New national funding system is expected to close the 10 per cent funding gap with schools
A cash bonanza is expected for colleges under plans that would see a common funding regime introduced for teenagers in schools or further education.
The Learning and Skills Council will be scrapped in 2010 when local authorities take direct responsibility for funding of 16-18 education under plans unveiled by ministers this week. For post-19, a new quango - the Skills Funding Agency (SFA) - will channel funds from the Department for Innovation, Universities and Skills.
The estimated 10 per cent funding gap between schools and colleges has been a bone of contention for years and has been cited as a key reason for lower pay in FE.
The extra money for schools includes 3 per cent more per student - about pound;60 million nationally.
It is also expected the Government will iron out a further discrepancy - the special allowances enjoyed by schools, which include the Teachers' Pay Grant and VAT exemption. They are believed to be worth more than pound;120 million.
In the new set-up, announced with the Department for Children, Schools and Families, 16-18 funding per student will be fixed at one rate regardless of who is providing the education or training.
Ministers have not made it clear whether schools would lose out from equal funding with colleges or if more money would be made available for college funding to catch up.
The news represents a victory in the long-running campaign by the Association of Colleges (AoC) and the University and College Union for a fairer deal for those teaching 16- to 18-year-olds.
Sue Dutton, the acting AoC chief executive, said: "We welcome the positive response that learners are best served by a national funding system, and the level playing field for 14-19, marking the end of the funding gap, which has been a key campaign issue in previous years.
"Colleges support the principle that funding will follow the learner - funding for the same qualification regardless of location and institution."
The Learning and Skills Council, formed in 2001, will see its budget split in two - with pound;4 billion a year going to the SFA and pound;7 billion a year to local education authorities. The latter will form local and regional buying consortia overseen by a new Young People's Learning Agency to commission provision from colleges, schools and private training companies.
In general further education colleges, the SFA will also be able to intervene where there are concerns about quality - even where provision is pre-19.
The new regime could bring other benefits.
Colleges lose points in performance assessment if students drop out of their courses - a factor not counted in schools. It has already been intimated by ministers that this discrepancy will be eliminated in the new regime.
In 2005, Bill Rammell, the minister for further and higher education, promised the funding gap would be reduced by removing what he then referred to as anomalies between the way cash is distributed between schools and colleges. The gap was gauged at 13 per cent in research carried out by the Learning and Skills Development Agency at the time.
While there has been some progress since then, this announcement suggests the problem could be cracked overnight.
The AoC had protested that it was unfair that the same student could expect pound;400 less funding if they chose FE over staying on in sixth form at school.
New quango boss, page 3
Leading article, page 4.