Judging by the initial reaction to the Chancellor’s Autumn Statement it seemed the Education and Skills sector had received its Christmas presents early. After bracing ourselves for pretty brutal cuts to budgets across the board, the actual announcements were generally positively received. Thanks in part to higher than expected tax receipts and debt interest, the government managed to avoid some of the larger scale cuts that the sector had been anticipating.

Indeed, the ongoing protection to the schools budget and an increase in financial support for education and childcare continue to be welcome for the sector, spreading a little festive cheer. The government has also set out its intention to introduce a new National Funding Formula for schools by 2017, with the intention of overcoming the regional discrepancies brought about by the current system.

Protection has also been granted to funding for 16-19 year olds, with the current national base rate being maintained in cash terms ‘for the remainder of the parliament’. The announcement has provided some reassurance for this age group, and will hopefully allow for some stability over the next few years.

Sixth Form colleges are also to be given the options to become academies, with the removal of non-business VAT to form the incentive for this process.

You can tell how hard austerity has been when we see a 17% cut to the Department for Business, Innovation & Skills (BIS) budget as a positive outcome. Within this the government has pledged to protect the ‘Adult Skills Core Participation Budget’, which is surely welcome news, and to create ‘5 prestigious National Colleges’. We’ve also seen the expansion of Advanced Learner Loans to include 19-23 year olds at Level 3 & 4, and 19+ for Levels 5 & 6. Essentially, those over 19 at Level & above will be expected to fund their own education through the Loans facility.

We’ve also seen clarification of the forthcoming Apprenticeships levy (intended to fund the government’s drive for 3 million Apprenticeship starts by the end of the parliament) that will come on stream from April 2017. This levy is ‘set at a rate of 0.5% of an employer’s pay bill and will be paid through PAYE [and] will only be paid on any pay bill in excess of £3 million’. It’s anticipated that this levy will raise around £3 billion a year, used to fund the Apprenticeship programme

The ghost of Christmas yet to come?

However, just as Dickens’ festive spectre warned Scrooge of the consequences of his actions, I too feel it would be remiss to not set out the concerns that arise from the announcements above.

The Department for Education will be looking for savings from its 16-19 non-participation budgets, the Treasury stating ‘Some targeted savings will be made from 16-19 funding, including from declining demographics and funding outside the national base rate per student’. Hopefully this won’t be to the detriment of learners, but until we get more detail, it remains to be seen.

Concerns have been raised about the changes to the school National Funding Formula, particularly that it may disadvantage some schools, especially in the South East. Teachers unions have warned that this could lead to an 8% drop in revenue in some cases. A consultation is due in the New Year for the sector to raise its concerns about this policy measure.

There are also worries that the Apprenticeship levy could be seen as another ‘tax’ on employers, with some looking to adjust their wage bill or reduce training spend in other areas in order to make up the shortfall that this would entail. Again, we anticipate more detail (especially regarding how it links into the employer ‘voucher payment’ system) soon.

Uncertainty also arises from the lack of clarity with the cuts within the Department of Business, Innovation and Skills (BIS) – we’re awaiting more clarity on what the ‘Adult Skills Core Participation Budget’ means, and by extension, what will not be protected outside of this. We can speculate that certain arm’s length bodies within BIS may no longer exist, but we’re again anticipating further clarification.

Overall, the surprise remission the sector received from cuts seems to us to hinge upon the anticipated performance of the economy over the next few months. If economic growth does not continue as anticipated, it may be that larger cuts come back on the cards in the March 2016 budget – in which case it may feel more like Groundhog Day than a Christmas Carol.

So has the sector got its Christmas presents early? Only once we’ve confirmation of the further details outlined above can we be sure, and it may be well into New Year by the time this happens. But in the interim, we can be a little jollier about the future of schools, post-16 and adult skills budgets than a few weeks ago.