The Budget 2016 – Changes to Education and Skills

Education reform was hailed to be the focus of George Osbourne’s budget yesterday despite the disruption of June’s EU Referendum and as expected he announced the governments’ plans for all schools to convert to academies by 2020 or to have an academy order in place to convert by 2022.

Osborne had faced claims of backing away from major reforms after he dropped proposals for a radical overhaul of tax relief for pension contributions, however, it looks as though the government are pressing ahead with draft legislation beginning the process of implementing the pledge made by David Cameron in his conference speech last autumn. The prime minister said his “vision for our schooling system” was to place education into the hands of head teachers and teachers rather than “bureaucrats”.

These reforms are expected to be fiercely opposed by Labour, which argues that taking thousands of schools out of council control undermines democratic accountability for the education system. Lucy Powell, the shadow schools minister, said there was “no evidence to suggest that academisation leads to school improvement”.

One thing is for sure, head teachers and chairs of governors need to start seriously considering whether they should convert to an academy and the legal implications that will follow.

Other changes to the Education Sector announced in yesterday’s budget included:

  • Alternative provider growth – The government will continue to free up student number controls for alternative providers predominantly offering degree level courses for the 2017-18 academic year;
  • Doctoral loans – From 2018-19, the government will introduce doctoral loans of up to £25,000 to any English student who can win a place at a UK university but doesn’t receive a research council living allowance;
  • Master’s loans – The government will extend the eligibility of master’s loans to include three-year part-time courses with no full-time equivalent;
  • Lifetime learning – The government will review gaps in support for lifetime learning, including for flexible and part-time study, and bring together information about the wages of graduates of different courses and financial support for further and higher education to ensure people can make informed decisions;
  • Apprenticeship levy – As announced at Autumn Statement and Spending Review 2015, the government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s paybill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means the levy will only be paid on any paybill in excess of £3 million. (Finance Bill 2016) The government will apply a 10% top-up to monthly funds entering apprenticeship levy payers’ digital accounts in England from April 2017;
  • Longer school day – The government will provide up to £285 million a year to give 25% of secondary schools increased opportunity to extend their school day in order to better prepare students for the working world;
  • Expansion of breakfast clubs – Starting from September 2017, the government will provide £10 million funding to expand the number of healthy breakfast clubs. This fits with the governments plans to tackle childhood obesity, another theme of this years budget;
  • National Funding Formula for schools – Subject to consultation, the government’s aim is for 90% of schools that gain funding increases to receive the full amount they are due by 2020;
  • Double primary school PE and sport premium – From September 2017 the government will increase the primary school PE and sport premium funding from £160 million per year to £320 million per year; and
  • Mentoring – The government will provide £14 million over the Spending Review period to deliver a mentoring scheme for disadvantaged young teenagers.

For further information on the changes to the Education Sector following yesterday’s budget or for any queries regarding our Education Sector offering please contact Lauren Hartigan-Pritchard on 01905 677045 or

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