Question to the Department for Education:

To ask the Secretary of State for Education, what recent assessment she has made of the adequacy of the funding model for further education colleges; and if she will make a statement.

In January 2021, the government published the ‘Skills for Jobs’ White Paper, which sets out the department’s vision for a skills system that supports people to access the skills required to progress their careers and access the jobs the economy needs. In the two years since the department published the White Paper, we have also published two consultations on funding and accountability reforms. The department sought views on the strategic aims and on more detailed technical aspects of our reforms.

The government’s response to the second consultation, Skills for jobs: implementing a new further education funding and accountability system’ has now been published, summarising the responses received and detailing the department’s further education funding and accountability policy decisions. The government’s response is available at: https://www.gov.uk/government/consultations/implementing-a-new-fe-funding-and-accountability-system.

On adult skills funding, the department’s aims have been to simplify the system and improve the outcomes achieved with taxpayer investment. On funding, the department is ensuring that providers can use the Adult Skills Fund flexibly and has set out the outcomes that tailored learning should support. The department has also introduced five new skills funding bands, with sector subject areas at tier 2 level assigned to one of these bands with specialist land-based provision, and areas of high policy importance such as functional skills continuing to receive higher levels of funding.

The department is increasing investment in adult skills with additional funding for apprenticeships and adult training through the National Skills Fund alongside increased funding in 16-19 and £2.8 billion of capital funding. The new skills funding rates will boost funding for 78% of courses from the 2024/25 academic year. In the interim period, the department is increasing the funding providers can earn within the adult education budget. All formula funded provision will see a 2.2% increase each year with further increases of 20% for specific high value subjects and the new funding rates for 2024/25 reflect these increases. The mayoral combined authorities and Greater London Authority are free to use their adult education budget allocation as they see fit.

The department is increasing funding for providers in advance of the new funding rates, by increasing provider earnings for the 2022/23 and 2023/24 academic years, which were announced recently. The department is allowing providers to use a proportion of their Adult Skills Fund allocation to work with employers to develop new innovative provision that meets local skills needs. The department is also maintaining the existing system of funding for disadvantage, learning support and learner support.

The department is continuing to look at how it can simplify funding further for further education, particularly in light of reclassification. This will include looking at the number and complexity of data returns, coordination of activity across devolved and non-devolved bodies, and streamlining processes and rules to reduce burden.