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Budget 2020: What can we expect for Skills and Education?


In this blog Niamh Corcoran takes a look back at the 2020 budget and the pledges made towards education and skills.

Wednesday’s budget saw the chancellor pledge to pump billions into the British economy, from investment into public services and infrastructure to a much-needed stimulus package to help businesses mitigate the impacts of the Coronavirus outbreak. Whilst there were few new announcements for further education and skills in the Budget, the Chancellor did confirm large cash-injections pledged in the Conservative manifesto earlier in the year. However, on a number of topics, such as reform to the apprenticeship levy and funding for apprenticeships, the Budget lacked specific detail and will need to be expanded upon in the upcoming Comprehensive Spending Review

Sunak officially announced the expected £1.5 billion to refurbish buildings and facilities in further education colleges, as well as committing to a £2.5 billion National Skills Fund to develop adult skills. Few details about this fund have been released, but the Government has said there will be a widespread consultation in the spring to decide how this money will be spent.

The Budget also re-announced a £95 million boost for T Level providers to invest in cutting edge facilities and industry standard equipment to support the rollout of the new qualifications in autumn 2021, and £120 million to establish eight new Institutes of Technology, one of which will be New College Durham. The government hopes these Institutes will bring together employers and providers to deliver higher quality technical education and address local skills gaps.

Disappointingly, decisions about the apprenticeship levy seem to have been delayed until the spending review in autumn, despite warnings from the Institute for Apprenticeships and Technical Education that the levy has engendered a divide between large and small businesses. It is estimated that levy paying businesses have seen a 20% increase in apprenticeship starts, whilst small and medium non-levy paying businesses have cut their apprenticeship starts by 10%. Although the Government has committed to looking into improving the system in order to support “businesses of all sizes”, it would have been desirable to see the Budget addressing the malfunctioning system more comprehensively. For example, by making the system by which levy payers can transfer unspent funds to smaller businesses simpler and more efficient.

On a brighter note, the Chancellor pledged to “ensure sufficient funding is made available” to increase the number of apprenticeships in small and medium enterprises in 2020/21. Despite initial confusion resulting from a Treasury spokesperson claiming that no new funding was coming, the Association of Employment and Learning Providers has since received confirmation from the Government that there will be “significant” and fresh funding in the coming year and in the spending review. Whilst the detail of this is lacking, with the National Audit Office warning that current apprenticeship funding is unsustainable, this is a welcome move from Government and one which will please businesses and skills providers in the North East. Hopefully come the autumn spending review, the Government will commit to a figure which addresses the apprenticeship funding shortfall.

The commitment to renewed investment in further education and apprenticeships is a welcome move, with the sector having faced a decade of the deepest cuts in education. Undoubtedly, our members will be keen to make use of the funding streams confirmed by the Chancellor and play a key role in shaping the direction of the National Skills Fund. It is a step in the right direction towards reskilling our workforce and establishing a culture of life-long learning.

However, the absence of significant fresh funding into further education and skills, as well as a distinct lack of detail over how the Government will deliver its pledges is disappointing. Whilst capital investment into colleges is promising, the Government must also commit to sustained higher-levels of core per-pupil funding, as the Chamber called for in its letter to the Chancellor. With Further Education funding having been cut extensively since 2010, we hope that the Government will unveil a long-term funding plan for further education as part of its promise to level up the UK and eradicate the regional skills gaps that the North East currently suffers from.

All eyes will again be on the upcoming spending review in order to offer more clarity on how a long-term further education funding settlement will allow talent in the North East to fulfil its potential. Any specific funding announcements will also need to be twinned with effective communication and much needed clarity about accessing future funding, how the apprenticeship system will be reformed and what “sufficient” apprenticeship funding really means.