Well, Gordon had some tax corkers up his sleeve, didn't he? Whilst the pundits cast their eyes over the nuts and bolts and winners and losers, we at SLIM have been looking at the employment, skills and education news to emerge from the Budget. Which didn't take very long really as we await the formal response to Leitch Review, expected this summer, so altogether the budget was a bit light on that front.

Nevertheless, last week saw the publication of the Green Paper, Raising Expectations: Staying on in education and training post 16. So we've included a briefing on that as well. Bargain!

So… below you'll find some thoughts on the Budget, a series of highlights and finally some links that will enable you to find out how much Gordon has put on the price of tabs, booze and sundry other necessities.

Bit quiet on the skills, learning and education front, partly as a result of Leitch. In the 2006 Pre-Budget Report, the Government accepted both the ambition of the Leitch Review, and the underpinning delivery principles of its approach. Government will publish a full implementation plan for the Leitch Review in the summer where it intends to set out in detail how it will take forward the recommendations made by the Review and the timetable for implementation.

Young people
The Budget 2007 reaffirms that the Government wants to create a "single, coherent system of financial support" for 16-19 year olds designed to encourage higher levels of participation and achievement in education and training.

Since 1997, the numbers of 16-24 year olds in full-time education, employment or training has increased from 5.2 to 5.8 million. Nevertheless there continues to be a small core of young people who are failing to engage in edcuation and training. The Chancellor therefore announced the setting aside of new funds so that 50,000 16-17 year olds who sign Activity and Learning Agreements will receive a training wage in return for gaining skills.

For small companies who take on an employee needing to acquire the most basic of skills, in the period from now to 2011, Government will offer £2,000 training support per employee and, in some cases, £3,000.

A Green Paper (see below) will consult on ways to ensure that all young people will remain engaged in education and training up to the age of 18. Overall, nearly five-out-of-six young people aged 16 and 17 are already in education and training: the total population is about 1,324,000 with about 70% in full-time education and another 15% in training or other education (mainly with their employer's support through apprenticeships).

Pilots are already underway to grant financial allowances and Budget 2007 announced the extension of Activity Agreements aimed at the "most disadvantaged 16-17 year olds" (namely those who qualify for Jobseekers Allowance (JSA) on the grounds of severe hardship). This is a relatively small population group. The latest data shows there are currently only about 11,000 people aged 16 and 17 who are in receipt of JSA for reasons of severe hardship. However, there are slightly more than 125,000 in England alone who are not in education, training or employment. Of these, about half are looking for work and the other half is economically inactive. This is the background to which the Chancellor has responded with the offer (mentioned above) that 50,000 16 to 17 year olds will receive a training wage in return for gaining skills.

There are some 80,000 young people aged 16 and 17 who are employed but are in jobs that have no training. Hence the announcement of the training grants.

It seems quite clear that efforts are to be focused on helping 16 and 17 year olds to stay in the education and training system. Re-engaging this population group should also work its way through and impact on the larger numbers of young adults who are not in education, employment or training (NEET). Presently, there are just over a million people aged 18 to 24 who are in this NEET category (almost 1-in-5 of the entire age group). Furthermore, the majority of these young adults are economically inactive. Although the New Deals have significantly reduced the long-term unemployed JSA population aged 18 to 25, more than 40% of all economically inactive 18-24 years olds are not in employment or learning compared with only about 10% of the economically active population in this position.

The Government also knows that it is under pressure. In December 2006, the Conservatives criticised the Government's record having revealed that, since 1997, the number of 16-24 year olds not in education, employment or training had risen by 15% from 1.08m to 1.24m.

Whilst the absolute number of NEET young people had risen, so too had the overall cohort of 16-24 year olds (by almost a quarter of a million). Proportionately, therefore, the problem has remained pretty much unchanged but, against a background of significant improvement elsewhere in the labour market, this represented an awkward weakness for the Government.

Finally, according to Inclusion, the funding of Education Maintenance Allowances (EMAs) for young people has been reclassified so that it is contained within the Departmental Expenditure Limits of the sponsoring department (DfES). Previously this had been uncapped and could grow according to demand. If the Department succeeds in increasing the take-up of EMAs, it may have to find compensating savings elsewhere.

Schools
Education spending in England, which was £29 billion in 1997 and is £60 billion this year, will be £64 billion next year, £67 billion the year after, then £70 billion, rising in 2010 to £74 billion. Education spending is rising as a share of national income from 4.5 per cent in 1997 to 5.6 per cent in 2010.

Average rises of 5 per cent cash each year for the next three years will: enable the provision of one-to-one tuition for 600,000 children, do more to double apprenticeship numbers to 500,000, increase higher education student numbers to 1.2 million, enable every school to be an extended community school. In addition, cash spending per pupil which was £2,500 in 1997 will from now to 2010 rise by a further 20 per cent, 10 per cent in real terms, to £6,600 - continuing to narrow the gap in investment per pupil between state and private schools.

Science and Innovation
The Budget announced early 2007 CSR settlements for the Department of Trade and Industry's ring-fenced science budget and the DfES, which together deliver average annual growth of 2.5 per cent in real terms over the CSR period. This announcement is intended to provide long-term certainty for the research community, enabling it to invest to support research; increase the economic impact of the science base; and implement the recommendations of the Sainsbury and Cooksey Reviews.

The Sainsbury Review is looking at what more can be done to ensure the UK’s success in the face of the opportunities and challenges of globalisation. At both regional and national levels, the review is identifying areas in which effective government intervention can continue to support the UK’s world-class science base and better enable wealth-creation, reporting by summer 2007.

To promote innovation, the Budget 2007 announced additional enhancements to the R&D tax credit. The Science and Innovation Investment Framework 2004-2014 announced increased support for the Technology Strategy Board (TSB) to support collaborative R&D with businesses, with funding of at least £178 million by 2007-08. The TSB will now take on a wider remit to stimulate business innovation in those areas that offer the greatest scope for boosting growth and productivity. This covers all areas of the economy, from the manufacturing industries to the arts and creative industries. Legislation will be included in the Finance Bill 2007 to extend the current SME R&D tax credit to companies with fewer than 500 employees. The extension will provide firms with between 250 and 500 employees with 150 per cent tax relief and a payable cash credit for loss-making companies. The legislation will be activated upon receipt of state aid clearance.

Enterprise
Budget 2007 announced plans to reduce the number of business support services offered from over 3,000 to 100 or fewer by 2010. A consultation document will be published before the Summer Recess, seeking views from businesses and other stakeholders on the proposals for the design of the new portfolio of government business support. This programme will also inform the sub-national review of economic development and regeneration and will be reflected in the 2007 CSR.

A partnership for jobs with major retail companies - Tesco, Sainsbury's, Asda, B&Q, Marks & Spencer, and the British Retail Consortium – was announced. The aim is that across the country, the unemployed who successfully pass work trials or induction courses will be considered for jobs. It is anticipated that over the coming five years, it will help create 85,000 jobs for the unemployed in England.

An Agreement between government and the companies was released with the Budget’s Supplementary Documents. It sets out the main headlines of how government and employers will work together. As part of the Partnership arrangement, managers will be expected to agree, with Jobcentre Plus, a number of specific measures that they will take to help support benefit claimants into work.

Some or all of these measures will be used:

• Offering 2-4 week Work Trials;
• Offering a target number of places for New Deal participants wishing to participate in the Subsidised Employment option;
• Working with Jobcentre Plus and the Learning and Skills Council (LSC) on the design of pre-employment training;
• Encourage their employees to volunteer to provide one-to-one mentoring for long-term benefit claimants;
• Review their application processes to ensure that local benefit claimants are not inadvertently excluded.

One of the dangers is that many of the jobs will be entry-level and low-paid and there will be a high degree of drop-out with claimants returning to benefits. Perhaps a new measure should be added to the list – a commitment to providing skills training leading to a vocational qualification and to put in place measure that help new recruits stay and progress in employment.

Jobcentre Plus is taking the lead in organising the Local Employment Partnerships – an important recognition of their role at the local level in working with employers and the LSC. This reinforces the importance of Jobcentre Plus and the LSC effectively working together to deliver a seamless service to employers – this is recognised in the Budget Report where there is a proposal to test how Advisors can work more closely together.

If you believed initial press treatment of this announcement, you would assume that the Government announced its intention to make young people stay on at school until 18. And of course you would have been wrong. As the Green Paper makes clear, introducing compulsory participation for 16 and 17 year olds should not mean forcing them to stay in school or the classroom. It recognises that all forms of learning, including work-based learning, are valuable. Much of what is contained in the Green Paper is a restatement of existing or planned initiatives already announced in the Youth Matters Green Paper or 14-19 Education and Training White Paper.

What is new is the clarification of the central proposals, and this forms the basis of the consultation:

• all young people should participate in education or training until their 18th birthday;
• participation could be at school, in a college, in work-based learning, or in accredited training provided by an employer;
• in order to count as participating, young people would be required to work towards accredited qualifications; and
• participation would need to be full time (at least 16 hours of guided learning per week) for those who are not in employment for a significant part of the week; and where a young person is employed for at least 20 hours per week, participation could be part time – but would need to be the equivalent of at least 280 hours of guided learning per year.

Government proposes introducing a requirement to participate until age 17, then later to require participation until 18. The intention is to raise the participation age to 17 from 2013. This is the first year in which government would have in place a national entitlement to the new qualifications they plan to introduce. It would mean that the extended requirement would first apply to pupils who start Year 7 in September 2008 – creating an expectation of continued participation for those young people right from the start of their secondary schooling. These proposals would apply to all 16 and 17 year olds resident in England.

Government also acknowledges that four key things need to be in place:

A suitable route for every young person
The first five new Diplomas will be available for teaching from 2008, and all 14 will be available everywhere at all levels from 2013. The new qualifications are being developed in phases. The first five, in Creative and Media, Construction, Engineering, Information Technology and Society, Health and Development, will be available for teaching from 2008. The next five Diplomas will be available from 2009 and all 14 will be available for teaching from 2010. A new statutory national entitlement to study the new Diplomas will be in place for all 14-19 year olds from September 2013. From that point, any 14-19 year old, wherever they are in England, will have the right to take one of the Diplomas at the level appropriate to them.

There will also be an expansion in the number of Apprenticeships. For young people who want to follow a work-based route but do not meet the entry criteria, there would be a place on a pre-Apprenticeship programme to help them progress quickly onto an Apprenticeship.

Around one fifth of the young people who currently drop out at 16 have achieved fewer than five D-G grades at GCSE and are not yet ready to progress onto a Level 2 course post-16. The Foundation Learning Tier, which will be introduced from 2010, aimed at bringing a more coherent approach to qualifications and training below Level 2. As announced in the Further Education White Paper in March 2006, the Foundation Learning Tier (FLT) is being developed to replace and rationalise the current complex range of provision and qualifications below Level 2, to create a system of units and qualifications that is easier for learners and employers to navigate. It will be focused on skills for life and work, subject and vocational learning, and personal and social development.

It is expected that, from 2008, the main offer within the FLT for 14-19 year olds at Level 1 will be one of the Diplomas. Until all the Diplomas are available everywhere, a FLT programme composed of other qualifications might include a vocational element relating to a particular sector, a basic skills element and a personal development or employability skills element. The different elements of the programme could be at different levels to suit the needs of an individual learner.

It is also recognised that it will be important to tackling disaffection early and keeping young people engaged with their learning up to age 16 is an essential prerequisite if they are to stay in education and training. Changes to Key Stages 3 and 4 will be made to address disengagement earlier and ensure more young people get to 16 engaged and well-equipped to choose which route they want to follow.

The right support
This refers largely to information, advice and guidance provision. From 2008 funding for Connexions will be transferred to Local Authorities who will decide how best to commission integrated support, as set out in the Youth Matters Green Paper. Every young person should have access to confidential, impartial, comprehensive and accessible advice and guidance to help them make well-informed decisions about their post-16 options. In addition, there will be further targeted youth support for those finding it difficult to make a choice, at risk of disengagement or facing additional barriers to continued participation.

Government also proposes to build upon EMAs to ensure that those from low income backgrounds have access to financial support (see Budget above). EMAs should continue until compulsory participation is introduced in 2013. After that, Government proposes that financial support will need to be restructured.

After raising the participation age, government signaled its intention that the benefits system should continue to support those young people who are most in need. At the same time it needs to be consistent with the expectation that all young people should be in some form of education or training until they are 18. Government will therefore consult on what the right model of financial support would be if participation in education or training is compulsory to age 18 and will look at benefits issues across the UK as this policy develops.

Good engagement from employers
The usual support for training is highlighted. In addition, it is proposed that employers who do not want to provide or arrange training for their employees would be required to release young people from work to undertake training. This release would need to be for sufficient time for their employee to work towards an accredited qualification (around a day a week).

Making sure everyone does participate
It is proposed to introduce a high quality, accurate registration system to enable Local Authorities and guidance service providers to know what all young people in their area are doing and find out if they drop out. There will be a duty on providers to notify the system as soon as a young person drops out so that they can be re-engaged as soon as possible.

For more info and the full document see:
http://www.dfes.gov.uk/consultations/conDetails.cfm?consultationId=1474