An extra £500 million in funding will be needed to support an additional 90,000 coming into the education system by 2024-25, the Association of Colleges has said.

The AoC said that growth would come from the combined impact of population growth, decreasing apprenticeship starts and a tough labour market. Similar growth in university undergraduates will be fully funded whereas the AoC said colleges were supposed to take on the financial costs of meeting extra demand a year ahead of being fully funded for them.

In a report published today and entitled Forecasting 16 to 18 education growth to 2030, the association argues that this formula risks leaving behind the students with the lowest grades, or those with no GSCEs at all, as the number of students in colleges is set to rise by 200,000 by 2030. 

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According to the AoC:

• Incremental increases in the 16- to 18-year-old population (approximately 2 per cent per year) until 2028, combined with shrinking apprentice numbers, a tough labour market and the impact of the way GCSEs were graded during the pandemic will all impact on learner numbers.
• There will be 90,000 more young people in education by 2024-25 and a further 100,000 in the second half of the 2020s.
• The cost of funding additional students in 2024-25 is £500 million.
• The one-year lag funding formula will hit the most disadvantaged and lowest-attaining students the hardest as numbers of 16- to 18-year-olds in colleges rise.

The AoC is calling on the Department for Education to publish student number projections covering 16-, 17- and 18-year-olds annually, and to guarantee that extra 16- to 18-year-olds recruited will be fully funded to ensure colleges can provide the support needed for everyone, no matter their background or circumstance.

The Treasury should provide a longer-term revenue and capital budget for 16-18 education that anticipates demographic trends in the Spending Review, the AoC added.

Chief executive David Hughes said: “The lack of official projection data on student numbers combined with a lagged funding formula will make it increasingly difficult for colleges to cater for every student. The government wants more students to study in colleges but is not providing the funding needed and things will get worse as numbers rise, every year over the next decade. 

“DfE and the Treasury need to provide guaranteed full funding for every student recruited, much the same way they do for universities, to ensure colleges are not left out on a limb and young people get the education they deserve.”

A DfE spokesperson said: “The system of lagged funding, whereby an institution’s funding allocation is based on student numbers from the previous year, is well established and understood because it provides institutions with clear allocations each year, allowing them to make plans with confidence.

“Where institutions see a particularly large increase in student numbers in a year, they typically qualify for exceptional in-year growth funding, in addition to the lagged funding, to help them with the extra costs of these students.”