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Tinkering around the edges in Budget

16 March 2016

George Osborne's latest budget comes only four months after the Autumn Statement and Spending Review so it’s not surprising that it’s short on news for colleges. The last two Treasury statements introduced the apprenticeship levies, protected billions of pounds spent on sixth form and adult education (in cash terms) and set the scene for a major programme of skills devolution. In this context, anything said in the March 2016 budget was always going to be tinkering around the edges. The Government's priority for further education in 2016 is preparation for a changing future via its national programme of area reviews. Nevertheless there were points of interest in what the Chancellor had to say and what the Treasury reports in its detailed statement. The first and most important points result from the changing economic forecasts. The Office of Budget Responsibility now reckons the UK economy will be 1.5% smaller in 2020 than they predicted a few months ago. Forecasts like these need to be taken with a pinch of salt but they make it harder for the Chancellor to reach his manifesto target of a budget surplus by the time of the next election. To get there he has therefore pencilled in a number of tax increases and future spending cuts. The cuts are not yet specified but the Treasury aims to find £3.5 billion by 2019-20. These will presumably come from unprotected departments which is why the announcements last year on the £4,000 sixth form rate and the adult education budget are so important. In the current state of play, further education is protected from many of these additional cuts but nothing can be taken for granted. The second big point from the budget is the action taken on schools. There will be an education white paper tomorrow, plans to make every school an academy by 2020 and a sugar drink tax to fund primary school sport and longer school hours in some secondaries. There is nothing in the headlines for colleges but it is recognition of the pressures in the Department for Education budget and a commitment to further wide ranging reform of the system. The details will matter for everyone in education. The Association of Colleges’ concern will be to protect and enhance what happens after the age of 16. Work is underway in Government on apprenticeship reform and new technical education routes. There was little in the budget on either subject but there will be important announcements in the coming weeks. Julian Gravatt is the Assistant Chief Executive of the Association of Colleges. A more detailed list of announcements is available on our website. These issues will be discussed at AoC's Annual Finance Conference & Exhibition on Tuesday 17 - Wednesday 18 May 2016, Jury’s Inn Hinckley Island Hotel. Finance conf 2016_flyer.pdf Finance conf 2016_flyer.pdf (PDF,276.81 KB)