What will this month's autumn budget mean for colleges?

By Julian Gravatt, Deputy Chief Executive at the Association of Colleges

On 28 October, the Chancellor of the Exchequer, John Healey, will publish the government's autumn budget. Budgets are big events for MPs, the media, think tanks and financial advisors but what exactly will it mean for colleges?

This budget will be first of Andy Burnham's administration. He has made several promises, including that there will be a 10-year plan for the UK, but the budget will be the point where trade-offs and priorities become visible. It is important not to overstate this. Some chancellors in the recent past have made their budgets into big events and used them to take control of other ministers' policies. This might happen this time, but it's not a given. 

This budget may simply set out the government's overall fiscal plans, make some necessary adjustments and set a framework for discussions. Disappointed commentators might yet describe such a budget as boring but perhaps that would be no bad thing. It is only just over a year that the previous Chancellor, Rachel Reeves, gave government departments three-year budgets in the 2025 spending review. There is a scheduled update to these budgets in 2027. One decision in October for John Healey and his chief secretary, Emma Reynolds, is to set the overall spending total for all departments as a prelude for more detailed negotiations.   
Steady-as-she-goes is a good motto for finance but sometimes urgent action is needed. 

World politics has become more volatile and this has economic consequences both via the increasing need to spend more on defence and security and the risk of shocks such as unexpected price rises and no-notice shortages. In his speech to the Labour conference, the Prime Minister made the case for major reforms of social care while asking for the "same boldness for our young people too". He described the one million young people not in education training or employment “as a generation whose potential has been wasted by policy failures”. Alan Milburn's review has shone a light on many of these failures. To quote the Prime Minister again, the policies to rectify them will need to involve “investment, opportunity and reform.” Here is an area where the autumn budget could support an agenda of hope.

There have been hundreds of thousands of people classified as not in education, employment or training (NEET) for decades but numbers have been rising and, as the Milburn review says, this is no reason for inaction. A major part of the solution is to get better routes into sustainable work but there's also the need to reduce the numbers who drop out of education early or slip through the net without helpful foundations for adult life. The number of 16-to-18-year-olds in the population is currently rising and it is good that recent governments have provided funding to provide more places. Over the last three years, from 2023 to 2026, FE colleges have expanded their intake by more than 5% a year with much bigger increases in construction, engineering, digital and other technical areas. 

However a large component of UK's NEET challenge is now the drop-off from education and training at age 19 and over. In other countries with lower NEET rates there are vocational programmes alongside apprenticeships that help young adults up to age 25 acquire the skills they need for adult life and for secure jobs. More education and training opportunities for those from 16 to 24 could and should play a major role in tackling this moral and economic issue.
 
This is the main argument of AoC’s autumn budget paper for HM Treasury but there are others. We argue that government needs to provide more places for young people and young adults but also needs to ensure these are high-quality ones involving appropriately paid and skilled staff. The government needs to build on recent progress in helping colleges to pay enough to recruit and retain teaching staff. Nor is it just about young people. The triple impact of a changing population structure in the 2030s combined with lower immigration numbers and continuing economic change makes the case for more adult education and training more pressing than ever. If we don’t start now, there’ll be an impact on even the best written ten-year plan. And then there are areas where the system could be more efficient.  The cumulative impact of new initiatives, new qualifications and new providers has created a further education system with lots of small groups taught by underpaid staff in a half-modernised estate. There is a long-term possibility that devolution will give local politicians the means and the need to tackle issues that central government has dodged but also risks they’ll have even less capacity to do so.
 

So, in conclusion, there’ll be lots to think about when it comes to the autumn budget on 28 October.  We won’t get all the things we ask for, nor find out everything we need to know, but let’s hope it’s a start.