Budget: capital and National Skills funding confirmed

Chancellor Rishi Sunak pledges £1.5bn for college estates and £2.5bn for the National Skills Fund

Kate Parker

Budget 2021: Rishi Sunak announces extra funding for FE

The chancellor has confirmed promised funding boosts for college capital and National Skills fund, but did not make any significant new funding announcements for the sector. 

Rishi Sunak pledged to deliver £1.5bn for college estates. 

He pointed towards former chancellor Sajid Javid and highlighted his passion for FE. 

He said: "One of the issues he is most passionate about is levelling up further education. At the spending round, he increased funding for 16-19 education by £400 million. Today, I can secure his legacy of £1.5 billion of capital over five years to drive to improve the condition of the entire FE estate."


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The chancellor also committed to the new £2.5 billion National Skills Fund to improve adult skills. 

Those in the FE sector hoping for a mention of the Augar review were left disappointed. 

In the supporting documents, the Treasury confirms that the government will provide "£120 million to bring further education and higher education providers in England together with employers to open up to eight new Institutes of Technology.

"These institutions will be used to deliver high-quality higher-level technical education and to help close skills gaps in their local areas."

The document also states that £95 million will be provided for T-level providers to invest in facilities and industry-standard equipment. This funding was originally pledged in February. 

On apprenticeships, the document promises that the government "will ensure that sufficient funding is made available in 2020-21 to support an increase in the number of new high-quality apprenticeships in small- and medium-sized businesses" - although it does not specify how much money will be made available. 

Reaction from the sector

Stephen Evans, chief executive of Learning and Work Institute, said that if we want to see a levelling up of prosperity across the UK, the government needs to invest in skills.

“New investment in the National Skills Fund is welcome, but with the number of adults improving their skills at a record low we need to go further.

“Our research has highlighted how the apprenticeship budget is under growing pressure, with a funding gap of up to £1 billion. Large employers are using more of their apprenticeship levy funds than forecast, which means there is less left-over for small and medium-sized businesses who don’t pay the levy. 

“The chancellor has said that sufficient funding will be made available next year to support SMEs to increase the number of apprenticeships. We need either more funding or changes to how the levy works. The spending review will need to set out how we avoid a creeping rationing of funding for apprenticeships at SMEs.”

Chief executive of the Association of Colleges David Hughes said that he was confident the chancellor had his sights set on the comprehensive spending review later in the year to set out plans to tackle the longstanding and profound challenges the country faces. 

"Colleges will be at the heart of those plans because they are where businesses are supported, communities developed, and individuals given the opportunity to get on ... today showed a clear shift in attitude towards technical and vocational education, after a decade of neglect.

"Colleges will be keen to access the £1.5bn capital funding and will want to shape the new National Skills Fund to make sure it works for their communities and for the people and employers they support.

"To create a truly transformative post-16 education system the comprehensive spending review later this year must commit to long-term investment ensuring no one is left behind.”

Bill Watkin, chief executive of the Sixth Form Colleges Association, said that "all roads lead to the autumn spending review where the government must seize the opportunity to secure an improved, long term settlement that will benefit all students.

He said: "The budget submission from the All Party Parliamentary Group for sixth form education sets out our priorities: raise the sixth form funding rate to the right level, boost capital funding (to help address the demographic boom in 16 to 19 year olds), and tackle the range of funding inequalities that continue to hamper sixth form education”.

Mark Dawe, chief executive of Association of Employment and Learning Providers, said that the government has taken a significant step to fulfil the Prime Minister’s promise last summer that apprenticeships should be properly funded.

He said: "While we welcome the impact of the levy in terms of getting large employers to engage in the programme, small businesses have traditionally provided the bedrock for apprenticeship opportunities for young people, especially in areas of the country where levy payers are scarce, and therefore the announcement in the budget is good news.  The treasury red book however does not say how much new funding and how many extra apprenticeships in SMEs will be secured.

"We should now build on this announcement in the spending review with the government working with employers and providers to find a longer term solution to make the apprenticeship programme sustainable.  This means a levelling up which enables more young people are able to get on to the apprenticeship ladder at level 2 and progress, and in the process making employers less reliant on migrant workers.

"The spending review should also sort out the woeful funding of the teaching of applied maths and English, functional skills, within an apprenticeship programme." 

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Kate Parker

Kate Parker is a FE reporter.

Find me on Twitter @KateeParker

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