Spending Review - analysis and comment

Spending review - analysis and comment

Let's start with the levy which it seems is genuinely welcomed by most in the sector.

It will affect only larger companies with more than 100-150 employees and a payroll cost of more than £3m per year so almost all colleges and many larger training providers will face this additional cost.  But it can be drawn down by businesses of all sizes and this should stimulate the take-up of apprentices in the SME sector.

In England, It should generate £2.5bn of revenue in the sector which is a large increase on current spending levels of about £1.5bn and supports Nick Boles steering at the AoC last week that Apprenticeships is where the budget is.

Of course, not everyone is pleased, the CBI http://news.cbi.org.uk/news/response-to-autumn-_statement (that represents many large employers) says  “With the levy set at 0.5%, even those businesses most committed to training and development won't be able to recoup their outlay, and it looks like an additional payroll tax.”

"Good news" for the Adult Skills Budget. Despite lots of rumours beforehand, the core ASB will be protected at £1.5bn but £360m of savings will be made from locally-led Area Reviews, along with a possible restructure of funding systems (EFA, SFA) and other departments such as UKCES.  Something similar to the Area Reviews has already been implemented in Scotland and Northern Ireland where larger regional colleges have now been established.

Advanced Learning Loans are being extended.  _“The government will expand tuition fee loans to 19 to 23-year-olds at levels three and four, and 19+ year-olds at levels five and six”._ Will this be additional or replacement funding in the ASB though?

Sixth Form Colleges can benefit from similar treatment of VAT to schools if they become Academies.  The Government also announced they will create 5 National Colleges and will support a new network of Institutes of Technology across the country.

FEWeek carried an excellent article http://feweek.co.uk/2015/11/25/much-feared-budget-looks-positive-for-adult-skills-budget-but-what-could-the-new-19-plus-fe-loans-mean/  with the full statement also available here https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/479749/52229_Blue_Book_PU1865_Web_Accessible.pdf   

The reference areas for the sector are paragraphs 1.170 to 1.179 and 2.80 - found on pages 45 and 46.

Jonathan Wells - ForSkills and Guroo Functional Skills