The extra pound;439 million committed to 16-19 education in 201011 brought palpable relief to a further education sector that feared a funding double whammy following the pre-Christmas cuts to adult learning.

This additional amount, taking the total spend on 16-19 places to nearly pound;7.5 billion in 201011, amounts to a 6.2 per cent rise, according to last week’s Statement of Priorities and Investment Strategy. The increase contrasts neatly with the 6 per cent cut in funding for post-19 training announced in November’s Skills Investment Strategy.

But as with all government funding there are several strings attached, of which the most obvious is the fact that colleges and school sixth forms will be expected to educate more teenagers with the extra money.

Further education is expected to provide an extra 10,000 16-19 places in 201011, taking the total to 943,000, which is up by more than 1 per cent on this year. The number of apprentices aged 16-19 is to grow by 21,000 to 223,000.

While the strategy says that a system of in-year adjustments will be introduced to moderate funding between providers that under recruit and those that over recruit, many colleges end up taking on students for whom no funding is available.

And while there is new money for more students, the rate of funding for each student is to be frozen at 200910 levels. For FE colleges and other providers this means a base rate of pound;2,920 per student and, assuming inflation at 1 per cent in 2010, it is effectively a 1 per cent cut in funding.

So, a 1 per cent rise in FE numbers, excluding apprentices, is coupled to a likely 1 per cent cut in funding. This in itself is perhaps not devastating - higher education is looking at a 12.7 per cent cut overall and, perhaps, a 5 per cent cut for teaching alone - but it belies the scale of the wider challenges facing FE.

According to the skills strategy, post-19 education is looking at a 6 per cent cut in funding for 201011, including a 3 per cent cut to the pound;1 billion Train to Gain programme.

There is also the sector’s on-going battle to repair and rebuild its crumbling estate following last year’s Building Colleges for the Future debacle. Scores of colleges, some of which put vital maintenance work on hold in the expectation that they would receive money to build new premises, now face a backlog of repairs costing millions of pounds.

Specific 16-19 courses will see their funding cut completely. These are courses that are not approved for automatic state funding and a list of them is to be published soon. The 16-19 strategy estimates that more than 1,000 qualifications will lose funding as a result, causing problems for colleges with large numbers of popular qualifications that fall into this category.

The way that the 16-19 funding cuts impact will be crucial. As Julian Gravatt, assistant chief executive of the Association of Colleges, said: “Given that more than two-thirds of colleges’ 16-19 costs go on pay, the key issue will be the level of pay settlements and also whether there will be any employer pension contribution rise.”

College managers will be relieved that the University and College Union (UCU) voted last week against going on strike over the employers’ 1.5 per cent offer on pay. But given the squeeze in funding for both 16-19 and adult education and training, many employers may argue that even 1.5 per cent is beyond them.

Barry Lovejoy, head of FE at the UCU, said: “Our understanding is that colleges budgeted for an increase in excess of this award. Members demonstrated restraint this year but colleges not meeting their obligation to staff are very likely to encounter further industrial relations problems as a result.”

The overall outlook for FE is, therefore, far from good. But in the face of the coming financial storm, many in the sector will now be hoping that they can escape the worst of it.

WHAT’S INSIDE THE NEW 16-19 FINANCIAL BOX OF TRICKS .

Budget

- pound;8.5 billion (up 5.7 per cent) total investment in 16-19 learning in 201011, including:

- pound;4 billion (up 6.6 per cent) for further education places

- pound;2.4 billion (up 3.2 per cent) for school sixth-form places

- pound;267 million (up 12.7 per cent) for people with learning difficulties or disabilities

- pound;677 million (up 0.9 per cent) for education maintenance allowances and learner support

- pound;270 million (up 26.8 per cent) for capital

Student Numbers

- 1,605,000 (up 42,000 or 2.7 per cent) total learners, including:

- 943,000 (up 10,000 or 1.1 per cent) in FE, of which 237,000 are Foundation Learning

- 223,000 (up 21,000 or 10 per cent) apprenticeships

- 431,000 (up 11,000 or 2.6 per cent) school sixth forms, of which 395,000 are maintained

- 37,000 (up 12,000 or 48 per cent) academy sixth forms including city technology colleges

Student participation targets (201011)

- 83 per cent of 16- to 18-year-olds participating, up from 80 per cent this year, including:

- 97 per cent of 16-year-olds (up from 95 per cent)

- 92 per cent of 17-year-olds (up from 87 per cent)

- 61 per cent of 18-year-olds (up from 59 per cent)

Funding per student

- pound;2,920 base rate per FE student and apprentice

- pound;3,007 per school sixth-form student

The 10 per cent of providers - across general FE colleges, school sixth forms, specialist FE colleges, tertiary colleges, sixth form colleges and independent foundation learning providers - with the highest funding ratios are likely to see their funding reduced. Appeals can be made.

Student Achievement (201011)

- 85 per cent reaching level 2 by age 19 (up from 81 per cent)

- 60 per cent reaching level 3 by age 19 (up from 54 per cent)

Neets

Additional student places will be distributed to regions on the basis of the numbers of young people not in education, employment or training. European Social Fund money will be targeted at Neets and young offenders.

Additional Learner Support (ALS)

Targeted at those with the lowest GCSE points scores in English and maths, plus increased ALS resources. It is allocated by formula - 100 per cent for school sixth forms, 60 per cent for FE colleges and 40 per cent for other providers

Diplomas funding per student

There is a 10 per cent premium in the rate of funding available for 14-19 Diplomas

Entry 2 Employment (E2E)

The budget for the E2E will be merged into a new Foundation Learning budget

Qualification funding

The Learning Aim Database, run by the FE Data Service, will only accept qualifications approved by section 96 of the Learning and Skills Act 2000. Qualifications falling outside this will be rejected for funding, although appeal is still possible. A full list of external courses is due to be published soon by the Learning and Skills Council.

6.2%: Rise in spending on 16-19 participation for 201011.