A new report from Policy Exchange, ‘Higher, further, faster, more – Improving higher level professional and technical education’ makes a convincing case for redeployment of increasingly scarce public resource for education and training.
The UK’s leading Think Tank revealed that up to half a billion pounds should be diverted from universities at the Spending Review to boost the quality of high level professional and technical courses in FE Colleges across the country.
Policy Exchange, says that, while UK universities are some of the best in the world, they are sitting on significant financial reserves, and public spending is currently skewed too much towards Higher Education to the detriment of Further Education. This is hampering the growth of the training desperately needed for a range of technical and professional jobs in the UK labour market.
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The report finds that funding for higher education institutions has increased markedly since the introduction of tuition fees with a rise in overall income of 26 per cent since 2009/10 and universities sitting on £12.3bn of unrestricted reserves – worth around 48 per cent of the entire annual budget for the HE sector.
By contrast, Further Education colleges have seen a significant drop in their revenue, with the adult skills budget having been cut by 24 per cent since 2009-10. According to the National Audit Office, more than one in four of the entire FE college network could effectively go bankrupt within a year.
NIACE chief executive David Hughes said: “We are pleased to see that Policy Exchange are joining us in advocating a universal and unified post 19 funding and student loans system together with a call for personal learning accounts to give people greater control and access to learning throughout their lives. These were key issues within our submission to HM Treasury ahead of the Spending Review.
“The Spending Review is an opportunity to redress the balance between employer demand for technical and professional skills and the need for good jobs, with ever-dwindling public investment in further education provision. Further education is of course one of the best ways to increase productivity and help secure economic growth locally and nationally. But we shouldn’t forget the FE sector’s success in promoting social inclusion through community learning and working directly with the most disadvantaged young people and adults. Ambitious plans for technical and higher skills are great, but we must ensure the pathways for people to get there are not lost.”
The report calls for BIS to redirect up to £532m of the Higher Education Funding Council (HEFCE) grant to improve the quality of higher level technical qualification on offer at FE Colleges, National Colleges and Institutes of Technology. Any remaining grant funding in this area should be directed towards universities with the smallest financial reserves.
It also proposes an expansion of the university student loan system, as well as the introduction of maintenance support, to FE students. This would mean that for the first time all young people will have equal access to finance to support further study, whether they choose a university or a high quality technical pathway.
The paper points out number of startling statistics to highlight the lack of technical graduates in the UK and the impact this could have on the future of the labour market:
- The Royal Academy of Engineering forecasts that the UK economy requires 830,000 more engineers by 2020.
- 28 per cent of firms who need technicians qualified in science, technology and engineering or maths already report difficulty in recruiting.
- 20 per cent more construction staff are required in London and the South East from 2014-17 compared to 2010-13, with a particular focus on skilled construction workers.
The report makes a number of other recommendations including:
- The ability for the new Institutes of Technology, announced in the Government’s recent Productivity Plan, to award their own technical degrees rather than have to partner with a university
- The expansion of Industrial Partnership bodies – groups of employers in specific sectors – to be the main route to design and approve all new technical qualifications, including the new degree Apprenticeships
The report concludes: “There is a systematic imbalance between the two halves of our tertiary education system. The FE sector is in a position of great risk. As the National Audit Office (NAO) concludes: “The further education college sector is experiencing rapidly declining financial health, and lacks a clear process to inform decisions about local provision.”‘
“By 2015/16, more than 1 in 4 of the entire FE college network could be financially inadequate – defined as “a significant risk of being unable to fulfil contractual obligations” – or in other words, effectively bankrupt and unable to continue. By contrast, the university sector has never been healthier.”
