The Spending Review: A political perspective

With a matter of days to go until the publication of the Spending Review, the Government is poised to unveil unprecedented levels of public sector spending cuts and a radical change in the way the state operates; and the skills sector will by no means avoid the changes to come.  The budget deficit, coupled with the Conservatives’ belief in a smaller, more efficient and decentralised state will result in a most dramatic shift in public sector spending and behaviour. 

The Liberal Democrats have added their own blend of local democracy and economic liberalism to the Government’s programme, which will affect all sectors of the economy, and will undoubtedly result in a different type of skills and FE sector.  The ways in which the sector will change will be made clearer on 20^th October, and later when the skills strategy is published by the Government following the Spending Review. 

The consultation paper issued in July, “Skills for Sustainable Growth”, confirmed that the new Government’s skills strategy will move away from Labour’s funding models and incentives, and move towards training programmes focused on employer and learner needs.  This approach is aligned with the wider Conservative agenda – that of public spending cuts, decentralisation and individual freedom.  Personal careers advice and less centralised training programmes fit into this philosophy.

In terms of spending, so far, the Coalition has been ruthless in its plans to reduce the number of quangos and budgets – and we have yet to see the bulk of the cuts to come.  The Education Secretary has cancelled large parts of the Building Schools for the Future programme; funds for Train to Gain have been diverted, Regional Development Agencies’ death warrants have been signed, and the Future Jobs Fund has been axed.  The Daily Telegraph recently published a leaked list of quangos to be abolished, consolidated or merged – this showed that the Government plans to privatise the Construction and Skills Training Board and the Film Industry Training Board.  The Training and Development Agency for Schools and the Young People’s Learning Agency are under review.  The skills sector should be braced for further abolitions, privatisations and consolidations, and significant cuts to budgets.  It is notable that in other sectors, even bodies with seemingly widespread support and proven profitability have already been axed, such as the UK Film Council. 

In the skills sector, as in others, the Coalition’s political aims are to be seen to cut bureaucracy, cut spending, decrease the influence of the state, and increase efficiency.  The Government’s reforms are unlikely to be resisted widely where they do not impact directly on services; the public do not warm to certain quangos and what is perceived as inefficient spending of taxpayers’ money.  However, the public will oppose the cuts where a service or body regarded as important is axed.  The Labour party will fight these reductions tooth and nail; and in the comfort of opposition it is easy to oppose individual cuts without setting out a comprehensive economic strategy.  They have already made it their policy to defend the Future Jobs Fund, Train to Gain and the Regional Development Agencies.  For the Coalition, the task will be to paint the Opposition as irresponsible and opportunistic. These arguments will go on for the rest of this Parliament, with a microcosm played out by Vince Cable and John Hayes, and whoever Ed Miliband chooses to shadow them. 

The 20^th October will see budgets cut, and bodies abolished or slimmed down.  The somewhat abstract debate of the last few months will become reality.  The skills and FE sector should be prepared for major changes stemming from the Spending Review, and the Skills Strategy that will follow.  The Government will also publish its Public Bodies (Reform) Bill in the Autumn, which will legislate for all the quango abolitions and reorganisations that are announced.  Looking ahead, these are extraordinary political times (in the skills sector as in any other), and the new Government will want to make its mark in a reformed, cheaper and streamlined system, geared towards business and learners. 

Ian Tennant is a public affairs and corporate communications consultant at Fleishman-Hillard, the PR agency