Education and Skills - The Funding of Year Olds Policy briefing outcomes note

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1 Education and Skills - The Funding of Year Olds Policy briefing outcomes note 10 May 2007 Campaign for Learning 19 Buckingham Street London WC2N 6EF supported by: A Campaign for Learning Event

2 The Campaign for Learning s policy briefings respond quickly to the publication of key papers and leading policy issues and offer essential information and analysis to inform the work of policy makers. This paper summarises a recent policy seminar held on 10 May which looked at funding for year olds. The seminar comprised two presentations; one looking at the overall context for funding and the other looking at some of the more specific funding issues for this particular age group. Introduction and Context Next month consultation closes on the DfES proposals for school, early years and funding. These proposals are intended to set the context for school budgets over the next Spending Review period, namely 2008 to Other matters included in the consultation are the future level of the Minimum Funding Guarantee, funding for deprivation and of course, funding proposals for Diplomas. The schools consultation follows hard on the heels of another important consultation Paper released at the start of the year; Delivering World Class Skills in a Demand Led System. This set out ways of moving forward the Leitch vision of a demand led funding system. Funding matters are therefore high on peoples minds at present. The Chancellor confirmed in his March 2007 Budget that education spending would rise in real terms by an average 2.5% a year between This is in line with the 2005 Manifesto commitment that education spending would rise in line with long term growth in the economy. As a commitment this was welcome but it is considerably below the 4% and 5% figures that the education sector has enjoyed in previous years. The Government is due to make its detailed announcements about future funding and priorities as part of the Report on the Comprehensive Spending Review in November, delayed slightly this year to allow for the change of political leadership. For many people with an interest in school funding, an important issue is how Diplomas will be funded. It s generally recognised that this type of provision, one based primarily on more practical forms of learning is more expensive to deliver but precise costings on this are hard to come by. LSN commissioned research last year suggested that the cost of one pupil spending one day a week on a college based course for a year was in the region of 2300 and that much of the cost for this was being subsidised often by the college itself. A further issue is whether the time is right to create a single funding system to support learning. The recent Lyons Inquiry on Local Government shied away from this proposal but the Secretary of State in evidence to the Education Committee suggested that the idea might be revisited after the next Spending Review. That would make it 2011, arguably in time for such a system to be levered in before the entitlement in Clearly when it comes to funding for year olds, it s a case of watch this space, a fact recognised by this seminar.

3 Big Picture Funding Mark Corney, Policy Adviser for the Campaign for Learning Mark looked at the wider landscape of funding as a starting point, noting that as part of this there were a number of funding issues bubbling around at present. These included Apprenticeship funding, public funding of tuition and off the job training, public funding of financial support and agency funding. School funding at present is the preserve of two Government Depts; Local Authority funding under the Dept for Communities and Local Government and the rest, that s early years and school funding under the DfES. In terms of facts and figures, there are broadly over 3,000 secondary schools of various types, nearly 400 colleges of various types and probably, though it s hard to gauge, some 800 work based providers offering provision for year olds. They are providing learning and training for around 4m learners aged between 11 and 18. At present the breakdown of funding is 34bn on schools, excluding sixth forms, and 6bn on funding coming through the LSC. Total Local Authority spending on secondary schools excluding admin, capital and sixth forms is around 12bn. Revenue figures for 2007/8 suggest that some 6bn of funding is spent on tuition or training and just over half that again on forms of financial support such Child Tax Credits and EMAs. Mark concluded by looking at where funding might be going in the future. Neither the Lyons Inquiry nor the current DfES Schools Consultation seemed to be indicating any immediate change such as a shift towards a single funding system. That said, Local Authorities now have an increasing long list of responsibilities for year olds, many deriving from the recent proposals to extend the learning age and the Secretary of State has hinted that further change is not ruled out. Mark s view was don t hold your breath at least in the short term! Funding the Phase Mick Fletcher, Consultant Mick took a detailed look at funding for year olds which he suggested was facing four issues currently: a supposition that reform necessitates collaborative delivery; the fact that at present school college collaboration is heavily subsidised by the FE system something which is unsustainable in the long term; the fact that there are different funding systems operating for learners pre 16 as opposed to post 16; and finally that while the current funding consultations contain many useful proposals, a number of big issues remain. The first of these big issues was the costs of collaborative provision. LSDA/LSN research last year had revealed that the average cost of one learner on a one day a week college course over a year was Out of this schools contributed anything between per learner, ESF or IF funding added a similar figure leaving colleges to subsidise the rest, in other words anything up to 1500 per learner. Follow up research looked at how schools viewed college courses, were they important or not, and how far schools could perhaps manage things more efficiently so as to reduce the burden on colleges. This follow - up research came up with a number of conclusions. Firstly that schools and learners value the opportunity to take different forms of learning at 14. Secondly that proper vocational courses cost more than GCSEs. Thirdly that schools have little room for making savings and fourthly that when it comes to funding, schools and colleges don t understand each other s systems particularly well and that this might be part of the problem.

4 The second of these big issues was about the costs of collaborative provision. Broadly there are three types of cost involved: start up costs which might cover capital and staff development; partnership costs such as transport and staff co ordination; and running costs. Research here had indicated that average annual running costs for a small consortium, anything perhaps up to 8 partners, was around 200,000 pa; for a medium sized one was just over 300,000 and for a large collaborative venture, up to 25+ partners, was around 500,000 pa. It s difficult, however, to be precise about such figures; costs, in areas like teaching and transport, vary enormously between different types of consortia. The third big issue was about the impact of having different funding systems pre and post 16. For pre 16, funding came through Local Authorities, was based on pupil numbers in the form of the Average Weighted Pupil Unit and attempted to ensure stability. For colleges and schools post 16, funding came through a single funding council, the LSC, was based on programmes rather than pupils for which it used a standard formula and various weightings and with its emphasis on competition and commissioning, seemed happy to encourage instability in the name of market competition. Such systems were hard to reconcile but as had been indicated earlier, this was an option under review in the long term. The fourth big issue was how some of the funding changes proposed in the various consultation Papers might operate. For school sixth forms, there are potentially a number of quite important changes. Firstly, success rates will be based not on average sector performance but on individual institutional performance. Does this mean, for instance, that in the future some schools might be reluctant to take on learners who might not boost their success rates? Secondly, schools with sixth forms will now have to have conversations with the LSC who might question them on matters of growth, numbers, curriculum offer and other efficiencies that they might not have been questioned on in the same way previously. Thirdly, and less contentiously, disadvantage will be based not on the traditional model of Free School Meals but on the more sophisticated Index of Multiple Deprivation. A few other admin changes were proposed but by and large the view was the changes balanced each other out in terms of positives and negatives. In terms of funding the Diplomas, the Schools Funding Paper recognises that offering vocational choice for year olds is going to be more expensive and that schools won t often be able to cover the costs through simple savings; for instance even if one or more learners are being provided for off site, other learners will still have to be taught. The Paper also recognises that the LSC funding method would be able to support post 16 learners on Diplomas but that at 14-16, the picture might be more complex with different stages of take up, different cohort sizes and so on, and so a different funding model is needed. The Paper is content to leave final decisions on funding matters to local partnerships and Local Authorities but it does make some assumptions about costs and it does offer three models for distributing funds. On the first of these, on the basis that that the Average Weighted Pupil Unit (AWPU) is around 3000 a year, it assumes that a one day per week vocational course for a year will cost around 1200 per learner. If a school then saves on average 300 per learner by having the learner off site, it assumes that an additional 900 will be needed to support each learner. On the second point, that of proposing different distribution models for funding, the Paper puts forward three options. One would be a central funding pot in which the Local Authority would hold the money and would reduce a school s AWPU proportionately as each learner participated. Another would be a pay as you go model in which the money would go direct to the school who would then purchase provision as it s needed. And the third would be a hybrid model where the money would be held

5 centrally but schools would be charged by providers for provision. The Paper seeks views on a preferred option. In all, Mick felt that this left a number of issues still outstanding. These included: how best to determine the DfES grant; how to fund small group sizes or where numbers deviate from plan; and how to identify and manage partnership and developmental costs. The general worry from the seminar was that funding might hinder rather than help collaborative provision. This was because it might lead to more competitive behaviour and attempts at cost saving rather than what s best for the learner. Further Information Rebecca Goodbourn, Policy and Research Manager Campaign for Learning, 19 Buckingham Street, London WC2N 6EF t f e. rgoodbourn@cflearning.org.uk