Guidance

16 to 19 funding: how it works

An overview of the 16 to 19 funding formula.

For information

This page provides an overview of how we calculate 16 to 19 funding. The first two sections provide general information about this page and the guidance we have available. The following sections provide information on all elements of the 16 to 19 funding formula.

The section on additional funding elements has guidance on

  • high needs funding
  • care standards
  • basic maths premium pilot
  • student support
  • teachers’ pension scheme grant

You can find further information on our main collection page for funding education for 16 to 19 year olds and in our published funding guidance.

New for 2020 to 2021

On the 31 August 2019, the Chancellor announced an additional £400m for 16 to 19 education for academic year 2020 to 2021. We have confirmed that for 2020 to 2021 there will be:

  • an increase to national funding rates
  • changes to programme cost weightings
  • introduction of high value courses premium
  • introduction of Level 3 programme maths and English payment

Details of these changes can be found below and in our published funding guidance.

Summary

We fund sixth-form colleges, further education (FE) colleges, sixth-forms in schools, sixth-forms in academies, special schools, special academies, independent learning providers (ILPs), local authorities (LAs), special post-16 institutions (SPIs) and some higher education institutions (HEIs). We fund these institutions to provide study programmes for young people.

We fund:

  • students aged 16 to 19 and
  • students up to the age of 25 when they have an education, health and care (EHC) plan
  • 14 to 16 year-olds who are directly enrolled into eligible FE institutions
  • home educated students of compulsory school age at any FE college

We use a national funding formula to calculate an allocation of funding to each institution, each academic year. We fund special schools and special academies using place numbers only. We do not use the national funding formula for these institutions.

We calculate the basic funding for institutions using national funding rates, which depend on the size of their students’ study programmes. These rates are regardless of which type of institution they study at or what they study. We then apply the other elements of the funding formula, as described below. To attract funding a student must meet the published eligibility criteria, such as residency requirements. These are set out in the funding regulations guide for the appropriate academic year. Students must stay on their study programmes for a certain amount of time to qualify for funding. Further information about qualifying periods is available in the student numbers section.

Funding formula and study programmes

The funding formula funds institutions to deliver study programmes to their students. At enrolment, the institution and the student agree what each student is going to study. A learning agreement/timetable is drawn up showing what the study programme is and the qualification and non-qualification planned hours that make up the study programme.

The study programme must be tailored to the prior attainment of each student, have clear study and/or employment goals reflecting the student’s prior attainment, show progression in learning, and should include:

  • substantial qualifications or work experience
  • maths and English for students who have not achieved grade 9 to 4, A*-C GCSE in these subjects by age 16
  • high-quality work experience
  • added value non-qualification activity

Most study programmes have a core aim. The core aim of a study programme is either a substantial qualification which can be academic or vocational, or work experience. It will usually be the component with the largest amount of timetabled activity associated with it. Study programmes can only have one core aim at a time. Core aims are an essential part of the funding allocations calculation.

How the funding formula works

We use a funding formula to calculate institutions’ allocations each academic year. There are several elements within the funding formula that make up the core programme funding, total programme funding and overall total funding. The diagram below shows the elements of the funding formula.

Figure 1: 16 to 19 funding formula

16 to 19 funding formula diagram

Core programme funding includes the following elements multiplied together

  • student numbers
  • funding rate per student (dependent on funding band)
  • retention factor
  • programme cost weighting

with the following elements then added to that figure

  • level 3 programme maths and English payment
  • disadvantage funding
  • large programme funding

and the total multiplied by

  • area cost

Total programme funding includes the following elements

  • condition of funding adjustment (subtracted), plus
  • formula protection funding
  • advanced maths premium payment
  • high value courses premium
  • T Levels industry placement funding (all added)

Total funding includes the following elements (all added)

  • care standards funding
  • capacity and delivery fund
  • high needs students funding
  • student support funding

You will find a full description of each element within the funding formula and how they are used on this page.

The data used to calculate each element is taken from data returns submitted by institutions. This information is mainly collected via the individualised learner record (ILR), for FE institutions, and the autumn school census, for schools and academies. Institutions are required to submit regular and accurate data returns to the department.

For FE institutions, both the Funding Information System (FIS) and the hub provide ESFA funding reports. This enables institutions to check their data is accurate.

We created the post-16 interactive school census tool to help schools and academies submit accurate autumn census returns. This interactive tool also provides information on how we use the data returned in the autumn census to calculate funding for schools and academies. 16 to 19 funding reports are available in COLLECT throughout the Autumn census returns window. We also publish 16 to 19 funding reports guidance within the school census user manual.

For 16 to 19 institutions we provide an allocation calculation toolkit (ACT) before the final allocation statements have been issued. This toolkit demonstrates to institutions how we have used their data and the various elements of the funding formula for their organisation. We also publish explanatory notes to guide institutions through their revenue funding allocation statement. We will publish these when statements are released.

Further information is in the funding regulations guide and the rates and formula guide.

Programme funding: core elements

Student numbers element

This is a count of the number of students participating at an institution in the previous academic year. We call this lagged student numbers.

We get the student numbers from either the school census or the individualised learner record (ILR).

We distribute student numbers into funding bands using historical data. To work out how many students are to be funded in each band, we

  • take the lagged student number and
  • apportion them into bands based on the proportion of students in each band in the most recent year for which we hold full-year data

To attract funding, students need to complete a qualifying period. For a full-time student this is 6 weeks, and for a part-time student it can be either 2 or 6 weeks depending on the length of the programme. The table below shows the qualifying periods for study programmes of different lengths.

Study programme planned hours and planned length in-year Qualifying period
450 hours or more   6 weeks (42 days)
Fewer than 450 hours >= 24 weeks 6 weeks (42 days)
  2 to 24 weeks 2 weeks (14 days)

We make adjustments to account for different enrolment patterns. For example, for some institutions who enrol students throughout the year, we use student numbers from a rolling 12-month period from February to the next January.

When the above approaches are not appropriate, we take the number of funded students from the latest full year’s data. For example, for institutions where this applies for the 2020 to 2021 allocations, we use 2018 to 2019 data.

We usually fund new institutions on a proportion of the institution’s full capacity, or on the estimated number of students to be recruited in the first year. There are also exceptions to the lagged approach, which are described in the funding rates and formula guidance.

Funding Rates

We determine the funding rate for each student by the size of their study programme based on their planned hours.

We fund all 16 and 17 year old full time students at the same national funding rate per student, per year. The funding rate can vary between academic years.

On 31 August 2019, the Chancellor announced an additional £400m for 16 to 19 education for academic year 2020 to 2021. We have published details on what this means for 16 to 19 funding. The national funding rates will increase in 2020 to 2021 and the new rates are set out below.

Band Planned hours National funding rate per student
5 540+ hours 16 and 17 year olds, students aged 18 and over with high needs £4,188
4a 450+ hours Students aged 18 and over who are not high needs £3,455
4b 450 to 539 hours 16 and 17 year olds, students aged 18 and over with high needs £3,455
3 360 to 449 hours   £2,827
2 280 to 359 hours   £2,234
1 Up to 279 hours   £4,188 per full time equivalent (FTE*)

(FTE*) means the proportion of 600 hours.

T Level funding rates are based on the new band 5 rate:

Average planned hours Minimum planned hours required for the band funding rate (2 years)
Band 6 - small T Levels 1250 hours 1100 hours £8,726
Band 7 - medium T Levels 1450 hours 1300 hours £10,122
Band 8 - large T Level 1600 hours 1500 hours £11,168
Band 9 - very large T Levels 1750 hours 1650 hours £12,216

Retention factor, programme cost weightings and disadvantage elements

These elements of the funding formula use historic data based on the latest full year. For example, to calculate 2020 to 2021 allocations, we use data from the end of 2018 to 2019 academic year.

Where there is no historic data, for example for new institutions, we use averages for a similar type of institution.

Retention

The retention factor recognises the number of students who are continuing on their programme or are “retained” to their anticipated end date. Each student who remains in learning to the planned end date of their study programme, or who is recorded as completed or continuing, gets full funding. Each student who is not retained attracts 50% of the full funding rate.

When an institution records a student’s core aim as completed, but the student has finished the core aim early, the student is considered retained.

An institution where many students withdraw will have a low retention rate and therefore will get less funding in future. For example, a 90% retention rate would result in a retention factor of 0.95, meaning funding would be reduced by 5% when it is applied in the allocation.

Application of retention

All students recorded on a 2-year programme will be treated as retained in their first year if they have completed that year. This will continue until further notice.

To establish whether a student has completed the year, we will review whether the student was still in learning on the last working day in June. Students recorded on a 2-year programme who withdraw before that date will continue to be treated as not retained and the 50% funding reduction will apply.

Programme cost weightings

Programme cost weightings (PCWs) provide an uplift for subjects that cost more to deliver. PCWs are determined by the core aim’s sector subject area (SSA) tier 2 classification.

For academic year 2020 to 2021, we will increase PCW factors for 6 subject areas. We have published further details on these changes on Gov.UK.

A list of PCWs is given in the funding rates and formula guidance for the relevant year. We aim to publish the funding rates and formula guidance in March each year.

Level 3 programme maths and English payment

This additional maths and English funding is provided to support the delivery of maths and English to those students on substantial level 3 study programmes (including T Levels) who have not yet attained a grade 9 to 4 GCSE or equivalent in either or both of these subjects.

Students who have not yet attained a grade 9 to 4 GCSE or equivalent in maths and/or English will attract:

  • a single £750 payment per subject for a 2-year programme; or
  • a single £375 payment per subject for a 1-year programme

Allocations for the payment in 2020 to 2021 will be based on full-year ILR, HESA or School Census data from academic year 2018 to 2019.

We have published further information about how the payment is calculated for 2020 to 2021.

Disadvantage funding

Disadvantage funding is made up of 2 blocks.

Disadvantage Block 1 provides funds to support students from areas of economic deprivation based on the index of multiple deprivation (IMD). We currently use IMD 2015 but are reviewing the use of IMD 2019 for allocations from 2021 to 2022 onwards.

Disadvantage block 2 provides funds to support students with additional needs including moderate learning difficulties and disabilities. It is based on low prior attainment in maths and English.

We use the latest full year’s data from the ILR and school census to calculate block 2. For example, to calculate 2020 to 2021 block 2 funding, data from the end of 2018 to 2019 academic year is used.

Disadvantage funding is not ring fenced. This means institutions are free to use this element of the funding to choose the best way to attract, retain and support disadvantaged students and those with learning difficulties and disabilities.

Large programme uplift element

The large programme uplift reflects that some study programmes are necessarily much larger than 600 hours. We apply an uplift for achievement of high grades on specific large programmes:

  • 4 or 5 A levels or Pre-U qualifications
  • International Baccalaureate
  • large Technical Baccalaureate (TechBacc)

The uplift for 2020 to 2021 is calculated using data from 2017 to 2018. There are 2 levels of uplift: 10% and 20% of the national rate per student. Institutions will receive the uplift for 2 years giving them either £800 or £1,600 additional funding per student.

Area cost allowance element

The cost of education in London and parts of the South East is higher than in the rest of England, due to the cost of premises and maintenance, staff and other costs. We give institutions in these parts of England additional funding through the area cost uplift. The area cost uplift varies from 20% to 1%. Area cost uplift is not applied outside London and the South East.

Programme funding: additional elements

Maths and English condition of funding

Maths and English GCSEs are essential qualifications for further or higher education and employment. Students who have not achieved grade 9 to 4, A* to C, or equivalent in these subjects by age 16 will be expected to continue to study towards achieving them as part of their 16 to 19 study programme. To meet this condition of funding, a student must be enrolled on an approved qualification, that is a GCSE or an approved stepping stone qualification.

We have produced a condition of funding interactive tool to help you check if your students are compliant with the maths and English condition of funding.

Formula protection funding

We introduced formula protection funding (FPF) to shield institutions from significant decreases in funding per student resulting from the changes to the funding formula in 2013 to 2014. We committed to provide FPF until at least 2015 to 2016. From 2016 to 2017 we began to phase it out and the last FPF payments will be made to institutions in 2020 to 2021.

Advanced maths premium

The purpose of the advanced maths premium is to support the sector to grow the number of students studying high quality maths qualifications to level 3. The funds can be used to provide whatever support a provider deems necessary to do this.

The premium will provide additional funding of £600 per year for each additional student taking a level 3 maths qualification in comparison to a baseline.

The premium was calculated for the first time in allocations for academic year 2019 to 2020 using students on eligible level 3 maths qualifications returned in data from 2018 to 2019 compared to a baseline calculated from an average of eligible students returned in data from 2015 to 2016 and 2016 to 2017. Baseline figures were calculated and circulated to funded institutions in Summer 2018.

High value courses premium

The high value courses premium is additional funding to encourage and support delivery of selected substantial level 3 study programmes (including T Levels) in selected A level subjects or Sector Subject Areas (SSAs) that lead to higher wage returns. Providers will receive £400 per eligible student per year. We have published full eligibility and payment details on Gov.UK.

T Levels industry placement funding

Industry Placements are a compulsory element of the T Level. Placements are to be delivered in line with the published standards and principles. We will fund Industry Placements at £275 per student for each of the 2-years of the T Level. Payments will be allocated for the T Level student numbers agreed with providers.

Where a provider also has an allocation of the Industry Placement Capacity and Delivery Fund (CDF) a corresponding reduction will be made to the number of students funded through the CDF. For example, a provider with 100 places funded through the CDF and an allocation of 40 T Level students will be allocated placement funding for the 40 T Level students in their mainstream allocation and 60 places through CDF.

Additional funding elements outside the programme funding formula

We calculate some elements of 16 to 19 funding outside the formula.

Care standards

Care standards (residential) funding is for those institutions who have residential accommodation for students under the age of 18. The Care Standards Act 2000 puts extra responsibilities on these institutions, and these mean higher costs.

The funding rates and formula guide provides more information about Care Standards and how it is calculated.

Capacity and delivery funding (CDF)

The industry placement capacity and delivery funding (CDF) helps institutions prepare to deliver substantive industry placements for students on vocational and technical study programmes at levels 2 and 3. The eligibility criteria may change in future years to line up with developing T Level policy. The funding for industry placements is a rate per student payment.

The funding is additional to the mainstream allocation, which already funds work experience for all students through the planned hours for employability, enrichment and pastoral (EEP) activity.

More information on CDF is available on GOV.UK.

High needs funding

A high needs student, for funding purposes, is defined as:

  • a young person aged 16 to 18 who requires additional support costing over £6,000
  • any young person aged 19 to 25 subject to an education health and care (EHC) plan who requires additional support costing over £6,000

The published high needs funding arrangements for 2020 to 2021 describe how the 2020 to 2021 high needs funding system works for all types of provision. It provides key dates and activity for the delivery of 2020 to 2021 high needs funding. We’ve published lists of the academic year allocated place numbers for 2019 to 2020 by institution.

Student support

Help is available to young people in education via a range of student support schemes.

Basic maths premium pilot

The Department for Education are running a basic maths pilot project with selected institutions to test the impact of additional funding for students who have not yet achieved a GCSE grade 4.

Teachers’ pensions scheme employer contribution grant payments

We have published guidance for further education providers about the teachers’ pension scheme employer contribution grant payments.

Qualifications funded for 16 to 19 year olds

We fund qualifications that meet the following criteria:

ESFA funding validity for ESFA funded qualifications and eligible work experience activity on the Learning Aims Reference Service (LARS). Qualifications approved for teaching to 16 to 19 year olds that meet the maths and English condition of funding are also in LARS.

Activity that is not part of a qualification can be funded. The planned hours for that activity in the study programme can be counted for funding purposes as non-qualification activity.

Home educated students and 14 to 16 olds in FE and sixth form colleges

Students aged 14 to 16 years old can directly enrol at further education and sixth-form colleges to study high-quality vocational qualifications alongside general qualifications including English and mathematics within the Key Stage 4 curriculum.

Home educated students of compulsory school age may also be funded to take a part-time course at an FE college. Home educated students are also known as elective home educated (EHE) students.

Students and parents can find details of participating colleges on the enrolment of 14 to 16 year olds in full-time further education page of GOV.UK.

Published 11 September 2015
Last updated 16 January 2020 + show all updates
  1. We have updated the page with information for the 2020 to 2021 academic year

  2. A video explaining the allocations process for academic year 2019 to 2020 has been added.

  3. This page has been refreshed to include guidance and information on 16 to 19 revenue funding allocations for academic year 2019 to 2020.

  4. Updated dates, CCP references to ILP. Added a new section about application of retention.

  5. A video explaining the allocations process for academic year 2017 to 2018 has been added.

  6. General update to page to reflect current allocation year.

  7. First published.