FE reacts to Budget 2016

George Osborne unveiled a Budget today along with news that levy payers will receive a £15,000 allowance and a 10% top-up from the government on their monthly contributions.

The chancellor also unveiled a £1.5 billion boost to the education budget and plans for all state schools to become academies.

Below is a selection of responses from FE opinon leaders to the government’s Budget:

Kirstie Donnelly, managing director at City & Guilds, said: “While the 10% top up payment announced in today’s Budget sounds like good news for business, like so much about the implementation of the levy, we will need to wait for further technical details to understand what this actually means for employers. While some well-informed employers will have no trouble spending their levy payment and top up, the emphasis must be on the effective and successful delivery of an apprenticeship programme. Whilst we are fully supportive of employers who will use all of their levy to deliver quality apprenticeships, there are others who will struggle to spend their levy on apprenticeships alone and would rather be given more flexibility on how they can invest it.

“Employers are telling us that payment from the levy would not encourage them to take on more apprentices. This is a real concern. If it is to work, the new system must be easy to understand and easy to access for all. If the Government is to reach its three million apprenticeship target, we need the right structure, autonomy and implementation of the system. Only then will we ensure a return on investment for apprenticeships and skills.”

Chris Jones, chief executive of the City & Guilds Group, added: “George Osborne has a clear focus on boosting productivity in today’s Budget. But right now, businesses have so many policies hitting them at once, from pension auto-enrolment to the upcoming apprenticeship levy, changes to tax exemptions and new living wage. Despite Osborne’s claim that this is a Budget for long-term stability, it may not feel like it to businesses.

“Combined, the policies will create challenges for UK plc, leading to instability and additional costs. It will also mean that employers have to make tough decisions about how they spend their already limited training budgets. The problem is, if employees can’t receive the training they need to perform their jobs well, it will negatively impact the country’s productivity, now and in the future. In today’s fast-moving world, making sure the UK’s workforce has the right skills to respond has never been so important. The businesses who will do best at navigating the changes are those that think about workforce development in a long-term, holistic way.”

Stewart Segal, chief executive of the AELP, said: “We will need to understand how exactly the top-up will work and in particular how it will work for those only paying a small levy.”

Frank Norris, director of the Co-operative Academies Trust, which oversees eight academy schools in the North of England, said: “Today’s announcements reflect a long term trend of schools converting to academy status – and the extra £1.5bn funding for extracurricular activities and the £20 million for the Northern Powerhouse schools strategy should be welcomed. Our experience has shown that with the right leadership schools can benefit from improving results and attendance levels.

“Academy status can provide the bed rock for generating change – but this change is only truly transformative when a school is fully rooted in its community. Top down approaches should be avoided and our success to date has been heavily down to our co-operative ethos and approach. When it comes to extending the school day from 3:30pm this can only be done if it is right for the school, the pupils and the teachers. Ultimately it’s about schools across the country being properly resourced.”

Gareth Robinson, CEO of ABE, said: “The £1.5 billion boost to the education budget in today’s Budget from chancellor George Osborne, along with a pledge to improve financial and social support for those in further education, is welcome news. However, this funding for further education still falls short and risks impacting the UK’s ability to create entrepreneurs, start-ups and jobs, both in local areas and nationally. Post-16 education is the cornerstone for people who either eventually want to find a job, or be part of our economic growth and create them instead. By increasing the support for vocational learning, we also begin to address the chronic white-collar skills shortages so well-documented in the industry.”

Brian Palmer, tax policy adviser, AAT, said: “Despite the positive news for apprentices in respect of a 10p increase in the minimum wage in from October 2016 – in line with recommendations from the Low Pay Commission – and the increase in the personal allowance to £11,500 from April 2017, apprenticeship schemes need more consistent support and not just a burst of publicity during this week’s National Apprenticeship Week. Government needs to incentivise businesses of all sizes across a range of industries, giving apprentices access to high quality training schemes that tackle the current skills shortage and truly provide a talented and motivated UK workforce for Osborne’s ‘Next Generation’.

Kevin Robertson, education partner at Bond Dickinson LLP, said: “The Chancellor’s announcement that all primary & secondary schools must become academies by 2020 or be in the process of becoming an academy will not be a surprise to the education sector, it has been rumoured since 2010. However not everyone is supportive of this move. Schools and Councils will want to know if money will be available to fund the costs of making this happen given the significant strain this will put on already stretched local authorities.”

Anna Feuchtwang, chief executive of the National Children’s Bureau, said: “The Government is right to invest in education and to think creatively about how to raise standards for all children, but there are question marks over whether making all schools into academies is the best way to do this. Evidence shows that local authorities are often as effective as academy chains in providing high quality education. There are also serious concerns that removing local authorities from the planning of education across an area could further disadvantage children who are already vulnerable because they have special educational needs, mental health problems or are at risk of missing education.”