In a new paper published by the Higher Education Policy Institute
(www.hepi.ac.uk), the
Rt Hon. the Lord (David) Willetts, the former Minister for
Universities and Science (2010-14), considers how to overcome
challenges currently facing the higher education sector as well
as how to save public spending on higher education at the
forthcoming Spending Review.
, the author
of Boosting higher education while cutting public
spending (HEPI Report 142), said:
‘Higher education has fallen out of favour. But it boosts
earnings, wellbeing and the prospects of people and areas left
behind. Conservatives are increasingly worried that graduates are
left wing but the Party’s problem is with young people more
widely. The best way to tackle this problem is by helping them
fulfil their aspirations – to own their home, get a decent job,
and – yes – go to university.
‘It is in the interests of students that universities are well
funded. But that should not come at the expense of taxpayers. It
is wrong that forecast loan write-offs have risen from 28% under
the Coalition to 53% today. Too many graduates have the
depressing experience of their student debt rising each year when
they could be paying it off. That’s why I believe the repayment
threshold should be brought back down to £21,000 saving £3
billion of public spending a year.
‘Universities are crucial to levelling up and boosting earnings
as well as delivering vocational training. That means breaking
down old-fashioned assumptions about universities shaped by the
long dominance of the Oxbridge model. Higher education comes in
many forms. The so-called “bad” universities are very useful
indeed in vocational training and applied research. They are
anchor institutions boosting local economies across England – in
Bolton, Bradford, and Sunderland as well as Oxford and Cambridge.
New universities should be created in towns from Blackpool to
Chatham. Universities are a great national asset. We should use
them and build more of them.’
Key Points
- The aspiration to reach higher education is widespread,
particularly among groups which have not had the opportunity in
the past. The red wall seats have much lower participation. Fewer
than 30% of school and college leavers go on to higher education
compared with 60% in affluent long-standing Tory seats.
- Low levels of participation in higher education are holding
back wages in the Tory red wall seats. New figures on a
constituency basis show that higher education qualification
ranges from 19% of the working age population in Great Yarmouth
(where median weekly full-time earnings £473) to four times this
at 77% in Tooting (where earnings are £767). For every 1
percentage point increase in the proportion of the working age
population with higher education qualifications, median full-time
earnings in a constituency rise on average by almost £5 per week
(or over £250 per year). Almost half of the variation in earnings
between parliamentary constituencies is statistically associated
with variation in the prevalence of higher education
qualifications.
- More graduates in an area boosts the earnings of
non-graduates. The levelling up agenda means we need more
university students from low-participation areas. That is
unlikely to be achieved if it is a zero-sum game dependent on
lowering participation in high participation areas.
- Economies with liberal labour markets and high levels of
flexibility tend to have slightly higher levels of participation.
Our participation rate is not the result of a centrally imposed
target of 50% participation which has long since been abandoned.
It is the result of the choices of young people.
- Graduates are not currently paying back enough of the cost of
higher education. Forecast write-offs of student loans in England
have risen from 28% under the Coalition to 53% now. This is the
result of the mistaken decision to raise the repayment threshold
to £25,00 and index it thereafter. It should be reduced to
£21,000, including for graduates who have recently graduated.
That would save £3 billion per year. It would also reduce the
number of graduates who see their graduate debt rising each year
– a concern to them and their parents.
- There should be a quinquennial review of the levels of fees
and loans so they can be recalibrated as the labour market and
the economy change.
- The Government should make it easier for universities to
communicate with their graduates. And universities should have
the opportunity of taking a stake in the debt of their own
graduates so they gain if their graduates’ earnings rise.
- The social backgrounds of degree apprentices are higher than
for university students. Compared with mainstream students doing
a similar subject, higher level apprentices were more white, more
male, less likely to be disabled and less likely to be from a
deprived area. Social barriers to apprenticeships may be one
reason why disadvantaged groups have rapidly increasing levels of
participation in higher education which has more diverse and open
recruitment.
- There is no battle between FE and HE. The biggest single role
of Further Education Colleges is delivering education and
training for 16 to 18-year olds. They are a crucial route to
higher education and can also deliver it themselves, usually in
courses validated by a university.
- Driving students to do T-levels and enforcing a binary divide
between academic and vocational courses at the age of 16 is a
mistake. BTECs straddle that divide and are popular with 250,000
students doing them every year. It would be a great error to
remove funding for them to force students onto T-levels. My
proposed amendment to the Skills Bill requires consultation with
employer representatives before any such qualifications lose
their funding.
- The Lifelong Loan Entitlement is an important new initiative.
However, mature students are more averse to loans than younger
students, who can see the promise of the graduate route whereas
it may be harder for older people to shift career. It is likely
therefore that take up of the four-year loan entitlement will be
greatest among younger students. This is an opportunity to move
to four-year degrees, a historic opportunity to tackle England’s
worst education problem – early specialisation.
Notes for Editors
- The Rt Hon. the FRS is the
President of the Resolution Foundation and chaired the
Foundation’s recent Intergenerational Commission. He served as
the Member of Parliament for Havant from 1992 to 2015 and was
the Minister for Universities and Science from 2010 to 2014. He
previously worked at HM Treasury and in the No.10 Policy Unit.
His books include The Pinch: How the Baby Boomers Took
Their Children's Future – And Why They Should Give It Back
(second edition, 2019) and A University Education
(2017). He is Chancellor of the University of Leicester and a
Visiting Professor at King’s College, London. This is his first
paper for HEPI.
- HEPI was established in 2002 to influence the higher
education debate with evidence. We are UK-wide, independent and
non-partisan. We are funded by organisations and universities
that wish to see a vibrant higher education debate, as well as
through our own events. HEPI is a company limited by guarantee
and a registered charity.
