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

While the investment in skills and jobs is welcome, too many different initiatives are causing confusion, writes David Hughes

David Hughes

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

This week’s Budget will be fascinating as the chancellor decides where and how to spend as well as tax more.

For colleges, too many Budgets (and Spending Reviews) over the past decade have brought disappointment and have often led to cuts in funding. But we live in exceptional times, and the chancellor has had to spend more money than any of us would have imagined over the past year, including in further education.

More funding for FE and for colleges has to be good news, so the pre-Budget announcement over the weekend of a further £126 million for traineeships and £7 million for apprenticeship incentives is to be welcomed. As is the £102 million for catch-up support for college students announced last week and the in-year funding announced last month to support the learning of 20,000 extra 16- to 19-year-olds colleges have recruited this academic year.

That’s on top of other extra funding this academic year: £100 million for digital devices, £700 million in the November Spending Review, a range of capital grants, around £120 million for higher teacher’s pension contributions, £96 million for catch-up, £111 million for traineeships, £101 million for a bespoke programme for 18- and 19-year-olds and more for apprenticeship incentives in the chancellor’s summer Budget.

All of that was on top of the increased 16-18 funding base rate for this academic year. Quite remarkable after a decade of cuts and neglect.

Revealed: Stark attainment gap in 16-19 education

More by David Hughes: Why every adult needs to be in lifelong education

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

'Separate funds are a headache to manage' 

The extra resource in further education has been more than matched by the chancellor’s Plan for Jobs funding, which has seen very big numbers pledged for Kickstart, Restart, Bootcamps, sector-based work academies, Work Coaches, additional JobCentre staff and more.

Impressive in many ways and it is right to invest in skills and jobs now, but I worry that it won’t work.

Extra funding is essential for the economy and labour market, but as it stands the many different funds are unlikely to deliver for many young people and adults. Put simply, the array of options for employers is bewildering, many people cannot afford to take them up and for colleges and providers, the separate funds are a headache to manage.

Employers are faced with a confusing set of options. Take on an apprentice and pay their wages, but get an incentive payment, support a traineeship with a placement, get a smaller incentive but pay no wages, recruit someone on Kickstart and have 25 hours a week of their pay subsidised, take on a T-level industrial placement and get nothing. Hardly joined up; unnecessarily confusing.

For those leaving education this summer, lost learning and lack of work experience will put them at a distinct disadvantage in a labour market already overwhelmed with unemployed people. Like those already unemployed, they face a tough time, with JobCentre advisers pressing them to apply for every single job going while knowing that there are not enough jobs and in many cases knowing that better skills are vital if a job is to be secured.

Bizarrely, if a young person opts for an education and skills programme outside of higher education, they lose their benefits and are denied access to any maintenance support, unlike their peers in higher education. Even more bizarrely, those on Kickstart have no guarantee that they will be able to access any skills or training alongside their 25 hours of work each week.

Colleges are faced with too many funding pots, disconnected from each other, with their own eligibility rules and accountability measures. The Skills for Jobs White Paper got it absolutely right in setting out an ambition to give colleges more autonomy to be able to meet the local learner and employer needs. That is urgently needed and requires a new culture of trust in colleges that has been lacking for too long with that trust underpinned with appropriate accountability. To meet local learner and employer needs, colleges need to have the time to set up the capacity to deliver clear outcome measures along with some certainty on how long the funding will exist.

'Allow colleges flexibility to meet needs' 

The chancellor has shown that he is willing to spend now to boost jobs and the economy. But unemployment has already risen and will get higher, so now is also the time to invest in the long-term skills and education of young people and adults unable to find work. It must be investment that gets young people ready for the jobs that will arrive later this year and over the coming years – in health, care, digital, construction, logistics and other growth sectors.

Helping more young people stay in full-time education for the next year or two would deliver a fantastic return on investment when the economy rebounds. Supporting millions of adults to improve their basic as well as work skills will help businesses bounce back.

To achieve this, the government needs to allow colleges flexibility to meet needs with a more appropriate set of performance measures and it must support the living costs of students. That’s not spending, it truly is investing, with a return for the individuals as well as the economy.

David Hughes is chief executive of the Association of Colleges

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