2021 Spring Budget – what does it mean for education and skills?
Realism was the leading theme ahead of yesterday’s budget announcement, paving the way for some unpopular decisions as we try to find a way through the financial impact of the pandemic. We are all braced for some challenging times ahead, and education and skills will be a key driver in getting the country back on its feet.
Furlough and supporting employment
Job retention continued to be the main focus for the Chancellor. The furlough scheme will now be extended until September, which is really positive news for businesses and workers, providing a final helping hand until the country’s economy is fully reopened. Supporting jobs has been key as we tackle this crisis and these efforts will hopefully mitigate the scale of the unemployment figures in the coming years.
The announcement of a rise in corporation tax has raised a few eyebrows as in recent years much of the discourse was around the UK becoming a Singapore-style low tax economy following Brexit. This 25% tax is on profits and there are many exceptions. The Chancellor seems to be asking businesses to pay more after supporting them so well through the pandemic.
Boosting skills – traineeships and apprenticeships
There was modest investment in education and skills. It is encouraging to see the government proving an additional £126 million in England to support traineeships for 16-24-year-olds. Young people entering the jobs market have been hit hard by the crisis and this is a positive step to encourage more employers to offer work experience to those most affected.
There will also be new incentives for employers who hire new apprentices, with the government pledging £3,000 per new hire, a significant increase compared to the previous scheme. Apprenticeships are vital in providing essential hands-on learning and knowledge for so many industries and career paths, and we hope these incentives encourage more employers to open up new routes into work for more young people. This is particularly important in sectors that have been hard hit by the impact of the pandemic, like the creative industry.
Lifetime Skills Guarantee
This follows the commitment to the level 3 Lifetime Skills Guarantee, which supports people of any age to secure qualifications if they do not have a level 3 qualification or higher. There is a risk that people may fall through the cracks, however. There will be many people looking to reskill at level 3 or below, and there are currently many barriers to accessing training for such people. We are passionate about the importance of lifelong learning, especially in times such as these when reskilling and retraining are going to be an important factor in getting the economy back on track.
Commitment to SMEs
The announcement of a new UK-wide management programme to upskill 30,000 small and medium-sized enterprises (SMEs) over three years is most welcome. Seeing commitment to support SMEs is very encouraging; helping them to develop will be pivotal in our economic recovery, creating more jobs and encouraging more localised prosperity in the long run. There is a difference between upskilling and reskilling, however, and we need to ensure that there is provision in place for both.
Staffing crisis for social care – a sector in need of investment?
There was no mention of social care in yesterday’s announcements, perhaps a missed opportunity to start investing in a skills pipeline for this sector. Social care is on the verge of a staffing crisis so we need to act now to provide more routes into the sector and ensure that people in the most need do not become victims of staff shortages and knowledge/skills gaps. We look to the government to provide more clarity on this in the autumn statement and Comprehensive Spending Review.
Positive steps forward
Overall, we commend the Chancellor’s statement and his ongoing commitment to support the workforce as we start the journey to recovery from the pandemic. The good news is that the projected recovery for the economy looks to be swifter than we initially thought. Unemployment is set to peak at 6.5% this year, which is lower than previous forecasts. There is no doubt that there is a lot of work ahead if we’re to succeed and play our part in our economic recovery - there has never been a more important time for our sector to keep education and skills investment and development at the forefront of the government’s mind. We look forward to the proposals from this budget translating into tangible opportunities across the UK to really empower businesses and increase prosperity in the areas most in need. By working together, we believe we can overcome the impact of this pandemic and affect real change for the better in the education and skills landscape.