#TLevel funding will be different from other 16 to 19 study programmes

This information is for those providers selected to deliver T Levels in academic year 2020 to 2021. It explains how we will fund T Levels.

The scope includes funding for 16 to 19-year old students and students up to age 24 who have an Education, Health and Care Plan.

This information should be read in conjunction with the ESFA 16 to 19 Funding Guidance.

How T Level funding will be different from the way we fund other 16 to 19 study programmes

We are building on the existing arrangements in order to distribute T Level funding for 16 to 19-year-olds, rather than design a new separate system. This means adjusting the current funding system so that it funds T Levels as well as existing 16 to 19 study programmes. There are a number of differences and additional elements that T Level students will attract, or where the rate for an existing element is higher for T Levels. We have introduced:

• four new funding bands – because T Levels will be larger than standard study programmes and will be of different sizes
• funding based on the hours over 2 years – because T Levels will be 2-year programmes
• consistent funding for 18-year olds – because T Levels have fixed hours
• Industry Placements funding at a flat rate of £550 – with half paid in the first year and half in the second
• a single payment of £750 per subject per student, paid in the first year for students without Level 2 in maths and / or English – who will need to continue studying these subjects as part of their T Level, in order to achieve the exit requirement
• additional disadvantage funding to reflect the additional hours and demands of T Levels

As each T Level carries an English and maths exit requirement, we will not apply the maths and English Condition of Funding.

Background

As set out in the government response to the T Level funding consultation published in June 2019 and supported by the majority of the respondents, we plan to build on the existing arrangements in order to distribute T Level funding for 16 to 19-year olds, rather than design a new separate funding system, so that we can maintain a simple, fair, efficient and transparent funding system.

This will mean adjusting the current funding system so that it funds T Levels alongside existing 16 to 19 study programmes.

Funding formula for T Level funding

The diagram below shows the national funding formula for 16 to 19 funding, adjusted for T Levels. Each element of funding for T Levels that is either additional to study programmes, or where the rate or operation is different is detailed below.

Student numbers

As T Levels are new there is no historical delivery to determine how many students to fund for T Levels for the 2020 to 2021 academic year allocations. We do not want funding to be a barrier to the introduction of T Levels. Therefore, in the early years we will be basing T Level student numbers on a planned figure agreed with providers. For 2020 to 2021 academic year we are using the T Level student numbers submitted by providers in May 2019. Where necessary, as outlined in the section below for under/over delivery we will update this figure in autumn 2020.

T Level students will, in the main, be students who would otherwise have taken existing courses. Therefore, the funding of planned T Level student numbers will not affect a provider’s overall allocation of student numbers – only the bands in which they will be funded. The overall lagged student numbers approach as calculated for any other academic year will apply for 2020 to 2021 and will still be used as the basis for the allocation.

Only students enrolled with a recognised T Level provider can attract additional T Level funding.

Funding bands

Because T Levels will include more teaching hours and be more prescriptive in their content than study programmes, we are adding 4 larger funding bands to the existing 5 bands. T Level students will be allocated to the appropriate funding band. Table 1 illustrates the average and minimum planned hours for each of the bands.

Table 1 average and minimum hours for each band

For 2020 to 2021 the first 3 T Levels will be funded in the medium band, band 7. In calculating the allocation, students funded in the T Level bands will replace students in the current full-time band (band 5). This ensures only the difference between the funding for a full-time student in band 5 and the T Level student in the higher band is funded as T Level funding.

Until lagged student numbers and funding factors are applied to T Level students the current methodology for distributing lagged student numbers across the funding bands will not apply for the additional T Level students. Each T Level student will be placed in the appropriate band.

For example, if a provider has lagged students of 1,000 distributed across the current funding bands as shown below, and the ESFA has agreed with the provider delivery of 40 T Levels in 2020 to 2021, the distribution across the funding bands will be as shown in table 2 below:

Table 2 example – distribution of students across funding bands

The retention factor

T Levels will be recorded as a 2-year programme, with retention calculated on an annual basis. When students are on a 2-year programme and they complete the first year, they will be counted as retained in that academic year. We define completing the first year as being in learning on the last working day in June. The same principle applies in the second year.

Transfers

We will use the core aim that the student is recorded on at the end of the academic year, to calculate funding factors and bands for future years. End year data will be used to identify what T Level the student is enrolled on. Where a student transfers from one T Level to another, it will be the latest T Level aim that will count.

Where the transfer is to a study programme, the planned hours recorded for the study programme will inform the distribution to funding bands for a future years’ allocation.

Where a student leaves the T Level during the year to start an Apprenticeship or other programme outside of 16 to 19 study programmes, usual retention principles will apply and the provider would lose 50% of the annual funding rate for that student, as the student will not be classed as having completed their learning aim. The other elements of funding are not affected by retention.

Programme cost weighting

We will continue to use the current programme weightings to recognise that some programmes are more costly to deliver than others. There are 4 programme cost weighting (PCW) factors in the 16 to 19 model.

Table 3: current programme weighting factors

For 2020 to 2021 we will apply the same programme cost weightings as we do to all other study programmes. Full details for the programme cost weightings by Sector Subject Area are included in the Funding guidance for young people 2019 to 2020 – Funding rates and formula document. A review of programme cost weighting is currently being undertaken, this may make a difference to the weightings that apply to delivery from 2021 and/or beyond. The first 3 T Levels being delivered in 2020 to 2021 will have a PCW of 1.2.

T Level funding for students without a level 2 in maths and English

Those students who do not hold a GCSE grade 4 (or above) or a level 2 Functional Skills qualification in maths and/or English when starting their T Level will need to continue studying these subjects as part of their T Level programme and achieve a pass grade in order to meet the minimum exit requirement. For T Level students with SEND who meet the same requirements as for apprenticeships, the requirement will be to achieve an Entry Level 3 in Functional Skills. As this requirement will be built into T Levels, the maths and English condition of funding which applies to other 16 to 19 study programmes will not apply to T Level programmes.

For these students additional funding of £750 per subject per student will be provided to cover maths and / or English needs, to give these students every chance of meeting the minimum exit requirement. This will be a single payment paid in the first year of a T Level. Students who need both maths and English would attract this payment for each subject (such as, £1500 in total).

Where the student has not reached level 2 by the end of their first year and needs to continue study into the second year, no further additional funding will be allocated. This payment will apply to students on T Level programmes only.

As initially we will not know the prior attainment of the students that start on a T Level, when we make the allocation, to avoid the necessity for an additional data collection, we will use existing data to estimate how many students will attract the maths and English funding.

We will estimate the number of payments by calculating the number of full time students with a Level 3 or above technical / vocational core aim, who do not have either GCSE grade 4 to 9 or Functional Skills Level 2, as a proportion of all students with those characteristics, and apply the instances per student to the planned T Level student number agreed with each provider. We will not reconcile this estimate against the actual characteristics of the T Level students enrolled.

In future years’ when prior attainment data is routinely available for T Level students, we will calculate the maths and English instances directly from that data. We will use end year data for the calculation, in accordance with the lagged approach.

The use of maths and English prior attainment data to determine additional funding for the delivery of maths and English classes, is different from the calculation of disadvantage block 2 funding. In the case of disadvantage funding prior attainment at age 16 is used as a proxy to identify students with low or medium level additional learning support needs.

Table 4 example: how instances of maths and English for T Level students will be calculated

Disadvantage funding

The disadvantage factor that we will apply to T Level students works in a similar way as for other 16 to 19 students, with 2 elements:

• block 1: economic deprivation, based on the home postcode of the student
• block 2: prior attainment in GCSE English and maths at age 16

Block 1: economic deprivation

Disadvantage block 1 funding is based on where students live, in order to determine whether disadvantage funding should be allocated and at what level. To do this we look up their home postcode in the Index of Multiple Deprivation (IMD). The IMD is an official government index that tells us how deprived areas are, based on; education, crime, health, employment, and income statistics. We then assign an uplift to those students who live in the 27% most deprived areas of the country. Details for how the factor is calculated is included in 16 to 19 funding guidance.

The calculation of the overall economic deprivation factor is weighted based on individual students and their historic programme size. Because T levels have more hours than students on study programmes for 2020 to 2021 this factor is applied to a higher level of funding which means that the allocation will generate a higher block 1 funding amount.

Block 2: prior attainment

Disadvantage block 2 provides funds to support students with additional needs including moderate learning difficulties and disabilities. As a proxy for identifying these students we use low prior attainment in maths and English.

Low prior attainment is defined as not achieving English and/or maths GCSEs at grades A* to C or grades 9 to 4 by the end of year 11 (typically age 16).

Each instance of a student not having achieved a maths or English GCSE at grade C/4 or above is counted. This means that a student who does not have this grade in both GCSEs will be counted twice for the block 2 uplift. We will calculate block 2 funding for T Levels as part of the overall block 2 calculation for the institution. We will therefore multiply the T Level student number by the institution’s overall instance per student figure to determine the disadvantage block 2 funding for T Level students, in the same way as we do for full- or part-time study programme students.

The funding rate for block 2 disadvantage for T Level students will be £650, which is higher than for other study programmes in recognition that this is a large demanding programme and additional support will be needed for students with special educational needs and disabilities, including when they are on an industry placement.

Table 5 example: how the number of instances of disadvantage block 2 will be calculated for T Level students

Each instance will be funded at £650, so a T Level student, without both maths and English by the end of year 11, would attract £1300.

Large Programme Uplift

T Levels will be demanding programmes, however there could be a small number of students that will want to take an A level alongside their T Level. We will provide funding for high attaining students who may want to take an A Level alongside their T Level through the Large Programme Uplift.

As the large programme uplift is funded on a 3-year lagged basis, for 2020 to 2021 academic year it is calculated using historical data for attainment from 2017 to 2018 academic year. This data is used to identify the number of students eligible for the large programme uplift. This means students on a T Level in 2020 to 2021 that qualify for the LPU will attract additional funding in 2024 to 2025.

Advanced maths premium

We are supportive of high attaining students who want to take core maths or maths A level alongside their T Level. The advanced maths premium announced in 2017, will mean there is funding for this where providers are expanding the number of students taking level 3 maths, including T Level students.

Funding industry placements within T Levels

Industry Placements are a compulsory element of the T Level. Placements are to be delivered in line with the published standards and principles. We will fund Industry Placements at £275 per student for each of the 2-years of the T Level. Payments will be allocated for the T Level student numbers agreed with providers.

Where a provider also has an allocation of the Industry Placement Capacity and Delivery Fund (CDF) a corresponding reduction will be made to the number of students funded through the CDF. For example, a provider with 100 places funded through the CDF and an allocation of 40 T Level students will be allocated placement funding for the 40 T Level students in their mainstream allocation and 60 places through CDF.

Under/over delivery against funded T Level student numbers for 2020 to 2021

Having set the allocation based on planned T Level student numbers, we will then use the first data return of the year (R04/S02) from the Individualised Learner Record (ILR) and the school census, to assess actual enrolments against the T Level numbers that we included in the allocation and make any necessary adjustments to the allocation. We will also check the T Level student numbers recorded in R04/S02 against the final numbers recorded in year-end data (R14/S05).

If providers over recruit on their T Level student numbers: For the first year of T Level delivery, there will be no threshold for growth in T Level student numbers. We will provide the additional T Level funding for all additional T Level students. A revision to the number of students in band 7 and corresponding reduction to band 5 numbers will be made and the allocation re-calculated and re-issued.

Table 6 example: showing the distribution across funding bands where there is recruitment above the planned number of students to T Levels

If providers under recruit on their student numbers: we recognise that providers will have planned and committed expenditure for delivery of the student numbers previously agreed, so there will be an under-delivery tolerance of 40%, of student numbers. For any under delivery up to that level, funding would not be recovered. Where under delivery is above 40% only the funding for students above 40% will be recovered.

For example, if the provider under delivers by 15 of the 40 T Level students we had included in allocations, T Level student numbers would not be reduced as 15 students out of 40 is less than 40%. However, if they under delivered by 20 students, (ie 50%) the number of students above the threshold (4) would be reduced in the T Level bands and the corresponding number of band 5 students will be increased.

This means that those students would revert to being funded as full-time band 5 students. Therefore, the difference in funding between band 7 and band 5 and the additional funding for industry placements, would be removed, other additional funding that is paid for T Level students will also be removed including the additional funding that is only paid for T Level students.

Table 7 example: showing distribution across funding bands for under recruitment below the threshold

Table 8 example: showing distribution across funding bands where there is under recruitment above the threshold

If a provider fails to deliver any T Levels at all: all T Level funding will be removed, and full-time student numbers returned from the higher band to band 5. This will result in all T Level funding being removed from the allocation and any reduction in funds being recovered from future payments, (such as, the provider will return to being funded for 1000 students overall with no additional T Level funding).

Table 9 example: showing the revision to distribution across funding bands where there is no T Level enrolment

We will review the approach for over/under delivery of agreed T Level student numbers for future years.

Exceptional in year growth in overall student numbers

Should recruitment to T Levels result in an overall increase in student numbers (above that used for the 2020 to 2021 allocation) then the normal exceptional in year growth process, which recognises total student enrolments in excess of lagged student numbers, would apply. This process is subject to affordability.

How to record T Levels

We are working on the changes to data collections to enable the correct identification of T Level students in order to make accurate allocations. Once completed we will update this guidance, in spring 2020, prior to first delivery of T Levels in 2020.

Audit and monitoring

T Levels, including their integrated Industry Placement, will be funded as an integral part of the 16 to 19 National Funding Formula and will be subject, on a sample basis to planned routine assurance reviews, alongside other 16 to 19 study programmes. Our assurance review approach will be developed to focus on areas of funding risk and will supplement data validation or analysis work. Further details on the audit and monitoring approach for T Levels will be published nearer the start on the 2020 to 2021 academic year.

Early Adopter Development Fund (EADF)

Additional funding has been allocated to providers delivering T Levels and Transition Programme in 2020 to 2021 and will be paid in 2019 to 2020 academic year. The funding is for one year only, to enable these early providers to support the Department to co-create high quality courses. The activity that is supported by the EADF will be reported through the T Level Implementation plan.

The additional funding for early adoption is:

• £30,000 per T Level, so a provider delivering 1 T Level will be allocated £30,000, and if delivering 3 would be allocated up to £90,000
• £20,000 per provider for delivery of the T Level Transition Programme
• to be paid in 2 amounts, two thirds of the annual amount in October 2019, and one third in May 2020
• £2,500 per T Level to support costs such as producing high-quality materials to recruit young people, all of which will be paid in October 2019.

In return for the EADF for T Levels, providers are required to:

• attend events, webinars and other activities arranged by the Department and engage with the Awarding Organisations in the development of the technical qualifications
• meet with their ESFA field force contact at least once a term to discuss plans for delivery
• complete their implementation plans and return these to the ESFA by the submission dates. The plans should contain detail of the actions that providers are taking across the categories in the plan which demonstrate providers readiness to deliver T Levels. Providers should discuss their plan with their ESFA local contact
• report on the recruitment of students for the first 3 T Levels with predicted student numbers expected set out in the October 2019 implementation plan. The number of students that have applied for T Levels to be reported in the January 2020 plan and the number of the confirmed T Level offers to students in the May 2020 plan. We will expect information and numbers on the staff recruited to deliver T Levels in the May 2020 implementation plans

In return for the EADF for the T Level Transition Programme, providers are required to:

• take part in the preparation year from September 2019 to July 2020 and delivery year from September 2020 to July 2021, exploring different approaches to delivery agreed with The Challenge Network (the delivery support organisation) and the Department
• engage actively in work to support preparation and delivery of the T Level Transition Programme in 2020 to 2021, including participating in peer learning, network events, progress monitoring and developing case studies of best practice
• complete their implementation plans and return these to the ESFA by the submission dates. The plans should contain detail of the actions that providers are taking across the implementation categories in the plans and demonstrate their readiness to deliver the T Level Transition Programme. Providers should discuss their plan with their ESFA local contact
• report on the recruitment of students for the T Level Transition Programme with predicted student numbers expected in the October 2019 implementation plan, updated predicted student numbers in January 2020 and the number of the confirmed T Level Transition Programme offers to students in May 2020

If providers fail to complete all actions above the Department reserves the right not to pay the final 2020 EADF instalment and may seek to recover any EADF already paid.

Planned hours and funding bands

Table 1 above outlines the average and minimum number of hours for each of the 4 T Level bands, bands 6 to 9. The technical qualifications are being developed by the Awarding Organisations with the Institute for Apprenticeship and Technical education. The technical qualification for each T Level will be approved by the Institute prior to first delivery of the T Level. We expect that taking into account any specified additional requirements such as mandatory qualifications required for entry to employment, plus enrichment, employability and pastoral (EEP) hours that the first 3 T Levels will fall into band 7.

We will expect that providers will normally deliver the minimum hours as published for the band that the T Level is allocated to. There may be a small number of exceptional circumstances where it is appropriate for the provider to plan to deliver fewer than the minimum number of hours. This may be where the student has already completed the learning required, for example a level 2 qualification in a related subject. In such cases and where the provider considers sufficient prior learning has taken place and studying the full content of the T Level is unnecessary a lower number of planned hours should be recorded, and the funding rate for the appropriate lower band will apply. All the other elements of the T Level that would result in extra funding will still apply and therefore must be recorded correctly.

This approach will apply whether the planned hours recorded fall into a T Level band or bands 1 to 5. We will monitor the recording of planned hours per T Level student at provider level to establish whether a significant proportion of T Level students have planned hours lower than the published minimum. The example below shows a student on a band 7 T Level, where the provider has only recorded enough planned hours to be funded in band 6.

Table 10 example: showing the funding rate to be paid where planned hours recorded by the provider are below the minimum planned hours for the specified T Level

Students that start their T Level part way through the year

We anticipate that students will commence a T Level at the beginning of the academic year. There may however be students who have sufficient prior learning that the provider considers it is in the best interest of the student to join a group rather than wait until the next year. In these instances, the total planned hours for the length of the T Level should be recorded, and we will calculate the level of funding that will apply to those planned hours. This funding will then be spread over the length of the T Level programme in a similar way that applies to part year study programmes.

There may be instances where a provider starts the T Level for a complete cohort outside the beginning of the academic year. In this circumstance the start and anticipated end date will indicate the duration of the T Level as 2-years and the T Level funding will be calculated taking this into account.

Funding for T Level Transition Programme

Delivery of the Transition Programme is expected to be through the standard study programme funding system and rates as set out in the T Level Consultation (November 2018) and the Government response (June 2019).