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Important announcements, but lots of questions

08 July 2015

George Osborne's Budget speech lasted a record 75 minutes and the Treasury's budget book runs to hundreds of pages. Over the next 24 hours there will be gigabytes of budget news on traditional and social media. There were important announcements on plans for a national apprenticeship levy to be paid by large companies, the scrapping of student grants (from September 2016 onwards) and housing benefit (for young adults under the age of 21). Despite this, the Budget itself doesn't get us that much closer to knowing exactly what will happen to post-16 funding or to future college income. What we have learnt is the planned course of future public spending. Back in March 2015, the Chancellor set out a plan to balance the Government budget by 2018 and to do so by making £25 billion in spending cuts in two years, £13 billion of which was to come from departmental budgets. The plan is now for a total of £37 billion in spending cuts but over a much longer period. There is still a large target to cut departmental spending but the Chancellor promises that the rate of spending cuts will be the same in future as in the last five years. To make this happen, it will be essential for the Government to introduce reforms to sustain a necessary level of activity. The national apprenticeship levy could be a major help here. Extending further loans to more people and more courses will also be necessary. The next 12 months will be very challenging for colleges because, on top of everything else, they face a 5% hike in teaching costs as a result of pensions and national insurance increases. Future college funding depends on the Comprehensive Spending Review which will run into the autumn 2015 but in the short term we are still waiting on some immediate announcements. Over the next 48 hours, we are likely to see announcements from Education Funding Agency, Skills Funding Agency and the Higher Education Funding Council for England about what this means for 2015-16 academic year allocations - the period starting in just three weeks. The Government's productivity plans identify some long-term economic challenges and will bring some reforms to education and skills but when it comes to money, Government's role is still too short-term. Julian Gravatt is the Assistant Chief Executive of the Association of Colleges.