My Lords, this debate has done justice to the quality of the Economic Affairs Committee and its many recommendations. I commend it and the chairmanship of the noble Lord, Lord Forsyth, as well as his introduction to the debate.
The committee identified the nub of the issue: growth in higher education over the past two decades has been in stark contrast to the number of students graduating with qualifications at levels 4 and 5. Rates of teenage literacy in England are lower than those of other OECD nations. Indeed, it is the only nation in the OECD in which rates of literacy for 16 to 24 year- olds are lower than those of people aged 55 and over. We know of the need for an advanced skills economy. If people lack basic reading skills, they will have great difficulty gaining the work skills that the economy so badly needs. The National Audit Office has highlighted a lack of STEM skills as a particular issue. The OECD characterises this as a cultural problem in the UK, with little having changed over the past four decades.
The Government make much of their investment in people’s skills, yet public spending on education as a share of GDP has fallen and is projected to continue falling to below 4% in 2020. Government spending on education is heavily front-loaded. Education spending per student reaches a peak at the age of 15 and falls until a young person reaches 18, at which point it increases again for those who take a full-time university course. Today’s young people will work until well after the age of 65, but they will generally complete their education by their early 20s and rarely return. That is why lifelong learning will be at the heart of the national education service that Labour will deliver in government: young people have rising aspirations, but the education system seems to judge large numbers of them to have failed at the ages of 16 and 18. Forty per cent of young people do not reach level 3 by the age of 19, and 15% have not even achieved level 2.
Part-time higher education will, as many noble Lords said, be a determining factor in confronting those issues, as well as the other major economic challenge that the UK faces of low productivity. Yet, as the committee’s report stresses, part-time higher education is in crisis, with a continuing fall in part-time and mature students largely the result of the huge increase in tuition fees since 2012, as highlighted by the committee. With Labour’s pledge to end tuition fees, that barrier will no longer face those who want to combine work with adding to their skills. I am afraid I must disagree with the noble Baroness, Lady Deech, on that point, but I welcome her support for another of our policies: the restoration of maintenance grants.
It is important that the committee’s recommendations, and any government decisions in response, avoid unintended consequences on the provision and uptake of part-time study in England, and the support that it gives to students at any age and from any background. For instance, if Philip Augar and his panel really are assessing a minimum grade required to access loans, as reported recently in the Sunday Times, it would have potentially severe implications for the Open University, which has no minimum entry requirements.
Flexible and affordable lifelong learning, such as part-time distance learning, is essential for those whose skills development needs to fit around a busy working and family life. Part-time distance learning also tackles directly one of the biggest problems facing regional economies: the skills drainage of those who must leave their communities to study. As the Open University says in its briefing to noble Lords for the debate, there are no geographical higher education “cold spots” for part-time distance learning.
To tackle one of the barriers to study—halting the decline of part-time and flexible learning—the committee recommends the establishment of a credit-based system, whereby people can learn in a more modular way and at their own pace, which I think was just advocated by the noble Baroness, Lady Garden. We support that and want to see such a system, which would provide support for study costs to those who may be unable initially to commit to studying towards a full qualification.
The committee was scathing in its assessment of the current delivery and quality of apprenticeships. That is a concern that we certainly share, although we believe that calling for the abolition of the Institute for Apprenticeships is somewhat premature. There have been long-standing concerns that vocational and technical routes are seen as somehow second-rate. Taking an apprenticeship should be a choice valued as highly as any other pathway. The Government say in their response to the committee’s report that they agree with that. Yet, as the noble Lord, Lord Forsyth, said, they continue to incentivise head teachers to retain as many of their pupils post-16 for reasons of funding, rather than ensure that young people are guided towards the route most suited to them—and, crucially, most suited to the future needs of the economy. The Government’s careers strategy should be working towards that, but it has been frustrated by some head teachers who continue to make it difficult for employers and further education colleges to gain meaningful access to their pupils. The noble Viscount might like to say how the Government will ensure that problem is dealt with.
We also agree with the committee that the Government should abandon their target of 3 million apprenticeship starts by 2020. Even the Institute for Apprenticeships now admits the target will not be hit and the focus surely has to shift from quantity to quality. We should better align apprenticeships with the needs of employers and the labour market, not just as it is today, but as it is projected to develop. The latest CBI education and skills survey stated that 73% of employers anticipate needing more employees with management and leadership skills in the next three to five years. Degree apprenticeships, which the noble Lord, Lord Baker, welcomed, have a role here. Applied learning is an increasing trend and a recent Chartered Management Institute survey shows that increasing numbers of parents—who, of course, are the key influencer in young people’s education choices—now favour a degree apprenticeship with a major employer over a traditional university degree.
I acknowledge the concerns of the noble Baroness, Lady Harding, on management apprenticeships. I have my own doubts, but yesterday I attended an event in Parliament on chartered management degree apprenticeships. The committee states in its report that some employers are “gaming” the system by investing in management apprenticeships, or that management apprenticeships are just rebadged MBAs. I am sure that will be true in some instances, but it would be unwise to generalise. Most management apprenticeships are learned at level 3, and the latest statistics show that level 6 apprenticeships—the chartered manager degree apprenticeship—are providing a route into management and leadership positions for people who might otherwise be excluded. Of those who started apprenticeships in 2017, over half are women, over a third were under 25 and two in five came from more disadvantaged areas. I simply say that there is more to that story than has hitherto been given attention.
The contrast was highlighted yesterday between a 21 year-old who completes a degree at university but has little or no work experience, has up to £50,000 in debt and can only rent their home, and a 23-year-old degree apprentice who finishes with an equivalent degree, but with five years’ work experience, no debt and savings towards a deposit on a first home of their own. Degree apprenticeships make learners think more like employees and employees more like learners. It is a system of earning and learning that could be expanded to the advantage of thousands of school-leavers.
Two months ago, the Government announced an expansion of accelerated degrees—a welcome step towards creating more choice and flexibility in higher education—but will it be matched with the funding to make it attractive enough to young people, as well as those with families and regular jobs? In their response to the committee’s report, the Government say that the Office for Students will provide £2 million to support development of accelerated degrees in the current academic year, but they say nothing about thereafter. There will need to be that amount and more on a continuing basis to ensure that these types of degree become more widely known and accepted; otherwise there is a danger that we could see the main beneficiaries being youngish people already in secure jobs and possibly even with a first degree, which surely cannot be what the Government intend. I hope that the noble Viscount will set out their position on this point.
The Government also say in their response, in this case on flexible learning:
“FE colleges can play a vital role for their … communities”.
That must have caused head-shaking by many in the sector, because further education colleges already do that to good effect, although it is despite rather than because of government policy. As acknowledged by the noble Lord, Lord Willetts, further education is the only part of the education budget to have had continued cuts since 2010. Over that period, funding for students aged 16 to 18 has been cut by 8% in real terms and over the last 10 years colleges have had to deal with average funding cuts of around 30%, so it should not come as a surprise to learn that the numbers of part-time higher education students at colleges, who are typically over 25, have declined by more than 10,000 over the last four years.
The committee rather timidly suggests that the Government should merely,
“explore restoring some teaching funding”,
for FE colleges to,
“stimulate demand for courses at Levels 4 and 5”.
The Government surely need to go much further than that if the imbalance in higher education is to be meaningfully addressed, yet even that modest recommendation is dodged by the Government in their response to the committee, with the suggestion that it will be considered as part of the review of post-18 education and funding. That has been a convenient bolthole in the Government’s responses. By my calculation, that was one of 14 such deflections to the review panel in the Government’s 14-page response.
Much is resting on the shoulders of the Augar review panel when it reports next month. We can only hope that it will largely reflect the committee’s recommendations in its own. The noble Viscount might prove me wrong, but I suspect that is not a hope that the Government will share.