CIPD Voice: Issue 13

This week Theresa May announced a long overdue, year-long independent review of fees and student finance. Students in England currently pay some of the highest tuition fees in world, with most universities charging the top rate of £9,250 per year, despite offering considerably variable returns depending on the subject studied and which institution they attend.

The average student in England will leave university with an estimated £50,000 worth of debt, with students from more disadvantaged backgrounds, who have more loans available to them, potentially saddled with up to £57,000.  The fact that more than three-quarters of graduates will never earn enough to repay the debt in full raises some serious questions around the value of university and how it should be funded.

The expansion of the higher education system has been driven by the assumption that increasing the level of highly skilled people in an economy would naturally lead to an increase in the number of highly skilled jobs. However, while there has been growth at the top end of the occupational spectrum this has not kept pace with the rapid expansion in the number of graduates – leaving many new graduates trapped in non-graduate jobs.  CIPD analysis published in November 2017 found that almost half of new graduates ended up in non-graduate jobs and a third in jobs that pay less the £20,000 a year. For some subjects the proportion is much, much higher, for instance, 93% of law and language graduates earn less than £20,000 six months after graduation.

Our research has shone a light on the outcomes of graduates in the labour market – what jobs they end up doing and how much they get paid – and has highlighted the colonisation over the last few decades of a range of traditionally non-graduate jobs by graduates. For instance, 41% of new recruits in property, housing and estate management are graduates, compared with 3.6% in 1979, and 35% of new bank and post office clerks are now graduates compared with 1979 when just 3.5% held degrees.

It is welcome that the review will look at the whole landscape of post-18 education. While the issue of university funding is important, it must be remembered that 50% of young people don’t end up going to university. Funding for further education has been squeezed considerably with spending on core adult for those aged 19 and over falling by 35% between 2009/10 and 2015/16, a cut of 41% when inflation is accounted for. It will also be important to consider how well the apprenticeship system is working for young people. At the moment just 25% of apprenticeship places go to those aged under 19, with most young people concentrated in sectors and subjects with poor wage returns and limited opportunities for progression. Unless we address both the failure of the apprenticeship system to offer a meaningful alternative to university as well as the chronic underfunding of further education, any changes made to higher education funding will be little more than just a rearranging of the deckchairs.

Elizabeth Crowley

Lizzie Crowley, Policy Adviser - Skills

Elizabeth has recently joined the CIPD as a Policy Adviser. Elizabeth is a policy and research professional with over 13 years’ experience in the employment and skills arena, having worked with both the public and private sector to develop high-quality research to inform organisational practice, public policy and shape the public debate.

Prior to joining the CIPD Elizabeth led The Work Foundation's research and policy development on the youth labour market – and has published a number of influential reports on youth unemployment. She has regularly appeared on national and regional TV and radio, including BBC Breakfast, BBC the One Show, the Today Programme and Channel 4 news. Elizabeth graduated in Sociology and has a master's degree in Social Science Research Methods, both from the University of Glasgow.