In March, we announced that due to the impact of COVID, we would lower the usual reconciliation rate threshold from 97% to 90% for grant funded adult education budget (AEB) adult skills.

We based this figure on the latest data from providers at the time and the knowledge that many grant funded providers have been able to continue remote delivery successfully during lockdown.

Following the year-end claims submissions, whilst the 90% threshold remains unchanged, we are developing arrangements to allow grant funded providers to apply for support on one or both of the following grounds

  • that local circumstances made it impossible for the provider to deliver at or close to the 90% level and recovery of funds based on the 90% threshold would lead to the provider’s costs of AEB delivery not being covered
  • that applying the full amount of AEB clawback would cause significant financial difficulties for the provider

The evidence supplied in any business case would be assessed against criteria to determine whether support should be provided, and if so, how much. The details of the new arrangements, including how this will operate, are being finalised and we expect to publish these in early September 2021.

These arrangements will be in addition to the existing scheme for supporting providers in financial difficulties.

Eileen Milner, ESFA Chief Executive, said:

Throughout the pandemic I have been amazed at the creativity and passion from colleges striving to ensure their learners receive the best possible quality education whilst in lockdown.

As we move to recovery, we have learnt that grant funded providers continue to deliver successfully both face to face and remotely where needed. However, we recognise that there is a risk that some colleges will face financial difficulty so we will continue to monitor them, offer early support, and intervene when necessary.

As part of the support offer, after extensive talks and listening to the sector, we are developing a process to consider business cases through which providers apply for support. The process will consider whether local circumstances made it impossible for the provider to deliver at or close to the 90% level and whether recovery of funds based on the 90% threshold would lead to the provider’s costs of AEB delivery not being covered. It will then determine how much (if any) help should be provided.

We will continue to fund delivery up to 103% of providers’ ESFA funded AEB grant allocation. We’ve increased the threshold from 110% to 130% for 16 to 18 traineeships (without a 16 to 19 contract) and 19 to 24 traineeships in 2020 to 2021. AEB reconciliation arrangements will return to normal in the 2021 to 2022 academic year, with the usual reconciliation rate of 97% of delivery.

In areas where the AEB has been devolved, Mayoral Combined Authorities or the Greater London Authority are responsible for determining the approach to reconciliation in their areas.

We expect to publish further details on the business case process on GOV.UK in early September 2021.

If you have any questions, please contact your ESFA territorial team or use our online enquiry form.

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    Reconciliation thresholds for ESFA grant funded providers 2020 to 2021

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