Education: Cash threat to sixth forms

The Government is considering funding reforms which would see schools penalised for the first time for pupils who drop out. The changes, designed to end competition with colleges, could put hundreds of small sixth forms out of business.

The proposals follow complaints from colleges that the present system leaves them disadvantaged in the race for students. Under changes being discussed by ministers, 16-18 year-olds in school sixth forms would be funded on the same basis as those in sixth form and further education colleges.

At present, colleges receive their money for each student in three tranches. A small portion of the cash is paid when the student enrolls, the lion's share comes while he or she is studying, and a final small amount is received only if the student takes final exams.

The system is designed to ensure colleges do not recruit students who will swiftly drop out, and provides an incentive to ensure they stay the course.

Schools, however, receive full funding for each pupil automatically from their local education authority providing the pupil is on roll at the time of an annual census in January.

Colleges complain that the system means schools are not penalised when pupils drop out part way through a course.

In 1995-6 the funding for a student taking three A-levels is around pounds 7,000 in a school, pounds 6,400 in a general FE college and pounds 6,640 in a sixth form college. Under the proposals being considered by Baroness Blackstone, the education minister, schools would use the same funding system as colleges. The question of whether the level of funding should also be brought into line is still to be resolved, though this could lead to the closure of small sixth forms which could not survive under tighter funding.