The Skills Funding Agency’s statement on the delay to Loans growth requests has left us all puzzled.
The SFA and sector support organisations (like SDN), have worked hard over the last few years to help providers understand the opportunities available through Loans – but now the SFA is sending out mixed messages.
The positive
- The current budget for Advanced Learner Loans is significant and is set to increase to £480m by 2019-2020. When other FE funding streams are under pressure, this commitment from the SFA provides a significant and safe funding stream for providers.
- The SFA’s recent statement highlighted a 25% growth in learners taking out a Loan, compared with this time last year. This again is positive – the SFA are now starting to see the growth they have sought to stimulate over the last few years.
- Although some disagreed with the process, it was positive news when the SFA decided to offer direct Loan facilities to high quality subcontractors, instead of just barring all subcontractors from delivering Loans provision.
So the budget is significant and is set to increase, we are starting to see growth – but this is where it gets puzzling…
The negative
- Figures obtained by SDN under a Freedom of Information request, showed that during 2015/16 providers on average were using just 37% of their Advanced Learner Loan allocation. That’s a significant amount of funding currently going unused. So why delay growth requests?
- The SFA have also stood on a number of stages over the last twelve months, suggesting they would set up an entry-to-market process for high quality providers to access a Loans facility. As yet there has been little movement to establish this, and recent delays to growth requests suggests this is now unlikely in the short term – leaving a number of high quality subcontractors without a route to offer Loans provision, in response to learner demand.
- It also seems puzzling (and for some frustrating) that the review to the approach to managing Loans facilities is taking place two months into the new academic year during a significantly turbulent time for the sector in terms of funding. This only exacerbates the pressure providers are under, when Loans should be a funding stream providers can rely on based on learner demand.
What the sector needs
1. It’s clear, in the short term providers need consistent information from the SFA – in particular, clear timescales for when growth request outcomes will be published.
2. In the longer term, the process for allocating Loans facilities clearly needs to reviewed. We are in a strange position where over half of the current Loans facilities aren’t being used, and yet relatively small growth requests are being delayed.
Does this suggest that the SFA’s methodology for allocating Loans facilities is flawed – perhaps so.
Some providers have been allocated a Loans facility, but haven’t touched it – whilst a waiting list of high quality providers are keen to deliver Loans provision, but are prohibited from doing so.
3. Providers also need to understand how they can fully utilise their Loans facility. There are significant opportunities available through Loans which many are unaware of. SDN is running a workshop on 3rd Nov in London to help providers understand these opportunities and learn how to maximise their Loans allocation.
The event will be led by Anna Sutton and Karen Kelly, former policy leads for Loans at the SFA.
You can sign up here: https://sdn-loans-workshop-nov16.eventbrite.co.uk
