Autumn budget news for colleges (22 November 2017)

What is new or interesting for colleges in the Autumn budget £20 million in staff development funding to support T level implementation. £40 million to establish Further Education Centres of Excellence in maths teacher training alongside a research budget of £8.5 million to test innovative approaches that improve GCSE resit outcomes. Funds to reward A level and Core Maths enrolment growth. The Treasury promise £600 for each additional student enrolled on maths courses at this level. There are already around 200,000 sixth form age students enrolled on the first or second year of A Level Maths programmes, around 65,000 of whom are in colleges. The budget documents say that £80 million is available for these bonuses but the money is uncapped. It is odd to reward future growth but not recent expansion. Confirmation of a new social partnership with CBI and TUC which will advise on a new National Retraining Scheme. The Treasury will support the scheme by making £30 million available for digital learning and £40 million for construction learning. There is also £8.5 million for Unionlearn. An announcement of a new devolution deal for the North of the Tyne area (Newcastle, North Tyneside and Northumberland). An earlier deal with the North East area (covering 7 local authority areas) ended in 2016 when some councils voted against participation. DfE is working with the 6 Mayoral Combined Authorities and the Greater London Authority on the devolution of the adult education budget which is likely to take effect for the 2019-20 academic year. Treasury today allocates £12 million to MCAs for capacity building (presumably so that they can employ staff). A 4.4% increase in the living wage in April 2018 taking the rate from £7.50 an hour to £7.83 an hour. The economic forecast prepared by the Office of Budget Responsibility downgraded forecasts for growth by several basis points (for example from 1.6% to 1.4% in 2018). OBR forecast that consumer price inflation (CPI) will peak at 3% in 2017-18. The Chancellor presented a relatively modest set of tax and spending changes. Taking these into account, the OBR forecasts that Public Sector Net Borrowing will fall from £49 billion in 2017-18 to around £25 billion in 2022-23. Given that some of this borrowing is for capital spending, this plan would bring the current budget into surplus by 2019-20 . This forecast depends on the core economic forecast being correct. Given the uncertainty around Brexit and the difficulties OBR has had with recent forecasts, these figures are likely to change The forecast outturn for this year (2017-18) is £8 billion better than forecast in March 2017. Every year this decade, the Treasury gets a benefit from departmental underspends. There are underspends on most DfE budgets which is reinforcing financial pressure on colleges. What was missing in the Autumn budget The Chancellor's speech and the budget document acknowledge the importance of education and skills and diagnose some of the weaknesses in the current system but the proposals are short term and a bit adhoc. Next Monday's Industrial Strategy may provide more coherence to government policy while DfE and the Education and Skills Funding Agency (ESFA) There were no big adjustments to the departmental spending totals agreed in the 2015 Spending Review apart from extra funds for the NHS (£350 million extra in 2017-18, £1.6 billion extra in 2018-19 and more in 2019-20), a large spending package for housing and a reserve budget of £3 billion set aside for Brexit preparations. A year and a half ago, the former Chancellor, George Osborne, set a target to save £3.5 billion by 2019-20 via an efficiency review. The Treasury reports that some savings have already been made but that no further work will be undertaken as part of this review to change departmental budgets. There were no significant new tax announcements affecting colleges. The Chancellor chose to cut stamp duty for first time buyers, to freeze fuel and alcohol duties, to implement election manifesto promises about the income tax personal allowance and to make some tax changes to raise revenue from certain companies and richer individuals.