Sector response to the Chancellor’s Autumn Budget 2017

Today (22nd November) the Chancellor Philip Hammond announced the budget. Further Education and Skills were key to this budget, against a backdrop of reduced economic growth and Brexit. The Chancellor explained that ‘Backing Skills is key to unlocking growth’. Three Million Apprenticeship starts were still mentioned for 2020, the Chancellor also mentioned he will review the flexibility of the Apprenticeship Levy.

An additional £20 Million was promised to FE Colleges to prepare for the new T-Levels. The Chancellor also wants more specialist Maths teachers and a mention of an additional £40 Million for training Maths teachers across the country.

How much of this will fall into FE coffers is unsure, but with the new Initial Teacher Training (ITT) announced on the 3rd November, there could be a significant growth for the FE sector delivering Teacher training. The Chancellor also wants to triple the number of Computer Science teachers (to 12,000), again this could be good news if many teachers choose the ITT route.

Further good news is that there was a pledge for an additional £600 Maths ‘Premium’ for every pupil taking Maths A-Levels or Core Maths across the Country. 

To increase Digital Skills there was a pledge for an additional £30 Million retraining fund for the Digital skills gaps, with Digital Distance Learning. To increase the amount of Construction skills to match the Government’s significant house building plans, the Chancellor also pledged £34 Million to help address Construction Skills. The government will provide £8.5 million over the next two years to support Unionlearn, an organisation of the Trades Union Congress to boost learning in the workplace.

To those involved in employability, there were significant changes mentioned on Universal Credit. Particularly the scraping of the 7 day waiting rule and interestingly there was a pilot £28 Million fund to reduce homelessness and rough sleeping in West Midlands, Manchester and Liverpool. It is unclear at this stage how much of this could be used (if any) for employability and skills.

So what does the sector think about the Chancellor’s announcements?

Mark Dawe, Chief Executive of the Association of Employment and Learning Providers (AELP) comments:

“We welcome the new investment in digital skills.  To help reverse the alarming forecasts on UK productivity however, basic digital skills training should be incorporated and funded within every apprenticeship.

“The chancellor said that he would keep under review how apprenticeship levy money is spent.  It should be a very short review because it is far too early to dilute levy spend on anything other than apprenticeships, especially after a 61% drop in programme starts since the levy was introduced.

“We have no issue with the youth rate of the national minimum wage being raised because social mobility is as much about a young person being able to afford to live as the offer of a job or apprenticeship.  But over the longer term with the downgraded growth forecasts in mind, we must remain mindful of what employers can afford – there is a balance to be struck.

The social mobility agenda will have been better served if the new investment in post-16 level 3 maths had also been accompanied by addressing the inequitable funding in the functional skills alternative at this age for maths and English.  Action has to be taken to improve attainment in the applied learning of these subjects which employers clearly want – £471 per learner doesn’t begin to do it.  We’re concerned that those who can are getting more while those that can’t never will.”

David Hughes, Chief Executive of the Association of Colleges, said:

“I said last week that the Chancellor should take a long-term and moral view of investment in young people and adults to address the skills challenges which he has so eloquently described in today’s Budget. Unfortunately, he has chosen to make short-term decisions which tinker at the edges. The uncertainty around Brexit may explain this cautious approach and we would hope to see more long-term consideration in the next spending review.

“Having said that, we have to welcome the new investment in the National Retraining Scheme, the focus on maths and the extra £20 million for colleges to deliver T Levels. It highlights the commitment to high-quality technical education. The prominence the Chancellor gave to skills in his speech today suggests that the Government is finally understanding the critical role colleges have in a post-Brexit world.

“The Chancellor did, however, miss the opportunity to address the chronic underfunding of all 16 to 19-years-olds in education and training. The case we made in our joint campaign with school and college bodies shows that 16 to 19 funding levels overall remain inadequate to support young people to enter adult life. This must be addressed in the next Budget and Spending Review.

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

“The Budget forecasts are a sea of red, with sharp downgrades to growth and productivity. We don’t have to just accept this, we can invest in improving skills and employment to boost growth. We need bold action to do this, and governments can’t solve all of our problems – it will require a shared national partnership.

“The measures on Universal Credit are welcome, meaning that people will have less of a wait for their money. But they do nothing to reverse the £3bn cuts to Universal Credit or to end the freeze on working age benefits. So in many ways this is more of a ‘baby steps’ budget – with welcome initial funding for a new national retraining scheme, more support to colleges to implement technical education reforms, and the prospect of future flexibility for the Apprenticeships Levy. The amount expected to be raised by the Apprenticeship Levy has been downgraded by £100m in 2021-22. We think this shows the need to underpin the budget over the economic cycle, rather than letting it fall in a downturn.

“What we need overall is a clear roadmap – backed by investment – for how we will address our productivity crisis, support the nine million adults without basic literacy or numeracy, and deliver employment opportunity for all, particularly disabled people.”

Kevin Courtney, Joint General Secretary of the National Education Union, said:

“The Government had a big political choice to make in today’s Budget – to invest in education, or to continue with its damaging policy of real terms cuts.  The Budget, with no significant new money for education, shows that the Government has chosen to ignore the anger of parents and the clear evidence of the problems being created by real terms cuts to education.  Parents and teachers will be deeply disappointed.

“Despite the worsening teacher recruitment and retention crisis and the huge real terms cuts in teacher pay since 2010, the Chancellor had nothing to offer teachers or the profession.  Instead of school staff losing jobs or seeing the value of their pay cut, the Government needs to invest in those working in education.

“The Budget has failed the key tests the National Education Union set for the Government on education funding.  The Chancellor has failed to reverse the real terms education cuts; failed to provide new money to fully fund all areas of education; failed to level-up funding to address historic underfunding; and failed to guarantee the investment needed for future years.

“We note the announcement of £42m for teacher training, which translates to about £1000 per teacher in selected schools. The only credible response to the widespread and worsening teacher recruitment problems is to properly invest in education, including fully funded proper pay levels across the profession, not sticking-plaster solutions like this that have not worked in the past.

“The Government’s goal should be to invest in a broad and balanced, fully funded curriculum for all children and young people. Offering schools in desperate financial circumstances £600 per student if they take up A-Level maths could steer students towards subject choices that may not be in their interests. If this investment isn’t accompanied by significant new funding for schools then it won’t make enough of a difference to pupils’ life chances and skills development and is a drop in the ocean compared to billions of real terms cuts to per pupil funding.  The announcement on funding for T-Levels is nothing more than a drop in the ocean compared to the huge real terms cuts to 16-19 funding since 2010.  There are no plans to restore Education Maintenance Allowance funding to support young people.”

Kirsty Mchugh, Chief Executive of ERSA, said:

“1.42 million people are unemployed in the UK, yet the Chancellor has forgotten about supporting them in his Budget. The Government must reverse its 80% reduction in funding for specialist employment services and thus avoid the falling away of frontline expertise from charities and other employment support providers. Current decision making is perverse given the Conservative’s own manifesto pledge to help one million people with disabilities and health conditions into work.

‘We’re also concerned that there is nothing new to help the nearly 12 percent of young people who are unemployed.  With Brexit looming we need to invest in jobs and growth, yet for the first time in years we lack a nationwide programme to help struggling young people to move into work.”

Dr Julie Mills, Principal of Milton Keynes College, said:

“There were a number of announcements to welcome in the Chancellor’s speech this afternoon. I noticed several uses of the word “training” alongside the five “skills,” – a record for the latter in recent budgets by my reckoning.

“It’s unclear whether the £20 million which is to be available to help colleges progress to the new T Levels is all completely new money but it’s good to see that government is taking seriously the importance of making sure that the new standards are properly designed and fit for purpose when they’re introduced.  It’s a major overhaul of the system and will require careful and thoughtful handling.

“The extra investment in maths is to be very warmly welcomed.  Specific mention was made of A Levels and Core Maths but there may be other areas where it could be used.  For example, our engineering students might benefit from being funded for an element of higher level maths as part of their courses, greatly increasing the value of their BTec or City & Guilds qualifications for potential employers.

“The Chancellor talked about funding an extra 8000 Computer Science teachers.  One wonders if that is exclusive to schools or if it includes a portion for FE.  Digital learning is something we already provide very effectively as a sector and it would seem a prudent place to put the cash.

“He also talked about funding for construction training as part of his housing push.  There is no doubt this will be entirely positive.  At Milton Keynes we have seen a dramatic increase in demand for construction courses and our Construction Centre is groaning at the seams.

“On the mentions front, it was good to hear FE getting a “shout out” from the Dispatch Box – not a frequent occurrence with many Chancellors past.  In her recent speech to the Association of Colleges Conference, the minister Anne Milton said it was essential that government understood how the sector was, “Ensuring that we have an adaptable workforce with the skills and opportunities to thrive. Supporting the growth of innovative, productive business, and making the most of local strengths in communities right across the UK.”  It’s good to hear that our new minister seems intent on banging the drum for the sector after such a long time feeling like the poor relation in education.

“However the central problems remain; the inexplicable differential between funding for teaching and support of GCSE students at £4,800 each as opposed to those a year older at £4,000 is still unaddressed.  The AoC’s request for an extra £200 per student would have provided a financial boost of £1.1 million to this College’s allocation – a sum of money with which we could do important and worthwhile things.”

Petra Wilton, strategy director of the Chartered Management Institute, the professional body for leadership and management, said: 

“This is a clearly a Budget for maths not management.  Yet without the leadership skills needed to create business strategies for growth and the ability to engage employees, our stubborn productivity puzzle will never add up.

“Whilst there is very welcome new investment in initiatives targeting young people, with £20m pledged to support FE Colleges with the new T-levels, and further new funds for those studying maths, it is disappointing that there’re no explicit recognition and further support for employers now using the apprenticeship levy to start their overdue investment in the management skills needed to lead our economic turnaround.

“It’s great that the Chancellor has used the Budget to also announce £30m for a new National Retraining Scheme to support digital and construction skills.  We now hope that the new Transforming Cities Fund of £1.7bn will better recognise the skills needed across all the regions, and look forward to further detail in the Industrial Strategy about how the management gap can be closed.

“The Chancellor opened by recognising that productivity remains stubbornly flat. Yet the government still stubbornly ignores the impact of management skills, when both the OECD and the Bank of England show that quality management and leadership is the number-one driver of productivity.”

Sarah Weir (OBE), Design Council CEO, said:

“We appreciated hearing the chancellor’s announcements today on education, lifelong learning, as well as research and development. All of which demonstrated the Government’s readiness to tackling the challenges of our future economy. However, more needs to be said about design. The speech, which focussed on science, innovation and emerging technologies, did not mention design at all. This was disappointing, particularly as we know that design contributes over £71 billion to the UK economy, and that there is an ever-increasing skills gap. To deliver an agenda that creates long term growth and boosts productivity we must also realise the importance of design.

“We estimate from our soon to be published ground-breaking research* that the current skills gap in a range of design-skilled occupations is already costing the UK economy £5.9bn each year. Design is a core part of our daily lives; whether in our homes, our offices, our travel networks and our health and education systems. Design delivers and contributes to our economy every day. What our latest research has also uncovered for the first time is the far reaching, cross sector contribution of design and its wider impact on the UK economy. Unless industry can provide the sufficient additional training required post a formal education to unlock these skills, and without urgent action from the government, this situation is likely to worsen as technology significantly changes the way we work and live”.

Ian Pretty CEO Collab Group, said:

“We welcome the measures that the Chancellor outlined in today’s budget. The £76 million investment in supporting retraining in the digital and construction sectors is welcome; these sectors are key areas of focus for Collab Group and they will be fundamental to the U.K.’s future economic growth and prosperity.

It is encouraging to see the establishment of a formal partnership between Government, CBI and the TUC to oversee the roll-out of the scheme. The success of these measures will depend on fostering a genuine spirit of partnership between government and industry. Ensuring an employer led approach remains critical if we are to meet our national skills and productivity challenges.”

Angela Middleton, Chairman and Founder of MiddletonMurray, said:

“There is no doubt that digital skills are the future and today’s Budget shows there are solid plans to future-proof our workforce. Initiatives like sustained Apprenticeship Levy funding, the National Retraining Scheme and the distance learning fund show a greater appreciation of upskilling and boosting national productivity.

“The new technical qualifications, T-Levels, show the shift towards vocational skills support and an understanding there are many options beyond the traditional academic route to employment.

“Funding for careers advice was notably absent from today’s announcement, which is disappointing considering the productivity push. We must support young people, their parents and their teachers, with excellent-quality advice from a young age, so they can become the “innovators of the future” the Chancellor referred to in his speech.”

NUS Scotland President Luke Humberstone, said:

“Graduates in Scotland should see the benefits of their education in their payslip before they start paying back student loans. But right now graduates in Scotland are getting a raw deal.

“While it’s welcome that the Scottish Government has committed to increasing the student loan repayment threshold, we need to see action when the Scottish budget is unveiled next month. Earlier this week the independent Review into student support called for the threshold in Scotland to be upped, and the UK Government’s budget announcement makes this all the more urgent.

“While Scottish students enjoy lower average debt, we must avoid a situation where Scottish Graduates have to start repaying this debt significantly earlier than counterparts elsewhere in the UK. This simple measure could have a significant, positive, impact on the lives of graduates across Scotland.”

Katie Gallagher, MD of leading digital trade body Manchester Digital, said:

“It is most welcome that the government is investing in the next generation of tech talent, pledging £600 to our schools for every new student who takes up A-level maths, and particularly in tripling the number of computer science teachers to 12,000. It’s not enough to have a computing curriculum, it needs to have talented experts who can teach it in an engaging and useful way that reflects the needs of industry.

“I will be interested to see how the £21 million in Tech City UK (now Tech Nation) is apportioned and spent, if it is about connecting clusters then they need to do a much better job of engaging with existing clusters and organisations and the regions must hold Tech City UK to account and ensure that London does not dominate its budget.”

Stephanie Baxter, Education Lead at the IET, said:

“As we are facing an engineering shortfall in the next decade, the financial boost for students studying the crucial engineering gateway subject of Maths at A-Level is welcome news.

“This is a small step in the right direction and there remains huge demand for engineers. We ultimately need to look at the focus on Maths and Physics, as studying engineering is creative and should not be limited to only those who have taken these subjects.

“We are at risk of stifling economic growth if we do not encourage more students to study engineering, which is crucial to ensuring a healthy and balanced economy. It is vital that students are supported in their studies so that they are aware of the exciting range of engineering roles available to them. This extends past GSCE and A-Level choices to university, apprenticeships and providing quality work experience.”

Statement from the support Our Sixth-formers campaign partners:

“Schools and colleges will welcome the Chancellor’s decision to introduce a £600 per student maths premium, as sixth formers in England are chronically underfunded compared to other countries and other phases of education. Our recent funding impact survey showed that over a third of schools and colleges have dropped STEM courses as a result of funding pressures, including Further Maths and Core Maths qualifications.

“However, the Chancellor has missed the opportunity to address the fundamental underfunding of sixth form education in England. The government’s priority should be to ensure that schools and colleges receive the funding they need to provide young people with a rounded, high quality, education – irrespective of the subjects they choose to study at A level.

“The government has clearly listened to some of the concerns expressed through the Support Our Sixth-formers campaign – but there is still a long way to go to ensure all sixth form students in England get a fair deal on funding. Our campaign will continue until the government restores a link between funding levels and the cost of providing a high quality sixth form education. This should follow a fundamental review of 16-19 funding – something the government should now undertake  as a matter of urgency.”

Bill Mitchell, Director of Education, BCS, The Chartered Institute for IT, said:

“We welcome the fact that the Chancellor has recognised the need for further significant investment in our children’s education. Tripling the number of trained computer science teachers to 12,000 should see a fully qualified GCSE computer science teacher in every secondary school, which means that every child, in every school will at last have access to this important subject.

“Not only would this both meet the needs at GCSE, but importantly, it will help ensure that the non-specialist teachers who will be called upon to teach non-examination classes, have access to support from a teacher in their school with the necessary subject knowledge

“We also welcome the retraining partnership between the TUC, CBI and the Government, which will invest £30 million fund in AI digital skills courses, andwhich will enable people to benefit from this emerging technology as they train for digital tech jobs in the tech sector.”