Per student spending in further education and sixth form colleges will be ten per cent lower than when the Conservatives entered government, according to the Institute for Fiscal Studies.

Analysis of yesterday’s autumn budget and spending review by the IFS revealed funding levels will be at around £6,500 by 2023-24 compared to over £7,000 in 2009-10.

The institute’s director Paul Johnson this morning called the lack of spending on education, which is set to rise by two per cent a year until 2024-25, compared to four per cent on health, “the most striking contrast”.

Spending per student in FE and sixth form colleges will “remain well below” 2010 levels, which Johnson said is “not a set of priorities which looks consistent with a long-term growth strategy or levelling up.”

“For the chancellor to have felt it appropriate to draw attention to the fact that per pupil spending in schools will have returned to 2010 levels by 2024 is perhaps a statement of a remarkable lack of priority afforded to the education system since 2010. A decade and a half with no growth in spending despite, albeit insipid, economic growth is unprecedented.”

This is despite chancellor of the exchequer Rishi Sunak promising to MPs yesterday the budget “invests in the most wide-ranging skills agenda this country has seen in decades”.

His commitments included £2.8 billion capital investment to, for example, improve colleges and build 20 institutes of technology, as well as £324 million in 2024-25 for “additional learning hours” for 16- to 19-year-olds, and £1.6 billion to maintain per student funding rates in real terms.

Much of the funding appears to have been announced already though, upon which FE Week is seeking clarity from the Treasury.

‘Plenty more’ spending announcements needed to undo 2010s cuts

Following the budget, Learning and Work Institute chief executive Stephen Evans warned another £750 million would be needed to return investment in skills to 2010 levels.

Speaking today about this week’s “once in a decade” fiscal event, which laid out government spending until 2024-25, IFS research economist Ben Zaranko said Sunak will need “plenty more events like this to undo the cuts of the 2010s”.

Johnson also joined in criticisms of the government for briefing several funding announcements in the days before the budget, which he said: “Served only to obfuscate”.

The briefings by the Treasury, including about boosts for college funding and for T Level teaching hours, “revealed less than nothing,” according to Johnson.

FE leaders have been left frustrated by the lack of clarity surrounding the government’s spending review commitments for skills.

Chancellor Rishi Sunak promised today that “total spending on skills will increase over the parliament by £3.8 billion by 2024-25, equivalent to a cash increase of 42 per cent (26 per cent in real terms) compared to 2019-20”.

But much of the investment, which includes funding for capital projects, adult education, the 16 to 19 base rate and apprenticeships appears to be a rehash of previous funding announcements.

FE Week is seeking clarity from the Treasury but the issue has not escaped the sector’s leaders, who have cautiously welcomed today’s spending review.

Stephen Evans, chief executive of think tank the Learning and Work Institute, said: “It’s good to see investment in skills rising again after a lost decade of cuts. However, it looks like this only restores some of the previous cuts and so won’t be enough to transform Britain into a skills superpower.

“The spending review is light on details, but we estimate another £750 million is needed to return investment to 2010 levels and how we invest and what we achieve is as important as levels of investment.”

David Hughes, chief executive of the Association of Colleges, said: “It’s clear that the chancellor and this government recognise that more investment in skills is vital for economic growth and their levelling up ambitions. So it is disappointing that despite lots of warm words about the importance of skills, and a long list of separate funding pots, overall investment does not look like it is going up by much at all

“A world class skills system needs more investment than this after more than a decade of cuts. Good rhetoric about skills will not level up the country – colleges will do that with the right investment.”

He added: “Government’s consistent refusal to increase the funding per student post-16 is baffling. The funding per adult will not have gone up in 14 years by the end of 2024/25, unlike in schools where per pupil funding will match 2010/11 levels in real terms.”

Bill Watkin, chief executive of the Sixth Form Colleges Association, said: “We asked three things of the Chancellor in this year’s spending review: boost capital funding for providers of 16 to 19 education that wish to expand, make a long-term commitment to the increases in revenue funding announced in 2019, and raise the rate of core funding for every sixth form student.

“On capital, it is our understanding that the post-16 capacity fund – currently a one-year scheme – will be extended for a further 3 years through the additional funding announced today. That is excellent news, and will benefit colleges that are currently oversubscribed and help to accommodate the thousands of additional 16- to 19-year-olds that will participate in education in the coming years.

“We are also pleased that the government has committed to maintaining the funding gains made in 2019 and to protecting revenue funding in real terms. However, at this stage, it is too early to say what the new funding rate will be or how funding 40 additional hours of learning per student, per year, will work in practice. We look forward to working through the details of this with officials in the days and weeks ahead.”

Kirstie Donnelly, chief executive of City & Guilds Group, said: “Whilst we welcome the chancellor’s spending package for professional and technical education, we need more clarity over whether the chancellor’s commitments to the sector are new, or merely a rehash of funding that was already allocated and sold to us as something ‘new’.

“With a million jobs left unfilled (along with our supermarket shelves and petrol tanks) there is too much at stake to get this wrong.”

Tom Bewick, chief executive of the Federation of Awarding Bodies, said: “From the perspective of government wanting to get more money into FE colleges; secure extra capital to deliver on the department’s own technical education reforms; as well as find additional resource for flagship schemes like Bootcamps, DfE ministers can claim some sort of victory.

“In that sense, l would argue that they’ve found more money to invest in the things that are perhaps important to them; and not necessarily the long term investment and policies needed to tackle the great skills and adult education divide that exists in our country.

“Indeed, what this budget and spending review absolutely doesn’t do is fully reverse over a decade of austerity in FE. England’s investment in technical education per head will still fall well below that of our major competitors; and crucially, today’s budget fails to tackle the huge intergenerational divide, since the burden of higher taxes and the cost of living squeeze will continue to fall disproportionately on the young, renters and those in work on average earnings.”

Jane Hickie, chief executive of the Association of Employment and Learning Providers, said: “I particularly welcome investment in apprenticeships, traineeships and employability programmes. This focus on vocational learning will help get people of all ages and at every level into good quality training and work.

“However, it is clear there remains a real lack of parity in treatment of different FE provider types. Independent training providers have been left out of education catch-up funding and capital investment, both of which are only available to schools and colleges. This is disappointing, given the important role independent training providers play in supporting employers and learners.”

Simon Parkinson, chief executive of the WEA, said: “It is remarkable to hear a chancellor highlight lifelong learning in a budget speech and we are pleased that there is a new programme, Multiply, to tackle the long standing challenge of poor numeracy.

“However, maths is only one part of the challenge and the nation also needs to tackle other essential skills such as literacy and digital skills. The Multiply programme will be delivered through the Shared Prosperity Fund so it will be separate to the Department for Education’s support of adult learning generally. We look to the detail behind the Budget speech for reassurance that community learning budgets are at least maintained and that the Multiply programme is additional to government spending on essential skills through DfE.”

Jennifer Coupland, chief executive of the Institute for Apprenticeships and Technical education, said: “We welcome the chancellor’s spending review announcement today which was full of great news for technical education.

“The extra financial support for apprenticeships, T Levels and colleges will be hugely beneficial. The Institute has championed the interests of small businesses within the apprenticeships programme, so it is great to see measures that will help more of them recruit and train apprentices.

“We will work with employers and the FE sector to ensure we capitalise on this timely boost and do better than ever at filling skills gaps, keeping pace with technological advances, supporting the green-agenda, and driving the national recovery.”

Chancellor Rishi Sunak delivered his spending review and autumn budget today and confirmed a number of investments for the FE and skills sector.

He promised that “total spending on skills will increase over the parliament by £3.8 billion by 2024-25, equivalent to a cash increase of 42 per cent (26 per cent in real terms) compared to 2019-20”.

However, the accompanying red book fails to provide clarity about how much of this funding is brand new money. Much of it appears to be a rehash of funding that was already allocated.

FE Week is seeking clarity from the Treasury. In the meantime, here is what the spending review documents commit for FE and skills:

16-19 funding rates to be ‘maintained in real terms’

The current base rate for 16- to 19-year-olds sits at £4,188 per student.

Today’s red book states that an “additional” £1.6 billion will be invested by 2024-25 to “maintain funding rates in real terms per student, and provide a 28 per cent real terms increase in 16 to 19 funding from 2019-20”.

FE Week has asked the Treasury to confirm whether this means the £4,188 rate will increase annually in line inflation.

The red book goes on to say the £1.6 billion provides “additional hours in the classroom for up to 100,000 T Levels students by 2024-25” and also funds “40 additional hours learning per student per year for 16- to 19-year-olds”.

Apprenticeship funding ‘increase’

The red book says the government is “increasing apprenticeships funding to £2.7 billion by 2024-25 – the first increase since 2019-20”.

It goes on to show this is a £200 million increase on what was predicted in March 2021.

However, it is not clear whether this is natural growth in the apprenticeship levy on large employers’ payrolls as employment and earnings rise. FE Week is seeking clarity.

The red book says the government is continuing to meet 95 per cent of the apprenticeship training cost for employers who do not pay the apprenticeship levy and “delivering apprenticeship system improvements for all employers”.

Improvements include an “enhanced recruitment service” by May 2022 for small and medium-sized enterprises (SMEs), helping them hire new apprentices.

By April 2022, the government promises to also “consider” changes to the “provider payment profiles aimed at giving employers more choice over how the apprenticeship training is delivered, and explore the streamlining of existing additional employer support payments so that they go directly to employers”.

Government also plans to introduce a “return on investment tool” in October 2022 to ensure employers can “see the benefits apprentices create in their business”.

The red book confirms that £3,000 cash incentives for each apprentice an employer hires will end on 31 January 2022.

£2.8bn skills capital investment

The red book states that government will be “providing £2.8 billion in capital investment in skills”.

This funding will include: “Improvements to the condition of post-16 estate, new places in post-16 education; more specialist equipment and facilities for T Levels; and delivery of the commitment to 20 Institutes of Technology across England. It will also help to provide the skills that local areas need in key sectors like biosciences, through industry-standard equipment and facilities.”

It is not clear how much for the £2.8 billion, if any, is new.

Capital funding for T Level equipment and facilities, £1.5 billion for college estate projects and almost £300 million for Institutes of Technology has already been announced.

£554m from the national skills fund to boost bootcamps and the level 3 offer

The government already committed to a £2.5 billion national skills fund in the 2019 Conservative party manifesto and subsequent budgets.

Today’s spending review document states that the government will provide “a total investment of £554 million by 2024-25 to substantially increase retraining and upskilling opportunities for adults”.

It continues: “This provides a 29 per cent real terms uplift in adult skills funding compared to 2019-20 and meets the government’s commitment to a national skills fund. This includes giving more adults access to courses at level 3 in in-demand areas such as engineering and digital skills, scales up skills bootcamps, supports reforms to the adult skills funding system, and invests in the skills local employers need.”

£1.8bn more for education recovery

Also included in the spending review is an additional £1.8 billion for education recovery. This is on top of the £3.1 billion already announced.

The new commitment includes a £1 billion “recovery premium” for the next two academic years “to help schools to deliver evidence-based approaches to support the most disadvantaged pupils”. It seems to be an extension of the current school-led tutoring fund.

Also coming out of the £1.8 billion is £324 million in 2024-25 for “additional learning hours” for 16- to 19-year-olds.

But that leaves over £400 million of the funding unaccounted for, and it’s not clear from the documents what this will be spent on.

The Department for Education later confirmed that £800 million will be allocated for 16 to 19 catch-up in total.

A spokesperson said: “Students in 16 to 19 settings who have the least time left to recover learning lost will benefit from an additional 40 hours of education across the academic year, equivalent to an additional hour per week.

“This time will be used for extra teaching and learning – including in English, maths and other subjects – depending on students’ individual needs. This, alongside the 16 to 19 tuition fund, will help to prepare these students for their future.”

UK Shared Prosperity Fund to pay for £560m Multiply project

The government has announced a £560 million Multiply scheme, aimed at improving half a million adults’ numeracy (click here for full story).

Documents show the shared prosperity fund, which is set to launch in April and succeeds EU structural funds, will be used for this scheme. The prosperity fund will be worth £2.6 billion in total over the next three years.

The national minimum wage for apprentices will increase next April from £4.30 to £4.81 per hour, the Treasury has confirmed today.

The 51p increase equates to an 11.9 per cent rise and is in line with a recommendation from the Low Pay Commission.

It will take effect from April 1, 2022.

Meanwhile, the National Living Wage for those aged 23 and older will increase from £8.91 to £9.50 an hour.

The the rate for 16 to 17-year-olds will rise from £4.62 to £4.81. For 18 to 20 year olds, the rate will shoot up from £6.56 to £6.83 per hour. And for 21 to 22 year olds, minimum salaries will increase from £8.36 to £9.18 per hour.

Chancellor Rishi Sunak is expected to confirm the wage rises during Wednesday’s spending review and budget.

He said today: “This is a government that is on the side of working people. This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.”

The Treasury trailed a £3 billion skills funding announcement over the weekend. Details of how much of this is new money are expected to be revealed on Wednesday.

Minimum wage increases:

Group	Current rate (£/hr)	2022 rate (£/hour)	Cash increase	% cash increase
NLW (23+)	£8.91	£9.50	59p	6.6%
21-22 year olds	£8.36	£9.18	82p	9.8%
18-20 year olds	£6.56	£6.83	27p	4.1%
16-17 year olds	£4.62	£4.81	19p	4.1%
Apprentices	£4.30	£4.81	51p	11.9%