Association of Colleges

20 October 2010

AoC reacts to George Osbourne's Comprehensive Spending Review announcements (20 October) relating to education budgets.

Assistant Chief Executive of the Association of Colleges, Julian Gravatt, said:

“While Further Education has not emerged unscathed in the Comprehensive Spending Review, things are not as dire as we had expected. However, Colleges, which have already seen a 14% cut to adult learner responsive budgets this year, are facing further cuts of around 25%. There is no escaping the fact that the next few years will be extremely difficult and there are some real challenges ahead, but Colleges are resilient and will find ways of making the best possible use of the funding available.

“While we will need to wait until the finer details of the spending review emerge over the coming weeks, we welcome the Chancellor of the Exchequer’s comments about skills being seen as a priority for growth and the announcement of funding for extra places for 16 to 19-year-olds. This is particularly important for Colleges – who teach two thirds of young people aged between 16 and 19. But we are concerned about the prospects of students from poorer families following the announcement of the withdrawal of the Educational Maintenance Allowance and would like to see more detail about what is meant by ‘more targeted support’ for these young people.

“The Association of Colleges suggests the Government should protect Education Maintenance Allowances for young people from the most disadvantaged backgrounds by tackling inefficiency in small school sixth forms and closing the funding gap between schools and Colleges – this could save them up to £250million.

“Further concerns centre on funding for basic skills in the workplace following the end of the Train to Gain programme and the review of Higher Education (HE) funding will create challenges for Colleges delivering HE courses.”

 

Notes to editors:

 

• There is insufficient detail today to reach firm conclusions on College funding for 2011-12 or beyond. AoC will be following up details and a fuller picture will emerge in departmental business plans published in November.
• The education budget settlement is better than expected with a 0.1% real terms increase in spending on schools for 5-16 year olds but the Treasury promises “unit costs reductions” for 16 to 19 education and the reform of the Education Maintenance Allowance so that it focuses on the most disadvantaged children. These are costed in the budget document as saving £500 million which will be partly reinvested in further increases in participation.
• It is too early to say exactly what the settlement means for the £4billion that Colleges receive for 16-18 education.
• The budget settlement for the Department for Business, Innovation and Skills involved above-average cuts of 25% on the revenue budget. Following the Browne review, the biggest cut is in higher education (a 40% cut over four years) which allows the department to limit savings elsewhere to 16% in real-terms over the four years. There is specific protection for the science budget and we calculate that the total reduction in the further education and skills area will be in the range of 25%. Within this, there will be a big increase in spending on adult apprenticeships (i.e. 19 to 25 year olds), the abolition of the Train to Gain (no date yet confirmed) and a plan to introduce loans to fund level 3 courses taken by those 25 and over instead of grants. We understand this change will take effect in 2013 or thereabouts.
• Capital budgets in education will be cut by 25% over the four years and by 50% in BIS. The priorities in the two departments in this area are schools and science but there may be scope for Colleges to secure small grants in both areas.

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