Chancellor’s spending review 2021/22

Chancellor Rishi Sunak delivered his spending review this week. Alongside additional funds for the NHS, the Chancellor announced increased funding for public services and investment in infrastructure projects. Skills and education are described as priorities in the review, receiving some additional funding. 

£375 million from the National Skills Fund will be invested in 2021-22, which will provide:

  • £138 million for the government’s commitment to fund in-demand technical courses for adults, equivalent to A level, and to expand the employer-led boot camp training model
  • £127 million to continue support for people to build skills to get into work, building on the summer Plan for Jobs, including funding for traineeships, sector-based work academy placements and the National Careers Service
  • £110 million, including £50 million of capital investment, to drive up higher technical provision in support of the future rollout of a Flexible Loan Entitlement to test and develop new models for local collaboration between skills providers and employers.

£2.5 billion of funding for apprenticeships and further improvements for employers will be made available, meaning that:

  • From August 2021, employers who pay the Apprenticeship Levy will be able to transfer unspent levy funds in bulk to small and medium-sized enterprises (SMEs) with a new pledge function -unspent levy funds will still expire after 24 months
  • The government will also introduce, from August 2021, a new online service to match levy payers with SMEs that share their business priorities
  • From April 2021 employers in construction, followed by health and social care, will be allowed to front-load training for certain apprenticeship standards. The government will explore whether this offer can also be made available in other sectors.
  • During 2021-22, the government will test approaches to supporting apprenticeships in industries with more flexible working patterns, including consideration of how best to support apprenticeship training agencies
  • Incentive payments for hiring a new apprentice introduced in the Plan for Jobs will be extended to 31 March 2021.

In further education:

  • £291 million is provided for further education in 2021-22, meaning that core funding for 16-19-year olds is maintained in real terms per learner
  • £83 million is provided to ensure providers can accommodate expected demographic growth.
  • £1.5 billion is provided over six years to deliver on the commitment to bring all further education college estates in England up to a ‘good’ condition
  • £162 million in 2021-22 to support the rollout of T Levels wave 2 and 3
  • £72 million in 2021-22 to support the commitment to build 20 Institutes of Technology.

It’s positive to see some additional investment in the sector but the Chancellor’s announcement has been cautiously received by many analysts. It’s hard to see how some of the interventions in our sector can have anything more than a limited impact. For example, the additional funding for the apprenticeship incentives for employers only extends the scheme by two months.

The spending review also provides £3.6 million in further funding for the Department for Work and Pensions to deliver job support schemes including the Kickstart scheme and a new £2.9 billion Restart programme to support one million unemployed people with tailored support to find work. It’s not clear at this stage as to whether these schemes intersect with the National Skills Fund.

Read the full spending review here.