Correspondence

ESFA Update further education: 26 March 2025

Published 26 March 2025

Applies to England

Information: Transfer of Education and Skills Funding Agency (ESFA) functions to the Department for Education (DfE)

ESFA will close on Monday 31 March 2025.

A letter from David Withey, Chief Executive and Accounting Officer of ESFA, to accounting officers has more information.

ESFA Update will be called DfE Update and will still be sent on a Wednesday.

For help with DfE enquiries, complaints and general questions visit the customer help portal.

Information: Updated adult skills fund – funding rates and formula guidance 2024 to 2025

We have updated our adult skills fund – funding rates and formula 2024 to 2025 guidance on claiming learning support for learning aims planned to be delivered in less than one month.

If you have any questions after reading our guidance, you can contact us via the customer help portal.

Information: 16 to 19 funding rates and formula 2025 to 2026

We have published the funding rates and formula guidance for 2025 to 2026.

We have updated the funding rates and made some minor updates and additions. You can view the details of all changes in the ‘What’s new?’ section of the guidance.

Information: Provider data self-assessment toolkit updated

We have released an updated version of the 2024 to 2025 provider data self-assessment toolkit (PDSAT).

This phase 2 release for the 2024 to 2025 funding year includes an update to the sampler, enabling users to select audit samples and output a set of audit working papers for the 2024 to 2025 funding year. This release updates the phase 1 release of PDSAT reports for the 2024 to 2025 funding year, published in November 2024.

PDSAT is available to providers of ESFA funded education and training to assist with their routine Individualised Learner Record (ILR) data-checking procedures for their ILR data returns (which we recommend are performed monthly), as well as with preparation for funding assurance reviews.

For further information, you can contact us via the customer help portal.

Information: New college financial framework documents for the financial year 2024 to 2025

DfE has published an updated college accounts direction (CAD) and regularity self-assessment questionnaire. Both documents are intended for further education (FE) colleges, sixth form colleges, and institutions established or designated under the provisions of the Further and Higher Education Act 1992 (‘colleges’). We will publish the Finance Record template for 2024 to 2025 later this year.

We have also published a new framework and guide for external auditors and reporting accountants of colleges. For colleges and their auditors, this is a successor document to the post-16 audit code of practice.

Following reclassification in November 2022, a derogation has been in place which means central government financial reporting requirements are not applicable for FE colleges. This derogation has been extended for the 2025 to 2026 government financial year, while we pilot an alternative to full consolidation of FE colleges into the DfE Group. Therefore, central government financial reporting requirements will not be reflected in the 2025 CAD, Finance Record or College Financial Forecasting Return process.

Information: Good practice guidance for colleges and academy trusts on novel, contentious and repercussive transactions

DfE has published a good practice guide in relation to novel, contentious and repercussive transactions for colleges and academy trusts. The guide supplements the requirements for such transactions set out in the academy trust handbook and the college financial handbook by setting out a number of constructed illustrative examples to allow college and academy leaders to better understand the issues involved.

Information: Publishing the 2025 to 2026 apprenticeship funding rules

DfE will be releasing the 2025 to 2026 apprenticeship funding rules in May 2025. We will not be publishing a draft version in March this year. This approach will allow us to incorporate the latest policy developments (see list below) before publication. From March to May, we will engage with The Association of Employment and Learning Providers, Association of Colleges, and expert providers to ensure the rules are clear.

Key changes  for 2025 to 2026 focus on operational updates, such as finalising Foundation Apprenticeships and off-the-job policy. The funding rules will include:

• active learning policy – supporting flexible delivery models and learner engagement
• prisoner apprenticeships – clarifying processes and eligibility to expand apprenticeship access
• end-point assessment – implementing modifications following announcements made during National Apprenticeship Week
• eligibility criteria – updating guidelines to ensure greater clarity and consistency
• English and maths – providing further guidance on requirements to support all apprentices

These rules apply to main providers, employer-providers and employers of apprentices in England. Apprenticeships starting after 1 August 2025 will follow these rules.

For the most up-to-date information, you can refer to the apprenticeship funding rules.