An overview of the 16 to 19 funding formula.
This page provides an overview of how we calculate post-16 funding. Further information can be found on our main collection page, for funding education for 16 to 19 year olds and our published funding guidance books.
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.
- 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. The national funding formula is not used for special schools and special academies. These institutions are funded on place numbers only.
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.
We have produced a video explaining how the funding formula works,
and a video explaining the allocations process for academic year 2017 to 2018. We will be uploading a new video for 2018 to 2019 in mid-February.
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. 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 uplift
- area cost allowance
The diagram below illustrates how these elements operate within the formula.
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.
The post-16 interactive school census tool has been created 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 school and academies.
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.
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 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. For example, for 2018 to 2019 allocations, the total number of students is derived from 2017 to 2018 autumn data returns and these are divided into bands based on the distribution in 2016 to 2017. You can find further information about funding bands in the national funding rates section.
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)|
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 2018 to 2019 allocations, for example, we use 2016 to 2017 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. There are also exceptions to the lagged approach where there is closing provision or a transfer of provision.
National funding rate element
The funding rate for each student is determined by the size of their study programme based on their planned hours.
All 16 and 17 year old full time students are funded at the same national funding rate per student, per year. The funding rate can vary between academic years. The national funding rate for 2018 to 2019 for students studying full time and part time is set out in the table below. We have published further information on planned hours in study programmes.
|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 based on the latest full year. For example, to calculate 2018 to 2019 allocations, data from the end of 2016 to 2017 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 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 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.
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 apply to academic year 2018 to 2019 funding allocations and will continue until further notice. We do not, however, expect this to be a permanent arrangement.
To establish whether a student has completed the year, we will review whether the student was still in learning on 30 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 weighting
Programme cost weighting relates to the cost of delivery of different subjects, and is based on the core aim’s sector subject area (SSA) tier 2 classification.
A list of programme cost weightings for 2017 to 2018 is given in the funding rates and formula guidance for that year. There are no changes to these weightings in 2018 to 2019. The funding rates and formula guidance for 2018 to 2019 will be published in April.
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 use IMD 2015 for this - that is the latest version of the index, released in September 2015.
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 2018 to 2019 block 2 funding, data from the end of 2016 to 2017 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
- 4 or 5 A levels or Pre-U qualifications
- International Baccalaureate
- large TechBacc
The uplift for 2018 to 2019 is calculated using data from 2015 to 2016. 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 and the last FPF payments will be made to institutions in 2020 to 2021.
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.
Funding outside the formula
We calculate some elements of 16 to 19 funding outside the formula.
High needs funding
A high needs student, for funding purposes, is defined as:
- a young person aged 16 to 18 who required 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
The published high needs funding arrangements for 2018 to 2019 describes how the 2018 to 2019 high needs funding system works for all types of provision. It provides key dates and activity for the delivery of 2018 to 2019 high needs funding. Lists of the academic year allocated place numbers for 2017 to 2018 by institution are also published on GOV.UK.
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.
The funding rates and formula guide provides more information about Care Standards and how it is calculated.
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
ESFA funding validity for ESFA 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.
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.