Adult Education (AEB)

AEB – To Spent it or Not? – When 90% Actually means 100%

Financial Health ESFA

I have been reading with interest the significant level of comment on opinion about the ESFA’s or was it the Treasury’s determination that there would be clawback of funding for those spending less than 90% of their allocation within AEB for 2020/21.

Inevitably, there have been significant differences in opinion:

  • Colleges suggesting that the approach was mean and ‘spiteful’
  • Many PTP’s claiming that they had demand significantly more than funds available and they could easily ‘soak it up’ if only the ESFA would act quickly;
  • ESFA in essence blaming the Treasury – inferring that they support the stance of the Colleges; and 
  • Claims that Colleges will go into financial melt-down as a consequence of these claw-backs requiring indeed further financial support from the DFE

We have also seen the emergence of the normal ‘ambulance chasers’ and ‘brokers’ – even though the latter is supposed to be banned looking to allocate surplus funding to providers – some of which even have learners that are already completed and just need funding. 

It is simply breath-taking – all in the context of the ESFA apparently not supporting sub-contracting where there isn’t a strategic rationale underpinning it. 

Having said all that, the ESFA did give the sector more than 5 months notice of it’s decision before the year-end and with an economy quickly recovering and many individuals seeking employment through Kickstart, other schemes or indeed simply want to up-skill. 

It will be interesting to see how many Colleges do actually record underspends at the year end. From what I am hearing, they are sub-contracting it as fast as possible to minimise the impact- indeed who can blame them but it doesn’t make the spending effective. 

Put simply, it comes back to effective account management at the ESFA and the whole process for the allocation of AEB. A system which procures what is the minority of the AEB pot and awards the vast majority to those ‘entitled’ but consistently underspend cannot be right unless of course the Treasury or ESFA budget for a major underspend each year and this is the safest way in which to achieve it.

There are arguments from both side as to whether Colleges should have been more flexible in spending the money through on-line approaches. There is no simple answer to this, clearly some provision cannot be flexed for distance learning but that does not mean you do nothing and expect to keep the funding for in essence doing nothing. Whilst staff have not been furloughed and as such additional financial support has not been obtained, arguing that the AEB could be seen to be in lieu of a furlough payment – many of the staff were not effectively utilised and if PTP’s did flex and develop new approaches, why couldn’t the College part of the sector. 

Lessons need to be learnt – looking forward rather than backwards is a more positive use of energy at the moment and as such encouraging Colleges and PTP’s to work together effectively rather than compete against each other, where much of this provision is delivered and planned locally would represent a much better use of resources. I would urge Colleges to reach out to PTP’s who are involved in AEB provision to work together to deliver effectively solutions to local communities and Combined Authorities to take a more strategic approach to procurement and providers working together. 

What is clear is whilst 2020/21 has been unprecedented in terms of the challenges facing all providers – underspends of AEB and last minute sub-contracting continues to be the norm. This delivers sub-optimal provision for learners in need of support, poor value for money and a system that is not effective in discharging the AEB budget. 

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