This Week in FE: Budget 2020 and Coronavirus
This week’s budget teased at some changes for the industry, including a promised review of the Apprenticeship Levy, as well as promised funding for the National Skills Fund to the tune of £2.5 billion. But the big news this week is the coronavirus, and Rishi Sunak’s first budget as challenger didn’t escape its effects.
Budget
ITPs who had been hoping for some clarity on the immediate future from this week’s budget will surely be disappointed. Promises were made about skills and ESF-style structural investment funds but so far, details are thin on the ground. No mention was made of additional funds to address the ongoing shortfall in low-level qualifications, and indications to date suggesting an ongoing focus on level 4 and level 5. Still, there were a few interesting points worth noting, and the highlights include:
Apprenticeship Levy - If you’re reading this, there’s a fair chance you rolled your eyes on reading those two words. It’s fair to say that things haven’t gone entirely as planned; The industry has seen “fake” apprenticeships, a huge drop in starts, millions in unspent funding AND a shortfall which prevented thousands of SMEs from recruiting apprenticeships.
Government has promised to “look at how to improve the working of the Apprenticeship Levy, to support large and small employers in meeting the long-term skills needs of the economy” and to “ensure that sufficient funding is made available in 2020-21”. For those among us who have been battling over apprenticeships for the past several years, the proof will be in the pudding. All will become clear (we hope) come this year’s Comprehensive Spending Review.
£1.5 billion to FE college estates - The chancellor announced plans to invest £1.5 billion to raise the standard of FE college facilities. It should be noted that these funds are specifically earmarked for investment in estates and facilities, so this won’t translate directly to extra cash for provision.
£2.5 billion National Skills Fund - Government will invest £2.5 billion in a National Skills Fund “to improve adult skills”. How the cash will be distributed remains to be seen, but consultations with stakeholders are expected to begin this Spring. Watch this space for further info!
Shared Prosperity Fund - Still no clear plans for this, but Government has promised to “set out further plans for the Fund, including at the CSR [Comprehensive Spending Review].”
Institutes of Technology - £120 million was earmarked 8 new Institutes of Technology were re-announced in addition to the 12 which were announced last year. To date, the existing institutes include collaborations between HE and FE colleges and large enterprises e.g. Milton Keynes College, Cranfield University and Microsoft; New College Durham, Newcastle University and Nissan. Every successful lead applicant to date has been a University or College, and only one ITP - In-Comm Training & Business Services Ltd - has formed part of a successful consortium.
Coronavirus
You’re probably as sick of reading about this as I am, but this raises a few important points for the industry. So, I’ll try to keep it short!
What kind of effects can we expect to see? I don’t mean to spread alarm, but I’d really like to see my clients and partners be prepared. Absent some widespread action very soon, the statistics are very clear that the UK will soon be looking at a similar situation as Italy. And very soon means a matter of weeks - or less. School and college closures, which will likely apply to FE providers - or, at least, those with classroom-based activities - are almost inevitable at that stage.
School Closures - When will they happen, and how will it affect FE?
In a statement yesterday, the PM acknowledged coronavirus as "the worst public health crisis for a generation." But, for now at least, the Government has chosen not to move ahead with the kind of school closures seen in Italy, France, and Ireland. However, if the experience of other European countries is anything to go by, that’s unlikely to be the case for long.
Even if nationwide closures don’t go ahead, at least some readers are guaranteed to have cases crop up at work. Whether it’s tutors, learners, or simply travel disruption, we’re certain to see knock on effects in the industry, including reduced starts, success rates, and learner retention rates.
The budget promised two-week SSP refunds for SMEs whose staff are affected by the virus, while HMRC will deploy a helpline for businesses who experience issues paying their taxes after any disruption in revenues. If you’re already struggling with revenues, it might be worth noting down the number: 0800 0159 559.
It’s a turbulent time for everyone, including providers, but my biggest piece of advice is the same as always: don’t sit around and wait for the next funding round; diversify! I’m always available for a chat if you’re on the lookout for new opportunities - just pick up the phone and give me a call. In the meantime, be safe, and be ready! More to come next week.
