'Nothing in FE's stocking in giveaway Budget'

Further education will have to win the political and economic case for investment, writes Stephen Evans

Stephen Evans

The chancellor promised a lot of giveaways in the budget, just not for FE

Good news. The government has declared the end of austerity and the chancellor got his Santa act in early, in one of the biggest "giveaway" budgets in more than a decade.

Except it’s not quite like that, particularly if you work in further education. Or any public service apart from the NHS.

But first the good news. Before the budget it seemed pretty tricky for the chancellor to square the circle of the prime minister’s promise of an end to austerity, the extra £20 billion already announced for the NHS, and calls to keep the public finances under control.

Fortunately, the helpful folk at the Office for Budget Responsibility (OBR) think the public finances have improved, so they reduced their projections of the amount the chancellor would need to borrow.

This allowed the chancellor to say public spending would rise over the next spending review period, show that debt would fall as a share of the economy, and find an extra £1.7bn to increase universal credit work allowances (the amount people are able to earn before their benefits are reduced) by £1,000.

The latter move was particularly welcome, and something the Learning and Work Institute has long argued for. There’s still more to do on the design, funding and administration of universal credit, though.

That’s the good news. The less good news is that the extra money for public services will all be swallowed up by the NHS and other protected budgets, such as overseas aid.

'More Halloween than Christmas'

The excellent analysts at the Resolution Foundation say that means all other departments will have an average cut of 3 per cent over the spending review period.

That’s much less of a cut than most services have seen since 2010, but not exactly turning the taps on either.

And there are pressing cases for lots of services to get an increased budget (which would leave larger cuts for everyone else) – the police, prisons services, local authorities, schools, transport and many other services can all make pretty good arguments for more funding.

That raises the risk that the spending review is more Halloween than Christmas.

Colleges Week could make a difference 

I started with good news, and I’ll finish with good news, too. I think it can be different for FE this time and there’s lots we can do together to make it so.

We need pressure from a wide group of people to make the political case for the Treasury to prioritise investment in FE.

Things like Colleges Week can and do make a difference and help to raise our profile. The engagement of a group of backbench Conservative MPs helped deliver the extra £1.7bn for universal credit. How can we replicate that?

Another way to persuade the Treasury is to make the economic case to invest: why is FE a better bet than some of the other options on offer?

Economic growth is one of the reasons. The OBR growth projections are pretty woeful compared with our “usual” rate of growth over the past 70 years, and this is because productivity growth (the amount each worker produces) has stalled. It is this fundamental weakness in economic growth that is driving the crunch in public finances and stagnation in living standards.

'A great case for investment'

But we need not become locked into a low-growth economy. The government’s industrial strategy is its plan to snap out of this.

There’s lots of good stuff in it, but a key pillar is skills. Investing in learning and skills can help us to grow for the long term and make the most of advances in technology and other global economic changes.

Learning and skills are important for many other reasons, too. For example, our recent report showed the health benefits of learning. Together these help to make the economic case for investing – to grow the economy and to help deliver other public services, saving money in doing so.

I’m not saying that’s the extent of what we need to do. Nor that it will be easy. We’ve got a great case for investment. We’ll need sharp elbows to win the argument.

Stephen Evans is chief executive of the Learning and Work Institute

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