The sector seems to be holding its breath in anticipation of George Osborne’s ‘Emergency’ Budget, due to take place on the 8 July.
It will come as no surprise that this budget will set out additional cuts across Government departments, with Further Education and Skills in line for greater restrictions on spending.
We’ve already had indications from the Chancellor of £4.5bn of new savings in 2015/16, drawn from the government asset sales, underspends and efficiencies – with £450 million to be drawn from the Department of Business, Innovation & Skills (BIS) & £450 million from the Department for Education (non-schools budget).
In advance of this budget, Skills Minister Nick Boles spoke to delegates at the AELP conference this week hinting at the future direction of spending on vocational education, questioning whether the general Further Education college model has a future. He stated ‘difficult choices’ will have to be made about the ‘less productive bits’ of the FE system.
Boles made reference to comparisons of the value to society for investment by Government on various provision, stating that Level 3 Apprenticeships have a return of £28 for every pound invested, Level 2 Apprenticeships £26, with Level 2 full time provision returning £21, and Level 3 full time provision £16. He was keen to focus on the low comparative value of Level 2 non-apprenticeship provision. From this we can speculate that Apprenticeships funding will be protected within a shrinking Skills Funding Agency (SFA) budget at the expense of other spending (particularly at the expense of Level 2 & 3 provision).
We’ve also had no clarification around the delay to ‘growth request’ payments. The delay in announcement has affected in year SFA allocations to centres who’ve already over delivered on their apprenticeship contracts, we’re hearing that the SFA will not process these until after the 8 July announcements.
Here at NCFE, we’ll be very closely monitoring the announcements in the 8 July Budget, and will analyse their potential impact on the sector.
