FE reacts to Budget 2014

The Government pledged £190 million in new funding to boost Apprenticeships as part of its 2014 Budget.

George Osborne, the chancellor, outlined £170 million for the Apprenticeship Grant for Employers (AGE) scheme for small businesses, and an extra £20 million to support degree-level and post-graduate Apprenticeships.

Below is a selection of responses from FE sector leaders to today’s budget announcement:

Chris Jones, chief executive of awarding body City & Guilds, said:

“It’s encouraging to see the Government taking steps towards combating youth unemployment in the Budget. Not only has the Government cut national insurance contributions for under-21s from next year, but it has also announced a £190 million boost for apprenticeships. Although today’s ONS figures show a slight drop in youth unemployment (29,000), it’s still a major cause for concern.

“Apprenticeships are a great way of helping people of all ages start out in their careers, and greater access to these opportunities is vital in the battle against unemployment.

“Now we need to see stability in the system. Over the past few months there have been extensive changes to apprenticeships – from a focus on employer ownership, to the trailblazer expansion, right through to the end of 24+ loans. The emphasis should now be on protecting funding across the further education sector, as well as educators and employers working together to drive quality.

“Businesses of all sizes must be empowered to make the most of this investment, by taking on apprentices, particularly as they fight to grow in tough markets and struggle to fill skills gaps. While measures such as the ability to recover subsidies through PAYE have good intentions, we’re yet to see whether they work in practice. We cannot assume businesses have the time, the resources, or the will to deal with any additional red tape – whatever their size.

“This Government’s investment and commitment to apprenticeships is a step in the right direction. Now we need to develop a strong, stable system that meets the needs of young people, employers, and our economy.”

Martin Doel, chief executive of the Association of Colleges, said:

“We welcome the decision to extend the Apprenticeship Grant for Employers and the development of a new model of higher level apprenticeships.

“But it is only four months since the Autumn Statement and colleges are still working through the implications of the autumn 2013 announcements while also working out how to manage reduced budgets.”

Stewart Segal, chief executive of the Association of Employment and Learning Providers (AELP), said:

“AELP welcomes the extra investment in Higher Apprenticeships as it will underpin the growing understanding that there are high quality alternative routes to higher level attainment in addition to the traditional academic A Level and university path. The intention to simplify the funding arrangements should be available to all providers.”

On the AGE announcement: “Any additional funding to support employer investment in apprenticeships should be welcomed. The AGE scheme should be reviewed to ensure that it is targeted correctly and that it generates a long-term commitment to apprenticeships from the employers who benefit. It will also be important to understand how AGE sits with the proposed employer contributions in the new apprenticeship funding system.”

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), said:

“We agree that all young people need good English and mathematical skills, but we are concerned that funding for the additional GCSE classes will come out of the 600 hours allocated to each student through the 16-19 Study Programme. Some students’ choices of A-level or other level 3 courses may be limited if they have to continue studying for GCSE maths and English. We also question whether there will be enough additional teachers, as there is already a shortage of maths teachers.

“The reduction in funding for 18-year-olds will exacerbate the hit schools and colleges are already taking from cuts to funding for 16- to 19-year-olds. Although this will be mitigated in 2014/15 by a 2% cap on cuts to the Education Funding Agency programme funding for 18-year-olds, the following year further education colleges will lose an average of 3% of their budget.

“The cuts will be particularly harsh for sixth form colleges because they do not have the option to reallocate their budgets in the way that schools and further education colleges can.

“We wholeheartedly support the provision of free school meals to disadvantaged students, but question the ability of some schools and colleges to provide them without help, especially small institutions which may need to invest heavily at the outset or go for a more convenient or less healthy option.”

David Hughes, chief executive of the National Institute of Adult Continuing Education (NIACE), said:

“As the economy picks up and despite some mention of skills, we were disappointed the Chancellor didn’t take more opportunities to boost ways for adults to increase their skills. The recent UKCES Employer Survey showed employer concerns about skills shortages there are people, in work and unemployed, who need skills training to help fill those jobs. Apprenticeships will go some way to help address this but they are not the complete solution.

“This is why we are pleased to see the extra funding in the Apprenticeship Grants for Employers, but it is crucial that Apprenticeships remain available for people of all ages. We know many employers benefit from fantastic Apprentices aged over 24 and they need to be incentivised as well.

“It is also good to see investment in the additional Centres for Doctoral Training and in some new Apprenticeship funding up to post-graduate level. The work we are doing with employers and providers on Higher Level Apprenticeships has shown us that there is huge enthusiasm, demand and need to make the Apprenticeship programme go all the way up to degree and masters levels. The investment, £20million over 2 years, is modest given the enormous economic impact postgraduate-level Apprenticeships could have as the economy starts to grow again.

“We’re pleased to see the Government acknowledging the need to break down barriers and increase participation in post-graduate study. However for the last few years we have been urging the Government to ensure that there is a more comprehensive offer of flexible learning for part-time higher education learners, and little progress seems to have been made on that so far. Flexible learning for adults at undergraduate and postgraduate levels is vital and needs addressing now. We want to see urgent action on both and will be writing to Government soon to offer support in its options appraisal on this key agenda.”

Paul Davies, head of policy at the Institution of Engineering and Technology (IET), said: “Our concern for some time has been that the Government’s proposed reforms for apprenticeships would have a negative effect on the number of SMEs taking on apprentices due to additional costs and increased red tape.

“We hope that this announcement from the Government, in addition to the apprenticeship funding reform consultation feedback, will result in sufficient steps being taken to support SMEs providing apprenticeships.

“The IET’s recent work leading the Government’s electrotechnical Trailblazer was also an opportunity for SMEs to have their voice heard in making sure that apprenticeship further education courses are fit for purpose in the real world.

“The priority now will be to make sure SMEs in the electrotechnical and other engineering disciplines are given a generous share of the grants the Government is making available. After all, given the huge shortfall of engineers, apprenticeships represent a valuable lifeline to the future of engineering in the UK.”