Sector response to the Chancellor’s Spring Budget 2017

With the Chancellor’s pledge to raise investment in schools to £10 billion, to provide £500-million for the introduction of new T Levels, set aside £300m to support new PhDs and STEM subjects and a further £270m for new and disruptive technologies, here are comments from the sector on the importance of skills and education and the role they will play in the future UK economy.

Rosi Prescott, CEO of leading education, health and wellbeing charity, Central YMCA, comments:

Rob May, Director, YMCA Awards, comments:

Sir Peter Lampl, Founder and Chairman of the Sutton Trust and Chairman of the Education Endowment Foundation, comments:

“We welcome the Chancellor’s plans to introduce T-levels to improve young people’s work-related skills. It is important not only that the new courses are properly funded, but that young people get good advice to make informed choices. It is also crucial that apprenticeships are improved, particularly advanced and degree-level ones.

“We welcome plans to provide more specialist maths schools and improve transport rights for disadvantaged pupils. However, it is vital that more is done to improve access to existing grammar schools, where there are very few pupils from low and moderate income backgrounds. We need effective outreach programmes, paid tuition for those who can’t afford it and we need to give poor kids a break.

“We are also concerned that the Chancellor has done little to address the real terms funding cuts facing many schools which are impacting adversely on teaching and the curriculum.”

Sarah Gillinson, Managing Partner at Innovation Unit, comments:

“Yes, our school system needs a revolution and yes extra funding for new schools is a good thing, but only if it is invested in the right way. If we genuinely want more of our young people to thrive, we must have the confidence to invest in new solutions that will have sustainable impact. Going backwards to grammar schools is not the answer.

“The new money announced today is a much-needed opportunity to fund R&D and innovation in education, and to invest in entirely new models of school so that all our children can thrive in and shape the world around them.

“Let’s not waste these opportunities. Across education we must invest in the right things, right now, that will lead to longer term transformation in society. That means funding new, evidence-based models and approaches that are ambitious for all those who engage in them and may look dramatically different from what we have now.”

“The Innovation Unit is delighted that routes other than the academic are getting attention – if we want everyone to thrive then we need to provide great options for all young people. T-Levels are an opportunity to recognise the importance of learning that connects to the real world. To be transformative we need to go one step further – real world learning must be available to all young people, regardless of the route they choose.”

Owen Goodhead, MD of Randstad Construction, Property & Engineering, comments:

“The Chancellor’s £500m a year pot for overhauling the education system is recognition the UK’s productivity gap is fast becoming a chasm.

“This allocation of funds is not just about future-proofing our workforce, it’s about reversing the effects of years of putting academia over and above technical vocations and practical trades.

“Today’s jobs market is candidate driven because of an already crippling skills shortage in some industries, putting more pressure on companies to find, attract and retain talent. The housing crisis, for example, is also a STEM skills crisis.

“We estimate the UK is facing a workforce shortfall of 3.1m people by 2050 due to a combination of skills shortages, an ageing workforce and restrictive migration policy.

“Funnelling money towards school leavers is the right tactic but pupils need to start thinking about technical skills from an even younger age. Change must start from the grass roots.”

Stephen Evans, Chief Executive, Learning and Work Institute, comments:

“With its focus on technical education and skills being at the heart of the government’s strategy for inclusive economic growth, this Budget provides vital investment in technical education for young people. Further education and skills providers will welcome investment of £500million by 2021/22.

“But with 90 per cent of our 2025 workforce already in the labour market, there remains a glaring lack of strategy and investment in adult education. Growth in apprenticeships is part of the solution, but we need a greater focus on the accessibility and quality of apprenticeships, as our research earlier this week showed. For example, just 600 of 17,500 engineering apprentices last year were women.

“The UK’s productivity record is dismal and living standards for low and middle earners have flatlined since 2008. The Chancellor’s is right that investment in infrastructure and training will help tackle these, but we saw very little today on training that will deliver the step-change we need for working people to progress in work and increase their earnings. This is essential to help ordinary working families too often stuck with stagnating living standards. And investment in adult education can help to ease pressure on other public services, such as social care.

“The OBR is projecting continued strength in the labour market, one of the great successes of recent decades. However, too many people still miss out on the chance to work. Learning and Work analysis shows that, on current trends, it will take 200 years for the government to meet their ambition to halve the disability employment rate gap. Cutting funding for employment programmes by 80% won’t help. The action needed to accelerate this work, such as greater engagement with disabled people and testing new forms of support, was missing from today’s Budget.

“With the Chancellor acknowledging that differences in tax treatment encourage people to become self-employed, therefore losing out important employment protections and benefits, we welcome progress towards reducing the tax incentive for self-employment. This needs to be matched with better access to services and support, including training, for self-employed people. We look forward to the Taylor Review to share the next steps on this.”

Peter Finegold, Head of Education and Skills at the Institution of Mechanical Engineers, comments:

“The proposed Industrial Strategy needs a clear, properly thought through national skills strategy to underpin it. Our economic success will heavily rely on both structural and cultural change to how we frame technical education, not simply to be on par with academic study but to be seen as seamless with it.

“The Chancellor’s £500 million per year commitment to support game-changing reforms including T-levels are welcome, but the challenge remains how to attract young people and their parents to the value of technical training, in areas such as engineering, in the first place. Our schools focus on a narrow set of academic success indicators and are largely staffed by teachers who have little experience of industry. Parents remain fearful that a technical education is a second-class option.

“To ensure the T-levels, Institutes of Technology and the renewed 16-19 sector all succeed, we must change fundamentally the relationship between schools, Further Education (FE) colleges and industry. Teachers should spend time in the modern workplace to understand the value of technical skills. Schools must open their doors to their educational competitors in the FE sector. Arguably the biggest threat to T-levels (in England, Wales and Northern Ireland) are the option limiting A-levels. It may be time to think again about whether reform of technical education can happen without changes to the academic ones.”

Mike Rowley, Partner and Head of the Global Education Practice at KPMG, comments on the Spring Budget:

“The Chancellor’s attention to lifelong learning and supporting the parity of esteem for technical skills offers a long-awaited refocus of the Government’s education strategy and will be critical elements to supporting the future growth of the economy. Yet, the simplification of the system, embodied by the planned reduction to 15 technical routes, will need to be carefully thought through and sufficiently flexible to meet the diverse needs of employers and learners.

“The effects of the Budget announcements on providers will need to be prudently managed, particularly in the face of growing school demographics and a lack of supply to deliver core subjects, such as English, Maths and Digital Skills. Not least the further education college sector, which has been subject to significant change and funding cuts over many years, which will need support to see through the changes.”

Debbie Tagoe, chair of Greater Merseyside Learning Providers’ Federation (GMLPF), comments:

“The government’s multi-million pound drive to improve vocational and technical education is a welcome announcement in today’s Budget. Investing in our home-grown talent will ensure a more skilled, knowledgeable workforce for the future, which is all the more urgent with the decision to leave to European Union.

“Going to university has become an expected rite of passage for many young people, with apprenticeships and technical routes often seen as the lesser alternative. Attitudes are slowly changing as more pupils with high attaining GCSEs and A-Level grades choose the apprenticeships route. Hopefully this latest reform will give vocational education the level of esteem it truly deserves.

“Working as a delivery partner on the Apprenticeship Support and Knowledge for Schools (ASK) project, we’ve been able to raise awareness of the Apprenticeship routes to employment, which is so important if we want to foster a culture of skills and productivity.

“Employers have been warning of the ‘skills shortage’ for some time, so these reforms are long overdue. It is important however, that the government works with apprenticeship providers on a local level to ensure the implementation is right and that there is equal access for all. As well as providing the training for Apprenticeships, GMLPF members also administer tailored one-to-one assistance to apprentices, helping with the achievement of maths and English qualifications if necessary; as well as offering personal support and guidance along the way. The success of Apprenticeships and technical routes into employment is dependent on the critical role skills providers play.

“Skills providers are the vital link coordinating and meeting the needs of employers and students so it is essential their input is considered and valued.”

Suzie Webb, director of education of development, AAT (Association of Accounting Technicians), comments:

“We welcome the support being shown towards professional and technical education and the financial commitment the Chancellor has provided in this area.

“As the UK’s leading provider of skills-based qualifications in accounting, AAT agrees that strengthening post-16 education can improve Britain’s productivity and social mobility through the provision of high quality technical qualifications that are valued by employers.

“However, AAT remains concerned with some aspects of the Technical and Further Education Bill. For example, proposals that will see the Institute for Apprenticeships take copyright and intellectual property rights from Awarding Bodies whenever the Institute approves a programme. This seriously risks the continued engagement and investment of Awarding Bodies and must be addressed.”

AELP CEO Mark Dawe, comments:

“We welcome the Chancellor’s recognition of the importance of skills for young people in today’s Budget, the measures to boost technical education and his statement that the government’s 3 million apprenticeships target remains a key plank of its skills policy.  However as part of the government’s social mobility and productivity agendas, ongoing financial support is crucial for SMEs who wish to offer apprenticeship opportunities. 

“Smaller businesses who are outside the apprenticeship levy’s scope account for over half of these opportunities, many of which are in areas of the country where there are few or no levy paying employers.  So it is absolutely vital that the government comes forward with a guaranteed minimum £1bn a year budget to keep SMEs on board the programme and to ensure young people get the opportunities they need.”

Ian Pretty, Chief Executive, Collab Group, comments:

“Today’s Budget announcement that £500 million will be invested to develop technical and professional education in the UK is to be welcomed.  Alongside Government announcements about the Industrial Strategy, Institutes of Technology and Post 16 technical pathways, this now puts FE firmly at the heart of key areas of Government policy.   Securing this additional investment in the sector is a tribute to the AoC lobbying on behalf of the entire sector to enable us to deliver these important reforms to technical and professional education.

“We also welcome the plans to boost the number of training hours for learners and the proposals to invest £40 million in piloting approaches to lifelong learning. The UK is currently experiencing both a major skills shortage in key industries as well as significant productivity challenges; it is a situation made even more significant by our impeding exit from the EU. But the UK Government, through its Industrial Strategy and today’s budget, has recognised the pivotal role that the FE sector can play in the modern British economy.

“We are proud to say that Collab Group Colleges have been leading the way over the last 18 months, working with Government on the development of solutions to deliver Institutes of Technology and working with key industry sectors to enable them to harness the power of 36 of the largest colleges in the UK.   FE now has the investment it has been demanding for so long; and so FE now has to rise to the challenges the UK faces. Collab Group colleges will continue to lead the way.”

Charles Senabulya, Vice President, SAS UK & Ireland, comments:

“The Chancellor has made it very clear with today’s Budget that education, infrastructure and industry are the foundations on which UK economic growth will be built as we head towards 2020.

“To boost regional development and productivity, investment in skills and training is essential. With many businesses crying out for qualified staff, addressing the UK’s well-documented skills gap remains one of the largest obstacles to overcome. We must do more to support the national workforce in unlocking its own potential. What’s more, we need to give young people a chance by investing in their future.

“Data is the key to reinvigorating and growing many sectors to create a sustainable economy – these include manufacturing, professional services, retail banking and telecoms. Research we recently conducted with CEBR indicated that big data analytics and the Internet of Things can create 182,000 new jobs in these sectors from 2015-2020, and inject £322 billion of additional revenue into the UK economy.

“The government has already taken steps towards this with plans to invest in artificial intelligence (AI) research. By partnering with businesses and academia, we can provide the right education and training opportunities for young people and the existing workforce, giving them access to jobs that demand data-driven technology skills.”

Ann Francke, Chief Executive of the Chartered Management Institute (CMI), comments:

“Investing £300m in STEM subjects is one part of the solution we need to boost UK productivity and profit from post-Brexit opportunities. But it dwarfs the £13m the Chancellor pledged in his Autumn Statement for Sir Charlie Mayfield’s review to raising management skills. The government is right to state that innovation in skills is paramount to improving productivity: poor management costs the UK economy £84bn a year in lost productivity. For this welcome investment to pay we’ll need skilled managers to lead the projects. Extending the investment in skills to supporting women returning from maternity leave, as well as young people, would be a welcome addition.”

Lee Sharma, CEO of Simply Do Ideas, comments:

“Improving the way that education is delivered must always remain a key priority if we want to effectively equip the next generation with the knowledge and skills they need to become future innovators and business leaders. Education must prepare youngsters for the world of work so if the announced shake-up can deliver on its promise to better suit business needs, it will bring significant benefits to both organisations and individuals.

“However, young people don’t just need to be taught about the skills of doing a particular job, they need to learn the tools to respond, adapt and thrive in the business environment no matter which route they take. That includes being able to harness their raw talent and creativity which they can bring to the world of business – whether following a career path or carving their own future as an entrepreneur.

“As a start-up company ourselves with an ambition to help young people realise their potential to become entrepreneurs, we welcome all efforts which achieve this goal.”

Chris Jones, Chief Executive of the City & Guilds Group, comments:

“It’s good to see training and technical education front and centre of today’s Budget. The £500m pledged today to enhance the amount of training available for 16- to 19-year-olds on technical programmes is certainly a step in the right direction and I hope this level of funding will be sustained in the future. For too long, the FE sector has suffered from a lack of investment or focus – even though improving the UK’s skills base has to be a top priority if we want to improve the UK’s productivity and competitiveness.

“It’s also encouraging to see an emphasis on a robust work experience element in ‘T levels’. Employers consistently tell us that real-life experience of the workplace is vital in preparing young people for the workplace. However, delivering a work experience programme is a serious undertaking for employers – particularly if we want to ensure all placements are high-quality. This can only work if businesses are supported by both the Government and the FE sector, so that offering work experience placements is a benefit, not a burden.

“The Chancellor’s announcement on maintenance loans for higher technical education is a positive move. These will help to level the playing field between university and technical routes, and enable students from all backgrounds to pursue technical routes. However these loans will only be available to students on higher technical education courses at levels 4-6 in National Colleges and Institutes of Technology. Rather than focus these loans on a narrow pool of institutions, why not open the field so more young people have the chance to benefit? For technical education to flourish in the way Britain needs to be more productive, students must have as much choice as possible.

“Equally, the loans should not take away from the fact that businesses also have a responsibility to invest in the training of their employees. I am pleased that the Government has highlighted the need to embed lifelong learning in Britain’s future employment system. Businesses must invest in training to boost their productivity, address skills gaps and develop their leaders. This has never mattered more than in today’s economy.

“All in all, the funding for pilot studies to test the effectiveness of different approaches to lifelong learning represents a promising starting point. Ultimately, the test will be in how businesses respond once best practice models are identified, and whether training is offered not as a nice to have but as a key part of both the employment journey, and business strategy. Businesses that prioritise investing in skills development to support new and existing employees will be rewarded by being well-prepared to meet the challenges of the future.

“While today’s Budget contains much to provide hope, as ever, the real test will be in what happens next. Without effective implementation, these reforms simply will not deliver the skills reforms to help Britain’s businesses thrive now and in the future.”

David Hughes, Chief Executive of the Association of Colleges (AoC), comments:

“We are delighted that the Chancellor has recognised what the Association of Colleges (AoC) has been saying about the need to invest more in technical education for both young people and adults. For too long, technical skills and education have been overlooked when investment in education is being considered; this announcement will make a significant and positive difference.

“This investment is a vote of confidence in colleges that are ready to work with employers to co-design the new routes, deliver the 900 hours per year and help more young people make a smooth and successful transition to work and to higher level learning. This signals a step-change in thinking, backed by investment in technical education for young people which will put us on a par with our international competitors.

“We know that many young people become motivated by experiencing the world of work, so the funding to support work placements is critical to the success of this investment. We will be working hard with our partners to secure the 180,000 work placements of one to three months which are needed to ensure that technical education is truly occupation focused.

“The Chancellor is right to highlight the need to improve productivity, address regional inequalities and help adults re-train and learn new skills. The extension of maintenance loans to adults on pre-degree part-time skills courses is essential to widen access and we look forward to helping the Government design and deliver the pilots for lifelong learning.

“Post-Brexit Britain will need more self-sufficiency in developing skills and people will need the confidence, support and opportunities to adapt and change over 50+ year careers. This announcement is a good down-payment to help develop a new and better system over the next decade. We will be working with the Government to help design that system and implement the changes needed.”

Lucy-Rose Walker, CEO, Entrepreneurial Spark, comments:

“Increasing National Insurance rates for the self-employed could be a further step by the Government to penalise those who are taking risks and starting a business, often giving up their regular pay cheques to take a chance at creating something great. We believe there should be more, not less, support for entrepreneurs who are starting and scaling businesses. Removing the few remaining incentives of being self-employed is counter-intuitive and will lead to fewer enterprises and consequently fewer jobs.”