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AoC's 2020 spending review submission (24 September 2020)

25 September 2020

The 2020 spending review, alongside the forthcoming FE white paper offers a once in a generation opportunity for the Government to place colleges at the heart of our society and economy. The pandemic requires exceptional leadership nationally and locally if we are to recover quickly and securely. Brexit will bring challenges to our labour markets. Climate change, Black Lives Matter and new technologies offer more challenge as well as opportunities. AoC sent this spending review paper to HM Treasury today AoC Colleges and the 2020 Spending review 24.9.20.pdf AoC Colleges and the 2020 Spending review 24.9.20.pdf (PDF,331.5 KB) AoC Colleges and the 2020 Spending review 24.9.20.docx AoC Colleges and the 2020 Spending review 24.9.20.docx (DOCX,298.35 KB) Across all of this, colleges offer solutions and investment opportunities with enormous returns economically and socially, Our proposals here build on the discussions we have had with employers, unions, other education providers, government officials and politicians. They represent a realistic investment portfolio which would release colleges to deliver so much more to support people, places and productivity. After a decade of austerity which has disproportionately hit colleges, it’s time for a decade of investment and opportunity. College leaders have shown their resilience, adaptability and resourcefulness through this pandemic and are ready to deliver more to support an inclusive and fair, quick and significant recovery. The UK has experienced its worst health crisis for 100 years and the worst economic crisis for 300 years. In turn, this has put many companies and jobs at risk and is stretching some public services to breaking point. Unemployment will rise sharply in the next six months and HM Treasury faces the reality of a very large budget deficit in the 2020-1 financial year. The context for the 2020 spending review but there is no time to lose. The proposals in this paper address two big issues: Skills for new jobs: The government’s Plan for Jobs published in July and the Winter Economic Plan statement in September aim to protect and promote employment by reducing costs for employers and stimulating economic activity but there is a pressing need for action on skills. The economic shock has caused a sharp fall in the number of apprenticeships while the end of the Job Retention Scheme is likely to see contracts for existing apprentices end. Meanwhile there are a number of growth sectors with rising job vacancies, including Health, Construction, Digital and the Green Economy. The Spending review should be the place where the government launches a Plan for Skills. Disadvantaged young people: The closure of schools, colleges and universities in March 2020 was an event without precedent since the second world war. Colleges continued to offer remote learning to the majority of students but there were considerable problems with IT access and curriculum materials, particularly for technical subjects. Many schools struggled. Large numbers of young people lost months of learning time and this has widened existing social and class divisions. Those leaving education will face a challenging labour market and will be less likely to find work with possible negative impacts for the rest of their lives. The £1 billion catch-up fund and the one year programme for 18 and 19 year olds are helpful first step but the pandemic shows that the government’s plan to level up opportunities for people and parts of the country will be an even bigger task than previously understood. We believe that big problems deserve big solutions. COVID19 and its impact on the economy is like nothing we’ve seen before, and the government’s response has to match that. Every community in the UK has a thriving college with the capacity to help young people and adults progress and that works with hundreds of local employers to develop their workforce and anticipate their future needs. Colleges are perfectly placed to offer education and training for their communities and business but are struggling because the lockdown had a negative impact on their budgets which were already stretched because of funding constraints, uncertainty, cost and competition from better-funded organisations. HM Treasury took bold decisions with its business support schemes, with the furlough scheme and in the Plan for Jobs but should now have the same resolve when it comes to education and training. To this end, we set out 20 proposals in this paper set out in 5 sections: Immediate actions focused on disadvantaged young people, apprentices and ensuring education continuity in 2020-1 A ten-year further education strategy A new deal for skills Ensuring every young person has a superb education Improving the education system