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The Budget 2026 · Insights from the Edge

• 0:07
  SPEAKER_02: Hello, welcome to Insights from the Edge.
• 0:10
  SPEAKER_02: I'm Molly Neaton, I'm Executive Director at the Edge Foundation.
• 0:13
  SPEAKER_02: And in today's episode, we'll be reflecting on the 2026 Autumn Budget.
• 0:18
  SPEAKER_02: It was the first fiscal event of Andy Burnham's premiership.
• 0:20
  SPEAKER_02: There was stuff about Gherkin imports, marmalades, even Dolly Parton got a mention.
• 0:25
  SPEAKER_02: And I know our two guests have been reading the detail behind it as well.
• 0:28
  SPEAKER_02: So delighted to be joined by Simon Ashworth, who is Deputy Chief Executive of the Association of Employment and Learning Providers, AELP, and Julian Gravett, who is Deputy Chief Executive of the Association of Colleges.
• 0:39
  SPEAKER_02: So yeah, we're going to get into the education and skill stuff.
• 0:42
  SPEAKER_02: We'll stay clear of the gherkins.
• 0:43
  SPEAKER_02: It's the morning after when we're recording this.
• 0:46
  SPEAKER_02: And I really wanted to just start by getting some of your general impressions.
• 0:49
  SPEAKER_02: So, Julian, let's come to you first.
• 0:51
  SPEAKER_00: I mean, many people were a bit disappointed with a budget because it's a hodgepodge of measures.
• 0:56
  SPEAKER_00: But I think the important thing is that spending plans are continued, are sort of kept in place, and we'll have lots of things we made in a spending review.
• 1:04
  SPEAKER_00: And then I think the um there's a lot of information in there about um the government's devolution plans, but it's all at the sort of architecture stage at the moment.
• 1:13
  SPEAKER_02: That's really important.
• 1:13
  SPEAKER_02: I think a lot of the detail this time came in the in the documents, which you were just telling me before we started, you'd been wading through Jillian.
• 1:19
  SPEAKER_02: So thank you for not getting any sleep last night as you made your way through those ready for the podcast.
• 1:23
  SPEAKER_02: Simon, what was your general impression?
• 1:24
  SPEAKER_01: I guess I was a little bit underwhelmed in terms of the autumn budget.
• 1:28
  SPEAKER_01: I mean, uh, we were certainly expecting it to be a budget that was focused on defence and energy.
• 1:33
  SPEAKER_01: Uh, and there was a lot on energy, obviously, but very little on defence and uh blinking you'll miss it in terms of uh effie and skills.
• 1:40
  SPEAKER_01: And uh it feels a little bit like deja vu from uh last year, thinking about uh the sequencing.
• 1:45
  SPEAKER_01: You know, last year we had the post-16 white paper, the machinery of government change, the budget, and um uh again we're in a similar position, aren't we, in terms of uh waiting for the outcome of the Milburn review, which I think will have a much more impact in terms of uh being relevant to uh FE and skills.
• 2:02
  SPEAKER_01: But um yeah, a few things of interest, you know, uh interest in minimum wage, uh government's decision on that.
• 2:07
  SPEAKER_01: Uh we you know we'd had some engagement with the low pay commission to talk about pressures on employers.
• 2:12
  SPEAKER_01: So uh that was probably a quite a good intervention.
• 2:14
  SPEAKER_01: Obviously, some change around business rates.
• 2:16
  SPEAKER_01: So stimulating demand uh is a really kind of critical key.
• 2:19
  SPEAKER_01: But as Julian says, quite a lot of interesting information on fiscal devolution, what we might see in the devolution delivery plan.
• 2:25
  SPEAKER_01: So yeah, a bit underwhelming, but uh probably not um massively unexpected is what I would say.
• 2:30
  SPEAKER_02: Yeah, I think that we're hearing that a lot, aren't we?
• 2:32
  SPEAKER_02: It's kind of less of a main meal, more of a cray of little scraps.
• 2:35
  SPEAKER_02: Um, there were some interesting little tidbits in there, weren't there, though?
• 2:38
  SPEAKER_02: Um I was reading this morning about the way that some of the skills that Skills Builder have been pushing for have been included in the way that government contracts are awarded.
• 2:46
  SPEAKER_02: So very small, but a really nice signal that actually even in the commercial approach from government, uh there's kind of a move towards including skills, which we all care about as well.
• 2:54
  SPEAKER_02: Julian, I know you've made your way through the footnotes.
• 2:56
  SPEAKER_02: Simon mentioned a few of the kind of smaller things there as well.
• 2:58
  SPEAKER_02: Was there anything else uh from the kind of uh tray of scraps that you wanted to mention?
• 3:02
  SPEAKER_00: Yeah, the civil service is going to save 165 million next year in admin costs, and the government is gonna give almost exactly the same amount of money, 160 million, to the strategic authorities to do the vast list of things that um are listed out in the budget.
• 3:17
  SPEAKER_00: So, in a sense, I guess that's the sort of first move in uh big change that government is planning to set out in the um what they call the uh re-rar in the state roadmap in December.
• 3:29
  SPEAKER_02: Yeah, it's a really important one.
• 3:30
  SPEAKER_02: And interestingly, I think we've seen quite slow progress from the civil service and from Cabinet Office in actually seconding civil servants out.
• 3:38
  SPEAKER_02: They were promised hundreds by this time, and I think there's about two as far as we can count.
• 3:41
  SPEAKER_02: But that's probably for another another podcast.
• 3:43
  SPEAKER_02: Let's think a bit about uh what we kind of wished there was in there, and obviously a part of the reason there wasn't a lot at the table this time is that a lot of it's been pushed back to Millburn, so we'll come on to that as well.
• 3:53
  SPEAKER_02: But Simon, for you, what would you have liked to have seen the Chancellor announce?
• 3:56
  SPEAKER_01: Uh well, there was very little extra money, wasn't there?
• 3:59
  SPEAKER_01: You know, we we could do with some extra money on 16 to 19.
• 4:02
  SPEAKER_01: We know the apprenticeship programme budget is has been bouncing off the limiter for the last couple of years.
• 4:07
  SPEAKER_01: DWP accounts show that the apprenticeship programme budget is likely to shrink over the next couple of years.
• 4:12
  SPEAKER_01: So uh some fresh investment, uh, some extra investment is much needed, else you end up having this uh trade-off.
• 4:19
  SPEAKER_01: And that's obviously a very uh topical discussion at the moment around uh intervention for young people and where do you find the money from?
• 4:26
  SPEAKER_01: So uh bit disappointed there wasn't any extra investment.
• 4:29
  SPEAKER_01: Uh obviously next year's spending view is going to be really, really, um, really, really critical.
• 4:34
  SPEAKER_01: So uh that that for me was probably the disappointing thing, you know, uh, in terms of some of that much needed investment, thinking about send reform, uh growth on 16 to 19, and the apprenticeship program bursting at the seams, uh, which will mean we'll have some trade-offs, I suspect, post the Millburn review.
• 4:50
  SPEAKER_02: Yeah, a really good point, Simon.
• 4:51
  SPEAKER_02: I think it was it was good to see that 100 million confirmed for apprenticeship brokerage, but that's a drop in the ocean in terms of the actual teaching, the money for providers, um, and of course the stuff we're looking forward to potentially for supporting young people not in education, employment, or training, which we know is an expensive business.
• 5:07
  SPEAKER_01: I guess just on, I mean, on the the 100 million for brokerage, obviously on top of the 140 million that was announced before, that's going to be over two years, uh, that that funding.
• 5:16
  SPEAKER_01: Um, most of that money is participation funding as opposed to investment for uh male strategic authorities.
• 5:21
  SPEAKER_01: We were quite pleased, though, I'd say, that that 100 million isn't been funded out of the levy, quite interesting that it's been funded out of uh some savings on uh on uh the government's doing around uh fraud prevention, but very small in the grand scheme of things, you know, when you add it together and what it's going to be uh spent on.
• 5:37
  SPEAKER_01: So uh pocket change, I guess, in the in the grand scheme of things.
• 5:41
  SPEAKER_02: Yeah, that's very fair.
• 5:42
  SPEAKER_02: Um and Julian, if you'd had your magic wander, what would you have liked the chancer to include from your side?
• 5:46
  SPEAKER_00: I think probably to have done the budget after the Milbourne review came out rather than before.
• 5:51
  SPEAKER_00: And it was quite interesting, the budget had a couple of lines on the youth guarantee.
• 5:55
  SPEAKER_00: So last time's budget was published in early March, and then they published the Youth Guarantee stuff and all the employer subsidies in the middle of March, and then they only cost them in this budget now in October, and it's quite modest amounts.
• 6:07
  SPEAKER_00: And it feels to me we've got a NEETs crisis, which the Melbourne um uh review described, an economic and a moral crisis, and um we're still sort of waiting in a way for action on that.
• 6:17
  SPEAKER_00: I mean it'd be great if a Melbourne review sort of comes out and do understand that there's some very big issues in terms of how you're gonna fund things from reducing benefit spending to move things into purposeful activity, but it feels that we're every budget feels like we're waiting for something rather than necessarily getting a full picture.
• 6:35
  SPEAKER_00: That's a really good point.
• 6:36
  SPEAKER_02: And knowing how the civil service works, Treasury, you're probably waiting just like all of us for when the Millburn review was gonna come out, uh kind of wondering whether it was going to be before or or after.
• 6:44
  SPEAKER_02: But since we're talking about Millburn and since it is potentially such a game changer, obviously we've seen quite a few drip-fed announcements from what might be in there, things like the 14 to 16 vocational work.
• 6:56
  SPEAKER_02: But let's kind of focus in on that whenever it might come out.
• 6:58
  SPEAKER_02: Uh Julian, what would be on your kind of wish list in terms of things that we might see from Alan Millburn's report?
• 7:04
  SPEAKER_00: The the interim report is a bit of a call of action for some pretty fundamental changes across various areas.
• 7:10
  SPEAKER_00: In our area, you you want to find ways to stop people dropping out at 16 by making sure there's enough places and they're the right places.
• 7:18
  SPEAKER_00: And so if your 14 to 16 reforms have worked properly, then people will continue on.
• 7:22
  SPEAKER_00: And rather than dropping out, you've then there's quite a cliff edge in our system at 18 because it's assumed that everybody has got to where they need to be at 18, whereas as we know, one in six people don't even have the sort of level two of standard and also not English and maths.
• 7:37
  SPEAKER_00: And then it's about making sure that you get proper transitions into apprenticeships and also into sustainable work.
• 7:44
  SPEAKER_00: So there's quite a big agenda and and the Milburn of pitch, I guess, is that you spend the money up front and you get the savings in the medium term.
• 7:51
  SPEAKER_00: But I suppose that perhaps you get a classic Treasury view that, well, we can't you've got to try and fund this from somewhere else.
• 7:57
  SPEAKER_00: And so there's a risk that there's this big words, but not quite the action that's needed.
• 8:02
  SPEAKER_00: So I think pro a proper package there is really necessary for an expenditure view.
• 8:06
  SPEAKER_02: Yeah, I think you're absolutely right, Julian.
• 8:07
  SPEAKER_02: It feels like the mindset on the neat issue needs to move from a kind of um sunk cost to a kind of investor save in Treasury, and that's a really hard mindset shift, but we all know the figures for the costs and benefits in the longer term there.
• 8:21
  SPEAKER_02: And there's a hugely compelling case, I think, um, for kind of investing now, even in a climate of shortage, to try and kind of address that issue um and and kind of realise those savings in the medium term.
• 8:33
  SPEAKER_02: Simon, what what would you be hopeful that Alan's scribbling about right now?
• 8:37
  SPEAKER_01: Oh well, yeah, I think you use the term game changer, isn't it?
• 8:39
  SPEAKER_01: And I was sort of thinking back, and uh, this is probably gonna be the most impactful review, probably since the Richard review in 2012.
• 8:46
  SPEAKER_01: Uh, you know, we had we've had a few reviews which have been probably a bit more superficial.
• 8:50
  SPEAKER_01: Uh we've also got to try and crack this issue around um uh a million young people who are not in education and cultural training.
• 8:57
  SPEAKER_01: Uh, you know, the steady state on NEET has been about six, uh, seven hundred thousand a year.
• 9:01
  SPEAKER_01: So uh we need to get the kind of right balance that uh, you know, we're not gonna magic up a million jobs for for young people.
• 9:07
  SPEAKER_01: A lot of noise at the moment, a lot of worry about uh, you know, having to trade off and what the consequences uh might be.
• 9:14
  SPEAKER_01: But uh, you know, one of the things that Milburn talks about in his review is we need to focus more on demand and not on supply, and uh absolutely agree with that.
• 9:22
  SPEAKER_01: You know, we're we're the number of apprenticeship vacancies compared to this time last year is down 25%.
• 9:27
  SPEAKER_01: And uh it's good to see a bit of a slowdown of uh national minimum wage because that is what one of the pressures on small employers to be able to kind of take more um young people.
• 9:36
  SPEAKER_01: So the things I guess things I I would like to see in the Millburn review is uh some more consistency and coherency around incentives for employers.
• 9:44
  SPEAKER_01: I think it's quite a complex system based on age and loads of other criteria.
• 9:48
  SPEAKER_01: You know, there's been some talk about incentives for providers.
• 9:51
  SPEAKER_01: You know, it's a lot more costly to deal in ones and twos in SMEs and uh the support needed for complex uh needs of young people.
• 9:58
  SPEAKER_01: So the government's already kind of committed, or the minister committed, to ask Skills England to look at uh, you know, uh boosting funding bans for uh popular standards for young people.
• 10:08
  SPEAKER_01: So a bit more uh joined up incentives, conditions for employers, uh a bit more recognition for providers about the additional cost of uh engaging with those small employees.
• 10:17
  SPEAKER_01: But uh ultimately uh we've got to be careful not to uh trample over the top of the uh well-developed adult apprenticeship market.
• 10:24
  SPEAKER_01: There's a statistic that says something like 80% of the 2030 or 2040 waterfirsts are unemployed.
• 10:30
  SPEAKER_01: So adult retraining and upskilling is really important.
• 10:33
  SPEAKER_01: So uh, you know, at one end, I think you know, Millburn has sort of floated that apprenticeship should be solely for young people.
• 10:38
  SPEAKER_01: I think that would be a disaster.
• 10:40
  SPEAKER_01: We absolutely meet need more young people, but uh and we need to get balance, and that's I think is what people are uh really waiting to see what uh what the government um puts forward in their recommendations to the Milburn review.
• 10:51
  SPEAKER_02: That's absolutely right.
• 10:52
  SPEAKER_02: And obviously Millburn has been since it's been going on for a while, as we were kind of joking earlier, there's been some drip feeding, and we we talked a bit about the um the support for apprenticeship brokerage.
• 11:01
  SPEAKER_02: Um but let's touch a little bit on the kind of vocational education at an earlier age, so 14 to 16 year olds getting more access to that.
• 11:08
  SPEAKER_02: Um in general, we think that's a really good thing as long as it's delivered in a really sensible way, and that sensible way would definitely for us involve collaboration between schools and colleges and education training providers rather than uh kind of schools working on their own.
• 11:21
  SPEAKER_02: But be good just to get your thoughts on the opportunity there and kind of how how that might pan out.
• 11:25
  SPEAKER_02: Simon, do you want to start on that one?
• 11:27
  SPEAKER_01: Yeah, I mean it's uh an area probably uh more aligned with with colleges, but uh I I just reflect there's there's so much change in that space when you talk about uh vocational uh GTSEs, V GCSEs or whatever the sort of uh the term will be.
• 11:41
  SPEAKER_01: It's really interesting to see kind of local areas will have more influence about that.
• 11:45
  SPEAKER_01: And uh I think it's really important we have a national system with a a local uh flavour to ensure portability, but so much change isn't the thinking about curriculum uh reform for V-levels, T levels, you know, kind of Milburn making noises about the effectiveness of 16 to 19 and that being devolved at the same time.
• 12:05
  SPEAKER_01: So lots of moving parts.
• 12:07
  SPEAKER_01: Like I say, I think having a national system with a local flavour and influence is really important.
• 12:13
  SPEAKER_01: You know, if we had you know things developed at a local level, uh we could have a real piecemeal system.
• 12:18
  SPEAKER_01: So having that portability and consistency, but uh certainly it more in Julian's world, uh, there's so much change in that sort of space for colleges to deal with.
• 12:27
  SPEAKER_01: Colleges obviously have apprenticeships as well, but uh they've got a lot of burden on their plate at the moment around uh funding, product, uh, you know, uh policy all at play at the same time.
• 12:37
  SPEAKER_02: Yeah, I totally agree.
• 12:38
  SPEAKER_02: Judy, does that feel like a opportunity challenge for colleges, that 14 to 16 space?
• 12:42
  SPEAKER_00: Yeah, I mean it's not straightforward, but there have been there have been many colleges who for decades have um worked successfully with 14 to 16 year olds despite all this of policy.
• 12:51
  SPEAKER_00: So I absolutely agree with you, Ollie, about um finding ways to do this in a collaborative way, which I guess is a little bit more difficult if you're doing something at speed.
• 12:59
  SPEAKER_00: So you've got that kind of um balance between impatience to get something in place but also allowing time for people to properly work together.
• 13:07
  SPEAKER_00: Because there is a risk, I guess, that um uh secondary school will just see, well, we've already got these technical awards, we'll just shift to students across to vocational GCSEs and we'll carry on doing pretty much exactly what we did.
• 13:18
  SPEAKER_00: Whereas actually what you want to do is to get a situation that uh means that all people at key stage four have the right kind of programme, whether that's within the school or working with a partner and also working through through, in some cases, direct entry to colleges or uh other places, and then how what that leads on.
• 13:35
  SPEAKER_00: I mean, I I think it's really important that uh though we're talking about the budget and we're talking about money, some of this is also about the kind of um way in which different parts of the education system work together so there's a proper transitions at at different points and that people get proper information at 16, 15, 16.
• 13:53
  SPEAKER_00: They they don't get forgotten um when they move on.
• 13:56
  SPEAKER_00: They they people aren't just going down one track.
• 13:58
  SPEAKER_00: The systems, as the Millburn review says, doesn't forget people who drop out and go missing.
• 14:03
  SPEAKER_02: That's so important, Jeannie.
• 14:04
  SPEAKER_02: And I think over the years the the kind of the least good examples we've seen of kind of 14-16 vocational in schools is where the poor DT teacher suddenly has to also do engineering with some kit off eBay.
• 14:15
  SPEAKER_02: And the best examples always through things like 14 to 19 diplomas, through the compass curriculum in Blackpool, of which there's a new video on our website, um, is always collaboration between schools and colleges, using the college's expert resources, um, uh expert expert teachers, um, and laying down potential uh routes for young people to get excited about what they might do after school as well.
• 14:35
  SPEAKER_02: So it feels like there's a real potential win-win.
• 14:37
  SPEAKER_02: But as you say, at speed, those those those partnerships can be challenging to put together.
• 14:42
  SPEAKER_02: Let's finish up with a theme that I know is dear to both of your hearts.
• 14:45
  SPEAKER_02: It's the good old levy.
• 14:46
  SPEAKER_02: Um and this is one where it feels like rather than getting a kind of preview from the Millburn review, we've had a bit of a hokey kokey like things being tested out, seeing how they land.
• 14:54
  SPEAKER_02: Simon, where where would you like the kind of levy debate to land in terms of uh what might happen next?
• 15:00
  SPEAKER_01: Well, there's a very live debate, I'm sure many of the listeners are uh are in the middle of around this sort of trade trade-off.
• 15:06
  SPEAKER_01: And if there's no extra money, you know, it could be uh it's been pitched potentially of taking money away from adults and and sticking it on on young people in terms of um incentives.
• 15:16
  SPEAKER_01: And uh I think one of the things that came out of the budget yesterday, we saw with the latest OBR forecasts, you know, the the levy top slice withheld by the Treasury by 27-28 could potentially be up to a a billion pounds.
• 15:28
  SPEAKER_01: Uh, you know, there's also 600 million of the immigration skills charge that um uh was going to be committed to uh skills upskilling for for um in our sector, and there's another sort of half a uh billion on the youth guarantee.
• 15:41
  SPEAKER_01: So there should be plenty of money kind of floating around rather than making those um hard choices.
• 15:46
  SPEAKER_01: I'll worry a bit about employees and uh certainly those um 35,000 uh employees who pay the apprenticeship levy, they've had an absolute roller coaster over the last 12 months.
• 15:56
  SPEAKER_01: Uh, you know, it was only in January that level seven was was capped.
• 16:00
  SPEAKER_01: Uh we've had some popular programs, leadership management uh defunded.
• 16:04
  SPEAKER_01: Uh it was only back in August that levy payers were told they're gonna have less money to spend, less time to spend it, and when they spend it, they're gonna have a much more expensive arrangement.
• 16:12
  SPEAKER_01: So uh uh there are some very disgruntled employers.
• 16:15
  SPEAKER_01: You know, apprenticeship units have been uh underwhelming, I guess, in terms of what that they're expecting.
• 16:20
  SPEAKER_01: So uh yeah, we can talk about some of the challenges for providers and uh you know where they've got high levels of adult occupancy and having to kind of pivot towards young people, but uh uh managing the message with employers, I think uh the government's still got a lot of work to do.
• 16:34
  SPEAKER_01: So I guess in this whole debate we're hearing at the moment around uh redistribution of uh of funding, if we are going to have a redistribution, I think we need to make sure it's done in a in a managed and transitional way.
• 16:45
  SPEAKER_01: The last thing the market needs and employees need who want to know what they can have tomorrow or next year is uh another another sudden lurch.
• 16:52
  SPEAKER_01: So I think we just need to be a bit more pragmatic about being clear what the direction of travel is rather than uh you know going from a pivot to a lurch, which is what we could do at the moment.
• 17:01
  SPEAKER_01: So I think there's plenty of money out there if the government was a bit more uh generous with that.
• 17:05
  SPEAKER_01: I'd be keen to see what happens with the uh if they are going to take funding off uh adults and put it towards young people and what the boost to funding for those sort of uh popular programs for under 25 looks like.
• 17:16
  SPEAKER_01: And uh how do we create more opportunities for employers?
• 17:18
  SPEAKER_01: That is the challenge.
• 17:19
  SPEAKER_01: Like I said earlier, uh vacancies are a well down, so you can't have an apprenticeship without an employer, uh, regardless of how hard providers work to try and engage employees and stimulate that demand.
• 17:29
  SPEAKER_01: So, really, really uh quite dangerous times, I think, about where we might go next.
• 17:34
  SPEAKER_01: And uh one of the good things that did come out of the budget is some more clarity about the sequencing.
• 17:38
  SPEAKER_01: Obviously, we're gonna have the millburn review in in November, and the government's committed to uh respond by the end of this calendar year.
• 17:45
  SPEAKER_01: So uh something is coming.
• 17:46
  SPEAKER_01: Everyone at the moment is uh holding their breath slightly, waiting to see kind of uh what the shape and size of that's gonna be and how quickly uh that's gonna come in.
• 17:54
  SPEAKER_02: Thanks, I mean, really helpful.
• 17:56
  SPEAKER_02: So take it gently and focus on getting more opportunities as well as uh the funding.
• 18:00
  SPEAKER_02: Julian, final thoughts on that?
• 18:02
  SPEAKER_00: Not much to add to what Simon said.
• 18:04
  SPEAKER_00: I think that for the sit for the younger people are definitely we're waiting for this review, and um I think it's helpful to have a sort of overall target where we want to get more, is it 40,000, 50,000 um more apprenticeships for under 25-year-olds?
• 18:16
  SPEAKER_00: But Simon's absolutely right, you've got to do this sort of sort of carefully.
• 18:19
  SPEAKER_00: I do worry that the levy is the levy system is very bureaucratic for small employers who are often very important.
• 18:25
  SPEAKER_02: Brilliant.
• 18:25
  SPEAKER_02: Thank you both so much.
• 18:26
  SPEAKER_02: That was a really, really uh helpful conversation, kind of picking through the the little tidbits that were available from the budget and looking ahead to what's coming in the next couple of months, uh, which we're really excited about.
• 18:36
  SPEAKER_02: So please join us again soon on this podcast uh for another episode of Insights from the Edge.
• 18:41
  SPEAKER_02: Thank you both.
• 18:47
  SPEAKER_01: This podcast was produced by the Edge Foundation.