Employers at the heart of our skills system

It turns out that skills policy announcements are like snowy days. You wait ages for a sprinkle and you end up with flood warnings.

Today the Government published the long-awaited ‘Skills for Jobs’ White Paper, alongside its interim response to the 2019 Augar Review of post-18 Education and Funding, its response to the review of the Teaching Excellence Framework and a new consultation on Post-Qualifications Admissions.

Each announcement is significant in its own right, but perhaps most notably there was a clear and welcome theme running through all of today’s announcements: place employers at the heart of our skills system.

In this blog, we ask:

• Do the announcements live up to the promise of a more employer-led skills system?
• What might the announcements signal for the future of higher education funding?
•  Are we doing enough to expand lifelong learning opportunities?

Before we go into the detail, a recap of what was announced:

• A Strategic Development Fund and network of new College Business Centres to enhance collaboration between colleges and employers, and develop tailored local skills plans.
• Giving employers a central role in designing almost all technical courses by 2030, to ensure that the education and training people receive is directly linked to the skills needed for real jobs.
• Boosting the quality and uptake of Higher Technical Qualifications by introducing newly approved qualifications from September 2022 supported by a government-backed brand and quality mark.
• Details on a new Lifelong Loan Entitlement so that from 2025 people can access flexible student finance so they can train and retrain throughout their lives.
• An intention to move towards more modular provision in higher and further education, with a promise for further consultation and funding.
• A nationwide recruitment campaign to get more talented individuals to teach in further education and investing in high quality professional development including a new Workforce Industry Exchange Programme.
• Increasing and reforming capital investment in the skills provider base, including by expanding Institute of Technology programmes.
• A proposal and consultation on whether to change the current system of higher education admissions and move to a system of post-qualification admissions.
• The maximum tuition fee cap will be frozen for at least a year, with further chances to the student finance system to be considered ahead of the next Comprehensive Spending Review.
• A statement of intent to change the balance between academic and technical education with an assessment that “we are currently too skewed towards degrees above all else”.

Do the announcements live up to the promise of a more employer-led skills system?

Investing in a Strategic Development Fund and establishing new College Businesses Centres is a welcome recognition that education providers and employers must collaborate much more to identify together how the economy and labour market is changing and what this means for future courses.  However, we do need to make sure that they do not lead to a further fragmentation of the education and skills landscape.

Why, for example, are these announcements targeted at colleges specifically, rather than taking a more strategic look at post-16 education as whole? How do the College Business Centres complement existing Skills Advisory Panels and the important work of LEPs? What data will be used and gathered to help inform local and national skills strategies?

Businesses will consider their talent needs and strategies in the round and so a business-led approach needs to take this into account.  Many businesses, particularly small and medium sized businesses, have limited time and resource to engage with educational institutions. The value of the insights they offer must therefore be maximised.

The economy is profoundly changing, and against this backdrop NCUB has long called for a national skills and talent body to be established to replace the former UK Commission for Employment and Skills (UKCES). The recently announced Skills and Productivity Board will help to generate much needed national intelligence, analysis and advice, but will not go as far as coordinating the variety of UK skills-related initiatives or drive greater collaboration between employers and educational providers. We still believe this strategic coordination is critical to guide national and institutional approach, policy and priority.

What might the announcements signal for the future of higher education funding?

The Augar Review recommended reducing the tuition fee cap from £9,250 to £7,500. The priority for universities has always been to ensure that there is sufficient funding per student to not only provide course-specific teaching and equipment, but also wider student facilities, services and support.

The announcement today made clear that the tuition fee cap will be frozen at £9,250 for at least another year. This will lead to a further real terms reduction in the value of the tuition fee – which is now worth about £7,500 in 2012 prices (when the higher fee was first introduced). The interim response talks about the “significant, and growing, taxpayer subsidy in the higher education student finance system”, stating that “the student finance funding systems remain sustainable” and that “those who benefit from their higher education should make a fair contribution”.

These are all important factors to balance, but it is also critical that there is enough funding available to help each student, regardless of their background, achieve their potential. The decisions on whether to change our student funding system will not be taken until the Comprehensive Spending Review, which is expected in the Autumn.

Are we doing enough to expand lifelong learning opportunities?

The Fourth Industrial Revolution, accelerated by the Covid-19 pandemic, is transforming our labour market. We urgently need to ensure that people are able to upskill and retrain. The Lifelong Loan Entitlement and a commitment to supporting development of more modular learning are both major and potentially transformational initiatives in the medium to long-term. We hope, however, to see announcements in the March 2021 Budget that will have a more immediate effect – like allowing more people to enroll for an equal or lower qualification in a different subject and providing targeted support for part-time and flexible adult learning.

What is clear is that universities, like all educational institutions, need to respond appropriately to ever changing student and employer demand, as well as balancing nurturing soft skills, creativity and independent learning against specific technical and competency skills. Evidence suggests that for most graduates having a degree does pay off, but universities should always be ready for challenge from employers and the Government to prepare for the future.

To read more about NCUB’s position on skills and Covid-19, see here.