Skills budget to drop by 19 per cent over two years, statement reveals

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Written by Seun Robert-Edomi on 13 February 2014 in News
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The adult skills budget reduces from £2.467bn in 2013/14 to £2.004bn in 2015/16, a reduction of 19 per cent.

The adult skills budget is to be reduced by nearly a fifth (19 per cent) over the next two years, it has been revealed.

The Government's Skills Funding Statement 2013 - 2016 was released this week and sets out the plans for Government funding for the next two financial years. The adult skills budget reduces from £2.467bn in 2013/14 to £2.004bn in 2015/16, a reduction of 19 per cent. 

 The majority of this reduction will be in the core adult skills budget while other budgets such as 24+ loans and offender learning remain around the same level. This budget settlement will affect all providers in reducing participation but the focus remains on apprenticeships, traineeships, English and maths and training for the unemployed. 

Stewart Segal, CEO of AELP, said: "These budget reductions mean that providers have to focus on delivering high quality programmes that deliver the most benefit for employers, learners and the local economies. The cuts come after a number of years of overall budget reductions and real term rate cuts. Providers have responded positively and continue to deliver higher quality provision. 

"The statement recognises that providers need the freedoms and flexibilities within the contract to respond to the new challenges and we are concerned that some of those flexibilities gave been reduced by restrictions on managing the ASB contract lines introduced this year."

The statement gave no further details about the future of apprenticeship funding other than that announced as part of the Autumn Statement but confirms that there will be a Technical Funding Consultation in a few months which will consider the funding options

"AELP has expressed concern over some of these proposals in relation to compulsory contributions and employers managing the funding. This will have a significant impact on SME employers taking on apprenticesWe have always believed in giving employers the choice of funding route and most would prefer to work through an experienced training provider although clearly the choice as it is now is with the employer," Segal added.

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