How will Brexit impact on education and skills?
We live in interesting times.
This morning, the UK is waking up to an uncertain future outside of the European Union. This has a great deal of impact across government, but how will it specifically impact on education and skills?
What we can say with certainty is that there will be a change in the UK Prime Minister and Cabinet.
David Cameron announced this morning that he would step down by the time of the Party Conference in October. There’s already talk of George Osborne stepping down too.
We’ll have to wait and see who will be appointed to the new Cabinet, but here are my initial thoughts on who it might be:
Boris Johnson – Prime Minister (post Cameron). He’s been the leader of the ‘Leave’ camp and is very popular within the party and with the public.
Michael Gove – Chancellor, Deputy PM, head of EU negotiations. Gove is popular with others in the party and the Conservative electorate.
Nadhim Zahawi – Business Secretary. He’s a prominent ‘Leave’ activist and current apprenticeship advisor to the Prime Minister. Prominent ‘Remain’ campaigners Nick Boles and Nicky Morgan may not survive.
Graham Brady – Education Secretary. “The chair of the influential 1922 committee of backbenchers, Brady has extensive connections across the parliamentary party. He has an interest in education as a leading opponent of Nicky Morgan’s forced academisation of schools. She is one of the ministers considered by the Brexiters to have gone far too over the top in her arguments for staying in the EU.”
Source: http://www.theguardian.com/politics/2016/jun/03/boris-johnson-post-brexit-cabinet-the-possible-lineup?CMP=share_btn_tw
Below are the potential impacts of the decision to leave the EU that those in the sector should be aware of.
Economic impact
- There has been a significant economic shock – at the time of writing, the pound has fallen by 10% against the dollar and the London Stock Market opened 8% down.
- Mark Carney, Governor of the Bank of England, has hinted heavily at reserves of £250bn to ease liquidity in the banking sector.
Impact on Skills Policy
- Upon invocation of relevant Lisbon Treaty articles, there will be a 2 year period before the UK ‘officially’ leaves the EU.
- It’s likely that government departments will spend this period working out the legislative and financial impacts on their relevant areas.
- Will Further Education and Skills remain a priority? Will the 3 million apprenticeship target and focus remain? It’s possible that these may disappear off the agenda (at least in the short term) due to the uncertainty around negotiating the exit from the EU.
- FE and Skills may be displaced on parliamentary agendas by higher profile actions the government wishes to undertake – decisions in Skills Policy may be placed in ‘stasis’ for 2 years.
Impact on Skills Funding
- European Social and Investment Fund (ESIF) funding will be maintained through the current round until 2020 (a total of £2.53 billion based on 2014-2020 allocations).
- However, there would be no further UK involvement in negotiations for allocations of ESIF funding post 2020.
- As an unprotected department, BIS and SFA budgets may be threatened to backfill EU funding elsewhere (including ESIF), especially if ongoing economic performance was to suffer.
- EU nationals may not be eligible for 16+ Skills funding under this scenario.
- There are indications that the Apprenticeship Levy may be dropped by the government to compensate for the anticipated economic shock.
- Nick Boles spoke at a Policy exchange event on 13 June, stating “like all public services, funding for apprenticeships, and other support for young people, depends on the economy being strong and businesses being profitable”. This would place the projected £2.9bn per year apprenticeship funding the Levy would raise at risk.
Finally, take a look at this scenario mapping of possible Brexit outcomes from Square One Law (source: http://www.thelondoneconomic.com/news/your-simplest-guide-to-exactly-what-will-happen-in-a-brexit/09/06/).
For more information on what’s next for Education and Skills following the result, sign up to our free webinar on 7 July, which will provide a snapshot of the major political and economic factors that will impact Education and Skills.
