Chancellor announces new funding for skills

Chancellor has announced an extension of the Kickstart programme and funding for the Lifetime Skills Guarantee

Tes Reporter

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A £375 million skills package has been announced by chancellor Rishi Sunak in today's spending review

The £375 million package includes £138 million of funding to deliver the Lifetime Skills Guarantee, which was announced by the prime minister in September, and £127 million to continue the Plan for Jobs skills measures. Mr Sunak also confirmed that the Kickstart scheme will be extended to the end of March. 

Speaking in the House of Commons today, he said: “We're also committed to boosting skills, with £291 million to pay for more young people to go into further education, £1.5 billion to rebuild colleges, £375 million to deliver the prime minister's Lifetime Skills Guarantee and extend traineeships, sector-based work academies, and the National Career Service, as well as improving the way the apprenticeship system works for businesses."

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Responding to Mr Sunak, Anneliese Dodds, the shadow chancellor, said that the Kickstart programme had been slow to get started.

"Labour has been clear about the responsible choices we wanted the chancellor to make today, to recover jobs, retrain workers, and rebuild businesses," she said. "To recover jobs, Labour called for £30 billion of capital spending accelerated in the next 18 months, focused on green initiatives, supporting 400,000 jobs and bringing us in line with countries like France and Germany. 

“This government's ambition is half that number of new jobs. To retrain workers, we needed an emergency programme to support people back into work. Kickstart has been slow to get started, and the skills offer for those over 25 won't start until April. The chancellor said at the beginning of his speech that our economic emergency has only just begun. Try telling that to people who've been out of work since March." 

Mr Sunak also promised £2.9 billion over three years for a new Restart scheme, which the Treasury says will help more than a million unemployed people find jobs. As part of the scheme, people who have been out of work for more than a year will be provided with “regular intensive support” tailored to their circumstances. There will also be £1.4 billion of funding to increase the capacity of Job Centre Plus.

What does Rishi Sunak's spending review promise for FE?

  • Around £291 million for further education in 2021-22 to ensure that core funding for 16- to 19-year-olds is maintained in real terms per learner. This is in addition to the £400 million that the government provided in 2019’s spending review. 
  • From the National Skills Fund 2021-22, £375 million will provide £138 million for the government’s Lifetime Skills Guarantee and to expand the employer-led boot camp training model, and £127 million to continue support for people to build the skills they need to get into work, building on the summer Plan for Jobs, including funding for traineeships, sector-based work academy placements and the National Careers Service.
  • For higher technical provision, £110 million will be provided, including £50 million of capital investment, to support of the future rollout of a Flexible Loan Entitlement to test and develop innovative models for local collaboration between skills providers and employers.
  • Around £2.5 billion of funding for apprenticeships and further improvements for employers, including: 

    * From August 2021, employers that pay the apprenticeship levy will be able to transfer unspent levy funds in bulk to small and medium-sized enterprises (SMEs) with a new pledge function. Unspent levy funds will still expire after 24 months. 

    * The government will also introduce, from August 2021, a new online service to match levy payers with SMEs that share their business priorities. From April 2021, it will allow employers in construction, followed by health and social care, to front-load training for certain apprenticeship standards. The government will explore whether this offer can also be made available in other sectors. 

    * During 2021-22, the government will test approaches to supporting apprenticeships in industries with more flexible working patterns, including consideration of how best to support apprenticeship training agencies.

    The incentive payments for hiring a new apprentice introduced in the Plan for Jobs will be extended to 31 March 2021.
  • The documents detail £1.5 billion to bring all further education college estates in England up to a good condition, £83 million in 2021-22 to ensure that post-16 providers can accommodate the expected demographic increase in 16- to 19-year-olds, and  £162 million in 2021-22 to support the rollout of T levels wave 2 and 3.
  • There will also be £72 million in 2021-22 to support the commitment to build 20 Institutes of Technology. 

The sector's reaction: 'A good first step'

The Association for Colleges' chief executive, David Hughes, said the announcements were a "good first step". 

"What did arrive, though, was confirmation of commitments to the Lifetime Skills Guarantee and capital funding for colleges with the welcome additions that funding rates for 16-to 19-year-olds will be maintained in real-terms and funding for the growth in student numbers over the next year – something we have been calling for," he said. 

"It also looks like the government has heeded our concern that current adult funding rates are not sufficient to deliver the Level 3 courses adults will need in the labour market, by ear-marking some of the £138 million for a rate rise in that budget.

"The new investment into higher technical training, supporting colleges and providers to deliver high-quality courses to meet labour market needs, is a good first step in reviving Level 4 and 5 education and training, and we look forward to working with the Department for Education on how that funding is utilised.

"Colleges are well-placed to support more young people and adults with upskilling and training into high-skilled work and this funding will help them build capacity and capability to do that quickly. 

"As ever, there is more detail to work through for DfE to confirm outstanding issues such as the TPS grant, which ends in March but which we are now assuming will continue as part of the baseline for colleges. There is more to do on capital funding and we look forward to those discussions as well."

'Retraining adults is absolutely essential'

The Association of Employment and Learning Providers’ managing director, Jane Hickie, said: “The extension of the apprenticeship hiring incentive could be an important boost to the recovery efforts, especially among smaller businesses where the first set of incentives has proved particularly attractive. 

“Retraining adults affected by the pandemic’s impact is absolutely essential and so new funding for the Lifetime Skills Guarantee will support key sectors. Training providers across the country are ready to play a key role in ensuring that the maximum number of employers, young apprentices and existing members of the workforce benefit from these welcome measures.”

'The public sector shouldn't pay for government mistakes'

UCU general secretary Jo Grady said: "Today's statement recognises the importance of education and skills as vital in our recovery as we move forward from the current health crisis, but the problems in the education sector are of this government’s own making after years of underfunding and ever-rising workloads.  

"This spending review was a missed opportunity to invest in rebuilding the further education sector to meet the country’s skills needs after years of funding cuts, jobs losses and pay cuts. We now need investment in the education workforce to ensure the sector can recruit and retain the staff it needs to deliver on the government’s skills ambitions. 

"The government is wasting the opportunity to invest and rebuild from the current health crisis. Instead of talking about pay restraint, which will further damage the morale of the very people that have picked up the pieces of this government's failings during the pandemic, we need investment to ensure that we have the skills to get the country moving again.

"The pandemic has taught us that it’s public services and key workers that are the people who hold our country together – they shouldn’t pay for this government's mistakes."

'We need a greater focus on creating jobs'

Stephen Evans, chief executive of the Learning and Work Institute, said that there must be a greater focus on creating jobs for people to move into.

The good news on vaccine development suggests light at the end of the tunnel," he said. "But as the chancellor explained today, the UK economy will take years to recover from this seismic crisis. Unemployment is forecast to be much higher for years to come, and our analysis suggests more than a million people may be long-term unemployed in the next year, the highest since the 1990s.

"Investing to help people back to work is the right thing to do, and it will pay off. The Restart scheme is good news, but we must learn from where previous programmes fell short, ensuring that this scheme provides the personalised support that people need and has a greater focus on upskilling and retraining. And while employment support will help, it alone is not enough. It’s clear, too, we need a greater focus on creating jobs for people to move into.”

'We're delighted with the expansion funding'

Bill Watkin, chief executive of the Sixth Form Colleges Association, said: We are delighted that the chancellor has earmarked £83 million for expansion funding. This will benefit providers of 16 to 19 education that are currently oversubscribed and is an important first step to accommodating the 260,000 additional 16- to 19-year-olds that will participate in education in the coming years.

"Given the enormous pressure on the public finances, doing anything more than maintaining the higher rate of revenue funding announced last year was always going to be a challenge. Maintaining the rate in real terms at least gives sixth-form colleges a clear basis on which to plan for the 2021 academic year.”

'Infrastructure development is vital'

Dr Neil Bentley-Gockmann OBE, chief executive of WorldSkills UK, said: “Today’s announcements from the chancellor reaffirm the government’s understanding that investing in skills is key to driving the country’s recovery. We welcome investment in the Lifetime Skills Guarantee and extensions to the Kickstart Scheme and apprenticeship incentive scheme to make sure as many people as possible can find a route to develop high-quality skills in the short term.

"But to get the economy motoring again, as a driver for growth and creation of jobs and apprenticeships, the pace of implementation of plans for infrastructure development, the green industrial revolution and innovation will be vital to create employer demand in key sectors for high-quality skills. 

"The upcoming FE White Paper and the UK industrial strategy refresh are therefore essential, but currently missing, jigsaw pieces for creating not just a skills-led recovery but also putting in place sustainable foundations for the longer-term creation of a world-beating skills system."

'The FE White Paper may not be a revolution'

The chief executive of the Federation Awarding Bodies, Tom Bewick, said: “The overall feeling in FE from today will be that the White Paper is probably not going to be the ‘revolution’ in investment that was perhaps first anticipated. The chancellor has simply reheated skills announcements already made.

"While this investment should be welcomed, of course, it still falls far short from the real-terms decline in post-16 funding that has taken place since 2010. If anything, what the government has reaffirmed today is that the skills strategy will continue to have to play second fiddle to its welfare-to-work plans, where more money will be spent next year by DWP [the Department for Work and Pensions] to keep a lid on the jobless figures. It’s clear to me that DfE ministers have been less successful in this spending round than was hoped.”

'We need immediate action'

Kirstie Donnelly, chief executive at City and Guilds Group, said that "alarm bells should be ringing" about the Office for Budget Responsiblity’s prediction of 2.6 million unemployed in the UK next year.

She said: "Refocusing existing funding is sensible right now, but the Restart programme feels backward-looking in scope and lacks any detail about how we’re going to support people to retrain and reskill now. It would serve no one, least of all those trying to get back to work, to see a rehash of the unsuccessful Work Programme. In order to get to grips with this unprecedented crisis, what we need are more creative and practical strategies designed to tackle today’s issues, to get away from a top-down, one-size-fits all approach and listen to the ideas and needs of local regions, and we need immediate action. If it’s going to be crunch time for unemployment in six months, can we afford to let people wait 12 months before giving them the support they need?

"The most practical step that we can take is to match skills to jobs, and supply to demand. In our Act Now report published last month, we called on the government to prioritise working with local authorities and businesses to create a national network of employment and training hubs within the regions most impacted by unemployment. These will act as a ‘one-stop-skills-and-jobs shop’ to support reskilling back into meaningful employment in areas where it's most needed.

"Providing people with the right support and framework to gain the necessary skills, advice and access to get back into work is critical for individuals and businesses, and will also save the public purse billions in benefits payments if people remain in work. There is no more time for discussion; we need to act now.”

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