Chancellor George Osborne today delivered the Autumn Statement, which he combined with the government’s Comprehensive Spending Review, to announce each governmental department’s spending limit for the next four years.
We, as well as many in the sector, were braced for up to a 40% cut in the Adult Skills Budget (ASB), as this has often been the first area in education to see large reductions in spending when the government is looking to save costs.
Instead of a direct cut to the ASB, instead the Department of Business, Innovation and Skills (BIS) has suffered a 17% reduction in budget. Whilst this is lower than anticipated, it’s still a significant cut to the governmental department mainly responsible for the funding of adult education. The government has stated that 16-19 adult skills funding will be protected on a per-learner basis.
While the FE sector was anticipating a cut to adult skills, the other big headline was the announcement that the Apprenticeship levy was to be set at 0.5%, and is expected to raise £3bn a year. This will only apply to companies whose payroll costs exceed £3m, and will be offset by a £15,000 allowance for each business contributing to the levy. Initially many thought this would be set for large companies by the number of employees, but the government decided against that. In addition, a new independent, employer-led body will be established to set Apprenticeship standards and ensure quality in the programmes. The group will advise on the levy funding each Apprenticeship will receive, with higher caps on high cost and high quality Apprenticeships.
In other news, loans will be made more widely available for learners. Advanced Learning Loans will be extended to cover qualifications of level 3 and upwards; the loans will be available for young people aged 19-23 for level 3 and 4 qualifications, while all learners can access an Advanced Learning Loan at level 5 and 6. Part-time students and postgraduates will now be eligible for maintenance loans – this is part of the government’s initiative to create more part-time learners. Loans will also replace maintenance grants for student nurses; Mr Osborne has stated he will lift the cap on recruiting nurses, with the aim of creating 10,000 new nurse training places.
While learners aged 19 or over will have to fund their own studies in future, the government has committed to protecting 16-19 funding per learner, and seems to have recognised that further cuts in this area may have been too much for the sector to bear.
With regards to schools, the government will be introducing a new National Funding Formula by 2017, which will see the weighting of funding given out based on area. The government is also keen to see more academies and free schools. In addition, Sixth Form Colleges now have the opportunity to save money by not paying VAT if they choose to become an academy.
Much of the immediate pressure on colleges and Sixth Form Colleges is likely to be eased following this announcement, however there are still likely to be tough times ahead in FE and skills. The large expected return on the Apprenticeship Levy is encouraging, and we hope to see the funding of many high quality Apprenticeships from this that give learners an opportunity to train in a real workplace and prepare for their future careers.
