Spring Budget: The St Martin’s Group Roundup

Yesterday, the Chancellor of the Exchequer, Jeremy Hunt, delivered his Spring Budget in the House of Commons. This is likely to be the last fiscal event before the general election, which is now firmly expected towards the end of 2024.

With very little wiggle room, the Chancellor and the Treasury spent the weeks leading up to the budget managing expectations, including the usual press leaks and a promise to cut national insurance, which was billed as the big retail offer to voters.

Once he was in the Chamber, there were no ‘rabbits out of a hat’ as the Chancellor remained focused on how to square the circle of stagnant economic growth, high taxation levels, creaking public services and high national debt. The headline figure was indeed that National Insurance (NI) will be cut by 2p, which the Chancellor hopes will stimulate economic growth by putting more money back into people’s pockets, thus improving consumer demand. If the Office for Budget Responsibilities (OBR) forecast is correct, this reduction, together with the previous NI cut announced in the Autumn Statement, is hoped to bring 200,000 people back into the workforce.

However, the tight financial situation for the Chancellor, meant there were not significant announcements on education, skills and employment. Summarising those most relevant for skills and further education, the Chancellor announced:

  • Plans to improve public sector productivity, in the hopes of making the public sector more efficient, with £1.8 billion of benefits to increase productivity, which the OBR forecasts could save more than £20 billion in the long run.
  • No extension of the National Tutoring Programme or the 16-19 Tuition Fund, both coming to an end this academic year.
  • Level Two devolution deals across Surrey, Warwickshire and Buckinghamshire, which will see these county councils take control of their Adult Education Budgets in 2026-27.
  • A move to a Level Four devolution deal for the North East Combined Mayoral Authority, which will see it join the West Midlands and Greater Manchester as “trailblazers” with an estimated £60 million budget.

Response from the sector has been mixed, with some praising the Chancellor for focusing on plans to create a high wage and skilled economy, while others call for greater commitment and investment in the future of education and skills.

This was not a revolutionary budget, especially for the FE and Skills sectors. However, looking ahead to the first fiscal event after the general election, it is likely there are going to be some difficult decisions made on raising taxes and cutting public spending, which could see growth stifled and public services struggle to deliver.

This was a budget attempting to continue on a steady path, and without many announcements relating to FE and Skills, did not break very much new ground. However, with a general election likely and local elections coming up in the spring, a potential new government will have a lot of decisions to make on how to deliver a growing economy and working public services.