Adult Education Budget funding changes factsheet

The Department of Education (DfE) has made 2 policy changes about expanding learner entitlement to Adult Education Budget (AEB) grant funding.

This may mean that certain learners can get AEB funding for a level 3 qualification, rather than an Advanced Learner Loan.

These changes are in addition to the legal entitlement of learners aged 19 to 23 to be funded by AEB for their first level 2 and level 3 qualification, which has been existing policy for a number of years.

1. High value courses for school and college leavers: a one-year offer for 18 and 19-year-olds

Additional funding for specific one-year level 2 and 3 courses, starting from September 2020.

On 8 July 2020 the Chancellor announced exceptional funding as part of the wider COVID-19 skills recovery response. This is to support 18 and 19-year-olds leaving school or college.

The additional funding is to encourage and support delivery of selected level 2 and 3 qualifications. These are in specific subjects and sectors that

enable a more productive economy
support young people to remain engaged with education, employment and training

This is a one-off intervention in response to the COVID-19 pandemic.

The priority is for young people to find

work
work-based training offers, such as apprenticeships or traineeships

Where these are not available locally, you can use this funding to deliver extra classroom-based opportunities. These are meant to prevent young people from becoming 'not in employment, education or training' (NEET).

This is a short-term offer. It will fund young people aged 18 and 19 for an additional programme of study of high value level 2 and 3 qualifications. The programme can last for up to a year from September 2020. It is available for learners who cannot find employment or work-based training.

See the list of the qualifications included in the offer for more information.

Funding arrangements for providers (level 3, 19-year-olds)

Funding will be routed through Mayoral Combined Authorities and the Greater London Authority for residents in those areas of England.

For residents in all other areas of England, funding will be routed through the Adult Education Budget. It will be administered by the Education and Skills Funding Agency (ESFA).

You can find more information about high value courses for 18 and 19-year-old school and college leavers on GOV.UK.

2. National Skills Fund level 3 adult offer: 19 to 23 uplift

This is part of the Lifetime Skills Guarantee the Prime Minister announced in September 2020. It is a long-term commitment to remove the age constraints and financial barriers for adults looking for their first level 3 qualification. This will let them access training to enable them to progress.

The government is investing £2.5 billion in the National Skills Fund. This will help adults to train and gain skills to improve their job prospects. It aims to boost the supply of skills that employers need. This will support the immediate economic recovery as well as future skills needs.

The Chancellor announced £375 million for the National Skills Fund at the Spending Review in November 2020. This includes £95 million of additional funding to give adults free access to level 3 qualifications.

Any adult aged 19 and over who wants to achieve their first full level 3 qualification can now access hundreds of AEB funded courses. The qualifications have been chosen to help adults improve their job prospects. They have good wage outcomes and aim to address skills needs in the economy, delivering a wide range of skills in many jobs and sectors.

See the list of the qualifications included in the offer for more information.

Funding arrangements for providers

Funding for the level 3 adult offer will be routed through Mayoral Combined Authorities and the Greater London Authority for residents in those areas of England.

For residents in all other areas of England, funding will be routed through the Adult Education Budget. It will be administered by the Education and Skills Funding Agency (ESFA).

You can find more information about the National Skills Fund and adult level 3 offer on GOV.UK.

Additional information

When new qualifications are added to these offers, they will be eligible for funding for new learners. This will apply to starts from the dates on the revised lists of eligible qualifications. These will be published on GOV.UK.

Qualifications can only be funded once they become eligible for AEB funding. Any delivery before this (where the learner has been funding the qualification by other means, such as an Advanced Learner Loan) is not eligible. You should only claim AEB funding for new starts on these qualifications.

For further information please see ESFA funded Adult Education Budget (AEB): funding and performance management rules 2020 to 2021.

The Mayoral Combined Authorities and the Greater London Authority (MCAs/GLA) are now responsible for commissioning and funding AEB provision for learners resident in their areas. You should contact them directly with any queries about using the funding.

For more information on funding arrangements and allocations please see the 2021 to 2022 Adult Allocations Technical Guidance.

Questions and answers

Q: We have some learners who have taken out a loan for their qualification. That qualification has now become eligible for funding through the AEB budget. Can we claim funding for these qualifications instead of the learners continuing with their loan?

A: The eligibility for new qualifications will not be backdated to the start of the academic year. The learners can continue to fund their qualification by other means. These include their Advanced Learner Loans. You can claim ESFA AEB funding for new starts on these qualifications.

Q: A qualification has been added to the funding eligibility list after a learner begun the course funded with an Advanced Learner Loan. Can we backdate their funding?

A: No. If a course is added to the offer after the learner's start date, you must not claim AEB funding for them.

Q: We have learners with Advanced Learner Loans on courses that were added to the age 18-19 NEET offer after they started. Can or should we move them onto that funding?

A: No. The eligibility dates for new qualifications will not be backdated to the start of the academic year. The learners can continue to fund their qualifications with an Advanced Learner Loan. You can claim ESFA AEB funding for new starts on these qualifications.

Q: We have learners who have started a loan-funded course which is now on the adult level 3 offer list. Should we move to claim AEB funding?

A: No. You should only claim AEB funding for the level 3 adult offer for new starts on eligible qualifications.

Q: We have a learner who has started a loan-funded course. This is due to an error and the course was on the adult level 3 offer published list when they started. Should we claim AEB funding?

A: Yes, you may be able to claim AEB funding for the level 3 adult offer. You should submit a change of circumstance on the Advanced Learner Loan application to change the fee to zero. The application should remain approved rather than being withdrawn. Keep in mind that we will check that there are sufficient future payments for the loan to be clawed back from. If not, we may make alternative arrangements with you, such as an invoice request.

Q: What are our options for using our devolved AEB budget allocation to fund learners who are currently funded with a loan?

A: You must discuss the use of your devolved AEB with the relevant Mayoral Combined Authority or the Greater London Authority directly.

Education and Skills Funding Agency (ESFA) contacts

If you want to discuss any elements of your ESFA funding, please contact your ESFA Territorial Team Lead.

You can also submit an enquiry using the ESFA Enquiry Form. This will send your questions to the relevant area in ESFA.