Spring budget

1. Spring budget

2. Headlines Announcements on economy, fiscal plans, tax and spending • Economy expected to grow in 2017 more than expected but forecast full of uncertainties because of Brexit • Inflation (CPI) expected to rise to 2.4% later in 2017 • Unemployment still below 5% • UK budget deficit below 3% of GDP in 2016-17 • Current target to eliminate deficit by 2021-22 • Budget includes £5 billion of extra spending over 5 years and £5 billion of extra tax income* in same period. Fiscally neutral if the forecasts are correct. * £2 mil of which is from extra NICs on self-employed

3. Education announcements Full speed ahead on schools • Schools white paper out soon • More places in good schools (grammars, faith schools etc) • £1 billion more added to free school capital budget for period after 2020. New school buildings take time to come on stream. • DFE now able to invite more bids for new schools No action in some areas • No change on national school funding formula • Adrian Smith Maths review not yet published

4. Technical education 16-19 year olds Towards a new system • Technical education routes now T-levels • £100 mil for 2019-20 academic year when first routes start • £500 mil a year extra in the early 2020s • Funding assumption 900 hours vs 600 now • Covers, perhaps, 20% of the age group • Work needed from EFA to include this funding and new assumptions into the 16-19 funding formula • Design of new T-Levels and implementation after 2019 have major implications for choices offered to all 16 year olds. Not clear where they will be available or who will offer them

5. .. and for adults Institutes of Technology • £170 million over 3 years for 10-15 new IoTs • No new Treasury funding. Comes from within DFE budget • Developed from existing institutions, preferably FE colleges • Maintenance loans for Level 4&5 courses in future • Applications will be invited later in spring 2017 Lifelong learning • £40 million to pilot innovative approaches • No new Treasury funding. Comes from within DFE budget

6. What’s next on public spending Next steps for the government • Treasury will now work on autumn budget including efficiency review (“6% savings by 2019-20”) • Much in government depends on Brexit negotiations Next steps for the government • EFA allocations just published • SFA allocations out in late March (no change) • Uncertainty on skills devolution • Apprenticeship D-Day 1 May 2017

7. The funding reality for colleges Difficult financial environment • Flat cash (no increase in rates) since 2012 or earlier • 16-18 FE numbers have fallen continuously for several years though 16-18 sixth form college numbers have held up • SFA adult education budget fixed in cash terms • Opportunities and risk in apprenticeships and HE • Banks retreating from colleges • Very limited capital grants • Colleges aiming to increase surpluses and conserve cash

8. Autumn budget

9. What we asked for from spring budget Govt needs a reset on education and skills • Fair funding for 16 to 18 year old college students • Technical education package (workforce, equipment etc) • Maintain apprenticeship spending whatever the levy • A citizen’s skills entitlement (including digital skills) • An English Social Fund • Capital funding • Measures to improve efficiency & effectiveness of the system

10. What government wants from colleges Several priorities • Savings in public spending by 2019-20 • Success with the apprenticeship reforms • Technical education on equal footing with academic • Higher productivity • Higher achievement in schools, colleges and universities but with greater progress for those from just about managing families

11. Our approach to the autumn budget Some considerations • Officials appreciate a detailed document (probably September) • College leaders want their immediate issues addressed • Helpful to come up with easy-to-remember asks • Good to work on common lines with others • Evidence and research do help secure change • AoC policy groups will be asked for their views What should be our approach and priorities?