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Budget does not address the big challenges ahead: AoC's response to the Autumn Budget

5th November 2018

The Association of Colleges has responded to the Autumn Budget, announced by Chancellor of the Exchequer, Philip Hammond on 29 October 2018. AoC's Chief Executive, David Hughes said: "It is deeply disappointing that a budget which purported to focus on skills, economic growth and jobs did not mention the word ‘colleges’ once. The Office of Budget Responsibility reports small improvements in economic growth over previous forecasts, but productivity is low, and the Treasury’s plans do not address the big challenges of falling investment, front-loaded spending and major skills shortages. We can only hope that DfE and Treasury address these in the 2019 spending review. Our recent survey showed that SMEs believe the biggest risk to their future success comes from not being able to hire a skilled workforce – with them finding it increasingly difficult over the last five years. Half of the SMEs surveyed believe colleges to be best placed to support them in recruiting and training the workforce they need to be successful. And yet the chancellor completely ignored their calls. DfE appears to be focusing its attention on next year’s Spending Review and college leaders, staff and students will have to hope that they can persuade Treasury of the investment sorely needed. There is some hope with the Post-18 education and funding review, the focus on T Levels and their current work on college sustainability all helping to inform the DfE submissions. It’s useful, for instance, to see the Treasury budget red book talk of a post-18 landscape with "all students having a genuine choice between technical, vocational and academic routes which are accessible to all". That red book promise will feel hollow in the meantime and particularly after years in which college pay has fallen behind inflation. Treasury forecasters now expect pay to grow by an average of 3.5% a year across the economy, well-ahead of inflation. In colleges that level of increase is simply unaffordable without a grant from DfE which matches the Teacher Pay Grant to schools over the next two years. Offering that grant to colleges would be well within the cash available to DfE but would require Treasury permission which clearly has not been forthcoming. Adding insult to injury, the Treasury announced £400 million in capital grants to the 24,000 schools in England but once again no capital funds for the 266 colleges (which would have cost just £13 million if paid on the same basis as the £50,000 grants to secondary schools). This month’s #LoveOurColleges campaign showed the cross-party and widespread support for more and better investment in people and in colleges. It is a real shame that the Chancellor still does not appear to be listening." AoC has prepared a detailed list of budget announcements relevant to colleges.