We need a step-change in higher technical learning to boost productivity

This blog has been kindly provided by Scott Kelly, the author of two past HEPI reports:

• Raising productivity by improving higher technical education
• Reforming BTECs: Applied General qualifications as a route to higher education

Scott was an adviser to the Minister for Further Education, Skills and Lifelong Learning (2010-12) and lectures at New York University in London.

According to the recently-published Skills and Employment Survey, the UK workforce is working harder than ever before. Though the image of exhausted workers may be depressingly familiar, it is nevertheless at odds with official statistics that indicate productivity has hardly risen since the financial crisis of 2008. Behind this apparent paradox is a worrying absence of the skills and equipment that workers need to become more efficient.  As Professor Alan Felstead, the lead researcher on the Survey put it, British workers are ‘running faster and faster just to stand still.’

The Survey puts into sharp focus the importance of the Government’s own review of technical qualifications at Levels 4 and 5. It is at these levels that skills shortages are often greatest, hardly surprising given that fewer British workers are qualified to these Levels than in other comparable economies.

A step change in provision could well result in significant improvements in productivity, but this is only likely if higher technical education becomes a real priority for policy makers.  Although the Government’s full review is not due to be completed until early next year, the Department for Education has lately issued an interim overview of the evidence gathered so far. While this progress report gives some grounds for optimism, its conclusions suggest a significant danger that the final report will represent a missed opportunity to grasp the real issues.

While the obstacles to expanding provision at Levels 4 and 5 listed by the interim report are commendably comprehensive, some are given much greater prominence than others. While it is clear from the research gathered for the review from HE and FE providers that the regulatory and funding system presents a profound barrier to increased provision, this is rather glossed over in the concluding section of the interim document, which simply notes that ‘Providers must also navigate both the Higher Education and Further Education regulatory and funding regimes, which intersect at this level.’

Rather than identifying these issues as the focus of likely reform, the paper instead highlights the difficultly employers have navigating the qualification system. Given that ‘too many qualifications’ has been the mantra of government policy since the Wolf review of 2011, such a conclusion was to be expected. Indeed, the paper points to the ‘wide range of qualifications available at levels 4 and 5’ as being the primary reason for low levels of employer engagement.

Yet, while it may well be the case that the qualification landscape has become cluttered overtime, there is little evidence that this issue is at the heart of the problem. Although some qualifications do attract a small number of learners, this is a poor proxy for industry demand, especially in sectors where there are niche but important job roles linked to specific and well-regarded awards.  It also ironic that a Government which habitually espouses greater choice – not least in terms of higher education provision – should regard the number of technical qualifications as being such an obstacle to growth.

As I wrote in my report for HEPI in 2015, the real issue is not the number of qualifications but the fact that they are delivered in ‘the no-man’s-land between the further and higher education sectors’. That the complexity of the current system has a profound influence on provision is confirmed by research conducted for the review. Around half of the providers consulted said that their decision on what to offer at Levels 4 and 5 was influenced by the current regulatory model.

I would highlight two ways in particular that the current system inhibits the growth of higher technical education.

1. The first is the sheer cost and complexity of qualification design, validation and quality assurance. It is hardly surprising that there are so few learners at Levels 4 and 5 when regulatory system is based on the assumption that most will move directly from Level 3 to degree-level study.
2. Secondly, the current funding model often works against stable and effective collaboration between higher education Institutions and FE Colleges. In an era where providers are often in direct competition for students, indirect funding arrangements – where colleges receive money via a higher education institute – are no longer fit-for-purpose. The review’s own research found that while many providers say that they would like to expand higher technical provision, increased competition is destabilising collaborative arrangements.

While inadequate employer engagement does represent a real barrier to increased provision it is also in large measure a consequence of the funding system. Why would businesses invest in training to Levels 4 and 5 when young people are willing to take out a loan to pay for a three of four-year residential degree? Yet the resulting skills mismatch has resulted in inefficient practices in the workplace, providing at least part of the explanation for lower levels of productivity.

Unless the current review ultimately results in substantial reform in how qualifications at Levels 4 and 5 are funded and validated, we are unlikely to see a substantial increase in the number of learners.

Lacking the right skills, British workers may find themselves stuck in a never-ending race to the bottom.