Budget 2018 – our response

29 October 2018

In response to today’s budget, Dr Fiona Aldridge, interim director of policy and research at Learning and Work Institute said:

Greater investment in further education will need to wait until next year’s Spending Review – we all need to make sure the government’s declared ‘end of austerity’ applies to FE and learning.

Increased expectations for earnings growth means the apprenticeship levy is now expected to raise £11.4 billion by early 2021 – a significant increase of £700 million, though still £200 million short of initial estimates and dependent on earnings hitting those forecasts. We now need to ensure that employers are encouraged and supported to spend this well, on high quality opportunities to develop skills and build careers.

The halving of the co-investment rate for SMEs is intended to engage more employers in apprenticeships – though there is some risk that it will also encourage others to delay their recruitment until the changes come into effect in April 2019. The bigger prize for engaging employers is ensuring that the apprenticeship levy is sufficiently flexible to meet the needs of businesses and our economy and simple to access – that’s what the review of the Levy must address.

We welcome both the above inflation increase to the apprentice minimum wage and the £1,000 increase to Work Allowances in Universal Credit. The government has listened, though we’ll need to study the fine print and implementation of Universal Credit must continue to improve so people get support when they need it.