US economy

UK plans 3 billion pounds of new education funding in budget

© Reuters. FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak meets U.S. Treasury Secretary Janet Yellen (not pictured), in London, Britain June 3, 2021. REUTERS/Hannah McKay/File Photo

By David Milliken

LONDON (Reuters) – British finance minister Rishi Sunak plans to announce an extra 3 billion pounds ($4.1 billion) of new funding for further education in next week’s budget as part of the government’s push to boost vocational training, officials said on Saturday.

Their remarks follow 6.9 billion pounds of funding for regional transport investment, 1.5 billion pounds more than previously planned, as the government seeks to boost living standards outside London through its ‘levelling-up’ agenda.

Sunak is expected to set fairly tight limits for most areas of day-to-day public spending in his budget on Wednesday, which will seek to lower public debt after a record surge in borrowing during the COVID-19 pandemic.

But unlike his Conservative predecessors’ policy after the 2008-09 financial crisis, he will allow more leeway for long-term public investment designed to reward voters who backed Prime Minister Boris Johnson in December 2019’s election.

Most of the education money will support 16- to 19-year-old students in England who are studying a new alternative qualification to the traditional school-leaving exams which are the normal pathway to university, the finance ministry said.

Some 550 million pounds will fund education and training for older adults, including numeracy skills and three- to four-month courses in areas such as digital skills, construction and roles in the rail and nuclear industries.

Johnson’s government wants to promote apprenticeships and other alternatives to standard university degrees, which it believes offer poor job prospects for many students and do too little to tackle skills shortages in industry.

Just over half of English school-leavers went to university in the 2018/19 academic year, up from 42% in 2006/07.

“Our skills reforms and this additional investment will support more people to continue to upskill and retrain throughout their lives and open the door to careers in high-skilled industries,” education minister Nadhim Zahawi said.

Separately, business organisations gave a cautious welcome to announcements they expect from Sunak which will promote inward investment to Britain, and extend a lending programme for companies struggling to recover from the COVID-19 pandemic.

So far, the government has published no data on how much has been lent under the Recovery Loan Scheme, which launched in March and was originally due to end in December.

“The acid test for the scheme will be whether it is able to support the recovery by getting credit flowing to the firms who need it most,” said Suren Thiru, head of economics at the British Chambers of Commerce. 

($1 = 0.7272 pounds)

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