Listen to this story Members can listen to an AI-generated audio version of this article. 1.0x Audio narration uses an AI-generated voice. 0:00 0:00 Become a member to listen to this article Subscribe John Healey’s first budget as chancellor was broadly the budget many people were expecting. It included a relatively small cost of living package, a handful of tax rises, and plenty of small measures. But many of the big decisions, on areas such as the welfare system, public spending and the path to spending 3 per cent of GDP on defence, have largely been pushed into next year. Those decisions will not be easy: the plan to bring down government borrowing, which will be higher across the rest of the decade, relies on public service spending plans that look extremely tight. For further education, there was little news. The government reaffirmed funding for the youth employment package announced in the spring and expanded local apprenticeship services, but there was nothing new on further education funding. One wider measure that could affect the sector indirectly is the minimum wage. For 18- to 20-year-olds, it will rise by 3.9 per cent from April, in line with the adult rate, postponing plans for the young person’s rate to converge with the higher adult minimum wage. So the budget had little to say directly about FE. That’s a reasonable decision for a government that has already made quite a few announcements on FE outside of fiscal events, including technical pathways from age 14 and plans to hand mayors control of 16-19 funding. And more decisions are likely on the way. The chancellor confirmed that the government will respond to Alan Milburn’s review of young people and work before the end of the year, with a white paper to follow in early 2027. Reducing the number of young people not in education, employment or training will require action on several fronts: young people need the skills to work and the incentive to do so, and employers need to be willing to take them on. The budget’s measures mostly work through employers. The wider questions, including what will be expected of FE providers, are likely to remain unanswered until the government responds to Milburn. On devolution, the budget included a new framework to give mayors and local areas control of some of the revenues raised in their area. Yet there is still little detail on the prime minister’s plan to hand them control of 16-19 funding. That leaves some basic questions open. What exactly will be devolved: all 16-19 funding or mainly technical routes? Will funding still follow students at a national rate, or will mayors set their own rates and rules? And will students’ post-16 choices materially change depending on where they live? Looking ahead, the biggest decisions for FE are likely to come at next year’s spending review, which will set departmental budgets. It is likely to be a difficult one. The chancellor left overall departmental spending broadly unchanged in cash terms, so higher inflation has cut its real value. Combined with existing plans to slow spending growth sharply, this implies real-terms cuts for some public services. New decisions on defence add to the pressure. The chancellor confirmed a target of spending 3 per cent of GDP on defence by 2030, but without setting out how it will be funded. To the extent it is met by reallocating spending, it will mean less for other areas, which could include FE and adult skills. Overall, yesterday’s budget was not hugely consequential for the FE sector. But that doesn’t mean the sector has been forgotten: we have seen quite a few consequential decisions already, and we’re expecting more to come. The government will need to make sure these decisions fit together, both in their design and, importantly, in the resources available to deliver them.