16 to 19 Funding: how it works
An overview of the 16 to 19 funding formula.
The EFA funds sixth-form colleges, further education (FE) colleges, sixth-forms in schools, sixth-forms in academies, special schools, special academies, commercial and charitable providers (CCPs), local authorities (LAs), special post-16 institutions (SPI) and higher education establishments (HEIs). We fund these institutions to provide study programmes for young people.
- 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 further education college
We use a national funding formula to calculate an allocation of funding to each institution each academic year. Institutions use the funding to provide study programmes. The national funding formula is not used when calculating allocations for special schools and special academies. These institutions are funded on place numbers only.
Each student is funded at the same basic funding rate per academic year, depending on the size of their study programme, regardless of which type of institution they study at or what they study. To attract funding a student must meet published eligibility criteria, such as residency requirements, and these are set out in the funding regulations guide for 2016 to 2017. They must also stay on their study programmes for a certain amount of time to qualify for funding.
This summary of how funding works is supplemented by the funding regulations guide for 2016 to 2017 which details the funding principles, rules and other regulations that apply.
We have produced a video explaining how the funding formula works,
and a video explaining the allocations process.
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 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.
The funding formula in detail
We use a funding formula to calculate institutions’ allocations each academic year. These are the elements used in the formula
- student numbers, split into bands by size of programme
- national funding rate per student
- retention factor
- programme cost weighting
- disadvantage funding
- large programme funding
- area cost allowance
A fuller description of the funding formula elements and how they are used is set out below. We have provided a diagram (JPEG, 32.9KB) to illustrate how these elements operate within the formula.
Student numbers element
This is a count of the number of students participating at an institution in the previous academic year. This is known as lagged student numbers.
Student numbers are apportioned into 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. For example, for 2016 to 2017 allocations, the total number of students was derived from 2015 to 2016 autumn data returns and these were divided into bands based on the distribution in 2014 to 2015.
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 2 weeks. 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|
Adjustments are made 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, the number of funded students is taken from the latest full year’s data. For institutions where this applies, for the 2016 to 2017 allocations, for example, we have used 2014 to 2015 data.
New institutions are usually funded on a proportion of the institution’s full capacity, or on the estimated number of students to be recruited in the first year.
National funding rate element
All full time students are funded at the same basic funding rate per student, per year. The funding rate can vary between academic years. The national funding rate for 2016 to 2017 for students studying full time and part time is set out in the table below. Further information on planned hours in study programmes can be found on GOV.UK.
|Band||Planned hours||National funding rate per student|
|5||540+ hours||16 and 17 year olds students aged 18 and over with high needs||£4,000|
|4a||450+ hours||Students aged 18 and over who are not high needs||£3,300|
|4b||450 to 539 hours||16 and 17 year olds students aged 18 and over with high needs||£3,300|
|3||360 to 449 hours||£2,700|
|2||280 to 359 hours||£2,133|
|1||Up to 279 hours||£4,000 per full time equivalent (FTE*)|
(FTE*) means the proportion of 600 hours.
Retention factor, programme cost weighting and disadvantage elements
These elements of the funding formula are based on historic data, that is, the data is taken from the latest full year’s data. For example, to calculate 2016 to 2017 allocations, data from the end of 2014 to 2015 academic year is used.
Where there is no historic data, for example when the institution is new, we use averages for a similar type of institution.
The retention factor recognises the number of students who achieve the aim of their study programme and who are still in education, that 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 gets 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 to be retained.
An institution where a lot of 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.
Programme cost weighting
A list of programme cost weightings for 2016 to 2017 is given in the funding rates and formula guidance for that year. Most programme cost weightings for 2016 to 2017 are unchanged from those used in allocations for 2015 to 2016.
The exception to this is the specialist weighting for land based programmes in sector subject area 3 (agriculture, horticulture, and animal care) delivered by institutions recognised as having resources/equipment. For 2016 to 2017 this has increased from 1.6 to 1.75.
Programme cost weighting is set by the core aim’s sector subject area (SSA) tier 2 classification.
Disadvantage funding is made up of two blocks.
Block 1: to provide funds to support students from areas of economic deprivation based on the index of multiple deprivation. This year we have updated the indices to IMD 2015 from IMD 2010 which we have used previously. IMD 2015 is the latest version of this index, released in September 2015.
Block 2: to provide funds to support students with additional needs including moderate learning difficulties and disabilities based on low prior attainment in maths and English.
Block 2 funding issues matched data, so is based on an earlier year than other factors. For 2016 to 2017 allocations, 2013 to 2014 data was used to calculate disadvantage block 2.
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 funding
- 4 or 5 A levels or Pre U qualifications
- International Baccalaureate
- large TechBacc
The uplift is calculated for 2016 to 2017 using data from 2013 to 2014. 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 costs etc. We give institutions in these parts of England additional funding through the area cost uplift. The area cost uplift varies from 20% to 1%.Outside London and the South East the area cost uplift is not applied.
Formula protection funding
Formula protection funding (FPF) was introduced 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 have begun to phase it out over a period of 6 academic years.
Condition of funding
Maths and English GCSE are essential qualifications for further or higher education and employment. Students who have not achieved A*-C 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. This is now a condition of funding.
Funding outside the formula
We calculate some elements of 16 to 19 funding outside the formula.
High needs students
Local authorities have lead responsibility for implementing the special educational needs and or disabilities (SEND) reforms in local areas.
In all instances, a high needs student’s placement must be commissioned by the local authority and include the top-up funding (element 3) to be paid to an institution. An agreement must be in place between the 2 parties to that effect.
If the local authority does not agree a placement (even where an institution may have assessed a student as requiring additional support or a student has been offered a place by that institution) and top-up funding for a student is not agreed to, these students cannot be counted as high needs for funding purposes.
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 EHC plan who requires additional support costing over £6,000
Funding for high needs students is calculated outside the national funding formula.
The high needs funding arrangements for 2016 to 2017 includes further information for local authorities and institutions.
Care standards (residential) funding is for those institutions that 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.
Help is available to young people in education via a range of student support schemes.
Qualifications funded for 16 to 19 year olds
We fund qualifications that meet 2 criteria
- they must be offered by an awarding organisation that is recognised by Ofqual
- they must be approved for delivery by being included in the section 96 database
EFA funding validity for EFA funded qualifications and eligible work experience activity can be found 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 can also be identified 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.
Apprenticeships and traineeships
Further information on funding for apprenticeships and traineeships can be found on GOV.UK.
14 to 16 year olds in FE
We fund 14 to 16-year-olds enrolled in eligible FE colleges or sixth-forms that meet certain criteria and have been approved.
Home educated students
We fund home educated students of compulsory school age when they do a part time course at a FE institution. Home educated students are also known as elective home education (EHE) students.
How to become an EFA funded institution for delivering post-16 education and training
Every year we review the procedures for prospective providers of education to be recognised and receive funding. There are a number of ways to enter this market dependent on the type of institution proposed.
Periodic tendering opportunities and gaps in provision
Under EU procurement law, we do not always have to tender for the delivery of education and training opportunities. However there is an expectation that dealings are conducted transparently.
We therefore use a mix of local negotiation and tendering, subject to the volume and value of the provision in question and the circumstances concerned.
In support of LAs’ statutory duty to secure provision in an area, we will consider requests to fill a gap in provision. Where these gaps cannot be filled through negotiation with good existing providers, they are put out to tender through open competition and advertised through our e-bulletin and on Contracts Finder, the government’s site for advertising its contract opportunities.
Local authorities may submit a case regarding a gap in provision at any point in the year. Cases should be made to the relevant EFA territorial director using the standard template.
Other aspects of funding that impact on institutions
This page provides an overview of post-16 funding. For further information please refer to the full guidance.