What could a Brexit mean for skills and employability?

With the referendum now called, the respective stay and leave camps are well underway in campaigning for our votes come decision day. But, do we really know what impact a Brexit may have on the world of skills and employability, and is staying in the EU any better?

If we stay, in some respects it will be business as usual. The EU has a long tradition of providing programmes aimed to boost employability and skills through education and training. Currently this includes Erasmus+, which will provide opportunities for 4 million Europeans to study, train, and gain work experience abroad up to 2020. And, of course, there is ESF provision, supporting area based initiatives co-financed by DWP, the SFA and Big Lottery. Collectively this makes up an important component of the current market, especially at a time when other funding streams are being cut. If we left the EU, the Government may of course reallocate some of its wider legacy EU spend into new, comparable programmes, which may even be less prescriptive and bureaucratic to manage and deliver than their EU equivalents. There is, however, no guarantee of this.

The rules around eligibility for overseas students taking part in FE provision are already complex. EU students (non UK nationals) can currently access a range of support, depending on the period for which they have been settled in the UK. In contrast, non-EU overseas students represented around £52m in tuition fees to the FE sector in England in 2011/12. EU students also currently have more flexibilities in combining paid work with study to their non-EU counterparts. Will the UK maintain the same principles post a possible Brexit, or will the lure of leveraging extra tuition fees from all overseas students, EU or otherwise, prove to be too great? What though, if a Brexit contributes to a dropping off in overseas student numbers, with study in other countries becoming more attractive? What too will be the expectation upon the FE sector in acting as a safeguard against inward EU migration through the post-16 back door?

Brexit would have a direct bearing on welfare spend. The Government has claimed that 40% of recent EEA migrants are in households supported by the welfare system, accounting for 10% of the total welfare bill. On average, families with a recent EEA migrant claim almost £6,000 per year in tax credits, and of these, around 8,000 families receive more than £10,000 pounds. Under a Brexit, the Government would have the option of culling some or potentially all of this spend, and re-directing it elsewhere. Could, however, that result in welfare prejudice against settled EU families?

Post Brexit, the UK would no longer be obligated to the EU’s Working Time Regulations or Agency Workers Regulations. On one hand, this could result in legislation being repealed, and a dilution of worker rights in favour of a more pro-business labour market. On the other, the EU may indirectly impose comparable regulations on the UK, as a condition of any resultant trade deals which support continued favourable trade with EU partners. The result, a probable score draw.

Freedom of labour market movement would also be a consideration. In recent years, pocketed towns like Boston in Lincolnshire and Shirebrook in Derbyshire have seen their populations swell through inward EU migration. Local services, including the capacity of education institutions, have had to be realigned to meet the need. Communities like these face uncertain futures, whichever way the referendum plays; local services may be further stretched beyond capacity if we stay in, or local economies may risk a devastating collapse if we pull out. Again, there are no obvious winners here.

So, in summary, there is a lot to debate and consider, and on balance, at least at this point, there doesn’t appear to be a sure fired case either way. As with all referendums, the country will inevitably make its own mind up. We might not be able to predict our future in Europe but, one way or the other, we will definitely have one!

Jim Carley is managing director of Carley Consult, a specialist business development agency supporting the skills and employability sectors