John Denham, Labour MP for Southampton Itchen and former Secretary of State for Innovation, Universities and Skills, gave a RSA lecture last night on the cost of higher education.

Here he blogs for NCUB on his proposal for more employer funded degrees


As soon as the Observer trailed my proposal to expand employer-backed degree courses I received a flood of e-mails drawing my attention to existing partnerships. They ranged from the small and very local to major companies like Jaguar Land Rover putting hundreds of employees through Warwick University.

This wasn’t a surprise to me. When I headed the Department for Innovation, Universities and Skills we introduced employer co-sponsored degrees (labelled the Workforce Development Programme) which created 20,000 places after just three years, before being closed by the current government.

The need for change is as pressing as ever.

Today almost 50% of new graduates, and a third of those who graduated five years ago, don’t work in graduate jobs. They’re in debt and they’ve not fulfilled the reason they went to Uni in the first place. The figures don’t prove we are educating too many graduates but they do show that producing more graduates doesn’t automatically increase the demand for graduates.

They also probably tell us that it’s true that some graduates lack the employability which would make employers want them in graduate jobs.

As the CBI have said ‘Strong overall performance on higher skills participation must not be allowed to mask the skills shortages already impacting upon key sectors of the economy, which point to a mismatch between supply and demand’

The CBI also called for more employer university partnerships to deliver degrees and more opportunity to combine work and study. It’s an attractive deal for students too, as living costs on traditional degrees outstrip student support.

My proposals are part of a package of reform which would concentrate public HE finance on teaching and, as a result, bring down fees and the cost of debt write off.

This would enable the creation of a student entitlement worth about £15,000 towards the cost of their education. A two year degree, taught intensively (or the same degree taught intensively but part time) costs about £19,500 in total to deliver.

My starting point is that an employer backed degree would attract a similar level of financial support on average. (In the workforce development programme the average employer contribution, not including fees, was over £3,000).

My model is very crude and simple at this stage, so the precise figures don’t matter as much as exploring the principle. Some employers already pay the full cost of fees, others would struggle to pay much more than wages.

My hope is to start a debate about the best way of developing this programme which I believe could reach about 50,000 student places and cover the widest range of employers (and avoid big dead weight costs!) One way, similar to the WDP, would be for universities and employers to submit joint bids to a ring-fenced HEFCE pot.

It might be assumed that only so-called ‘vocational’ universities will want to provide employer-backed degrees, but I’m not sure that’s true. The involvement of Warwick with JLR and Durham with KPMG suggest a much wider potential market.

It’s exciting to think how wider partnerships might develop at local and sub-regional level. We could see larger companies helping to support their supply chain companies, or smaller companies in one sector coming together under the Local Economic Partnership to shape local university provision.

50,000 places would be about 15% of the total university population. It’s likely though that the development of these strong partnerships will influence the delivery of many other courses and help to improve graduate employability.

Watch John’s RSA lecture.

Can employer funded degrees reduce the impact of student debt? Tweet us your thoughts @NCUBtweets or comment below