Autumn Budget and Spending Review 2021
By DTA | 28th October 2021 | News
The Chancellor, the Rt Hon Rishi Sunak MP, spoke about the absolute critical role of skills in the Autumn 2021 Budget speech:
- The government is putting its Plan for Growth into action, with significant investment in innovation, infrastructure and skills.
- To boost wages and prospects for all, total spending on skills will increase over the Parliament - by £3.8 billion by 2024-25 - equivalent to a cash increase of 42% (26% in real terms) compared to 2019-20.
- This funding will quadruple the number of places on Skills Bootcamps, expand the Lifetime Skills Guarantee on free Level 3 qualifications, and improve numeracy skills through the new Multiply programme.
- This is in addition to providing extra classroom hours for up to 100,000 T Level students.
- Spending Review 21(SP21) also confirms funding to open 20 Institutes of Technology and for upgrades to the Further Education college estate across England.
- Apprenticeships funding will increase to £2.7 billion by 2024-25 - the first increase since 2019-20 - to support businesses to build the skilled workforce they need.
- Funding for the Help to Grow schemes will help SMEs improve their productivity through world-class management skills training and support for digital adoption.
On raising living standards:
- To ensure that work always pays, the government is increasing the National Living Wage to £9.50 an hour from April 2022, and is reducing the taper rate in Universal Credit (UC) from 63% to 55%, as well as increasing work allowances in UC by £500 a year.
He confirmed other National Minimum Wage rates to apply from April 2022 including:
- increasing the rate for 21 to 22 year olds by 9.8% from £8.36 to £9.18 per hour
- increasing the rate for 18 to 20 year olds by 4.1% from £6.56 to £6.83 per hour
- increasing the rate for 16 to 17 year olds by 4.1% from £4.62 to £4.81 per hour
- increasing the rate for apprentices by 11.9% from £4.30 to £4.81 per hour
- increasing the accommodation offset rate by 4.1% from £8.36 to £8.70 per hour
On helping businesses invest and create jobs:
- The Recovery Loan Scheme will also be extended until 30 June 2022 to ensure that lenders continue to have the confidence to lend to small and medium-sized businesses.
- Finance will be available up to a maximum of £2 million per business, supporting them to recover from the impact of the pandemic and to grow. The government guarantee will be reduced from 80% to 70% to encourage the lending market to move towards normality as the economy continues to recover.
To help businesses across the UK access the finance they need to invest and grow, as set out in section 2.2 Investing in growth, the government is:
- confirming over £1.6 billion for the British Business Bank's Regional Funds to provide debt and equity finance to SMEs, and to expand the Regional Angels programme
- providing funding for Start Up Loans to deliver 33,000 loans to entrepreneurs across the UK looking to start or grow their business
- In addition, the Help to Grow scheme will provide further productivity support to over 100,000 SMEs around the UK through world class management training and support for digital adoption.
The National Insurance increase
As had already been announced last month the National Insurance rate will increase by 1.25 per cent in April 2022 as a way for the government to pay for health and social care across the country.
VAT rise to 20% is going ahead
VAT rates will return to pre-pandemic levels as planned in April 2022. The rate will increase to 20 per cent, after being slashed to five per cent and then 12.5 per cent to support businesses during the pandemic.