Don’t Let the AEB 90% Funding Threshold Catch You 0ut!

The recent announcement that the Adult Funding Threshold was being returned to its pre-Covid level of 90% has given rise to much publicity and has attracted a fair amount of justifiable criticism from many colleges in the FE Sector. This was the threshold we knew in normal times.

Could anyone claim that the times we are currently in are once again “normal”? I think not!

Ah well, Covid has been expensive for the Government and has to be paid for, we all appreciate that and as usual the FE Sector is a good and easy target.

We have spent the last twenty years at MCA visiting colleges around the country helping them to improve their financial performance. One area that has attracted much of our attention over the whole of that time has been Adult Education Funding and concern from colleges that their actual performance would fall short of their funding targets, leading to clawback of funds. Typically, when we have asked colleges what actions they were planning to take in order to overcome this, the most common response was the use of subcontract providers who could not only deliver the requisite amount of funding income but could also “find” the learners.

Over the years this Adult Education Funding Support (ALS) solution has been sought by numerous colleges. Whilst it certainly can help to ease the pressure on funding targets, it is an exceptionally expensive way to do this, with typically 80% of the income the college is attempting to keep being paid over to the subcontractor. There is also the hidden internal cost of administration, not to mention the risk of dealing with such third parties especially the risk to quality. Often this action is needed very late in the year, according to a tight timescale that does not lend itself to the most comprehensive checks.

In our opinion, there is a better first step, which is cost-free. Before this expensive, high risk action is taken, any college would be well-advised to examine more closely its own Additional Learning Support claim. Given the challenges which many Colleges will be facing in reaching the Adult Education Funding threshold following the recent change in the Threshold, it is particularly important that they ensure that they are recording and claiming all the Learning Support provided to adults, which can help meet the AEB target.

Over the years many institutions have gained from our advice in helping them to understand what does actually constitute learning support. The costs attached to it and the evidence needed to make a complete claim. It is surprising how much is regularly understated in claims or completely omitted.

Have you recently asked yourselves the following questions?

• What can we claim as ALS?
• How much learning support funding are we claiming for adults and apprentices – does this claim feel correct?
• Are we able to records learning support costs on the Earning Adjustment Statement in a timely and accurate manner?
• Are we claiming all our appropriate costs and are these costings up to date?
• Are our initial assessments effectively identifying all those adults and apprentices who require ALS?
• Do we have robust processes and procedures in place to provide effective learning support?
• Are we receiving the correct placement and top up funding for our High Needs students?
• Where are we in discussions with our local authorities about the new flexibilities around placement funding?
• Do our records support our ALS claim and satisfy audit requirements?
• Do we have an agreed and well understood strategic direction which ensures effective additional learning support for all our students and apprentices?

We have supported several colleges recently in developing claims around Adult Learners, Apprentices and High Needs students. This has resulted in a significant easing of funding problems, by looking at support which had previously been understated or overlooked.

It is important to recognise that narrowing the gap between actual activity and target need not give rise to extra expenditure; especially not when such action would result in the sacrifice of 80% of the very income you are trying to retain. Instead, we would recommend as a first step, a review of ALS records for support already delivered.

Why not give it a try? We think you will find it will work!

Malcolm Cooper, MD, MCA Cooper Associates