High returns from general degrees are not sustainable: Tackling the higher technical education conundrum

England and Wales lag behind competitor nations in the proportion of people with higher technical skills.

In his pamphlet “Raising productivity by improving higher technical education: Tackling the Level 4 and Level 5 conundrum“, Scott Kelly proposes three overarching reforms to ensure employers have access to the skills they need:

1. There should be a well-defined set of institutions where the core mission is to deliver technical and professional qualifications.
2. Work-oriented qualifications at higher levels should be validated and funded by the same processes.
3. Public policy should acknowledge and address the barriers to employer engagement.

It’s a pleasure for us at Pearson to have worked in partnership with HEPI, and of course Dr Scott Kelly, on this excellent report.

In this pamphlet, Scott outlines the problems we face in rebalancing our country’s skills profile, using rock solid evidence and strong international comparisons. Having identified the problems, Scott hasset out a positive vision for how we achieve that rebalancing and contribute to the UK’s long-term competitiveness. In doing so, he has made a powerful case for the foundations needed for a better higherlevel technical education pathway.

The case made here for increased participation at Levels 4 and 5 is compelling. However as I write this, we are aware of the significant threat to what is sometimes termed the adult skills budget, but is in fact a vitally important pathway for those young people who have not attended university but want to acquire the technical skills the country badly needs. So how do we win the argument that this expansion should form a critical part of our post-19 education landscape?

Can we build a sustainable model for growth at Levels 4 and 5?

While the structural changes proposed in this paper are persuasive, it is important to challenge them – for my part I am keen to explore how the proposed new agency could bring in employers without inadvertently jeopardising the standing of Levels 4 and 5 within higher education, since a significant part of their value for a learner lies in their ability to provide a stepping stone to a technical degree. The changes we seek should always improve the standing of these vital skills, not reinforce any negative stereotypes about vocational qualifications versus academic degrees.

Questions of structure and incentive are hugely important, but at the heart of this conundrum is an unarguable fact: our economy needs more technically-qualified employees. We will not succeed without them. Recent analysis by Baroness Alison Wolf and Lord Sainsbury’s Gatsby Foundation shows we are heading for a precipice, and that failure to act will damage our productivity. Evidence from the CBI and the experience of both large and small employers up and down the country support that conclusion.

In the end, it may be the demand from learners themselves that proves the most convincing evidence of all. Ever since tuition fee charges were floated by Ron Dearing in his 1997 report, we have heard predictions that the end of the full-time three-year degree was imminent, whereas demand now is higher than before the £9,000 annual fee cap was introduced. That is because students rightly see a degree provides a good return on investment, but high returns from general degrees are not sustainable.

The market will inevitably segment, and the demand for shorter technical programmes that cost less in time and money, and lead not only to a good job but to a higher technical degree too, will grow significantly provided the supply is there to meet it. And, given the perennial concerns expressed about over-qualified but unemployable graduates in countless newspaper columns, young people qualifying as high-level technicians and technologists are likely to be some of the most sought-after employees in the country when they finish their course.