How does George Osborne’s Comprehensive Spending Review affect FE, Skills and Welfare sectors?

Chancellor George Osborne launched the coalition government’s Comprehensive Spending Review (CSR) this afternoon and, as expected, the FE sector has been strongly affected.

In his speech to parliament, Osborne confirmed the abolition of the Train to Gain programme and Educational Maintenance Allowance, and heavy cuts to the budget of the Department for Business, Innovation and Skills (BIS), as the government seeks to fulfil its pledge to wipe out the national defecit in a single term.

However, the Chancellor also announced that the government would increase funding for new adult apprenticeships by £250m per year compared with the Labour government’s level of spending by 2014/15.

In addition Osborne appears to have backed down from the feared reduction of the child benefit threshold from 18 years of age to 16. FE News reported yesterday on the 157 Group’s concern at the potential impact of such action, but their fears would appear to have been at least partly allayed.

Away from the soundbites and finger-pointing of Osborne’s lunchtime speech to Parliament, the full report goes into more detail on the proposed cuts and also reveals further plans which impact directly on the FE sector.

The report says: “The government will significantly lower the overall cost of the Further Education system by aboloshing Train to Gain and by reducing spending on budgets which do not directly support learners.”

Included in this pledge are the cuts to BIS’ budget. Its departmental programme and administration budget will be reduced by 25% in real terms by 2014/15, from the £16.76bn allocated in 2010/11 to £13.7bn. Its capital budget is to be cut by 52% over the same period, again in real terms, from its current level of £1.8bn per year to £1bn.

The report also heralds significant changes to the provision of training for adult learners, saying: “The balance of funding will be shifted from the taxpayer towards the individuals and employers who benefit, including the introduction of student loans and exploring mechanisms to increase employer contributions such as voluntary training levies.”

The entitlement to free training for those seeking a first full Level 2 qualification for those over the age of 25 is to be removed entirely. Furthermore, FE students aged 24 and over studying for a level 3 qualification will have to pay fees. “These will be supported by the offer of a government-backed loan where repayments will be dependent on the learner’s income,” says the report.

Details on the planned changes to the EMA are thin on the ground, the report making the vague promise to “replace EMAs with locally managed discretionary funds to target support.”

The full report can be downloaded here.

Nathan Brown