Our Spring Budget roundtable discussed the implications of the Budget Statement and forecast by the Office for Budget Responsibility for post-16 education, skills and labour market policy.
We were joined by: Louise Murphy, a leading economist from the Resolution Foundation; Professor Ewart Keep, an expert on industrial and employer training policy; and representatives from key stakeholders in the post-16 education and skills system – Simon Ashworth, director of policy at AELP; Julian Gravatt, deputy chief executive at AoC; Susan Pember, director of policy at HOLEX, and Nick Hillman, director of the Higher Education Policy Institute.
The Cost-of-Living Crisis
The panel discussed the economic, fiscal and monetary outlook for the UK economy in 2023, including the continuing impact of the cost-of-living crisis on every part of the post-16 education and skills sector:
- parents of 16-19 year-olds in full-time further education, and 16-19 FE students themselves;
- students in full-time higher education (especially 18-24 year-olds);
- adults in part-time Level 3 and below further education;
- adults in part-time Level 4-6 higher education;
- parents of young apprentices living at home and adults from poorer households on apprenticeships;
- employer spending on training including demand for apprenticeships;
- funding received by providers to deliver all forms of post-16 education and skills, from basic skills to Level 8, and
- the real terms pay of lecturers; teachers, tutors and trainers in the post-16 workforce.
The panel were genuinely concerned that the impact of the cost-of-living crisis - even though inflation is predicted to fall to 2.9% by the end of 2023 and the economy is expected avoid a large contraction – has not fully worked through the post-16 education and skills system.
There are worries of student drop-outs from full time further and higher education, and lower participation by adults in part-time FE and HE.
Key Takeaways from the Roundtable
The Chancellor billed the Spring Budget as a bridge from securing economic stability to generating economic growth.
As a self-styled Budget for Growth, it seeks to deliver growth without skills.
The Chancellor made clear that the Budget tackles the two biggest barriers to growing businesses – incentives to invest and increasing the labour supply. Whilst incredibly important to long-term growth, skills hardly got a look in.
The most important skills policy announced in the Budget was a further relaxation of net worker migration into the UK. Higher net worker migration is good for economic growth but not so good for increasing employer investment in skills which can boost labour productivity.
The one bright spot was the UK Apprenticeship Levy which is forecast to raise £3.7bn in 2023/24. What is needed now is greater transparency over how the levy translates into public spending in Scotland, Wales and Northern Ireland, and on apprenticeships in England.
Too many skills policies – from devolution to the Lifelong Loan Entitlement – are timed from 2025/26 and after the general election.
For skills, it is a Budget which will quickly be forgotten.
All eyes should turn to the next fiscal event – the Autumn Statement – making the case for skills.
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