ESFA Funding Guidance for Young People 2018-2019
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The format of the funding guidance is the same as last year. It
consists of four separate books:
•
‘Funding regulations’ (published April 2018)
•
‘Funding rates and formula’ (published April 2018)
•
‘ILR funding returns’ (published June 2018) – this does not
apply to schools or academies
•
‘Sub-contracting control regulations’ (published July 2018)
All these documents are available at:funding-guidancewww.gov.uk/16-to-19-education-
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•
the ESFA use the ILR data to monitor and reconcile institutions
16 to 19 funding in-year
•
we now match the 16 – 19 final ILR R14 data values to the final
funding claim values in the combined adult and 16 to 19 final
claim when this is available on the website
•
advice on the final claim process for 2018 to 2019 will be made
available later in 2019 on the website at:
How to return ILR final funding claims to the EFA
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21-25
For non-contract funded institutions (colleges, local
authorities and HEI) they are not usually subject to in-year or
post-year reconciliation (either up or down) but funding recorded
in the current year will affect future funding allocations
•
26-28
For contract funded institutions (private training
organisations and charities now known as CCPs) they are subject
to in-year and post-year reconciliation, down and up (subject to
affordability), and current funding affects future lagged
allocations. Reconciliation compares the overall programme
funding out-turn against the overall programme funding allocation.
The detailed reconciliation policy, together with some worked
examples, are explained in the final section of this presentation
5
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only the student numbers, by bands, on the funding allocation
schedule is calculated on an actual basis
•
the retention factor and programme weighting use the same
lagged factor that was used for the purposes of calculating the
allocation and these factors are contained within the FIS report
•
the area cost will usually be the lagged allocation uplift
(although any institution that physically relocates within uplift
areas will be considered on an individual basis – this is not
expected to be an issue for most institutions)
6
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disadvantage funding is calculated using a combination of
lagged and actual data – the FIS report uses:
•
the proportion of disadvantage funding as a proportion of
whole allocation
•
then simply applies this proportion in the same proportion
to the out-turn figures
•
for example, if an institution delivers 110% of their student
number funding they will deliver 110% of their disadvantage
funding
7
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The 16-19 funding claim report takes into account:
•
the ESFA split funding responsibility between 16 to19 students
and adults
•
that the funding responsibility for students aged 19 to 24 with an
Education and Health and Care (EHC) plan remain under our 16
to 19 funding arrangements
•
students who started programmes aged 18 in the first year of
their programme but are aged 19 or over on the 31 August 2018
(shown as “19+ continuers”) are now funded at all ILR funded
institutions under our 16 to 19 funding arrangements
10
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•
the 16 to 19 funding claim report also takes into account that
19+ continuing students at ILR-funded institutions are funded
under the ESFA 16 to 19 funding model
•
the ILR fields used to determine into which part of the 16 to 19
funding claim report the student and their funded cash appear is
summarised on slide 9 and in annex D (table D1)
11
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the FIS 16 to 19 funding claim report breaks students down into
the full and part time funding bands as shown in the allocation
schedule and applies the relevant national rate to each band. In
calculating students’ programme funding out-turn figures the
report then uses exactly the same funding factors as those used
to calculate the institution funding allocation
12
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:
•
we have issued full guidance on the ILR 16 to 19 funding claim
report within the FIS 2018 to 2019 report guidance, and
information on this will be available during the year from:
www.gov.uk/government/collections/individualised-learner-
record-ilr
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To keep the 16 to 19 funding claim report as simple as possible
the report principally looks at ILR fields “source of funding”,
“funding model”, “learner funding and monitoring type” and
“learner funding and monitoring code” to determine where each
student appears on the report. It also has to reference the
individual student’s date of birth to determine to which category
students belong.
5
To be funded on the 16 to 19 funding claim report students
must have at least one learning aim coded in the ILR data as
set out in table D1.
14
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6
The disadvantage element is not a funding factor. It is an
additional amount of funding that is then included within the
overall funding allocation. This requires a different method to
calculate a funding out-turn that includes the disadvantage
element that also adjusts the overall out-turn figure to reflect
the difference between the allocation student numbers and
actual student numbers recruited during the year.
this is explained in more detail on the next slide which has a
reduced font size so annex D paragraph C fits on one
screen
15
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the total block 1 and block 2 funding is calculated as a percentage of
the programme funding (less disadvantage and before area cost)
this percentage is applied by FIS (at the same standard percentage) to
each individual student’s programme funding (before adding
disadvantage funding or using the area cost factor). The standard
disadvantage uplift factor for the institution is shown in FIS tables in the
column labelled PrvDisadvPropnHist
FIS calculates the outturn including both the programme and
disadvantage funding. This total is then further uplifted by the area cost
factor to produce the out-turn
16
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7
The cash reduction made to 2018 to 2019 allocations for
students who did not meet the condition of funding in 2016 to
2017 is also being applied to institutions’ funded out-turn in
2018 to 2019.
8
This is so the reduction is applied equally to all institution types
in 2018 to 2019. This ensures those institutions that are subject
to funding reconciliation are treated equally in respect of the
condition of funding as those who are not subject to
reconciliation. This deduction will not affect the calculation of
lagged funding allocation values for 2019 to 2020.
17
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14
As stated in paragraph 17 institutions are expected to use
PDSAT reports to verify their own ILR data during the year.
15
The software is developed and supported by KPMG. Support is
via their helpdesk facility is as detailed on the main PDSAT
page, where you can also find a PDSAT e-learning guide:
www.gov.uk/government/publications/ilr-data-check-that-it-
meets-standards-and-quality-requirements
the funding impact of how changing ILR data after either
institution or funding auditor PDSAT review work is completed is
explained in the following slides. The audit evidence needed to
support ILR data has similar funding impacts
18
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11
All LLDD students (those with an EHC plan) aged 19 to 24 on
31 August 2018 and for whom the ESFA has agreed 16 to 19
funding responsibility should be coded in “source of funding” as
107.
12
All continuing students completing programmes started whilst
aged 16 to 19 (flagged in ILR as “19+ continuers”) aged 19 or
over must be coded in “source of funding” as 107. We fund
these students through the 16 to 19 funding model.
19
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The ILR data in the current year has 2 different impacts on an
institution’s funding from us.
some affects the current year funding out-turn figure as shown on
the FIS funding reports – particularly the 16 to 19 funding claim
report. It also affects forward allocations
some only affects the institutions future funding allocation factors,
also known as “lagged funding factors”
20
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w
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i
c
h
f
u
n
d
i
n
g
y
e
a
r
i
s
i
m
p
a
c
t
e
d
b
y
I
L
R
d
a
t
a
c
h
a
n
g
e
s
?
)
D
a
t
a
t
h
a
t
i
m
p
a
c
t
s
o
n
t
h
e
c
u
r
r
e
n
t
y
e
a
r
f
u
n
d
i
n
g
o
u
t
-
t
u
r
n
student start and end dates determine whether the student
completes the necessary start period to count as a funded
student in the year. The qualifying periods are solely calculated
from the dates recorded in the ILR against the individual student
learning aims
planned study hours for the year determine each student’s
funding band. If the overall total is amended so that the student
is moved into a different funding band (see Funding rates and
formula table 1) then the funding out-turn figure is changed
21
P
D
S
A
T
s
-
I
L
R
d
a
t
a
a
d
j
u
s
t
m
e
n
t
s
(
s
l
i
d
e
3
)
(
w
h
i
c
h
f
u
n
d
i
n
g
y
e
a
r
i
s
i
m
p
a
c
t
e
d
b
y
I
L
R
d
a
t
a
c
h
a
n
g
e
s
?
)
D
a
t
a
t
h
a
t
i
m
p
a
c
t
s
o
n
t
h
e
c
u
r
r
e
n
t
y
e
a
r
f
u
n
d
i
n
g
o
u
t
-
t
u
r
n
All students in all funding bands must have their planned hours amended if
they transfer, withdraw or complete their study programme within their
initial 6 week period.
PDSAT 17E-210 identifies students in the higher bands with short periods
of attendance.
Students who attend for more than 2 weeks but less than 6 weeks on short
study programmes (see Funding rates and formula paragraphs 57 to 60)
remain eligible as a funding start but their planned hours are restricted to
the period of their actual attendance.
22
P
D
S
A
T
s
-
I
L
R
d
a
t
a
a
d
j
u
s
t
m
e
n
t
s
(
s
l
i
d
e
4
)
(
w
h
i
c
h
f
u
n
d
i
n
g
y
e
a
r
i
s
i
m
p
a
c
t
e
d
b
y
I
L
R
d
a
t
a
c
h
a
n
g
e
s
?
)
D
a
t
a
t
h
a
t
i
m
p
a
c
t
s
o
n
t
h
e
c
u
r
r
e
n
t
y
e
a
r
f
u
n
d
i
n
g
o
u
t
-
t
u
r
n
disadvantage funding is generated exactly in accordance with
the proportion of study programme funding generated against
the allocation (see slides 16 to 17). Any changes to the funding
out-turn from data changes outlined on the previous slide will
also alter the current year disadvantage funding out-turn
the area cost factor is usually the same for calculating both
current and future funding allocations. Area cost is explained in
document Funding rates and formula in paragraphs 100 to 103
the large programme uplift is generated exactly in accordance
with the proportion of study programme funding generated
against the allocation (similar to disadvantage funding)
23
P
D
S
A
T
s
-
I
L
R
d
a
t
a
a
d
j
u
s
t
m
e
n
t
s
(
s
l
i
d
e
5
)
(
w
h
i
c
h
f
u
n
d
i
n
g
y
e
a
r
i
s
i
m
p
a
c
t
e
d
b
y
I
L
R
d
a
t
a
c
h
a
n
g
e
s
?
)
D
a
t
a
t
h
a
t
i
m
p
a
c
t
s
o
n
l
y
o
n
f
u
t
u
r
e
“
l
a
g
g
e
d
”
f
u
n
d
i
n
g
a
l
l
o
c
a
t
i
o
n
s
future programme weighting factor is determined by using each
individual student’s core learning aim to calculate an overall
institution programme weighting factor
future retention factor is determined by using each individual
student’s retention (based on their core aim) in the current year
to calculate an overall institution retention factor
future disadvantage funding is determined by using all the
individual student home post codes and their prior attainment for
GCSE English and maths to calculate an overall institution
disadvantage funding figure
24
E
F
A
C
o
n
t
r
a
c
t
i
n
s
t
i
t
u
t
i
o
n
(
C
C
P
s
)
r
e
c
o
n
c
i
l
i
a
t
i
o
n
o
n
l
y
T
h
e
r
u
l
e
s
w
i
t
h
s
o
m
e
w
o
r
k
e
d
e
x
a
m
p
l
e
s
25
R
e
c
o
n
c
i
l
i
a
t
i
o
n
r
u
l
e
s
a
n
d
e
x
a
m
p
l
e
s
T
h
e
p
r
i
n
c
i
p
l
e
s
o
f
C
C
P
f
u
n
d
i
n
g
a
d
j
u
s
t
m
e
n
t
a
n
d
f
i
n
a
l
r
e
c
o
n
c
i
l
i
a
t
i
o
n
•
in-year payments are made on profile as is planned for all ESFA
16 to 19 funding
•
in-year delivery of cash is reviewed during the year and where
delivery is outside an agreed tolerance, action is taken to adjust
the profile of payments from April for the remainder of the year
•
all funding variances (both in terms of student numbers and
cash) are calculated by comparing each whole year delivery
(either in-year or at the final return) with the final funding
allocation as paid for the year
•
only cash is subject to reconciliation (not student numbers)
26
T
o
l
e
r
a
n
c
e
p
r
i
n
c
i
p
l
e
s
a
n
d
V
f
M
C
o
n
t
r
a
c
t
f
u
n
d
e
d
i
n
s
t
i
t
u
t
i
o
n
s
(
c
h
a
r
i
t
a
b
l
e
a
n
d
c
o
m
m
e
r
c
i
a
l
p
r
o
v
i
d
e
r
s
k
n
o
w
n
a
s
C
C
P
s
)
•
the ESFA tolerance arrangements for CCPs have been agreed
to recognise that minor increases or shortfalls in student
recruitment do not result in additional financial costs or savings
that are disproportionate to the financial impact from small
variances between CCP delivery and allocation figures
•
tolerance arrangements need to meet the requirement to
safeguard public funding, especially where it is transferring to
the private sector, and obtain as much value for money (VfM)
•
institutions are expected to deliver their full allocation each year
27
R
e
c
o
n
c
i
l
i
a
t
i
o
n
p
o
l
i
c
y
f
o
r
C
C
P
s
C
o
n
t
r
a
c
t
f
u
n
d
e
d
i
n
s
t
i
t
u
t
i
o
n
s
(
c
h
a
r
i
t
a
b
l
e
a
n
d
c
o
m
m
e
r
c
i
a
l
p
r
o
v
i
d
e
r
s
k
n
o
w
n
a
s
C
C
P
s
)
(
r
u
l
e
s
d
e
t
a
i
l
e
d
i
n
p
a
r
a
g
r
a
p
h
s
2
6
–
3
4
)
The following detailed reconciliation rules apply.
•
reconcilliation includes disadvantage funding within overall
study programme funding
•
tolerance for both under and over performance is reduced to
higher of 1.0% of cash allocations or £5,000
•
growth is subject to affordability
28
R
e
c
o
n
c
i
l
i
a
t
i
o
n
r
u
l
e
s
a
n
d
e
x
a
m
p
l
e
s
O
v
e
r
-
p
e
r
f
o
r
m
a
n
c
e
-
p
a
r
a
g
r
a
p
h
s
3
2
-
3
4
•
for CCPs who have delivered at least 101% of their programme
cash allocation a cash tolerance of 1.0% (but with a minimum
value £5,000) of the programme allocation will be used when
comparing total programme cash delivered against the total
cash programme allocation. The cash delivered above the
tolerance of the programme funding allocation (together with
any FPF) will be paid as responsive growth subject to a growth
cap and affordability
•
the growth cap for contract institutions is normally 30% of the
allocation with a minimum value of £100,000 and a maximum
value of £1 million
29
R
e
c
o
n
c
i
l
i
a
t
i
o
n
r
u
l
e
s
a
n
d
e
x
a
m
p
l
e
s
U
n
d
e
r
p
e
r
f
o
r
m
a
n
c
e
-
p
a
r
a
g
r
a
p
h
s
2
9
-
3
1
•
for CCPs who have not delivered at least 99% of their
programme cash allocation a cash tolerance of 1.0% (but with a
minimum value £5,000) of the programme allocation will be
allowed when comparing total programme cash delivered
against the total cash programme allocation
•
in such cases all the cash not delivered below the tolerance of
the programme funding allocation will be recovered as clawback
•
the following slides include some examples of reconciliation for
contract funding underperformance and over performance
30
C
a
l
c
u
l
a
t
i
n
g
r
e
c
o
n
c
i
l
i
a
t
i
o
n
(
C
C
P
s
)
O
v
e
r
p
e
r
f
o
r
m
a
n
c
e
o
n
l
y
R
e
c
o
n
c
i
l
i
a
t
i
o
n
c
a
l
c
u
l
a
t
i
o
n
(
o
v
e
r
p
e
r
f
o
r
m
a
n
c
e
)
Programme out-turn (£)
-
Allocation (including TP and FPF) (£)
=
Variance (£)
(
I
f
p
e
r
f
o
r
m
a
n
c
e
o
u
t
s
i
d
e
t
o
l
e
r
a
n
c
e
r
a
n
g
e
d
o
c
a
l
c
u
l
a
t
i
o
n
b
e
l
o
w
)
- (Tolerance in reverse sign to variance) (£)
=
Revised variance (£)
=
£ cash (responsive growth payment*)
(* figure above also subject to a growth cap and to affordability)
31
R
e
c
o
n
c
i
l
i
a
t
i
o
n
-
f
o
r
m
u
l
a
p
r
o
t
e
c
t
i
o
n
f
u
n
d
i
n
g
(
F
P
F
)
–
O
v
e
r
p
e
r
f
o
r
m
a
n
c
e
o
n
l
y
This slide shows how FPF is used in calculating funding reconciliation for
over performance for CCPs only.
* All growth payments are subject to affordability and the maximum in-year
payment is 50% of the calculated growth value.
32
C
a
l
c
u
l
a
t
i
n
g
r
e
c
o
n
c
i
l
i
a
t
i
o
n
(
C
C
P
s
)
U
n
d
e
r
-
p
e
r
f
o
r
m
a
n
c
e
o
n
l
y
R
e
c
o
n
c
i
l
i
a
t
i
o
n
c
a
l
c
u
l
a
t
i
o
n
(
u
n
d
e
r
p
e
r
f
o
r
m
a
n
c
e
)
Programme outturn (£)
-
Allocation (£)
=
Variance (£)
(
I
f
p
e
r
f
o
r
m
a
n
c
e
o
u
t
s
i
d
e
t
o
l
e
r
a
n
c
e
r
a
n
g
e
d
o
c
a
l
c
u
l
a
t
i
o
n
b
e
l
o
w
)
+ (Tolerance in reverse sign to variance) (£)
=
Revised variance (at Full Rate) (£)
=
£ clawback (a cash recovery adjustment)
33
R
e
c
o
n
c
i
l
i
a
t
i
o
n
-
F
o
r
m
u
l
a
P
r
o
t
e
c
t
i
o
n
F
u
n
d
i
n
g
(
F
P
F
)
–
U
n
d
e
r
-
p
e
r
f
o
r
m
a
n
c
e
o
n
l
y
This slide shows how FPF is used in calculating funding reconciliation for
underperformance for CCPs only.
34
R
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
s
A
t
o
E
i
n
t
h
e
f
o
l
l
o
w
i
n
g
s
l
i
d
e
s
(
s
l
i
d
e
s
3
4
-
3
9
)
•
the following slides (34 to 39) give some simple examples of
CCP reconciliation for 2018 to 2019
•
for all growth examples all growth payments are subject to
affordability and these examples are based on all growth being
affordable but this may not be accurate for the final out-turn
examples
•
for CCPs whose ILR R06 funding out-turn is below 60 % of their
programme funding allocation will face in-year clawback based
on a proportion of their remaining allocation payments from April
to July 2019. All final year clawback calculations will be based
on final out-turn against final allocations for the year
35
I
n
-
y
e
a
r
r
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
A
(
a
l
l
i
n
£
,
0
0
0
)
In-year out-turn (ILR figure)
900
Allocation
1,000
Variance
- 100
Add in-year tolerance (1.0%)
+ 10
In-year adjustment (clawback)
- 90
Funding out-turn (final claim)
870
Allocation
1,000
Variance
- 130
Add final tolerance (1.0%)
+ 10
F
i
n
a
l
r
e
c
o
n
c
i
l
i
a
t
i
o
n
v
a
l
u
e
(
c
l
a
w
b
a
c
k
)
-
1
2
0
Final reconciliation cash adjustment
-
1
2
0
(
f
i
n
a
l
)
d
e
d
u
c
t
(
i
n
-
y
e
a
r
c
l
a
w
b
a
c
k
)
-
9
0
Cash final adjustment
(clawback)
- 30
* CCPs whose final claims are lower than their in-year funding
figure will see no advantage from the final claim calculations
from any over statement of their in-year funding.
36
I
n
-
y
e
a
r
r
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
B
(
a
l
l
i
n
£
,
0
0
0
)
In-year out-turn (ILR figure)
870
Allocation
1,000
Variance
- 130
Add in-year tolerance (1.0%)
+ 10
In-year adjustment (clawback)
- 120
Funding out-turn (final claim)
900
Allocation
1,000
Variance
- 100
Add final tolerance (1.0%)
+ 10
F
i
n
a
l
r
e
c
o
n
c
i
l
i
a
t
i
o
n
v
a
l
u
e
(
c
l
a
w
b
a
c
k
)
-
9
0
Final reconciliation cash adjustment
-
9
0
(
f
i
n
a
l
)
d
e
d
u
c
t
(
i
n
-
y
e
a
r
c
l
a
w
b
a
c
k
)
-
1
2
0
Cash final adjustment (re-pay clawback)
+ 30
* Any clawback calculated from in-year funding figures that is
not then calculated from the final claim figures is refunded to
CCPs who have increased their delivery above the in-year
figure.
37
I
n
-
y
e
a
r
r
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
C
(
a
l
l
i
n
£
,
0
0
0
)
In-year out-turn (ILR figure)
900
Allocation
1,000
Variance
- 100
Add in-year tolerance (1.0%)
+ 10
In-year adjustment (clawback)
- 90
Funding out-turn (final claim)
1,150
Allocation
1,000
Variance
+ 150
Deduct final growth tolerance (1.0)
- 10
F
i
n
a
l
r
e
c
o
n
c
i
l
i
a
t
i
o
n
v
a
l
u
e
(
g
r
o
w
t
h
)
+
1
4
0
Final reconciliation cash adjustment
+
1
4
0
(
f
i
n
a
l
)
d
e
d
u
c
t
(
i
n
-
y
e
a
r
c
l
a
w
b
a
c
k
)
-
9
0
Cash adjustment (growth & re-pay in-year clawback)
+ 230
* Any clawback calculated from in-year funding figures that is
not then calculated from the final claim figures is refunded to
CCPs who have increased their delivery above the in-year
figure.
38
I
n
-
y
e
a
r
r
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
D
(
a
l
l
i
n
£
,
0
0
0
)
In-year out-turn (ILR figure)
1,150
Allocation
1,000
Variance
+ 150
Deduct in-year tolerance (1.0%)
- 10
In-year adjustment (interim growth)
+ 140
Funding out-turn (final claim)
1,250
Allocation
1,000
Variance
+ 250
Deduct final growth tolerance (1.0%)
- 10
F
i
n
a
l
r
e
c
o
n
c
i
l
i
a
t
i
o
n
v
a
l
u
e
(
g
r
o
w
t
h
)
+
2
4
0
Final reconciliation cash adjustment
+
2
4
0
(
f
i
n
a
l
)
d
e
d
u
c
t
(
i
n
-
y
e
a
r
g
r
o
w
t
h
)
+
1
4
0
Cash final adjustment (additional growth)
+ 100
* Any clawback calculated from in-year funding figures that is
not then calculated from the final claim figures is refunded to
CCPs who have increased their delivery above the in-year
figure.
39
I
n
-
y
e
a
r
r
e
c
o
n
c
i
l
i
a
t
i
o
n
e
x
a
m
p
l
e
E
(
a
l
l
i
n
£
,
0
0
0
)
In-year out-turn (ILR figure)
1,150
Allocation
1,000
Variance
+ 150
Deduct in-year tolerance (1.0%)
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ESFA funding guidance
www.gov.uk/guidance/16-to-19-education-funding-guidance
ILR funding returns:
www.gov.uk/government/publications/advice-individualised-
learner-record-ilr-returns
Funding regulations
www.gov.uk/government/publications/advice-funding-
regulations-for-post-16-provision
Rates and formula
www.gov.uk/government/publications/funding-rates-and-
formula
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The ESFA funding guidance for young people in 2018-2019 covers funding regulations, rates, ILR funding returns, and sub-contracting control regulations. The presentation explains the funding reconciliation policy, calculation methods for 16 to 19 funding, and provides technical advice on ILR data recording. Institutions using ILR data for monitoring and reconciliation are guided on final funding claims and reconciliation policies.
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Presentation Transcript
ESFA funding guidance for young people 2018 to 2019 ILR Funding Returns 2018 to 2019 Funding regulations are explained in separate presentations - ESFA Young People s Funding Team
2 Funding guidance for young people: 2018 to 2019 The format of the funding guidance is the same as last year. It consists of four separate books: Funding regulations (published April 2018) Funding rates and formula (published April 2018) ILR funding returns (published June 2018) this does not apply to schools or academies Sub-contracting control regulations (published July 2018) All these documents are available at: www.gov.uk/16-to-19-education- funding-guidance
3 ILR funding returns: (by slide numbers) contents of this presentation Introduction 1 - 3 4 Funding returns timetable 5 - 6 Funding reconciliation policy 7- 9 How is 16 to 19 funding calculated? 10 - 22 ILR funding returns annex D technical advice on FIS and ILR data recording 23 - 26 PDSATs ILR data adjustments funding impacts 27 43 Contract institution reconciliation examples
4 Funding return timetable Funding return timetable see table 1 all institutions the ESFA use the ILR data to monitor and reconcile institutions 16 to 19 funding in-year we now match the 16 19 final ILR R14 data values to the final funding claim values in the combined adult and 16 to 19 final claim when this is available on the website advice on the final claim process for 2018 to 2019 will be made available later in 2019 on the website at: How to return ILR final funding claims to the EFA
Funding reconciliation policy 5 No significant change to existing policy (paragraph references) 21-25 For non-contract funded institutions (colleges, local authorities and HEI) they are not usually subject to in-year or post-year reconciliation (either up or down) but funding recorded in the current year will affect future funding allocations 26-28 For contract funded institutions (private training organisations and charities now known as CCPs) they are subject to in-year and post-year reconciliation, down and up (subject to affordability), and current funding affects future lagged allocations. Reconciliation compares the overall programme funding out-turn against the overall programme funding allocation. The detailed reconciliation policy, together with some worked examples, are explained in the final section of this presentation
6 How is funding calculated? (slide 1) See Funding rates and formula paragraph 2 the formula only the student numbers, by bands, on the funding allocation schedule is calculated on an actual basis the retention factor and programme weighting use the same lagged factor that was used for the purposes of calculating the allocation and these factors are contained within the FIS report the area cost will usually be the lagged allocation uplift (although any institution that physically relocates within uplift areas will be considered on an individual basis this is not expected to be an issue for most institutions)
How is funding calculated? (slide 2) 7 See Funding rates and formula paragraph 2 the formula disadvantage funding is calculated using a combination of lagged and actual data the FIS report uses: the proportion of disadvantage funding as a proportion of whole allocation then simply applies this proportion in the same proportion to the out-turn figures for example, if an institution delivers 110% of their student number funding they will deliver 110% of their disadvantage funding
ILR 16-19 funding claim 8 16 -19 Funding Claim Report 2018/19 Summary version Funding Lines Category Category Each category below is applied to each Funding Each funding line has all 4 categories Line Type Funding value ( ) A 14-16 Direct funded students Funding value ( ) 16-19 Students (including those with an EHC plan) B Funding value ( ) C 19-24 with an EHC plan) Funding value ( ) 19+ Continuing Students (excludes students with an EHC plan) D Total funding (programme funding only) (A +B + C + D)
Annex D: additional Information Table D 1 (page 25) in ILR funding returns - summary 9 ILR field learner funding and monitoring Source of funding Funding model A 107 25 n/a HNS Code = 1 or <> 1 Type = EHC Code = 1 B 107 25 C 107 25 D 107 25 Total (programme funding only) = A + B +C +D (For C students must also be aged over 19 and under 24 on 31 August 2018)
Annex D: additional Information (slide 1) with reference to the FIS 16-19 funding calculation The 16-19 funding claim report takes into account: 10 the ESFA split funding responsibility between 16 to19 students and adults that the funding responsibility for students aged 19 to 24 with an Education and Health and Care (EHC) plan remain under our 16 to 19 funding arrangements students who started programmes aged 18 in the first year of their programme but are aged 19 or over on the 31 August 2018 (shown as 19+ continuers ) are now funded at all ILR funded institutions under our 16 to 19 funding arrangements
Annex D: additional Information (slide 2) with reference to the FIS 16-19 funding calculation 11 the 16 to 19 funding claim report also takes into account that 19+ continuing students at ILR-funded institutions are funded under the ESFA 16 to 19 funding model the ILR fields used to determine into which part of the 16 to 19 funding claim report the student and their funded cash appear is summarised on slide 9 and in annex D (table D1)
Annex D additional information (slide 3) with reference to FIS funding calculation 12 FIS 16 -19 funding reports - notes: the FIS 16 to 19 funding claim report breaks students down into the full and part time funding bands as shown in the allocation schedule and applies the relevant national rate to each band. In calculating students programme funding out-turn figures the report then uses exactly the same funding factors as those used to calculate the institution funding allocation
Annex D: additional information (slide 4) with reference to FIS funding calculation 13 Advice on running and using FIS reports: we have issued full guidance on the ILR 16 to 19 funding claim report within the FIS 2018 to 2019 report guidance, and information on this will be available during the year from: www.gov.uk/government/collections/individualised-learner- record-ilr
Annex D: additional information (slide 5) (paragraph numbers referenced from annex D) 14 ILR data recording issues 4 To keep the 16 to 19 funding claim report as simple as possible the report principally looks at ILR fields source of funding , funding model , learner funding and monitoring type and learner funding and monitoring code to determine where each student appears on the report. It also has to reference the individual student s date of birth to determine to which category students belong. 5 To be funded on the 16 to 19 funding claim report students must have at least one learning aim coded in the ILR data as set out in table D1.
Annex D: additional information (slide 6) (paragraph numbers referenced from annex D) 15 ILR data recording issues (slide 1 of 2 on paragraph 6): 6 The disadvantage element is not a funding factor. It is an additional amount of funding that is then included within the overall funding allocation. This requires a different method to calculate a funding out-turn that includes the disadvantage element that also adjusts the overall out-turn figure to reflect the difference between the allocation student numbers and actual student numbers recruited during the year. this is explained in more detail on the next slide which has a reduced font size so annex D paragraph C fits on one screen
Annex D: additional information (slide 7) (Annex D paragraph 6) 16 the total block 1 and block 2 funding is calculated as a percentage of the programme funding (less disadvantage and before area cost) this percentage is applied by FIS (at the same standard percentage) to each individual student s programme funding (before adding disadvantage funding or using the area cost factor). The standard disadvantage uplift factor for the institution is shown in FIS tables in the column labelled PrvDisadvPropnHist FIS calculates the outturn including both the programme and disadvantage funding. This total is then further uplifted by the area cost factor to produce the out-turn
Annex D: additional information (slide 8) (paragraph numbers referenced from annex D) 17 Condition of funding reductions in allocations and out-turns 2018 to 2019 7 The cash reduction made to 2018 to 2019 allocations for students who did not meet the condition of funding in 2016 to 2017 is also being applied to institutions funded out-turn in 2018 to 2019. 8 This is so the reduction is applied equally to all institution types in 2018 to 2019. This ensures those institutions that are subject to funding reconciliation are treated equally in respect of the condition of funding as those who are not subject to reconciliation. This deduction will not affect the calculation of lagged funding allocation values for 2019 to 2020.
Annex D: additional information (slide 9) (paragraph numbers referenced from annex D) 18 Provider Data Self Assessment Tool (PDSAT) reports 14 As stated in paragraph 17 institutions are expected to use PDSAT reports to verify their own ILR data during the year. 15 The software is developed and supported by KPMG. Support is via their helpdesk facility is as detailed on the main PDSAT page, where you can also find a PDSAT e-learning guide: www.gov.uk/government/publications/ilr-data-check-that-it- meets-standards-and-quality-requirements the funding impact of how changing ILR data after either institution or funding auditor PDSAT review work is completed is explained in the following slides. The audit evidence needed to support ILR data has similar funding impacts
Annex D: additional information (slide 8) (paragraph numbers referenced from annex D) 19 ILR data recording issues: 11 All LLDD students (those with an EHC plan) aged 19 to 24 on 31 August 2018 and for whom the ESFA has agreed 16 to 19 funding responsibility should be coded in source of funding as 107. 12 All continuing students completing programmes started whilst aged 16 to 19 (flagged in ILR as 19+ continuers ) aged 19 or over must be coded in source of funding as 107. We fund these students through the 16 to 19 funding model.
PDSATs - ILR data adjustments (which funding year is impacted by ILR data changes?) 20 (slide 1) ILR data and funding audit recording issues The ILR data in the current year has 2 different impacts on an institution s funding from us. some affects the current year funding out-turn figure as shown on the FIS funding reports particularly the 16 to 19 funding claim report. It also affects forward allocations some only affects the institutions future funding allocation factors, also known as lagged funding factors
PDSATs - ILR data adjustments (which funding year is impacted by ILR data changes?) 21 (slide 2) Data that impacts on the current year funding out-turn student start and end dates determine whether the student completes the necessary start period to count as a funded student in the year. The qualifying periods are solely calculated from the dates recorded in the ILR against the individual student learning aims planned study hours for the year determine each student s funding band. If the overall total is amended so that the student is moved into a different funding band (see Funding rates and formula table 1) then the funding out-turn figure is changed
PDSATs - ILR data adjustments (which funding year is impacted by ILR data changes?) 22 (slide 3) Data that impacts on the current year funding out-turn All students in all funding bands must have their planned hours amended if they transfer, withdraw or complete their study programme within their initial 6 week period. PDSAT 17E-210 identifies students in the higher bands with short periods of attendance. Students who attend for more than 2 weeks but less than 6 weeks on short study programmes (see Funding rates and formula paragraphs 57 to 60) remain eligible as a funding start but their planned hours are restricted to the period of their actual attendance.
PDSATs - ILR data adjustments (which funding year is impacted by ILR data changes?) 23 (slide 4) Data that impacts on the current year funding out-turn disadvantage funding is generated exactly in accordance with the proportion of study programme funding generated against the allocation (see slides 16 to 17). Any changes to the funding out-turn from data changes outlined on the previous slide will also alter the current year disadvantage funding out-turn the area cost factor is usually the same for calculating both current and future funding allocations. Area cost is explained in document Funding rates and formula in paragraphs 100 to 103 the large programme uplift is generated exactly in accordance with the proportion of study programme funding generated against the allocation (similar to disadvantage funding)
PDSATs - ILR data adjustments (which funding year is impacted by ILR data changes?) 24 (slide 5) Data that impacts only on future lagged funding allocations future programme weighting factor is determined by using each individual student s core learning aim to calculate an overall institution programme weighting factor future retention factor is determined by using each individual student s retention (based on their core aim) in the current year to calculate an overall institution retention factor future disadvantage funding is determined by using all the individual student home post codes and their prior attainment for GCSE English and maths to calculate an overall institution disadvantage funding figure
25 EFA Contract institution (CCPs) reconciliation only The rules with some worked examples
Reconciliation rules and examples The principles of CCP funding adjustment and final reconciliation 26 in-year payments are made on profile as is planned for all ESFA 16 to 19 funding in-year delivery of cash is reviewed during the year and where delivery is outside an agreed tolerance, action is taken to adjust the profile of payments from April for the remainder of the year all funding variances (both in terms of student numbers and cash) are calculated by comparing each whole year delivery (either in-year or at the final return) with the final funding allocation as paid for the year only cash is subject to reconciliation (not student numbers)
27 Tolerance principles and VfM Contract funded institutions (charitable and commercial providers known as CCPs) the ESFA tolerance arrangements for CCPs have been agreed to recognise that minor increases or shortfalls in student recruitment do not result in additional financial costs or savings that are disproportionate to the financial impact from small variances between CCP delivery and allocation figures tolerance arrangements need to meet the requirement to safeguard public funding, especially where it is transferring to the private sector, and obtain as much value for money (VfM) institutions are expected to deliver their full allocation each year
Reconciliation policy for CCPs Contract funded institutions (charitable and commercial providers known as CCPs) (rules detailed in paragraphs 26 34) 28 The following detailed reconciliation rules apply. reconcilliation includes disadvantage funding within overall study programme funding tolerance for both under and over performance is reduced to higher of 1.0% of cash allocations or 5,000 growth is subject to affordability
Reconciliation rules and examples 29 Over-performance - paragraphs 32 - 34 for CCPs who have delivered at least 101% of their programme cash allocation a cash tolerance of 1.0% (but with a minimum value 5,000) of the programme allocation will be used when comparing total programme cash delivered against the total cash programme allocation. The cash delivered above the tolerance of the programme funding allocation (together with any FPF) will be paid as responsive growth subject to a growth cap and affordability the growth cap for contract institutions is normally 30% of the allocation with a minimum value of 100,000 and a maximum value of 1 million
30 Reconciliation rules and examples Underperformance - paragraphs 29 - 31 for CCPs who have not delivered at least 99% of their programme cash allocation a cash tolerance of 1.0% (but with a minimum value 5,000) of the programme allocation will be allowed when comparing total programme cash delivered against the total cash programme allocation in such cases all the cash not delivered below the tolerance of the programme funding allocation will be recovered as clawback the following slides include some examples of reconciliation for contract funding underperformance and over performance
Calculating reconciliation (CCPs) Over performance only 31 Reconciliation calculation (overperformance) Programme out-turn ( ) - Allocation (including TP and FPF) ( ) = Variance ( ) (If performance outside tolerance range do calculation below) - (Tolerance in reverse sign to variance) ( ) = Revised variance ( ) = cash (responsive growth payment*) (* figure above also subject to a growth cap and to affordability)
32 Reconciliation - formula protection funding (FPF) Overperformance only Table 1: FPF examples No FPF FPF + ve 600,000 600,000 1.1 Funding Allocation 0 3,000 1.2 Formula Protection Funding (FPF) 600,000 603,000 1.3 Net Allocation * Funding Allocation (that is being used for over performance reconciliation only) 600,000 603,000 1.4 6,000 6,000 1.5 Tolerance - standard 1.0% Funding Claim (figures from ILR FIS Funding Claim report). 1.6 625,000 625,000 19,000 16,000 1.7 Responsive growth * This slide shows how FPF is used in calculating funding reconciliation for over performance for CCPs only. * All growth payments are subject to affordability and the maximum in-year payment is 50% of the calculated growth value.
Calculating reconciliation (CCPs) Under-performance only 33 Reconciliation calculation (underperformance) Programme outturn ( ) - Allocation ( ) = Variance ( ) (If performance outside tolerance range do calculation below) + (Tolerance in reverse sign to variance) ( ) = Revised variance (at Full Rate) ( ) = clawback (a cash recovery adjustment)
34 Reconciliation - Formula Protection Funding (FPF) Under-performance only Table 1: TP examples No TP TP + ve 600,000 600,000 1.1 Funding Allocation 0 3,000 1.2 Formula Protection Funding (FPF) 600,000 603,000 1.3 Net Allocation * Funding Allocation (that is being used for under performance reconciliation only) 600,000 600,000 1.4 6,000 6,000 1.5 Tolerance - standard 1.0% Funding Claim (figures from ILR FIS Funding Claim report). 1.6 560,000 560,000 - 34,000 - 34,000 1.7 Clawback This slide shows how FPF is used in calculating funding reconciliation for underperformance for CCPs only.
Reconciliation examples A to E in the following slides 35 (slides 34-39) the following slides (34 to 39) give some simple examples of CCP reconciliation for 2018 to 2019 for all growth examples all growth payments are subject to affordability and these examples are based on all growth being affordable but this may not be accurate for the final out-turn examples for CCPs whose ILR R06 funding out-turn is below 60 % of their programme funding allocation will face in-year clawback based on a proportion of their remaining allocation payments from April to July 2019. All final year clawback calculations will be based on final out-turn against final allocations for the year
36 In-year reconciliation example A (all in ,000) In-year out-turn (ILR figure) Allocation Variance Add in-year tolerance (1.0%) In-year adjustment (clawback) 900 1,000 - 100 + 10 - 90 Funding out-turn (final claim) Allocation Variance Add final tolerance (1.0%) Final reconciliation value (clawback) 870 1,000 - 130 + 10 - 120 Final reconciliation cash adjustment - 120 (final) deduct Cash final adjustment (clawback) (in-year clawback) - 90 - 30 * CCPs whose final claims are lower than their in-year funding figure will see no advantage from the final claim calculations from any over statement of their in-year funding.
37 In-year reconciliation example B (all in ,000) In-year out-turn (ILR figure) Allocation Variance Add in-year tolerance (1.0%) In-year adjustment (clawback) 870 1,000 - 130 + 10 - 120 Funding out-turn (final claim) Allocation Variance Add final tolerance (1.0%) Final reconciliation value (clawback) 900 1,000 - 100 + 10 - 90 Final reconciliation cash adjustment - 90 (final) deduct Cash final adjustment (re-pay clawback) (in-year clawback) - 120 + 30 * Any clawback calculated from in-year funding figures that is not then calculated from the final claim figures is refunded to CCPs who have increased their delivery above the in-year figure.
38 In-year reconciliation example C (all in ,000) In-year out-turn (ILR figure) Allocation Variance Add in-year tolerance (1.0%) In-year adjustment (clawback) 900 1,000 - 100 + 10 - 90 Funding out-turn (final claim) Allocation Variance Deduct final growth tolerance (1.0) Final reconciliation value (growth) 1,150 1,000 + 150 - 10 + 140 Final reconciliation cash adjustment + 140 (final) deduct (in-year clawback) - 90 Cash adjustment (growth & re-pay in-year clawback) + 230 * Any clawback calculated from in-year funding figures that is not then calculated from the final claim figures is refunded to CCPs who have increased their delivery above the in-year figure.
39 In-year reconciliation example D (all in ,000) In-year out-turn (ILR figure) Allocation Variance Deduct in-year tolerance (1.0%) In-year adjustment (interim growth) 1,150 1,000 + 150 - 10 + 140 Funding out-turn (final claim) Allocation Variance Deduct final growth tolerance (1.0%) Final reconciliation value (growth) 1,250 1,000 + 250 - 10 + 240 Final reconciliation cash adjustment + 240 (final) deduct (in-year growth) + 140 Cash final adjustment (additional growth) + 100 * Any clawback calculated from in-year funding figures that is not then calculated from the final claim figures is refunded to CCPs who have increased their delivery above the in-year figure.
40 In-year reconciliation example E (all in ,000) In-year out-turn (ILR figure) Allocation Variance Deduct in-year tolerance (1.0%) In-year adjustment (interim growth) 1,150 1,000 + 150 - 10 + 140 Funding out-turn (final claim) Allocation Variance Add final tolerance (1.0%) Final reconciliation value (growth) 900 1,000 - 100 + 10 - 90 Final reconciliation cash adjustment - 90 (final) deduct Cash final adjustment (recover growth and clawback) (in-year growth) + 140 - 230 * No tolerance is available for in-year growth delivery not included in final claim.
41 Adjustments from in-year to final claims (CCPs only) Outturn compared to allocation. Shows the alternatives at Final from In-year position FINAL (payment adjustment to take account of in-year clawback) In-year Interim clawback adjustments Under (below tolerance) Within tolerance Over delivery No final adjustment other than reversal of in-year clawback Reversal of in-year clawback and growth (subject to affordability) Under Clawback Clawback Within tolerance No reconciliation adjustment Growth (subject to affordability) Clawback No final adjustment Clawback No final adjustment other than recovery of interim growth Interim growth (subject to affordability) Growth (subject to affordability) Over delivery Recovery of all interim growth
42 For more information Visit the website to find document publication pages ESFA funding guidance www.gov.uk/guidance/16-to-19-education-funding-guidance ILR funding returns: www.gov.uk/government/publications/advice-individualised- learner-record-ilr-returns Funding regulations www.gov.uk/government/publications/advice-funding- regulations-for-post-16-provision Rates and formula www.gov.uk/government/publications/funding-rates-and- formula
ESFA Funding guidance for young people 2018 to 2019 ILR funding returns 2018 to 2019 Funding regulations are explained in separate presentations - ESFA Young People s Funding Team
