The chancellor of the exchequer, Philip Hammond, will publish the Spring Budget on Wednesday, 8 March. The chancellor’s plan is to move the budget cycle to one statement a year each autumn. As a result, this budget might be the last one in March and might be brief. However, it may still be an important signal about how ministers will deal with big issues in public spending.
The backdrop to the budget is growing pressure on public spending. The health service, social care, schools and prisons all show signs of budget pressure because demand and costs are outstripping the funds available. Although Philip Hammond delayed the target date for eliminating the government budget by several years, the current public spending settlement is the tightest for decades and the strains are showing in a range of services. Any response would be a sign that Theresa May’s cabinet is responsive to lobbying on spending and could set the tone for the debate in future. But even if there are more funds for urgent problems, it is likely there will be compensating tax announcements to fund them. For example, there is talk of allowing councils to use increases in business rate income to fund social care. If so, it would be part of a wider trend to reserve - or hypothecate - a particular tax to fund a service. In our sector, the apprenticeship levy will be used to fund apprenticeship training. In schools, the soft drink levy - the sugar tax - has been earmarked to provide funds for school sport from 2018 onwards.
The desire to keep a lid on public spending means that there isn’t much of an audience for spending proposals but the case in post-16 education must be heard. The further education sector has been one of the hardest hit in the austerity drive since 2009 and this has had consequences. 16 and 17-year-olds in England are funded at a base rate of just £4,000 which allows for just 17 hours teaching hours a week. This is a full 40 per cent less than in Norway, Shanghai or Singapore. Ministers know this is insufficient and have said so in the recent industrial strategy. The prime minister’s desire for a technical education system matching the Nordics and Germans will only happen if this issue is tackled. Adequate funding levels are a precondition for the full implementation of the plans outlined in the Sainsbury Review, which are due to start in 2019.
‘Time to take this seriously’
Fair funding for college students would also involve continuing the pupil premium up to the age of 18. In the case of apprenticeships, major reforms started two years ago and come into effect this year. The levy and digital apprenticeship system both go live around Easter. It would be stupid for anyone to make last minute changes now, but we have a concern about reductions in training volumes. The government is handing spending power to 20,000 employers and they may understandably prefer to save their funds until they have enough to make a difference. Our suggestion here is that spending is protected while the system beds down.
Last month’s industrial strategy identified the need for a fresh approach to adult education and training. There are a number of areas where funding could make a difference. The money spent via the adult education budget needs to be protected so that everyone can acquire a minimum level of basic and digital skills. The money currently spent via the European Social Fund should be redirected to help people and communities deal with economic change. Our suggestion here is an English Social Fund. Finally there is the need for a new approach to help people learn throughout their working lives. We suggest it is time to look again at learning accounts.
An educated and skilled population will be the backbone for the country’s future economic success. Next month’s Budget will be a chance for the Treasury to show that it takes this seriously.
Julian Gravatt is assistant chief executive of the Association of Colleges
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