14th November 2016

Remaking Tertiary Education: can we create a system that is fair and fit for purpose?

Remaking Tertiary Education, authored by Professor Alison Wolf – with supporting analysis by Education Policy Institute researchers – examines the future of England’s Tertiary Education system. It concludes that English technical education is “in tatters” and that the current system for funding university level qualifications is unsustainable and highly inefficient.

You can download the report here.

Professor Wolf argues that our higher education system is increasingly expensive, but is failing to serve the needs of our economy or of students. This is a direct result of the funding arrangements created by recent governments. In this report, she proposes radical and significant reform to funding for post-secondary education qualifications, designed to support better choices for all young people, encourage innovation, and create courses which are better suited to labour market needs and more economically rational for the country.

This new research finds that:

  • Technical education, at Level 4 and Level 5, is on the verge of total collapse due to a steep decline in numbers.In 2014/15, only 4,900 learners achieved level 4 awards or above under the adult education budget. This was a fall of 36 per cent since the previous year. In contrast, in 2014/15, there were eighty times more undergraduate, first time degrees awarded.
  • In England technical post-secondary awards now account for less than 2 per cent of substantial qualifications being taken, and well under one per cent of all qualifications funded, in the adult skills system. This contrasts with most other developed economies where these qualifications prove effective in developing advanced technical and applied skills.
  • Where Level 4 and 5 qualifications are being delivered, they are not in subjects that meet the needs of the UK economy or labour market. Most qualifications at sub-degree level are Business qualifications, and very few are in engineering or other STEM fields where there is a serious skills shortage.
  • The push, by consecutive governments, for more university graduates has resulted in an unsustainable higher education funding system.Around 70 per cent of full time students taking out loans are forecast not to repay their full loan. Any plausible scenario, under current government policy, will mean that the level of unpaid student debt is set to rise because even more people will take full 3 year degrees and then never earn enough to repay their full student loan. The contribution of student loans to net government debt is forecast to rise from around 4 per cent of GDP today to over 11 per cent in the 2040s.
  • The anticipated growth in student numbers is likely to involve students who later earn salaries in the bottom half of the currently-forecast graduate earnings distribution. In that case, the estimated cost per full time student borrower for a cohort starting in 2020/21 will be increased by an estimated £1,610. The proportion not fully repaying loans could increase from 71 to 74 per cent as a result of this change in student composition. The cost of making loans to students would be significantly reduced by making two year rather than three year tertiary awards, as is common with higher technical education. We estimate that this would cut the estimated public subsidy by an estimated £6,310 (57 per cent) in each case.

Professor Wolf states that:

There are very serious flaws in our …system….these flaws are totally unnecessary, highly expensive, involve major misallocation of resources and are ruinous to equal opportunity…..We have created here systems which are not merely highly inegalitarian but also financially ill-conceived, and demonstrably ill-suited to our labour market.

Tertiary (or technical) education takes place after Key Stage 5 – it includes conventional degrees, but also HNDs, HNCs and Foundation degrees – which now make up a tiny proportion of tertiary qualifications, with the number and availability declining rapidly in England in recent years.

Warning against maintaining the status quo, Professor Wolf notes that the government currently intends to increase the number of full degrees yet further. She states that:

We can predict, confidently, that if current policies are maintained, then 5 and 10 years hence, England will be producing even more undergraduate degrees, in absolute and relative terms, and even fewer intermediate technical qualifications than at present. We can also predict that the result will be huge costs for both the taxpayer and for students carrying loans for university study.”

In this report, Professor Baroness Wolf calls for an evidence-based series of reforms, including:

  • A single lifetime tertiary education entitlement, which can be drawn down as a loan in whatever instalments an individual pleases, whenever they wish, and used at any approved tertiary institution. The maximum value of this would be based on the total amount which government currently sees as appropriate for a three-year full-time bachelor’s degree.
  • An updated and redeveloped qualification framework to re-invigorate a high status public equivalent to the ‘Higher National’ qualification. These qualifications should provide a sub-degree tertiary route open to entrants from a wide variety of secondary programmes as well as adult entrants. They should be designed for flexible delivery through further education colleges, without direct university involvement, as well as by universities should they so wish.

See also: 

Education Policy Institute 2016 Annual Lecture with Professor, The Baroness Wolf of Dulwich: