The government is to slash £460 million from the adult skills budget, forcing colleges and training providers to make “difficult decisions” about cutting jobs and courses to balance the books, FE leaders have warned.
The skills funding statement was finally published this afternoon by the Department for Business, Innovation and Skills, more than two months later than expected.
The overall skills budget increases by £56 million for 2014-15, before falling by £271 million the following year to £3.87 billion.
While many parts of the budget will see a slight increase for 2014-15, the adult skills budget will be hardest hit. It faces substantial cuts for two consecutive years, equating to a 19 per cent (£463 million) drop in funding by 2015-16 to just over £2 billion.
“That is a sizeable cut; it will have a real impact,” said Julian Gravatt, assistant chief executive of the Association of Colleges. “It will mean there will be fewer unemployed people going on courses.”
While speculation in recent weeks has suggested that the FE sector could face larger cuts than expected in order to protect the higher education budget, Mr Gravatt said that the figures announced were largely in line with cuts announced last June.
He called on the Skills Funding Agency to work quickly in providing institutions with the individual funding allocations to help them budget for the next academic year.
“If you want high-quality provision, [providers] need to be able to plan,” he told TES. “If you take £460 million out of the budget, people need time to stop courses and make redundancies.
David Hughes, chief executive of adult learning body Niace, said the settlement “could have been worse” for the sector, but warned individual providers would be left to make “difficult decisions”.
“What that does do is create a postcode lottery in terms of what’s on offer for adults. The decisions will have to be made at a local level, and providers will be making difficult decisions in isolation. That’s the bit that worries me most,” he said.
Skills and enterprise minister Matthew Hancock also confirmed plans to scrap FE loans for apprenticeships, which he said have not proved to be popular with learners.
“The newly-available loans for further education have seen a high level of demand,” he said. “However, loans for apprenticeships have not seen the same uptake. We will therefore remove apprenticeships from loans and offer a government contribution for all apprenticeships whilst continuing to expand the loans budget to deliver training on the ground.”
The learner support budget will increase by almost £30 million next year, with the budget for 24+ advanced-learning loans going up by £269 million in the same period.
However capital grants will be cut by almost 8 per cent (£35 million) over the next two years.
The funding statement stressed the “need to ensure that government funding delivers value for money whilst giving individuals the skills they need to enter and progress in work”.
The statement added that apprenticeships “remain the government’s top priority. Funding will continue to be prioritised to encourage increased take up and availability of apprenticeships.”
This was welcomed by Stewart Segal, chief executive of the Association of Employment and Learning Providers, along with the news that traineeships will be extended to include 24-year-olds from 2014-15.
“There is no doubt that the adult skills budget is under some considerable pressure and the 19 per cent cut over two years will affect all providers. It is therefore very important that funding within it is allocated in line with evidenced employer and learner demand,” he added.