Budget misses opportunity to address low-skills crisis

18th March 2015

Responding to today’s budget, David Hughes, Chief Executive of NIACE, said:

“This Budget is completely blind to Britain’s low-skills crisis and was the Coalition’s last opportunity to reverse the damage done to adults participating in further and higher education.

“Today’s raising of the tax threshold does nothing to help the lowest paid, four out of five of whom have been stuck in low pay for the last 10 years. And with the Adult Skills Budget being cut by 24% this year, putting a million learning opportunities at risk, the prospects for people escaping low pay are even worse. Our recent Progression Policy Solution detailed how even modest reprioritisation of funding would help hundreds of thousands of people get the support and skills they need to help improve productivity in their workplace and therefore earn more. This would be a much more effective, sustainable and long term way to help the economy, help people on low pay and increase the tax take.

“And while giving people more control over their pensions is a good thing, I do have concerns over levels of financial literacy. Suddenly having the choice over how to invest their pension is a monumental decision to get right. Especially when around one in four adults lack the skills they need for everyday maths. Financial literacy is a vital life skill. I am concerned about the lack of detail on the Chancellor’s assurance that pensioners will get the right guidance and advice.

“The investments in broadband and wi-fi, alongside a new digital tax account look promising. However, six million adults have never been online and many more adults simply do not have the skills to benefit from these measures. I would like to see the investment in infrastructure and digital tax accounts to be matched by investment for adults to improve their skills through personal skills accounts. 

“In our Manifesto we called for a new localism and it’s encouraging to see the Chancellor support this. Our expectation is that this will be a major feature of the manifestoes for the General Election and a priority for the next Government. Our alliance with Inclusion is all about supporting unemployed people and those in low pay, through local partnerships. The announcements on skills devolution to London, Sheffield, Manchester and West Yorkshire, need to be widened to include other areas across the country.

“The OBR tables set out how severe the Chancellor’s planned cuts are for 2016-17 and 2017-18; these are cuts on top of those we have seen already and those planned into this year, so the impact could be devastating. The cuts since 2010 have already led to a loss of 1 million learning opportunities for adults, with another 400,000 to come next year. All of this at the time when all of the respected analysts agree about the benefits of greater investment in skills training for people of working age and when skills gaps and shortages are hampering economic growth. I believe that we are in a skills crisis now, but those looming cuts really are frightening.

“Even by the Government’s own ambitions, the cuts look like they will be hitting the job and life chances of millions of hard-working families, which cannot be right, surely?”