Budget highlights for colleges (3 March 2022)

03 Mar 2021

Written at 140pm

The Chancellor, Rishi Sunak, announced the government's 2021 budget today.  Compared to recent Treasury announcements which included new skills programmes and details of Department for Education budgets, there was less of interest for colleges but there are some points of interest:

  • The budget statement includes the skills package announced over the weekend (£3,000 employer incentives for new apprentices whatever their age and for the next 6 months and £126 million to triple traineeships).
  • An extension of the Job retention scheme for 6 months to September 2021 with higher employer contributions for last 3 months from July
  • National Living Wage up 2.5% (the main rate rises from £8.72 an hour to £8.91)
  • A big rise in the corporation tax rate in 2023 (up from 19% to 25%) with lots of tax allowances frozen for several years from 2022 onwards (including personal income tax, pension allowances and the VAT registration threshold). Fuel duty rates are frozen again  for the tenth year)
  • a new Help to Grow scheme for SMEs with 90% subsidies for business school training and 50% subsidies for digital training. Launch in autumn
  • Nothing in the speech on public spending but the Chancellor's aim is to get government borrowing down from 17% of GDP in 2020-1 to less than 3% by 2023-4. The tax rises above help. OBR forecasts that the unemployment will peak at 1.8 million (rather than the 3 million forecast a few months ago), that the economy will grow fast for the next few years (7% in 2022) and that the long-term impact of Covid will be to reduce the size of the economy by just 3% 
  • First round of levelling up fund opens today (£4.8 bil UK wide capital fund to be managed by Treasury)
  • 8 freeports announced (East Midlands Airport, Felixstowe, Humber, Plymouth, Solent, Thames and Teeside)
  • Some town deals also out. Local govt media report that much of the 2021-2 towns fund money has been diverted to levelling up fund and freeports
  • A new government bank in Leeds (Pudsey) and a new Treasury/ BEIS / MHCLG office in Darlington