The recent funding boost has done little to reverse funding cuts to post-16 education, leaving colleges and sixth forms requiring an extra £570 million in funding if the sector is to avoid a drop in per-student funds, new research from the Institute for Fiscal Studies (IFS) has shown.

The data, published today by the IFS and funded by the Nuffield Foundation, shows that inflation, combined with an expected six per cent rise in student numbers, will take up most of the recent funding boost for the sector and that significant extra investment will also be needed in 2022 if a drop in funding per learner is to be avoided.

The IFS estimates that £570 million will be required but says that amount will increase if there is a further rise in the rate of participation, which the institute says is likely, given the further rise in GCSE scores in 2021.

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According to the IFS, the share of 16- and 17-year-olds in full-time education rose to a historical high of 85 per cent in 2020, while the number of 16- and 17-year-olds studying A levels or equivalent level 3 qualifications rose. At the same time, the number doing apprenticeships fell by 30 per cent - or 15,000 - between 2019 and 2020.

The share of 16- and 17-year-olds in apprenticeships fell to a historic low of 3 per cent in 2020, with a 30 per cent fall in numbers in 2020 alone, according to today’s IFS briefing note.

This, the institute says, reflects the effects of the pandemic and a gradual reduction in take-up over the long run.

Any further falls in spending per student could create immense resource challenges for colleges and sixth forms, given that they have faced the biggest cuts of any education sector over the past decade, the IFS says. The government allocated an extra £400 million to colleges and sixth forms in the 2020-21 financial year.

Imran Tahir, research economist at the IFS and co-author, said: “Despite extra funding in 2020, colleges and sixth forms face immense resource challenges. The additional funding in 2020 only takes funding back to 2018 levels, leaving in place the vast majority of the cuts to funding per student over the previous decade.

“These institutions now also face a plethora of additional challenges created by fast rises in student numbers and the need to help pupils catch up on lost learning. The government will need to allocate at least an extra £570 million in funding for the 2022-23 academic year, as compared with 2020-21, just to keep per-pupil spending at existing levels.”

Qualifications landscape

Commenting on the report, Cheryl Lloyd, education programme head at the Nuffield Foundation, said: “Apprenticeships are an important part of the qualification landscape, providing young people with the opportunity to learn new skills in a paid job while studying. While more young people are now continuing in education and training after the age of 16, there has been a substantial fall in those taking apprenticeships.

“Without further action, some of this decline could become permanent. To reverse this trend, more support is needed for students, education providers and businesses. The wider funding system should be designed to incentivise and support apprenticeship opportunities with, for example, protected funding for 16- to 18-year-olds and additional support for disadvantaged learners.”

David Hughes, chief executive of the Association of Colleges, added: “The lagged funding methodology makes it increasingly difficult for colleges to cater to every student during times of population growth and even more so when there are also reduced opportunities in the labour market and on apprenticeships.

“There is an urgent need for the Department for Education (DfE) to guarantee full funding for every student recruited by schools and colleges this autumn, much the same way it does for universities, as well as seek a commitment in the spending review to a longer-term revenue and capital budget that anticipates demographic trends.”

James Kewin, deputy chief executive of the Sixth Form Colleges Association, said: “Today’s report provides further evidence that sixth-form education should be a priority area for investment in the forthcoming spending review. After a decade of funding cuts and cost increases, sixth forms and colleges are now also dealing with a surge in demand for places while providing catch-up support to students following the pandemic. The government cannot continue to fund sixth-form education on the cheap.

“The spending review provides the ideal opportunity to move away from the current model of inadequate, single-year funding settlements to a multi-year funding model, where sixth forms have the resources to provide every student with the high-quality education and support they need.”

BTECs remain popular

Geoff Barton, general secretary of the Association of School and College Leaders, said: “There is no rhyme or reason why the funding rate for 16- and 17-year-olds is less than the minimum funding rate for secondary school pupils and nowhere near university tuition fees. All of this before the far-reaching impacts of the pandemic are factored in, with a profound need to catch up on lost learning.

“We note that the IFS report shows BTECs remain very popular with students. Bizarrely, the government wants to do away with these qualifications, which provide a trusted and valued way into higher education, apprenticeships and future careers for many disadvantaged students. The government simply must provide a better deal for young people in post-16 education.”

A DfE spokesperson said: “Further education is playing a vital role in delivering the skills young people need to get ahead. So we can meet the needs of all 16- to 19-year-olds, we’ve announced an extra £291 million for 2021-22, in addition to the £400 million increase in 2020-21.

“This commitment has contributed to the current record high proportion of 16- to 18-year-olds who are participating in education or apprenticeships since consistent records began. Funding for future years beyond 2021-22, including anticipated increases in the 16-19 population, will be considered as part of the upcoming Spending Review.

“To help employers to create more apprenticeship opportunities, we’re also offering businesses £3,000 for each new apprentice they take on until the end of September.”