Audio lesson · 12 minutes
How FE funding works
Colleges are not paid a block grant for teaching. They are funded through several separate streams, each with its own rules, and each earned by recording delivery in the ILR.
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Chapters
- There is no single pot of money
- Funding is earned through data
- Every answer belongs to a year
- Who does what inside a college
Transcript
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Introduction
How further education funding actually works. Colleges are not paid a block grant for teaching. They are funded through several separate streams, each with its own rules, and each earned by recording delivery in the ILR.
There is no single pot of money
The streams differ not just in rate but in mechanism, and that is what catches people out. A 16 to 19 allocation is built from data returned in an earlier year, so this year's delivery does not change this year's income. An adult skills allocation is a ceiling you earn against in year, and you can lose part of it by under-delivering. Apprenticeship income is not an allocation at all: it is the sum of what individual employers have agreed to spend. Because the mechanisms differ, the management response to a problem differs too. Under-recruitment in 16 to 19 is next year's problem. Under-delivery in adult skills is this year's, and there is a point in the year after which it cannot be fixed.
Funding is earned through data, not granted for effort
The ILR is submitted every month and restates the whole funding year each time. Everything downstream reads it: the funding calculation, the funding reports finance reconciles to, the published achievement rates, and the population an auditor samples from. This is why a data problem in further education is never only a data problem. A learner who left in October and was not withdrawn until June has generated eight months of funding that will be recovered, and has sat in the achievement rate cohort the whole time.
Every answer belongs to a funding year
Funding rules, rates and formula documents, the ILR specification and the validation rule set are all published per funding year. Codes that were valid last year may not be valid this year. Entitlements change. Devolved boundaries move. This is also why an aim is governed by the rules in force when it started, not the rules in force when somebody asks about it. A learner who started in July is on last year's rules for that aim.
Who does what inside a college
The single most useful thing to understand is that MIS does not create the data. It inherits it. By the time a problem is visible in a funding report, the decision that caused it was made weeks earlier by somebody who had no idea it was a funding decision. That is why most durable improvement in funding accuracy comes from changing what happens at enrolment and in curriculum planning, not from working harder at return time.
Read it instead
How further education funding actually worksThe written module carries the same content at three depths, with the worked examples, the pitfalls and the sources.
Sources
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