The government should introduce a new “student premium” to level up funding for disadvantaged 16-19 year olds, new EPI report recommends

A new report by the Education Policy Institute (EPI), supported by Unbound Philanthropy, calls for a 16-19 student premium to tackle the sizeable attainment gap facing disadvantaged 16–19-year-olds.

Building on recent research by EPI which has shown disadvantaged students are 3.2 grades behind their peers by the time they finished 16-19 education, the report makes recommendations to the new government about how a new student premium might work, who would be eligible and the likely costs.

EPI recommends that the student premium should be based on student-level and area-level measures of disadvantage. This would be additional to existing 16-19 funding and would be a fixed, per-student amount received by institutions. Setting the student premium at an initial rate to match the secondary school pupil premium, the policy would cost around £340 million annually and support 28 per cent of 16-19 year old students.

Policy Recommendations

To effectively support disadvantaged students during the 16-19 phase the report proposes:

• The introduction of a student premium for disadvantaged students in 16-19 education, based on eligibility criteria that combine student-level (FSM6) and area-level (IMD) measures of disadvantage;
• That the student premium is initially pegged to the rate of the secondary school premium to help address the cliff-edge in funding for disadvantaged students at age 16 but that this rate is kept under review;
• That the Department for Education develops the 16-19 evidence base on what works and at what cost, and uses this to inform the value of the student premium longer-term;
• The Department should ensure that institutions are automatically able to identify which students are eligible for the student premium and evaluate institutions' use of the shared data system to ensure it is fit-for-purpose;
• 16-19 institutions should be held to account by publishing information on how much student premium funding they receive and how they are using it to support their disadvantaged students; and
• The Department should consider a staggered roll-out of the student premium in order to evaluate its effectiveness.

Emily Hunt, Associate Director for Social Mobility and Vulnerable Learners at the Education Policy Institute, said:

“With the gap between disadvantaged students and their peers at over 3 grades by the end of 16-19 education, urgent action is needed to prevent these young people from falling further behind their peers. There is no justification for the cliff-edge in funding for disadvantage of almost £1,000 at the point students turn 16. Existing funding is insufficient to offset the educational challenges facing 16-19 disadvantaged students, particularly in the context of rising child poverty and the further education sector having seen the largest spending cuts of any education phase since 2010.

“Our report makes the case for a student premium, providing additional targeted funding to institutions, supporting them to tackle these challenges head-on.

“The introduction of a student premium would end the disparity in funding for disadvantage as students transition from secondary school into 16-19 education, sharpen institutions' focus on disadvantage and support evidence-based solutions to tackling the 16-19 disadvantage gap.”

ENDS

Why do we need a student premium?

The 16-19 disadvantage gap is sizeable at 3.2 grades over students' best three qualifications. Whilst this this partly reflects the educational inequalities that disadvantaged students experience in earlier phases, they also fall further behind during the 16-19 phase.

Existing resources in 16-19 education are not commensurate with the additional challenges of supporting disadvantaged students, against a backdrop of the further education sector having seen the largest spending cuts of any phase of education in the decade after 2010. Disadvantaged students are currently funded at least one-third higher in secondary schools than in 16-19 education. There is no obvious rationale for this cliff-edge in the funding system.

Potential advantages of introducing a student premium as its own targeted funding mechanism rather than using existing 16-19 funding include: sharpening institutions' focus on economic disadvantage; providing certainty over the amount of funding per eligible student; stimulating the market for interventions aimed at improving outcomes and developing the 16-19 evidence base on what works; and driving impact.  

Who would be eligible?

EPI's preferred eligibility criteria combine student-level (FSM6) and area-level (IMD) measures of disadvantage:

• The report uses pupils' eligibility for free school meals during the six years before the end of secondary school (FSM6) as the starting point for student premium eligibility. This is the same measure that is used to determine pupil premium funding.

• However, this may miss students who did not have a FSM6 record in year 11 (for example, those recently arriving to the English education system from abroad), as well as students whose financial circumstances had deteriorated since year 11. For these students, the report proposes the use of area-based measure of deprivation based on where a student currently lives (the Index of Multiple Deprivation or IMD). 
• Under this proposed ‘EPI definition', 28 per cent (or 329,000 students in 2021/22) would be eligible for a student premium. By combining measures at both individual and area-levels, this does a better job of targeting disadvantage than other definitions explored in the report. These include using a measure based solely on FSM6 and using the Department for Education's definition of disadvantage in the 16-19 funding formula, which targets low prior attainment alongside area-based deprivation.

• Using a measure based solely on FSM6, 22 per cent of students in 16-19 education would be eligible for a student premium – or around 260,000 students.
• Using the official definition of disadvantage in the 16-19 funding formula 45 per cent, or 536,000 students would be eligible. Whilst having benefits in terms of reaching other groups of students with additional needs such as SEND, it would dilute the focus on economic disadvantage and result in a much higher policy cost; plus the official measure excludes around 70,000 students who are themselves disadvantaged (on the FSM6 measure) despite not living in a deprived area or having low prior attainment.

How much would it cost?

The report explores several scenarios for setting the rate of a student premium. Under the preferred EPI definition of disadvantage and matching the secondary school pupil premium rate, the policy could cost £340 million annually.

By initially pegging to the rate of the secondary school premium, this would address the cliff-edge in funding for disadvantaged students at age 16, whilst the Department should prioritise the development of the 16-19 evidence base on what works and at what cost. This evidence should then inform the value of the student premium longer-term.