Budget 2021: What it means for education

Tes looks at the impact today's Budget will have on further education, from colleges to apprenticeship providers

Julia Belgutay

Budget 2021: What Rishi Sunak's plans mean for education

This afternoon, chancellor Rishi Sunak set out his Budget, with funding announced for apprenticeships and traineeships, as well as training for small and medium-sized enterprises. 

But what do his plans mean for those working and studying in the further education sector? We have gathered together everything you need to know.

Budget 2021: Rishi Sunak's plans for further education

Background: Chancellor to announce £2bn job scheme for young people

Rishi Sunak's Budget: What will it mean for FE?

Today's Budget document, published alongside the chancellor's speech, only contains a passing mention of colleges and contains nothing on direct funding for them. Nevertheless, a number of measures were announced that will affect colleges and apprenticeship providers.

The documents also reveal that the expected money raised from the apprenticeship levy will rise from £2.8 billion in 2019-20 to £3.4 billionn in 2025-26 – an increase of 20 per cent. The levy is paid by all large employers across the UK, and those in England can use their funds directly to pay for the training of apprentices. 

Budget 2021: Traineeships

The government says it will provide an additional £126 million in England for high-quality work placements and training for 16- to 24-year olds in the 2021-22 academic year.

"Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee," it says.

Payments for those hiring apprentices

As Rishi Sunak announced in his Budget speech, the government will extend and increase the payments made to employers in England that hire new apprentices. Employers that hire a new apprentice between 1 April 2021 and 30 September 2021 will now receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme.

According to the Budget document, this is in addition to the existing £1,000 payment the government provides for all new 16- to 18-year-old apprentices and those aged under 25 with an education, health and care plan, where that applies.

Last November, Scotland's first minister, Nicola Sturgeon, announced that businesses in Scotland would receive £5,000 for each apprentice they employ who is aged between 16 and 24, and up to the age of 29 for those who are disabled, from minority communities or care leavers. For apprentices over the age of 25, the first minister pledged to pay £3,500.

From July of this year, the Westminster government said today it will introduce a £7 million fund to help employers in England set up and expand "portable apprenticeships". This, the Budget sets out, will "enable people who need to work across multiple projects with different employers to benefit from the high-quality long-term training that an apprenticeship provides".

"Employers themselves will also benefit from access to a diverse apprenticeship talent pipeline. Employers will be invited to bring forward proposals here, and, in particular, the Creative Industries Council will be asked to do so in recognition of the potential benefits of this new approach for the creative sector."

Training for SMEs

The government said today it will offer a new UK-wide management programme to upskill 30,000 small and medium-sized entreprises in the UK over three years. This will combine a national curriculum, which will be delivered through business schools, with practical case studies and mentoring from experienced business professionals. 

Corporation tax

The chancellor has announced an increase in the rate of corporation tax from April 2023 to 25 per cent – although he stressed that the UK's rate will remain the lowest of the G7 nations. A small profits rate of 19 per cent will be introduced to provide protection to the smallest businesses.

The Budget contained no announcements on public spending, but the chancellor said his party was the party of "public service". 


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Julia Belgutay

Julia Belgutay

Julia Belgutay is head of FE at Tes

Find me on Twitter @JBelgutay

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