Today the Chancellor highlighted some positive economic developments since last year’s Autumn Statement. The Office for Budget Responsibility has revised down its public borrowing forecast by £16.4bn for 2016-17, whilst borrowing as a percentage of GDP is set to fall from 3.8 per cent to 2.6 per cent. The employment rate has risen from 70.2 per cent in 2010 to 74.6 per cent, and unemployment is at an 11 year low.[1]



However, there is no escaping that the job of Chancellor of the Exchequer has become more difficult following the outcome of the EU referendum. The OBR is still forecasting a similar level of GDP in 2021 as it did at the Autumn Statement, the country is enduring the effects of a decade of lost real wage growth, it has a debt of nearly £1.7 trillion, and borrowing over the forecast period is still set to be £100 billion higher than predicted at Budget 2016.

With that in mind, it is not surprising that this was a Budget of few financial giveaways, with all additional spending decisions fully funded over the forecast period. That makes it encouraging to see support for technical education reinvigorated, albeit with spending commitments which do not take effect in in earnest until the next parliament and, in the case of new student loans, with implications which will not be known until much farther down the line.

“Uniquely narrow and short”

Recent research has described our upper secondary education curricula as “uniquely narrow and short” compared to those of successful education systems.[2] Upper secondary Shanghai students can expect at least 30 hours of tuition per week in addition to homework; 16- to 18-year olds in Singapore get over 27 hours per week; Swedish students in upper secondary vocational programmes have an entitlement to 21 hours per week over a three year period up to the age of 20; while senior high school pupils in Alberta have a minimum of 1,000 hours of instruction per year or 26 hours per week.

In comparison, most 16- to 18-year old students in England can expect a narrower curriculum with less than 20 hours per week of tuition on average. With educational participation now compulsory to 18, an increase to 900 hours funded by an extra £500m per year once new technical ‘routes’ are rolled out is welcome and long overdue, and it is vital that this helps the new ‘T-levels’ become a credible and valued option for young people. It remains to be seen whether it will be enough.

Remaking Tertiary Education

In the EPI and Professor Alison Wolf’s Remaking Tertiary Education report, we highlighted the consequences of recent government policies to promote 3 year degrees at the expense of technical, often shorter courses, at levels 4 and above.[3] In part, this has arisen through disparities in funding, with income-contingent loans to cover recent fee increases (most of which will not be fully repaid) and support with living costs. The Government’s decision to provide maintenance loans to students on technical education courses at levels 4 to 6 in National Colleges and Institutes of Technology should help to address this. However, there will be disappointment if those studying at other further education institutions do not benefit, and it leaves many still seeking lower level training short of support for adult learning.

At our recent conference, Educating Young People for the Modern Economy on Skills, we heard from a range of experts that in a rapidly shifting economy with longer working lives it is vital that people are able to retrain and build new skills.[4] It is therefore encouraging that the Government will spend up to £40 million by 2018-19 testing new approaches to help people upskill throughout their working lives. However, as our research has made clear, it may be difficult to afford the public funding of such training that may be required whilst also encouraging people to use the enormous public subsidy involved in taking first degrees before careers have even started.

All in all, this additional investment in technical education and lifelong learning are likely to be positive for social mobility. For now, at least, it is those from poorer backgrounds who disproportionately enter vocational training routes or find themselves at the margin of employment and education, despite the recent reductions in NEET rates hailed by the Chancellor today.

Social change through education?

However, elsewhere the Budget offered much less in support of social change through education.

The Budget announced an extension of the free schools programme (which already had a target of 500) with investment of £320 million in this Parliament to help fund up to 140 new schools. It also signalled that this could include selective schools. Our analysis shows that there are very few areas in which you could introduce grammar schools without undermining existing high performing schools or increasing the attainment penalty for those that miss out.[5] In her recent speech, the Prime Minister celebrated the increase in the number of good and outstanding schools, but this policy may put that improvement at risk.[6]

With pupil numbers expected to rise and school budgets tight, the Government should be ensuring that the £320m for new schools is spent where there is the greatest need for new places. Excess capacity could create pressures on existing schools at a time when they are already preparing themselves for real terms budget cuts. As the National Audit Office has highlighted, existing free schools have not always been in areas where they are needed, and so the benefit of this investment will depend heavily on the extent to which new schools really raise standards through increasing choice.[7] There is probably more assurance that an extra £216m investment in school maintenance will be spent where it is most needed.

Marking International Women’s Day, the Chancellor also celebrated this year’s introduction of the tax free childcare scheme and the extension of the 3- and 4- year olds’ early years entitlement to 30 hours for families with two parents in work as steps towards higher maternal employment. As our report Widening the gap? The impact of the 30-hour entitlement on early years education and childcare argued, these policies might actually do very little to raise maternal employment, but may instead risk harming the progress of disadvantaged pupils who fall behind before they even start school, especially if take up of nursery places for disadvantaged 2 year olds does not increase.[8]

Overall, the investment announced in this Budget goes some way to helping more young people find a way into valuable training and the labour market after finishing their GCSEs, but gives little assurance that attainment gaps up to that point will be reduced.

Peter Sellen is Chief Economist at the Education Policy Institute