Quietly but consistently – Bridget Phillipson is cutting support for advanced skills.
On 19th May she cut £108 million from the Teaching Grant that the Government gives to universities — a 10 per cent cut, after accounting for inflation. Eliminated budget lines include supplementary funding for degree apprenticeships and accelerated degrees. Alongside the increase in tuition fees scheduled for September, the Government is tilting our university system — already one of the most expensive in the world — even further towards an exclusively fee-based model, funded and driven by graduate debt.
On 26th May, Phillipson confirmed what had long been expected: that the Government would be removing funding from all Masters-level apprenticeships for anyone aged over 21. Meanwhile, the flagship skills policy from Labour’s manifesto — a “flexible Growth and Skills Levy” — appears to have been kicked into the long grass. This policy, recommended in Policy Exchange’s report, Reforming the Apprenticeship Levy, could let employers spend a portion of the Apprenticeship levy — a tax paid by medium and large employers — on a greater variety of useful training courses, from HGV driving to coding, instead of the money being pocketed by the Treasury.
Of course, it is not unreasonable to reprioritise budgets. The decision to end the subsidy to media studies courses, to overseas study programmes and to franchised providers of education — often of highly dubious quality — is fully justified. It is absurd that the taxpayer has been paying universities more to put on media studies courses than mathematics courses, and the Government’s decision completes the process of phasing out the subsidy that was begun when I was a Special Adviser (we halved it).
But here is the difference: when we cut budget lines, we reinvested, giving inflation-busting increases to the high-cost, lab-based subjects such as chemistry and engineering that the UK desperately requires. We stepped up support for degree apprenticeships, which more than doubled in number between 2019 and 2024. I would be the first to agree that there is much waste in our university sector — but there is also much that requires support.
On apprenticeships, the situation is similar. There is a genuine problem that apprenticeship opportunities for young people have collapsed, falling by approximately a third over the last decade. Too many “apprenticeships” are, in reality, advanced management courses or professional training for people who already have degrees. If the Government had cut its support for Masters-level apprenticeships in order to provide more support for employers to take on younger apprentices — such as the £2,500 payment to small and medium businesses who take on apprentices aged under 25, recommended by Policy Exchange — then that would be a decision one could support.
But the additional support for young people is minimal. A £14 million scheme for construction skills is welcome, but worth only a tenth of the sums saved by cutting elsewhere. Foundation apprenticeships are a good idea, but there are only 7 of them. The Treasury will still be snaffling over half a billion pounds from the levy, and the target of 30,000 new apprenticeship starts appears to be just that: a target, with nothing that would incentivise employers to create more places. There have been some sensible adjustments, such as shortening teacher apprenticeships, that the Tories could and should have made, but nothing like the big bazooka required.
It seems the Education Secretary is more interested in prosecuting her misguided war on academies and the curriculum
Before the election, I had high hopes for Labour on skills. Despite having been a Conservative Special Adviser, I wrote during the general election campaign that, “Labour’s manifesto offers the strongest proposition on skills and apprenticeships, demonstrating a determination to reverse the multi-year drop in uptake and regalvanise England’s creaking technical and vocational skills system.” Yet sadly it seems the Education Secretary is more interested in prosecuting her misguided war on academies and the curriculum than in delivering the transformative skills reforms that were promised.
The great irony is that investing in skills could help to generate the growth the Government says is its number one priority. Levy reform would also ease its challenging relationship with business, currently strained under the triple blow of the National Insurance hike, minimum wage increase and the Government’s Employment Rights Bill, giving employers the breathing space they need to invest in the skills of the future.
There are still four years to go. The recent appointment of a new Skills Adviser to the Prime Minister — a position left vacant since the election — is a sign that No. 10 may be waking up to the fact that this is an area that needs more attention. To deliver on their skills commitment will need more energy, more pace and a willingness not just to cut, but to reinvest. Getting the Growth and Skills Levy up and running this year would be an important first step.
