* 13 per cent cash boost needed to put colleges on a par with school sixth forms
* AoC chief slams gap that 'short-changes' 700,000 college students each year
Ministers have been presented with what amounts to a pound;200 million invoice - to cover the cost of reducing the funding gap between colleges and schools.
A report by the Learning and Skills Development Agency (LSDA), published yesterday, says colleges would need increased funding of around 13 per cent for the tuition of their 16 to 18 year-olds if they are to be on a par with school sixth forms.
Further and higher education minister Bill Rammell told FE Focus: "We must be clear that continuing progress on narrowing the gap will not be easy, and will depend on the resources available.
"However, we intend to explore the scope for addressing the technical anomalies between the school sixth form and further education funding systems. We aim to announce decisions on the way forward in the autumn."
The report was completed in mid-March. The Learning and Skills Council, which had intended to publish on July 29, says it made the last-minute decision to release it this week in response to "strong interest" in the document.
The report, compiled for the skills council by the LSDA, shows how different funding arrangements and poor data-collection have meant school sixth-forms get the lion's share of cash per student.
John Brennan, chief executive of the Association of Colleges, had joined the lecturers' union, Natfhe, and MPs in criticising the LSC for failing to publish the report earlier.
He said: "Perpetuation of this gap short-changes more than 700,000 young people who study at colleges every year, especially those from poorer backgrounds.
"The AoC believes it imperative that the Government and the LSC now set a clear timetable to close the gap, and remedy this long-standing injustice."
The LSC told FE Focus it is determined to reform the funding system so all providers - including colleges and school sixth forms - come under a common set of rules.
It said decisions about whether this means more cash for colleges are for ministers to take. But the report, which the LSC helped to compile, states that it is "generally agreed" that "learners in equivalent circumstances should receive equivalent treatment".
The gap is blamed on several factors that amount to a softer funding regime in schools than in colleges. The report shows that, despite the Government's policy of increasing the number of teenagers who stay in education at 16, the rewards for recruitment in this age group vary between schools, which are guaranteed to get extra cash for better-than-expected recruitment, and colleges, which must demonstrate that they have incurred extra costs and that they are unable to cover them internally.
This factor alone, says the LSDA report, leaves schools 2.98 per cent better-off than colleges.
Colleges also lose 3.6 per cent more money than schools if students drop out because the number of early leavers is checked three times a year, compared with once in schools.
The LSDA report questioned the logic of penalties for drop-outs, describing them as "one of the most contentious areas of the funding system".
It said: "The specific rationale for penalising non-retention is unclear, though the possible justifications are well-rehearsed.
"One argument is that, if a student leaves, there is a failure to achieve, but this, in a sense, is covered by the separate achievement factor in the funding formula."
The report adds that it is "questionable" whether the departure of the single student from a course leads to a cost-saving.
Money for "disadvantaged" students also flows more readily into school sixth forms than colleges, the report says. Schools label their teenagers as disadvantaged if they qualify for free school meals, but colleges make judgements based on socio-economic data about the student's home postcode area.
The LSDA says this discrepancy contributes 1.07 per cent to the gap, and says schools would get even more money if they had to cope with the same cross-section of teenagers as colleges.
A further disparity is caused by a lack of data about school sixth-formers.
In principle, under LSC rules only partial funding is available for students who take extra qualifications beyond an allowance of five AS-levels (or equivalent). In colleges, individual student records reveal whether they are studying for the extra qualifications. If so, the reduced level of funding is applied.
But no such records exist in the case of schools, so the number of qualifications taken by each student is worked out as an average - based on the number of qualifications that are being studied and the number of sixth-formers in the school.
The average is rarely more than five qualifications per student, so schools are much less likely to lose funding - even if some students are studying for six or seven AS-levels.
The result is that colleges lose 0.08 per cent more money than they would if they were assessed in the same way as schools.
The report concludes: "Had the FE sector been funded on the same basis as school sixth forms, it would have received 13-14 per cent more funding for 16 to 18-year-olds than it actually did."