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5 June 2019updated 27 Jul 2021 2:03pm

By ignoring colleges, the Budget ignored the UK skills crisis

Far from being a “people’s Budget”, the Chancellor failed to address the critical need amongst young people and employers for investment in colleges. 

By David Hughes

“The hard work of the British people is paying off. Austerity is coming to an end.” These were the words of the Chancellor as he introduced his Budget for “the strivers, the grafters and the carers”. I’ve even heard commentators talking about it as a “people’s Budget”. The problem, as always, is which people?

There are many other commentators who will pore over the tax and benefits announcements to declare how fair or otherwise the Budget was and who won and who lost. What I saw was a Budget that was more about politics and potholes than about the jobs, skills and life chances.

Any long-term view of our country will recognise just how important it will be to improve our education and skills investment as the weaknesses in our labour market become more exposed. Employers in private and public sectors have become reliant on skilled and semi-skilled people moving here to work, many from the EU. Nurses, teachers, engineers, construction workers, carers, shop workers – the list goes on and on. That reliance has hidden the misfit between our education and skills investment and the jobs that are available.

The reliance on being part of a thriving global labour market has not only left exposed the employers who will increasingly find it impossible to find people with the skills they need; it has also allowed government and employers to reduce their investment in young people as they make the transition to adulthood and adult opportunities to learning and training. The Institute for Fiscal Studies’ recent 2018 Annual Report on Education Spending in England showed that college income has dropped by 30 per cent over the last decade and that spending on adult learning has dropped by over 50 per cent. Employer investment in skills in the UK is also lower than in other OECD countries and has declined over the same decade.

Those cuts have left colleges facing extremely tough challenges, but it is the impact on different groups of people that are most alarming. This is a government that says it wants a country which “works for everyone”, and yet it is allowing education to become more polarised and more divisive, resulting in some groups doing well and others missing out. Three groups will show what I mean: young people who struggle with GCSEs, adults in low-paid and often precarious jobs and small employers.

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Investment in young people at the crucial aged 16 to 19 phase of their lives and of their education has suffered enormously in recent years. The education Budget was protected from the worst of the austerity cuts, but only for ages five to 16. At 16 the funding per pupil drops by 24 per cent, resulting in weekly teaching hours of around 15. That compares badly with the 30 in Singapore, the 28 in Sweden and leaves too many of our young people with low or very low levels of achievement as they leave their teenage years.

The Skills for Inclusive Growth report published this week by the Centre for Progressive Policy (CPP) highlighted the large numbers of young people who struggle to achieve Level 2 (GCSEs) as well as the numbers who fail to progress from Level 2 to Level 3 (A Levels). That matters because of the changes in the labour market which increasingly require people with good basic skills, digital skills and the abilities to adapt and learn over 50-year careers.

But there was nothing in the Budget to address this. No funding to increase hours, nothing to support colleges, no mention of young people and their life chances.

The second group of people who are ill-served by education investment are those in low-paid and often precarious work. As the CPP highlights, many people in low-paid work are held back because they lack the skills to progress. They quote the Social Mobility Commission and the Resolution Foundation: “For most low-paid workers, poorly-paid positions are not acting as a first rung on the ladder – it is the only rung.”

And yet the government investment in this group has reduced enormously in the last ten years. Our own analysis shows that there has been a drop in adult enrolments in colleges due to funding cuts from 5.2m per year to 2.2m. The government will point to apprenticeships and higher education investment, but neither of those will help people in this group. Many will need their local college to be open in the evenings and funded to help them with literacy and numeracy, with digital skills and confidence, before they can progress in learning or in work.

The third group are the small employers, in particular, who struggle to find people with the skills they need. We commissioned a survey of small employers as part of our #LoveOurColleges campaign. We wanted their views on the future and found 60 per cent saying that the biggest challenge they face is being able to find skilled people to fill their jobs. Brexit was important for them, but they were less worried about the single market or the customs union. Skills are their major concern.

And yet, the Budget did nothing to help them. When asked, small employers say they look mostly to their local college to help recruit and develop people with the skills needed. But those very same colleges have been denuded of their abilities to meet those needs.

So if it was a Budget for the people, it was not for the people colleges want to help more. It was not facing up to the big labour market challenges which we would have without Brexit, but which will be amplified. And all of that is before we factor in the technological changes which are transforming jobs already and which herald a 4th industrial revolution. Our society responded to the first industrial revolution by establishing mechanics’ and technology institutes. Most of those are now colleges and universities. What we need now is a government which will invest in our colleges to ensure that this industrial revolution benefits everyone and every community. A Budget delivering that could rightly be called the “people’s Budget”.

David Hughes is the chief executive of the Association of Colleges.

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