Following the recent publication of the Adult Education Budget (AEB) funding rules for 2018-2019, you’ll be wondering what the key changes are, and how they could both benefit and impact your centre and learners.

Whether you have an AEB allocation as a direct prime contract, a subcontractor, or don’t have an AEB allocation yet, we want to help you maximise the funding that is available and fully support your adult learners. Taken from our recent AEB funding webinar, below is an overview of what’s changing and a few hints and tips that can help towards your planning.

You can also watch the full AEB Funding Update 2018-2019 webinar on demand for an in depth look at funding with our resident expert Paul Saunders.


AEB is a significant funding source for adult education providers across England. The total pot for next year is £1.5bn. The Department of Education (DfE) describes AEB’s purpose as a “means of engaging and providing adults with the opportunity, skills and learning needed to equip them for work, an apprenticeship or further learning”.

The AEB broadly supports four types of delivery:

  1. Statutory entitlements – English and maths Functional Skills up to Level 2 (can be included as part of a traineeship) for those aged 19 and over who have not achieved GCSE grade 4-9; provision to support progression up to and including a full Level 2 for those aged 19-23; first full Level 3 for those aged 19-23
  2. Skills provision for unemployed – getting adults back into education or employment
  3. Traineeships
  4. Community learning for learners further from learning or employment – mix of unaccredited activity, units and qualifications

TIP: When planning your academic and budget year, list these four categories and align your organisation against them; which of the four delivery types do you offer? Is it a mix of all four? This planning method will help you see where your learners fall against a monthly funding profile.

In the current climate, it’s important to remember devolution is around the corner, so as a provider your priorities should be to recognise your local area needs and respond to the priorities set out by local commissioners and other stakeholders – think about this element when you are planning.

Subcontracting is a big part of AEB; it’s an option to gain extra funding from another organisation to support local learning needs. While this is a positive (especially if you can work together with another local organisation – tackling the devolution issue) it’s important to note that it comes with its problems, such as transparent management fees, working with potentially difficult prime providers and ensuring you’re subcontracting for/with eligible reasons. “You must not subcontract to meet short term funding objectives” – Adult Education Budget: Funding rules draft version 2018-2019, page 13

What’s changing for 2018-2019

Unusually, there are not many changes, which is viewed as positive news:

One of the main positive pieces of information to pull from the above summary is “qualifications eligible in 2017-2018 will still be eligible in 2018-2019, as long as the qualification is available for delivery and is on Ofqual’s Register of Regulated Qualifications“. This means if you have a qualification delivery model that tutors and learners are positively responding to, you can continue to deliver in 2018-2019 and know it is funded.

It’s important to remember this is a draft version of the AEB Funding Rules and that the ‘payments and performance management’ section is missing, but it will be available in future/final versions. While we are unsure what the performance thresholds will be, historically, these percentages have stayed the same over the years. However, it’s important to be up-to-date and make sure you are always referring to the most recent version of the funding rules – you don’t want any funding clawbacks, in fact, quite the opposite in that you want to grow your contracts.

Update – 1/6/18The Education and Skills Funding Agency has announced increased flexibility for funding learners on low wages in an update to the Adult Education Budget Funding Rules 2018-19. For a trial period, learners who are eligible for co-funding but who earn less than £15,726.50, will qualify for full funding. For more information, read our Increased AEB Flexibility for learners on low wages post.

For 2019-2020, there will be 9 regional areas which are going to have their AEB funding devolved. This will result in a mixed economy, with the 9 regions devolved and others funded directly through national contracting. There is tension with this change, but there are opportunities to grow, especially if you focus on your local area’s needs. It’s key to work with different, local funding partners to support localism and the economy. Worth a mention that the word ‘local’ is heavily mentioned in Ofsted’s Further education and skills inspection handbook, so align your delivery to local priorities. We cannot stress this enough.

The 9 regions include: Cambridge & Peterborough, Greater Manchester, Liverpool City Region, Sheffield City Region, North of Tyne, Tees Valley, West Midlands, West of England, Greater London.

As an AO, we work nationally so we have the challenge of ensuring our provision is right and fit for purpose for all the devolved areas.

Hints and tips

Ways to source additional AEB via subcontracting:

  • Sign up to external procurement sites such as; Contracts Finder – lists public service opportunities and sends daily email updates. Intend – lists all the FE colleges where they are subcontracting out.
  • Use relevant, local networking opportunities to see how you can help each other. During our recent webinar, some attendees with AEB were finding it difficult to spend their full allocation so there may be opportunities to partner with larger primes in your area.
  • Use the list of declared subcontractors and contact those in your local area to see if there is an opportunity to get some income from them
  • Get your own contract and register with the Education and Skills Funding Agency (ESFA)

Watch on demand: AEB Funding Update 2018-2019

You may also be interested in:

At a Glance: AEB Funding Information

Funding section of our website

Full list of our qualifications