Guidance

Adult education budget devolution operational guidance

This guide provides an overview of the adult education budget (AEB) devolution operational guidance.

From:
Education and Skills Funding Agency
Published
28 October 2020

This guidance was withdrawn on

This page has been withdrawn because it is no longer current. You can read the new operational guidance at adult education budget devolution.

Applies to England

Introduction

Information detailing the local authorities delivering devolved adult education budget (AEB) is available on the AEB Devolution Guide.

Further information covering the background to the devolution of the adult education budget is available on the devolution background guidance page.

The adult education budget

Details confirming how the AEB is apportioned between the ESFA and MCA/GLA can be found in the AEB 2019 to 2020 residency funding calculations video, below.

2019 residency funding calculations

The ESFA will continue to be responsible for:

  • funding learners in England that are resident outside of the devolved areas
  • funding for continuing learners both inside and outside devolved areas (learners that were in learning in 2018 to 2019 and will not complete their programmes by 31 July 2019) – for one year only
  • 19 to 24 traineeships, which will remain a national programme, with funding provided by ESFA irrespective of where the learner resides in England.
  • learners resident in England, attending providers who meet the following specified criteria and will be funded nationally in 2019 to 2020 and 2020 to 2021:
  • qualify for a financial residential uplift for their learning provision; and
  • receive more than two thirds of their income from the adult education budget; and
  • target their provision predominantly at those most disadvantaged in society

The providers which currently meet these criteria are:

  • Fircroft College, Birmingham,
  • Richmond and Hillcroft Adult and Community College London (Specific arrangement in place with the Greater London Authority)
  • Northern College, Barnsley, and
  • Ruskin College, Oxfordshire

Allocations to these providers were made nationally by the ESFA in March 2019. These providers can use this funding to deliver provision to eligible learners resident anywhere in England.

Devolved authorities are also able to have funding relationships in place with the above providers during the 2-year transitional period in addition to those provided by the ESFA.

A map of the mayoral combined authorities

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A map of the mayoral combined authorities (Greater London is not a ‘combined authority’ but is included here for completeness).

The following guidance remains in place for ESFA funded AEB:

Devolution of the AEB

The Department for Education (DfE) has published statutory guidance which provides clarity for the MCA in the exercise of their adult education functions and the associated budget.

The apportioned devolved AEB has been transferred by the DfE to the MCAs/GLA and grant letters setting out the details of the payments made under a Section 31 non ring-fenced transfer (Local Government Act 2003) to the MCAs have been published. The grant to the Mayor of London was transferred under section 39A of the Greater London Authority Act 1999.

The National Local Growth Assurance Framework provides guidance to MCAs to support the development of their own assurance frameworks, governing the appropriate use of public money, including their devolved AEB.

We agreed Memoranda of Understanding (MoU) between DfE, MCAs and the Mayor of London for the devolution of adult education functions, setting out agreed ways of working between the organisations.

Further advice for providers

To support the implementation of AEB devolution we have put in place a number of working arrangements with the MCAs/GLA. These arrangements are summarised below.

Devolved authorities will decide, from the 2019 to 2020 academic year, which providers they have a funding relationship with to deliver AEB provision (excluding 19 to 24 traineeships) for learners resident in their respective areas.

Providers who wish to deliver to learners who are resident in areas where the AEB is devolved will need to discuss funding arrangements with the relevant authority, because the funding to support these learners has been devolved to the authorities.

All providers are reminded that it is their responsibility to ensure appropriate funding agreements are in place with the relevant funding body (ESFA or devolved authorities) in 2019 to 2020 for learners they claim AEB funding for and providers must make sure that an individual is eligible before claiming funding for them. Providers can check which funding body will be responsible for funding the learner using the devolution postcode data set (see below).

Data sharing agreement

A MoU sets out the agreed arrangements between ESFA and the devolved areas (MCAs and GLA).

The MoU is underpinned by a data sharing agreement which ensures the data being shared is consistent, safe and secure. It sets out the specific data ESFA shares with the MCA/GLA and the timetable for its provision and aims to support the development of the MCA/GLA operational processes and strategic planning. The data includes participation and audit and assurance datasets.

Each year we will review, agree and update the data sharing agreement.

Submit learner data post-devolution

Learner data will continue to be gathered from providers in a national data system via the Individualised Learner Record (ILR) and all providers should familiarise themselves with ILR technical documents, guidance and requirements.

We have added some additional fields/codes to the ILR which will allow for the MCA/GLA to apply particular variations from the national ESFA AEB funding model to take account of local flexibilities.

For each devolved area, a subset of the data is split out from this national dataset. This action is managed by referencing a new postcode field in the ILR which records each learner’s residence at the start of their learning, and matching it to the postcodes in each of the devolved areas, or a new field in the earnings adjustment statement (EAS) identifying devolved delivery, thereby determining the funding body responsible for each record.

New source of funding codes for each devolved area have been set up. These are used by providers to indicate where a devolved area is expected to fund provision. On submission, this code is mapped against the learner postcodes to ensure the learner is resident in the area indicated by the chosen code. Where this does not match, the ILR record will be rejected and guidance given to the provider but in exceptional circumstances an agreed override will be used.

For more information about postcodes, including the matching process, how we create postcode files, and a postcode look-up tool to help you determine which funding body is responsible for any given postcode, please refer to the AEB devolution postcode dataset.

We will produce and share with MCAs/GLA a report on the data submitted via the ILR which covers learners in their area. We will also share with providers a report indicating the MCA/GLA responsible for funding learners enrolled by the provider.

A new devolved occupancy report has been created which sets out the income due to each provider based on the ILR data submitted. For providers with learners in a devolved area, this figure may be further adjusted as a result of additional calculations relating to funding rules specific to that devolved area.

To allow for this, some modifications have been made to the ESFA data collection systems to collect specific details. The modifications are:

  • how to use the existing “Other Funding Adjustment” field in the ILR
  • a process for proposing additional records to the Learning Aims Reference Service (LARS) to cover additional qualifications and learning
  • developing the EAS to record additional funding for devolved areas
  • introduction of bespoke devolved area monitoring codes to allow local management of variations from ESFA AEB funding model

Year on year arrangements

Year 1 (2019 to 2020)

Providers will continue to submit data through the ILR and EAS.

Year 2 (2020 to 2021)

If there are no significant changes proposed by the MCA/GLA, providers will continue to submit data through the ILR and EAS with no change.

Year 3 (2021 to 2022)

Arrangements will be reviewed with the MCA/GLA based on any changes they have identified as important to support their local strategies.

Devolution postcode dataset guidance

We have published a file detailing the funding bodies (ESFA/MCA/GLA) responsible for funding each postcode in England and an accompanying guidance document.

Providers can use this data file to support their learner enrolment and completion of the ILR, by assessing which learners will be funded by each funding body based on their postcode at the start of their learning – and ensuring they have an appropriate funding agreement in place.

Providers should ensure that learner postcode information is accurate and up to date at the point of enrolment, as this may affect funding eligibility.

Audit, assurance, fraud and investigations arrangements post-devolution of the AEB

We will continue to remain responsible for providing appropriate assurance in relation to the funding we provide and will continue to deliver our ESFA programme of assurance.

We have agreed with the MCA/GLA to share annual assurance statements on an April to March financial year basis. The funding body (ESFA/MCA/GLA) producing each statement will set out the assurances it has over the providers detailed within the statement. The annual assurance statement will be supported by a code of practice detailing the approach taken by the funding body (ESFA/MCA/GLA) to obtain assurance over the provision the organisation funds.

We have agreed with the MCA/GLA that they can nominate a maximum of three providers where their learners are sampled from within ESFA assurance activity in relation to providers that are funded by both the ESFA and the individual MCA/GLA. These providers may be providers that we were going to audit routinely, or providers specified by the devolved authority.

We will share our random and risk audit activity with the devolved authorities to agree which providers they would like audited. Samples of their learners will then be determined for audit purposes and the audit will be consistent with devolved authorities funding rules.

Where devolved learners are audited, the results of the audit will be shared with the devolved authority and each devolved authority will determine what action they want to take– this may include the recovery of funds. Under Data Sharing Arrangements we will share financial health grades and key financial indicators with devolved authorities, we will only share financial information with the devolved authority once we have informed individual organisations.

If we suspect fraud or financial irregularity or if we receive information and/or allegations specifically about AEB funding which is funded by both us and the devolved authorities, we will share the details with the devolved authority.

Where we are the sole funder, we will not routinely share information with the devolved authority, but we will consider this on a case by case basis.

We have agreed with the devolved authorities that these arrangements will be reciprocal.

Providers should ensure that they remain fully compliant with our funding and performance management rules, conditions of funding and Post 16 Audit Code of Practice.

Providers delivering AEB to residents of devolved authorities must ensure that they comply with the requirements of the appropriate devolved authority.

ESFA’s Approach to Audit Assurance Fraud and Investigations

College and independent training providers oversight

In April 2019 we introduced the national college oversight support and intervention regime. The college oversight regime comprises categories of support and intervention, from prevention through to early and formal intervention and, if necessary, restructure or the exit of a provider from the market.

National guidance on the oversight of Independent Training Providers has also been introduced.

In order to fulfil our oversight functions, we have agreed with the MCA/GLA to share information, on a national and consistent basis, in accordance with appropriate data sharing mechanisms and the Memorandum of Understanding.

When intervention is likely, both ESFA and MCA/GLA, as funding stakeholders, will engage in dialogue, how and when this engagement takes place will vary, subject to the type of provider concerned, what the risks and issues are and the scale of funding interest of the ESFA/MCA/GLA.

ESFA’s approach to college and ITP oversight

Managing AEB enquiries post-devolution

From 1 August 2019, the ESFA will remain responsible for handling enquiries and complaints from providers, other stakeholders and learners in respect of ESFA funded AEB.

The MCA/GLA will be responsible for responding to enquiries and complaints in respect of devolved AEB and the administration of the devolved AEB.

Responsibilities for devolved authorities

In line with the legislative orders, delegation agreement and statutory guidance, the devolved authorities must:

  • adopt learner eligibility rules for awards by an institution to which it makes grants loans or other payments in accordance with any direction given by the Secretary of State
  • have regard to guidance issued by the Secretary of State
  • must ensure access and funding for the statutory entitlements for their residents

The devolved authorities will be responsible for commissioning and contracting AEB provision in their local areas. They will:

  • manage and be accountable for the budget transferred to them
  • allocate the funds transferred to them determining their own procurement requirements (and compliance with the appropriate legal regulations)
  • have the freedom to set their own priorities (strategic skills plans)
  • determine their own funding and performance management rules
  • set their own contracting and conditions of funding arrangements
  • set and put in place their own funding rates and payments arrangements
  • publish their own funding and performance management rules; and
  • manage providers with whom they have a contract/funding agreement

Providers who wish to deliver to learners who are resident in areas where the AEB is devolved will need to discuss funding arrangements with the relevant authority, because the funding to support these learners has been devolved to the authorities.

The following guidance remains in place for ESFA funded AEB:

Updates to this page

Published 28 October 2020

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