Guidance

Adult education budget (AEB) devolution

This guide contains information for providers with a current Education and Skills Funding Agency funding agreement and AEB allocation.

Background

AEB – provision and individuals we fund

The AEB aims to engage adults and provide the skills and learning they need to equip them for work, an apprenticeship or other learning. It enables more flexible tailored programmes of learning to be made available, which may or may not require a qualification, to help eligible learners engage in learning, build confidence, and/or enhance their wellbeing.

The national AEB, administered by the ESFA, supports 3 statutory entitlements to full funding for eligible adult learners. These are set out in the Apprenticeships, Skills and Children’s Learning Act 2009, and enable eligible learners to be fully funded for the following qualifications:

  • English and maths, up to and including level 2, for individuals aged 19 and over, who have not previously attained a GCSE grade A* to C or grade, or higher, and/or
  • first full qualification at level 2 for individuals aged 19 to 23, and/or
  • first full qualification at level 3 for individuals aged 19 to 23

The national AEB also supports delivery of a wider range of provision as set out in section 2 of the 2018 to 2019 AEB funding and performance management rules.

Eligibility for AEB funding is based on an individual’s age, prior attainment and circumstances. This is set out in section 1 (eligibility for funding), relevant paragraphs in section 2 and the eligibility table on page 23 of the 2018 to 2019 AEB funding and performance management rules.

AEB devolution

In 2015 to 2016, the government agreed a series of devolution deals between central government and local areas (combined authorities) in England. As part of the devolution deals, central government will transfer certain adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009, from the Secretary of State for Education to the combined authorities. Through this transfer of functions, the combined authorities will take on responsibility for the AEB to make sure learners, aged 19 and over, eligible for funding from that budget, who reside in their areas, have appropriate education and training.

From the 2019 to 2020 academic year (1 August 2019 to 31 July 2020), the government will devolve the AEB to the following 6 combined authorities and through a delegation agreement to the Mayor of London for the Greater London Authority (GLA):

  • Cambridgeshire and Peterborough
  • Greater Manchester
  • Liverpool City Region
  • Tees Valley
  • West Midlands
  • West of England
A map of the combined authorities
A map of the combined authorities

Where relevant in this document, combined authorities and the GLA will be referred to as the ‘authorities’.

This means that from 1 August 2019, the ESFA will no longer be accountable for administering the AEB in these areas.

Subject to readiness, two further authorities, North of Tyne and Sheffield City Region will take on the new responsibilities one year later, in the 2020 to 2021 academic year. We will continue to work closely and support both these authorities in their preparations.

What AEB devolution includes

The orders and delegation agreement provide for the transfer and delegation of the following adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009 from the Secretary of State (SoS) for Education to the 6 combined authorities and GLA in relation to their areas:

  • section 86 which relates to education and training for persons aged 19 or over
  • section 87 which relates to learning aims for such persons and provision of facilities
  • section 88 which relates to the payment of tuition fees for such persons
  • the combined authority and GLA, instead of the SoS, will be responsible for these functions in their area

Functions of the Secretary of State to be exercisable concurrently with the combined authority in relation to the area.

The orders and delegation agreement provide for the following adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009 to be exercised concurrently by the SoS for Education and the 6 combined authorities and GLA in relation to their areas:

  • section 90 which relates to the encouragement of education and training for persons aged 19 or over and others subject to adult detention
  • section 100 which relates to the provision of financial resources

Exclusions

The Department for Education (DfE) will not transfer or delegate functions relating to apprenticeships training, persons subject to adult detention or any power to make regulations or orders.

Traineeships for 19 to 24 year olds will remain a nationally funded and contracted programme with funds provided by ESFA, regardless of where trainees reside.

Conditions

Through the orders and delegation, the SoS has set the following conditions on combined authorities and the GLA:

  • the combined authority and GLA must adopt learner eligibility rules for awards by an institution to which it makes grants loans or other payments in accordance with any direction given by the SoS
  • in exercising these functions, the combined authority and GLA must have regard to guidance issued by the SoS

DfE retains the power to specify which qualifications are part of the legal entitlements, as outlined above, as government is not transferring this to the combined authorities and GLA.

Providers exempt from devolution arrangements

Ministers have agreed that providers who meet all the criteria below should remain funded nationally for a transitional period of two further academic years (2019 to 2020 and 2020 to 2021):

  • qualify for a financial residential uplift for their learning provision; and
  • receive more than two thirds of their income from the adult education budget; and
  • target their provision predominantly at those most disadvantaged in society.

Approval of the draft orders

The draft orders to transfer certain adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009, from the Secretary of State for Education to the 6 combined authorities, were debated and approved in both Houses of Parliament on the 15, 16, 23 and 24 October 2018.

Following formal approval of the orders by both Houses of Parliament, the Secretary of State for Education will sign the orders to come into effect.

In parallel, government will devolve certain adult education function in the Apprenticeships, Skills, Children and Learning Act 2009 under S39A of the Greater London Authority Act 1999 to Greater London Authority through a delegation agreement between the Secretary of State for Education and the Mayor of London.

The table below provides links to the debates in the Commons and Lords:

Date House Order
15 October 2018 Commons Greater Manchester Order and West Midlands Orders
16 October 2018 Commons Liverpool City Region Order and Tees Valley Order
23 October 2018 Commons West of England Order and Cambridgeshire/Peterborough Order
24 October 2018 Lords Orders and regulations for Combined Authorities: Greater Manchester; Liverpool City Region; Cambridgeshire and Peterborough; Tees Valley; West Midlands and; West of England

Responsibilities of the combined authorities and GLA

Authorities must ensure access and funding for the statutory entitlements for their residents. In addition, they will be responsible for ensuring access to appropriate adult education provision to meet the needs of their area.

The authorities will be responsible for commissioning and contracting AEB provision in their local areas, this includes:

  • manage and be accountable for the budget transferred to them;
  • allocate the funds transferred to them determining their own procurement requirements (and compliance with the appropriate legal regulations);
  • have the freedom to set their own priorities (strategic skills plans);
  • determine their own funding and performance management rules;
  • set their own contracting and conditions of funding arrangements;
  • set and put in place their own funding rates and payments arrangements;
  • publish their own funding and performance management rules; and
  • manage providers with whom they have a contract/funding agreement.

Sharing the AEB between devolved and non-devolved areas

From the 2019 to 2020 academic year, the AEB will be apportioned into devolved and non-devolved budgets.

Ministers have agreed the methodology for calculating the devolved and non-devolved AEB budget shares. Each combined authority and GLA will receive its own budget and ESFA will have a non-devolved budget.

In order to calculate these budget shares, non-devolved/devolved budgets for England will be baselined on 2017 to 2018 delivery data submitted by providers (excluding 19-24 traineeships). This includes looking at each AEB learner’s ‘home’ postcode prior to enrolment to determine where they resided and how much funding they accounted for. A narrated presentation sets out the technical detail of how these residency calculations will work.

Adult education budget (AEB) 2019 to 2020 - residency funding calculations

ESFA allocations for AEB providers for non-devolved delivery

For action:

  • providers are encouraged to look at their own data and the letter ESFA issued in June 2018 to assess the potential impact on their allocations.
  • providers should ensure that learner postcode information is accurate and up to date at the point of enrolment, as this may affect funding eligibility.

From the 2019 to 2020 academic year, AEB allocations will be based on providers’ delivery in the 2017 to 2018 academic year. This is a change from ESFA’s approach of maintaining allocation levels year on year. It also means that providers who deliver to non-devolved residents only, may see a change in their allocation level. In June 2018, ESFA wrote to all current AEB providers to set out the details of how AEB allocations would change from the 2019 to 2020 academic year onwards.

ESFA will confirm non-devolved allocations for the 2019 to 2020 academic year before the end of March 2019.

AEB funding

Funding continuing learners

Some learners, resident in devolved areas, that start during the 2018 to 2019 academic year will not have finished their programme by the end of July 2019 and will need to continue learning in 2019 (continuing learners). To ensure these learners can complete their programmes, ESFA will provide funding for these learners through ESFA contracts, regardless of where they reside. This applies for the 2019 to 2020 (academic year) only.

Principle for funding continuing learners from the 2018 to 2019 academic year

The ESFA will ensure continuing learners from the 2018 to 2019 academic year continue to be eligible for funding for the whole of their learning aim or programme, if they are eligible for funding at the start, even if the duration is over one year.

Funding agreements

For action:

Providers who wish to deliver to learners who are resident in areas where the AEB is devolved will need to discuss funding and contracting arrangements with the relevant authority, because funding allocations to authorities will be based on learner residency postcode.

The term ‘funding agreement’ includes: financial memorandum; conditions of funding (grant); contract for services; and conditions of funding (grant) – employer.

ESFA will continue with its current funding relationships from the 2019 to 2020 academic year, with providers who deliver AEB provision to learners resident in the non-devolved areas.

Authorities will have, from the 2019 to 2020 academic year, a funding relationship with providers who deliver AEB provision to learners resident in their respective areas.

Some providers may only have a funding agreement with ESFA, others may have multiple funding agreements with different authorities as well as ESFA. Providers that deliver to devolved areas only, may not have an ESFA funding agreement at all.

ESFA will not replace any contract or grant funding arrangement to authorities. Authorities will be responsible for procuring and commissioning provision to be delivered from the 2019 to 2010 academic year and beyond.

Managing AEB enquiries and complaints from 1 August 2019

From 1 August 2019, the ESFA will remain responsible for handling enquiries and complaints from providers, other stakeholders and learners resident in non-devolved areas in respect of provision, which we are funding or have commissioned.

Timeline for AEB devolution

July 2018

Draft orders laid before Parliament to transfer certain adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009, from the Secretary of State for Education to the 6 combined authorities of: Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, Tees Valley, West Midlands and West of England.

Alongside the laying of the draft orders, there is a published statutory guidance. This guidance provides combined authorities with clarity in the exercise of their adult education functions and the associated budget.

August 2018

2018 to 2019 academic year commences.

DfE and the 6 combined authorities have agreed arrangements to work together for the transition period before adult education functions are fully devolved for the 2019 to 2020 academic year.

These arrangements are set out in a Memorandum of Understanding published on GOV.UK.

October 2018

The draft orders to transfer certain adult education functions in the Apprenticeships, Skills, Children and Learning Act 2009, from the Secretary of State for Education to the 6 combined authorities, were debated and approved in both Houses of Parliament on the 15, 16, 23 and 24 October 2018.

November to December 2018

Following formal approval of the orders by both Houses of Parliament, the Secretary of State for Education will sign the orders to come into effect.

Letter delegating adult education functions to the Mayor of London agreed.

Memorandum of Understanding, for devolution from the 2019 to 2020 academic year, agreed with the 6 combined authorities and GLA.

August 2019

2019 to 2020 academic year commences.

The authorities will, from the 2019 to 2020 academic year, be responsible for commissioning and contracting of, and payment for AEB-funded provision for their residents.

August 2020

Subject to readiness, two further authorities, North of Tyne and Sheffield City Region will take on the new responsibilities one year later, for the 2020 to 2021 academic year.

Published 7 November 2018