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When it comes to deciding what subjects should be studied, the gentleman in Whitehall really doesn’t know best

  • 5 February 2019
  • By Scott Kelly

A guest blog by Dr Scott Kelly, who lecturers at New York University London. He is the author of ‘The Myth of Mr Butskell: The Politics of British Economic Policy 1950 – 55’ and of two HEPI reports, Reforming BTECs; Applied general qualifications as a route to Higher Education and  Raising productivity by improving higher technical education: Tackling the Level 4 and Level 5 conundrum

On the face of it, there’s little in common between the big speech Damian Hinds delivered recently at Battersea Power Station, with the report published by the precocious new think tank Onward in January. After all, Onward’s report was openly critical of current policy.  Yet Onward is led by Will Tanner, the former deputy head of policy at 10 Downing St, a man who clearly knows a thing or two about the policy options currently under consideration in Whitehall. In fact, though focused on different aspects of the system, Hinds’ speech and Onward’s report were actually cut from the same cloth – both indicating a direction of travel where post-compulsory education policy becomes increasingly dirigiste.

Hinds’ speech outlined a familiar diagnosis of the failures of technical education in England. In particular, he argued that low take-up levels are due to practical subjects being perceived as ‘second class’ and because potential learners are confused by ‘too many’ qualifications.  But Hinds then rather contradicted himself by suggesting that, in spite of all the snobbery and confusion, there are actually lots of learners on some courses, they just happen to be the wrong ones. Hinds singled out hairdressing as an occupation where we are training far too many people; by contrast construction is beset by skills shortages. Consequently, Hinds wants to go back to a system where local employers determine the amount of provision.

Similarly, the authors of the Onward report see poor course selection as the real problem at the heart of the student loan system. Too many students will never earn nearly enough to pay off their debt because they have studied degrees with low earnings potential. In this instance, the authors singled out creative arts as the culprit, noting that ‘the lowest earning subjects of all were creative arts courses, which had the largest number of graduates of any course type despite the lowest earnings.’

One problem for both Hinds and the authors of the Onward report is that measuring the value of qualifications is hardly a straightforward business – even if you start from the narrow assumption that all that matters is what students go on to earn. For example, detailed research by Steven McIntosh and Damon Morris presents a complex picture of the wage returns of vocational qualifications, precluding any blanket statements of value. While it is the case that the returns for qualifications in service sector occupations such as hairdressing are lower than in occupations such as construction, within service sector occupations themselves vocational qualifications are associated with higher wage returns. In other words, if you want to be a hairdresser it’s a good idea to get qualified.

Similarly, research by McIntosh, this time in collaboration with Joanne Lindley, does not support the thesis that university expansion has resulted in too many people studying the wrong subjects. In fact, their detailed analysis of data from 1994 to 2011 found hardly any growth in the variance of graduate earnings between degree subjects.  In fact most of the growth in wage inequality was to be found within subjects themselves. The largest growth in the variance of wages was observed in engineering and economics. By comparison, arts and humanities exhibited lower growth in wage inequality. Expansion in higher education hasn’t resulted in an explosion of underperforming arts degrees, as the Daily Mail would have it, rather it appears to have resulted in more variable wage outcomes across the higher education sector.

The tricky subject of wage returns is just one example of the bureaucratic nightmare that awaits us if we follow Hinds and the authors of the Onward report down the rabbit hole of indicative planning. Estimating just how many people should be taking each qualification is a fool’s errand. There may be far more people taking hairdressing courses here than in Germany, as Hinds suggested, but hair and beauty has been a growth sector – look at any high street – and, by some estimates, Germany actually has a shortage of qualified hairdressers. Similarly, Britain leads the way in Creative Industries with the Government itself estimating that they are worth over £100 billion to the economy.

The Home Secretary Sajid Jaivd likes to tell the story of how he was advised at school to apply for a job as a TV repair man at Radio Rentals. With the benefit of hindsight this makes a good humorous anecdote, but few at the time would have anticipated how changing technology would revolutionise the television market. Similarly, preventing someone today from training as a web designer because of a lack of local demand, as Hinds suggested in his speech, may well prove to be equally short sighted. Predicting skills needs is certainly worthwhile when it informs general macroeconomic policy; it’s quite another matter when it prevents students from following their dreams. The gentleman in Whitehall doesn’t always know best.

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