The news from this week’s autumn statement was considered better than expected for further and higher education, and we now have further details on how the apprenticeship levy will operate. Key points from the spending review include:
The Spending Review protects the core schools budget in real terms.
The government will introduce a national funding formula for schools. A consultation will be launched in 2016 with the new formulae implemented from 2017-18.
£23 billion will be invested in school buildings, opening 500 new free schools, creating 600,000 school places, rebuilding and refurbishing over 500 schools. This will accelerate the government’s ambitions towards ending local authorities’ roles in running schools and all schools becoming academies.
£1.3 billion of spending will be used to attract new teachers into the profession, particularly into Science, Technology, Engineering and Mathematics (STEM) subjects and to deliver the English Baccalaureate (EBacc).
The current national base rate per student for 16 to 19 year olds in school sixth forms, sixth form colleges and further education colleges in England will be protected for the rest of the Parliament in cash terms.
Sixth Form Colleges in England will be given the opportunity to become academies, allowing them to recover VAT costs. Academies are currently excluded from the government’s Area Reviews.
The apprenticeship levy on larger employers will be introduced in April 2017. It will be set at a rate of 0.5% of an employer’s paybill. The levy will only be paid on any paybill in excess of £3 million and less than 2% of UK employers will pay it. Each employer will receive an allowance of £15,000 to offset against their levy payment. The levy will be paid through Pay As You Earn. By 2019-20, the levy will raise £3 billion in the UK.
A new employer-led body will be established to set apprenticeship standards and ensure quality. The body will be independent of government and will also advise on the level of levy funding each apprenticeship should receive.
Funding for the core adult skills budget will be protected in cash terms.
“Efficiencies will be delivered” through locally-led Area Reviews, which will be supported with additional government funding aiming to ensure the FE sector is financially resilient and meets local economic needs.
Five National Colleges and a network of Institutes of Technology will be created.
Maintenance grants are being replaced by tuition fee loans which will be expanded to 19 to 23 year olds at levels 3 and 4, and 19+ year olds at levels 5 and 6, and the government will consult on introducing maintenance loans for people who attend specialist, higher-level providers, including National Colleges.
The government will lift the age cap on new loans to postgraduates from 2016-17 so they are available to all those under 60. For all STEM subjects, tuition loans will be extended to students wishing to do a second degree from 2017-18.
The range of higher education providers will be widened: a new Institute of Coding will be set up to provide training in higher level digital skills; a new university in Hereford will be created focusing on engineering; part funding will be provided for a new campus in Battersea for the Royal College of Art.