Post-school education in England attacked in Lords report
Tertiary education in England is heavily skewed in favour of universities, but offers poor value for money for students and the economy, according to a critical report by the House of Lords.
The report by the Lords’ economic affairs committee calls for immediate reform of the funding system and concludes that changes introduced in 2012 – when university fees were raised to £9,000 a year – have overbalanced funding for 18-year-olds towards universities while heaping debt on students.
The crossbench committee, which is chaired by Michael Forsyth, a former Conservative minister, is calling for “a new deal for post-school education funding which promotes all types of learning regardless of where or how it takes place”.
Its report also backs the reintroduction of maintenance grants for disadvantaged students, and for a steep cut in the interest rates charged on student loans.
“The way we expect students to access higher and further education is deeply unfair. We must create a single system, including apprenticeships, that offers more choice and better value for money,” Lord Forsyth said.
The Lords’ intervention comes as the government is reviewing the funding of tertiary education, with ministers questioning the purpose of courses that appeared to offer little value to their graduates.
“It’s not whether or not you offer creative arts, it’s whether or not you offer creative arts that is truly competitive, so you are not putting on courses that are cheap to offer, that are threadbare and not as competitive as they could be,” Sam Gyimah, the universities minister, said last week.
A recent report by the Institute for Fiscal Studies, which was commissioned by the Department for Education, found huge variations in the rewards earned by graduates. Those who studied economics or medicine earned 20% more than average several years after graduation.
The Lords’ report criticises many parts of the higher education system, in particular arguing that the switch in funding towards tuition fees has incentivised universities to attract as many students as possible to maximise income.
“This suggests that in terms of labour market outcomes at least, some graduates may have been better off considering other higher education qualifications that were cheaper, shorter and more relevant to the workplace.”
Peers were also critical of the government’s promotion of apprenticeships, saying the levy for these has merely encouraged rebadging of existing training or even courses such as MBAs as apprenticeships.
“The government’s target of 3 million apprenticeships has prioritised quantity over quality, and should be scrapped. The lack of clear accountability for the delivery and quality of apprenticeships is unacceptable,” the report says.
The report follows a series of hearings and evidence from more than 150 individuals and organisations. Members of the committee include Lord Turnbull, a former head of the civil service, and Lord Layard, emeritus professor of economics at the London School of Economics.
The report found evidence that while higher education funding for universities was at its highest level for 30 years, funding per student in further education has continued to fall.
“The gap in resources between further education and universities was described by one witness as ‘quite staggering’,” it says.
Universities UK, the lobbying group that represents most of the country’s higher education institutions, said: “A university degree remains an excellent investment. On average, graduates continue to earn £10,000 per year more than the average non-graduate and are more likely to be in employment.”
The way student loans is included in the UK national accounts was also criticised by the committee as being motivated mainly by a desire to keep the costs of the loans out of the government’s deficit.
“The decision to switch almost all higher education funding to tuition fees hides the true cost of public spending on higher education,” it concludes.
Because a substantial proportion of student loans will never be repaid after 30 years – an estimated loss of more than £8bn on loans made in 2017-18 alone – the committee noted that the cost will fall on taxpayers in 2047-48.
“It is unacceptable to expect future taxpayers to bear the brunt for funding today’s students,” the report says.