Funding

The high needs funding system was introduced in 2013/14, a year prior to the Act. The definition of high needs has a cost threshold and applies to students whose total support costs are more than £6,000 in addition to the basic formula funding (so around £11,000 in total). There is a close but not 100% correlation between those students with plans and those who attract high needs funding.
All students – about 3,000 – in specialist colleges fall into the high needs group.

  • The high needs funding system has the following components:
    Element 1 is the basic funding formula; in GFEs this varies in each college according to the formula, in specialist colleges a national average of £4977 has been used.
  • Element 2 is £6,000 of support
  • Element 3 is additional (top up) funding to pay for further support costs

E1 and E2 are paid directly into colleges by the EFA, each using a different data set to determine numbers; colleges will therefore have different E1 and E2 allocations. These two Elements are called place funding, not linked to individual students.

Updated information on funding is available here:

Recent documents

The Education Funding Agency publishes an operational guide each year which describes how the funding system works. Download the guide for 2016-17 and 2017-18 below.

Negotiating College Funding in the context of the EFA High Needs Formula

The link below leads to a downloadable copy of a report prepared for Natspec by acl consulting. The report makes some suggestions for good practice that Natspec member colleges might adopt when negotiating student placements with local authority commissioners, now that the matrix is no longer in national use.

The main purpose of the report is to set out a systematic approach to programme pricing that should help ensure the fees charged to local authority commissioners by colleges are sufficient to cover their reasonable operating costs, including the significant fixed costs (management and other central staff, premises, utilities, etc.) that do not directly relate to an individual student’s programme. The report builds upon the self-evident recommendation that the sum total of fees a college intends to charge for its students should “balance back” to the college’s intended revenue budget, and shows how this recommendation can be implemented in practice.

It is worth noting that the report does not recommend particular fee levels, or specify funding approaches, such as banding. There is no (implicit or explicit) recommendation that fees may be or should be increased from levels previously set. Instead, the suggestions in the report are a useful check for Natspec colleges that their proposed fees do indeed match their college’s costs, in time to make any adjustments, either increases or decreases, which may be necessary.