In-year growth for 2022 to 2023
Information about in-year growth funding for 2022 to 2023.
Applies to England
Subject to affordability, 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. There are 3 strands to the in-year growth exercise:
- exceptional in-year growth for student numbers
- exceptional in-year growth for specialist post-16 institutions (SPIs) and centrally funded exceptions (CFEs)
- free meals in FE and bursary
All references to R04 in this guidance mean the R04 student figure with a 1 November reference date applied.
Exceptional in-year growth for student numbers
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 also does not fund increases in programme size.
This process does not apply to independent learning providers (ILPs) for whom there is a separate reconciliation process.
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 of the in-year growth award.
Each year, we revisit the methodology for awarding growth and the thresholds at which individual institutions become eligible for a growth award. The key considerations of this process are the levels of over-delivery in the sector and affordability. This year, in recognition of the volatility in recruitment during and following the coronavirus (COVID-19) pandemic, we have not made an adjustment to the growth award for under-delivery in the previous year (2021 to 2022). All other elements of the methodology will remain unchanged from 2021 to 2022.
The removal of the adjustment for previous under-delivery is intended for 2022 to 2023 only, and the expectation is that in 2023 to 2024 we will again adjust growth awards for under-delivery in the previous year.
Furthermore, the overall method 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 2022 to 2023 is a 3-step process:
- Calculate over-delivery (in numbers of students)
- From the over-delivery, calculate growth
- Apply the growth award minimum
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 (colleges, local authorities and higher education institutions), over-delivery is the lower of:
- 2022 to 2023 R04 students multiplied by 2021 to 2022 R04:R14 ratio, less the 2022 to 2023 allocated students
- 2022 to 2023 R04 students less the 2021 to 2022 R04 students
For schools and academies submitting the school census:
- 2022 to 2023 autumn census students less the 2022 to 2023 allocated students
Step 2. Growth calculation
There are 2 thresholds, and we fund over-delivery at different marginal rates for the over-delivery above each threshold. The 2 thresholds are:
- lower threshold - 7.5% of the 2022 to 2023 allocated student number, with a minimum of 25 students and a maximum of 100 students
- upper threshold - 15% of the 2022 to 2023 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. We fund the over-delivery between the lower and upper thresholds at 100% of the average funding per student. We fund the over-delivery above the upper threshold at 50% of the average funding per student.
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 – not funded. We do not fund the first 100 students
- over-delivery between the lower and upper thresholds – funded at 100%. The next 100 students are funded in full
- over-delivery above the upper threshold – funded at 50%. This means we fund the 50% of 50 students, i.e. 25 students
Growth funding for this institution would be a total of 125 students.
Step 3. Minimum growth award
If the figure after step 2 is less than 10 students, we do not make a growth award.
Exceptional in-year growth for specialist post-16 institutions (SPIs) and centrally funded exceptions (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 of the in-year growth award.
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” above.
The general principles for calculating of 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:
- 2022 to 2023 R04 students less the 2022 to 2023 allocated students
The thresholds are:
- lower threshold - 7.5% of the 2022 to 2023 allocated student number, with a minimum of 5 students
- upper threshold - 15% of the 2022 to 2023 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 – not funded. This means we would not fund the first 6 students
- over-delivery between the lower and upper thresholds – funded at 100%. This means we would fund 6 students at 100%
- over-delivery above the upper threshold – funded at 50%. This means we would fund 8 students at 50%, i.e. 4 students
Growth funding for this institution would be a total of 10 students.
As above, this year we have not made a deduction for under-delivery in the previous year. 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:
- 2022 to 2023 R04 element 2 students less 2022 to 2023 allocated element 2 students
The threshold used to calculate growth awards depends on the number of element 2 students funded in the 2022 to 2023 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/CFEs with a 2022 to 2023 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.
To illustrate:
An SPI/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 = 2. Therefore, we will provide additional element 2 funding of £48,000 (8 × £6,000).
2. SPIs/CFEs with a 2022 to 2023 allocation of 51 or more high needs students
For SPIs/CFEs with 51 or more students in their 2022 to 2023 allocation, the threshold will either be 10% of their allocation or 10 students, whichever is lower. Over-delivery above this threshold will be funded at £6,000 per place.
To illustrate:
An SPI/CFE has an allocation based on 72 high needs students; therefore, the threshold is 7.2 (as 10% of 72 is lower than 10). They have recorded 90 high needs students in their ILR R04, therefore over-delivery is 18 students. The growth is calculated as 18 minus 7.2 = 10.8, which is rounded to 11 students (as we round to the nearest whole number) × £6,000 = £66,000.
Free meals in further education (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 have:
-
released additional bursary funding outside the main growth process, where analysis of the data suggested that an increased student number could put an institution’s bursary allocation under considerable pressure
-
released 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
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removed the cap on bursary allocations that was introduced in 2020 to 2021 academic year as part of the transitional arrangements for bursary funding. This means that some institutions will receive an increase to their bursary allocation even if they have not seen an increase in student numbers
This applies to all institutions whose calculated amount of bursary allocation was previously capped at the +75% threshold (meaning that their 2022 to 2023 academic year bursary allocation could not be more than 75% higher than their 2019 to 2020 academic year bursary allocation).
Institutions that benefit from the removal of the cap may also receive additional bursary funding over and above the removal of the cap, either through the exceptional in-year growth process or the bursary in-year growth process, as set out above.
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.
Growth calculator
An is available which will allow you to input your institution’s figures and will calculate the potential growth award. There is a separate tab for SPIs and centrally funded exceptions (element 2 only).
Payments
In most cases, growth payments will start to be received from March 2023 and will be profiled across the remainder of the current academic year. This growth funding will not be included in the payment profile smoothing which has resulted from the Office for National Statistics (ONS) reclassification of FE institutions.