Higher Education

Lord Londesborough Excerpts

Thursday 7th March 2024 Lords Chamber

[Lord Londesborough (CB)]

My Lords, it is a pleasure to follow the noble Lord, Lord Willetts, and two former Secretaries of State for Education. For my part, as an employer, I will focus on higher education and productivity, which of course is a two-way street.

It is no coincidence that the UK’s flatlining productivity since 2008 comes at a time when we have seen the education budget fall in real terms per pupil over the past 15 years. Low economic growth reduces our ability to invest in the education and training of our future workforce. This vicious cycle has brought us to the point where we now spend more annually on debt interest payments than on our entire education budget. Strangely, the Chancellor did not flag this up in yesterday’s Budget Statement.

I speak today from the perspective of an entrepreneur rather than an educator or Minister. I was an employer for 30 years, and many of our best long-term hires came from graduate trainee schemes, both here in the UK as well as in Asia and the US. I now back and advise early-stage businesses and, for many, the biggest single hurdle to growth is the supply of talent in this country, particularly graduates. This is not so much about the calibre of graduates as about the supply of work-ready graduates with relevant degrees, as there is a damaging mismatch between skills and vacancies.

We have large swathes of graduates in jobs not requiring a degree. The IFS reports that, outside London, this number has risen to 42%, up from 31% back in 1993. That is a red flag for productivity. Graduate vacancies are now falling, as is the wage premium, as students rack up a cumulative debt of £200 billion, the majority of which the Government admit will never be repaid.

For the two-thirds of graduates across the UK who go on to high-skilled employment, their median salary is reported to be £11,000 higher than that of non-graduates—but that average is much lower due to the skewing effect of very highly paid professions. To achieve that differential, graduates will have devoted three to four years to further education on little or no pay and racked up an average debt of £45,000 each—as will the other third who, despite graduating, never secure high-skilled jobs.

These numbers are symptomatic of an economy failing to keep pace with the major and, some would say, unsustainable expansion in the number of graduates over the past 30 years. Put bluntly, we do not create enough high-skilled jobs. Given this context, universities should focus much more on preparing their students for the workplace and not just on graduation. Too many graduates leave university with no clear idea of what they want to do, with the result that many stray into a series of short-term jobs that fit poorly with their skills and character.

So what can be done to address this fundamental mismatch? I have just three quickfire observations on which I would welcome the Minister’s response. First, I advocate that one-third of an undergraduate’s curriculum should be devoted to their future employment prospects, developing life skills that apply to the workplace, receiving comprehensive careers advice and gaining hands-on, relevant work experience.

Secondly, we need radically to reduce the number of students taking degree courses with poor outcomes, lack of academic rigour, high dropout rates and poor employment prospects. We need to be more discriminating.

Finally—this is a problem of both supply and demand—we need much greater involvement from employers, both public sector and private sector, in helping educate students about professional life as well as scaling up graduate traineeships and internships.

This country has an extraordinary array of young talent, but it needs much more specific advice, training and guidance if we are to turn our students into engaged, happy, well-paid and, above all, productive workers.

Jobs Market: Graduates

Lord Londesborough Excerpts

Monday 27th November 2023 Lords Chamber

Asked by

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the jobs market for graduates, and whether this assessment points to a mismatch between skills and vacancies.

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, one-third of vacancies in the UK are due to skills shortages. The Government want to develop a world-leading, employer-focused, high-quality skills system that is fit for the future. Our higher education sector delivers some of the most in-demand occupational skills with the largest workforce needs, including training of nurses and teachers. The DfE published graduate labour market statistics showing that, in 2022, workers with graduate-level qualifications had an 87.3% employment rate and earned an average of £38,500. Both are higher than for non-graduates.

[Lord Londesborough (CB)]

I thank the Minister for her detailed response, but the fact remains that we have swathes of overqualified graduates in jobs not requiring a degree. Outside London, that number has now risen to 42%, and in many regions it is more than half. Graduate vacancies are falling steeply, as is their wage premium, and students have now racked up more than £200 billion of debt, much of which will never be repaid. How do the Government plan to respond to the damaging mismatch between skills and vacancies?

[Baroness Barran (Con)]

I thank the noble Lord for his supplementary question. I recognise some of the points that he makes about the regional differences in graduate opportunities. However, on our wider skills strategy, the Government have introduced the lifelong learning Act, which will offer students the ability to reskill and upskill over their lifetimes. We are investing in skills at all levels and also focusing on making sure that the quality of all degrees is as high as can be.