The writer was chair of the independent panel for the review of post-18 education and funding set up by the May government but writes in a personal capacity
The pandemic will permanently change the world of work. New sectors for old, new ways of working and a re-evaluation of some occupations will require agility from employers and employees alike.
Higher and further education will play a key role in shaping this. England, where the sectors are disconnected and unevenly funded, faces particular challenges. A panel on post-18 education, which I chaired, reported a year ago and the government says it will respond this year. Reform would be timely.
Ever since Tony Blair set a target of getting 50 per cent of young adults into higher education, policy in England — it is devolved to the rest of the UK — has been characterised by a relentless drive to put young people through university. That target was reached in 2019: we must review the consequences, not just for graduates but for the 50 per cent of young people and the majority of older adults without a degree.
Let’s begin with the positives. The payback has been considerable. Higher education is an important part of the economy at national and local level. UK research is globally renowned. More disadvantaged 18-year-olds go to university than ever before, most graduates enjoy a significant earnings premium and higher levels of education bring better health and cultural benefits.
However, there are signs that the dividend from higher education as currently delivered in England has played out. One in three graduates are not in graduate-level employment; one in five would have been better off financially had they not gone to university; and outcomes for the disadvantaged vary too widely. Recruiting large numbers on to poor quality, irrelevant courses is not a triumph of social mobility. Better directed recruitment at scale could be.
This is a public as well as a private issue. University education in England is funded by state-backed student loans, written off after 30 years. Nearly half of all students receive a government subsidy in this way. The write-off varies between subjects. The state loses money on around a third of all subjects studied. It writes off more on social studies subjects than on maths, computer science or engineering; more on communications and media studies than on agriculture and veterinary science; and more on creative arts than on any other subject. Without denigrating any subject as being unworthy of study, there is a clear misalignment between the subsidy and the economy’s needs.
The funding model is the root of the problem. It allows universities to charge £9,250 for all courses, cross-subsidising research and expensive subjects from fee income earned on high-margin courses and overseas students. This has led to an oversupply in some disciplines, under-investment in science degrees and over-reliance on overseas student fees, which necessitated this week’s government support package.
The panel I chaired recommended cutting tuition fees to the average cost of a humanities degree — £7,500, according to Universities UK — and increasing the existing top-up for strategically important courses.Covid-19-related disruption may now mean that such a fee cut would be too destabilising. But the problem has not gone away. An alternative would be to freeze fees for a further five years and ramp up the teaching grant for strategic subjects. Other options include number caps on some courses or a payment back to government by universities for reinvestment in priority subjects.
One final point. The importance of the country’s research base has been underlined during this crisis. In future, university research needs to be funded openly, generously and strategically, not partly via the back door.
Further education has slipped under the radar. The sector has seen a steep, steady decline in funding, eroded entitlements for some of the most disadvantaged and a collapse in the numbers in part-time study and vocational training. Reversing this is a key to closing the skills gap. That means higher rates paid to further education colleges for priority courses, a unified adult education budget, flexible learning and restored adult education entitlements.
This should not be an unconditional hand out. The present blizzard of qualifications should be stripped down and consolidated around employer-led standards. We need fewer colleges in some areas and more in underserved locations. There needs to be a better career structure for teachers and lecturers. More institutions could then play a revitalising role in their communities, as the best already do. Properly funded, well taught technical and vocational education directly linked to better employment prospects would be a viable alternative to degrees. The other 50 per cent would then be served, as part of a coherent cross-sector response to the post-pandemic challenge.
