Guidance

March 2025 update for 16 to 19 funding: in-year growth for 2024 to 2025

Updated 5 March 2025

Applies to England

The Education and Skills Funding Agency (ESFA) closed on 31 March 2025. All activity has moved to the Department for Education (DfE). You should continue to follow this guidance.

In-year growth for 2024 to 2025 (16 to 19 funding)

Each year, we review the early data returns from institutions delivering 16 to 19 education (including up to 24 for those with high needs) and award in-year growth where necessary, subject to affordability.

Changes in March 2025

For academic year 2024 to 2025 we published our expected method for calculating in-year growth awards early. We explained that if the resulting in-year growth funding was exceptionally high, we might need to amend the rules to ensure that the payments are affordable and would provide an update in February 2025.

We will notify all institutions with growth awards by the end of March and start to make payments in May 2025.

Exceptional growth in student numbers

There has been a very large increase in 16 to 19 funded students this year. The growth has also been uneven across institutions. This growth is positive for the many young people who have been able to take up opportunities for 16 to 19 education and represents a strong response by the sector.

However, because of the size and distribution of this growth in student numbers, it does create an unprecedented amount of in- year growth. We will fund all students through the lagged student number methodology in future allocations as normal. However, the current growth is significantly above the budget available for in-year payments, and so we cannot fully fund this growth.

Change to funding methodology

We’re changing our funding methodology for this year’s in-year growth to provide you with the highest possible funding available within our budget.

We will provide approximately two- thirds of the funding expected based on arrangements published in August 2024.

This change applies to the exceptional in-year growth for student numbers only. We are not changing the methodology for:

• high needs in-year growth in special post-16 institutions (SPIs) or centrally funded exceptions (CFEs)
• bursary and free meals in-year growth

We’ve always stated that our method depends on affordability, but we understand that lower payments will  be unexpected. If you have concerns regarding the impact of this change and need to discuss this, please contact your place-based team contact or our customer help centre.

Impact on payments

If you qualified for in-year growth based on the rules from August 2024, you will receive a growth payment at the lower level. We will profile your payments over the academic year, meaning you will receive the majority of the total amount in May and monthly payments for the remaining amount after that.

Exceptional in-year growth for student numbers

There are 3 strands to the in-year growth exercise:

• exceptional in-year growth for student numbers
• exceptional in-year growth for SPI and CFEs
• free meals in further education (FE) and bursary

All references to R04 in this guidance mean the R04 student figure with a 1 November reference date applied. 

The primary way in which we account for increases in student numbers is through lagged funding. In-year growth funding is exceptional and is intended only for those with significant recruitment above their allocation, to provide a contribution to the additional in-year costs. It does not fund increases in programme size.

This process does not apply to independent learning providers (ILPs), which have a separate reconciliation process. It also does not apply to academies on estimates which are subject to the pupil number adjustment. 

This process is entirely data driven; we do not accept business cases for exceptional in-year growth. We make growth awards on the assumption that the in-year data used is materially accurate. If later data returns (usually the R14) show that the in-year data returns are inaccurate, we will recover some or all the in-year growth award. We usually make any recoveries once we have reviewed the final R14 data. However, in exceptional cases, we may make some changes during the year.

We have amended the methodology for calculating 2024 to 2025 in-year growth awards compared to 2023 to 2024, adding 2 further steps.

However, the overall method to be used this year does not set a precedent for the method used or thresholds in place in future years. Each year is assessed independently with thresholds and marginal rates dependent on levels of over-delivery and affordability.

The calculation of growth awards for 2024 to 2025 is a 6-step process:

1. calculate over-delivery in numbers of students

2. from the over-delivery, calculate growth

3. adjust for previous under-delivery

4. apply the growth award minimum

5. apply the affordability factor   of two-thirds

6. round to the nearest whole number

Step 1: over-delivery

The method for calculating student number over-delivery depends on the institution type.

For institutions that submit the individualised learner record (ILR) (colleges, local authorities and higher education institutions), over-delivery is the lower of:

• 2024 to 2025 R04 students multiplied by 2023 to 2024 R04:R14 ratio, less the 2024 to 2025 allocated students
• 2024 to 2025 R04 students less the 2023 to 2024 R04 students

For schools and academies submitting the school census:

• 2024 to 2025 autumn census students less the 2024 to 2025 allocated students

Step 2: growth calculation

There are 2 thresholds, and we will fund over-delivery at different marginal rates for the over-delivery above each threshold. The 2 thresholds are:

• lower threshold – 7.5% of the 2024 to 2025 allocated student number, with a minimum of 25 students and a maximum of 100 students
• upper threshold – 15% of the 2024 to 2025 allocated student number with a minimum of 50 students and a maximum of 200 students

We do not fund over-delivery below the lower threshold because the primary way in which we account for increases in student numbers is through lagged funding. We fund 100% of the over-delivery between the lower and upper thresholds. We fund 50% of the over-delivery above the upper threshold.

Example:

An institution with an allocation of 2,000 students would have a lower threshold of 100 students and an upper threshold of 200 students. If the over-delivery is 250 students, we calculate the growth as follows:

• over-delivery below the lower threshold is not funded, therefore we do not fund the first 100 students
• over-delivery between the lower and upper thresholds is funded at 100%, therefore we fund the next 100 students in full
• we fund 50% of the over-delivery above the upper threshold, therefore we fund 25 of the final 50 students
• this is a total of 125 students

Step 3: previous under-delivery

We then make a deduction for any under-delivery in 2023 to 2024. We deduct half of this figure from the growth award.

• under-delivery in 2023 to 2024 was 10 students
• we deduct half of this figure
• this is a now a total of 120 students

Step 4: minimum growth award

If the figure after step 3 is less than 10 students, we do not make a growth award.

Step 5: apply the affordability factor of two-thirds

Due to affordability, we will pay two-thirds of the growth award. We will multiply the figure after step 4 by two-thirds.

Step 6: rounding

We round your student numbers to the nearest whole number, recalculate your total funding and upload a revised allocation statement for academic year 2024 to 2025 to Document exchange.

We will show this in the student numbers section, exceptional variations to lagged student number line in your allocation statement.

Exceptional in-year growth for SPIs and CFEs 

This process is entirely data driven; we do not accept business cases. We make growth awards on the assumption that the in-year data used is materially accurate. If later data returns (usually the R14) show that the in-year data returns are inaccurate, we will recover some or all the in-year growth award. We usually make any recoveries once we have reviewed the final R14 data. However, in exceptional cases, we may make some changes during the year.

Element 1 growth for SPIs 

This section on element 1 growth applies to SPIs only. CFEs should refer to the ‘exceptional in-year growth for student numbers’ section.

The general principles for calculating programme funding increases under the national 16 to 19 funding formula (element 1 growth) are the same as set out above. However, we calculate over-delivery as:

• 2024 to 2025 R04 students less the 2024 to 2025 allocated students

The thresholds are:

• lower threshold – 7.5% of the 2024 to 2025 allocated student number, with a minimum of 5 students

• upper threshold – 15% of the 2024 to 2025 allocated student number with a minimum of 10 students

Example:

An SPI with an allocation of 80 students would have a lower threshold of 6 students and an upper threshold of 12 students. If the over-delivery is 20 students, we calculate the growth as follows:

• over-delivery below the lower threshold is not funded, therefore we would not fund the first 6 students

• over-delivery between the lower and upper thresholds is funded at 100%, therefore we would fund the next 6 students at 100%

• over-delivery above the upper threshold is funded at 50%, therefore we would fund 8 students at 50% (4 students)

Growth funding for this institution would be a total of 10 students. 

We deduct half of the under-delivery in 2023 to 2024 as outlined above, but there is no minimum growth award for element 1 growth for SPIs.

Element 2 growth for SPIs  and CFEs

We calculate element 2 over delivery as:

• 2024 to 2025 R04 element 2 students less 2024 to 2025 allocated element 2 students

The threshold used to calculate growth awards depends on the number of element 2 students funded in the 2024 to 2025 allocation. If over-delivery exceeds the threshold, we will fund all over-delivery above the threshold at the full annual rate of £6,000 per place. There are no deductions for previous under-delivery.

1. SPIs and CFEs with a 2024 to 2025 allocation of up to and including 50 high needs students

The threshold will be 5% of the allocated element 2 places. We will fund high needs student places above the threshold at £6,000 per place.

Example:

An  SPI or CFE has an allocation of 40 element 2 places, and records 50 in their ILR R04 return (an additional 10 high needs students). The threshold is calculated as 5% of 40 which is 2. Therefore, we will provide additional element 2 funding of £48,000 (8 × £6,000).

2. SPIs and CFEs with a 2024 to 2025 allocation of 51 or more high needs students

For  SPIs or CFEs with 51 or more students in their 2024 to 2025 allocation, the threshold will either be 10% of their allocation or 10 students, whichever is lower. We will fund over-delivery above this threshold at £6,000 per place.

Example:

An SPI or CFE has an allocation based on 72 high needs students; therefore, the threshold is 7.2 (as 10% of 72 is lower than 10). The SPI has recorded 90 high needs students in their ILR R04, therefore over-delivery is 18 students. We calculate the growth as 18 minus 7.2 which is 10.8, rounded to 11 students (as we round to the nearest whole number). Therefore, we provide additional funding of £66,000 (11 x £6,000).

Free meals in FE and bursary in-year growth

Both bursary and free meals in FE allocations are linked to the allocated student number, so an increased student number allocation resulting from the exceptional in-year growth for student numbers process may also result in increased bursary and free meals allocations.

In addition, we will:

• release additional bursary funding outside the main growth process, where analysis of the data suggests that an increased student number could put an institution’s bursary allocation under considerable pressure. Additional bursary funding will be awarded where student over-delivery is expected to be 25 or more above the number already allocated, but will be adjusted for bursary funding resulting from exceptional in-year growth

• release additional free meals in FE funding to ensure that institutions have sufficient funding to support the students they recorded as eligible for, and in receipt of free meals, in their in-year data return. Additional free meals funding will be awarded where there are more students recorded as being eligible for and in receipt of free meals than those already allocated plus any free meals award linked to the exceptional in-year growth

As with all other strands of in-year growth, we make these growth awards on the assumption that the in-year data used is materially accurate. If later data returns (usually the R14) show that the in-year data returns are inaccurate, we will recover some or all of the bursary and/or free meals in FE growth award. We usually make any recoveries once we have reviewed the final R14 data. However, in exceptional cases, we may make some changes during the year.

Growth calculator

We have provided growth calculators to enable providers to get an indication of their potential growth awards.

We developed these calculators based on the rules we published in August 2024. Colleges, other providers submitting the ILR (except SPIs) and school and academies must apply the affordability factor of two-thirds to the final amount produced by the calculator.

Please read the cover page of the calculator before using. There are 4 different calculators depending on the provider type:

• colleges and other providers submitting the ILR (except SPIs)

• schools and academies

• SPIs

• CFEs (for element 2 only)

Growth for 2025 to 2026

We have not yet made a decision on in-year growth for 2025 to 2026. Institutions should not assume that we will continue the 2024 to 2025 rules next year or that early notification of the rules will be possible.