John Cope, Independent Strategic Advisor, & Senior Counsel (Education & Skills), PLMR. Former Executive Director, UCAS; & former Non Exec Director, IfATE.
Shortly before leaving UCAS, I oversaw the publication last year of a fantastic series of analyses called Journey to a Million. This considered the demographic realities of applications to university, college, and apprenticeships – and what it meant for the system and our economy. Based on UCAS data (partial in places, especially when it comes to further education and apprenticeships), robust modelling and some careful assumptions around participation rates, we put our necks on the line and projected by 2030, UCAS would be processing a million applications, compared to around 750,000 currently. We also made clear that in all likelihood there is a plateau and potential drop in higher education numbers after 2030.
Today, HEPI publishes an insightful piece by its President, Bahram Bekhradnia, building on similar analysis. Bahram is right to diagnose that ‘if there is no improvement in participation then demand will reduce after 2030, implying a very bleak outlook for many universities’, but in my view, unnecessarily concludes that the harsh medicine of student number controls are needed, with the paper concluding government should control ‘the number of students that can be recruited by individual universities to reduce the damage that is being done to the sector.’
So how do we avoid a Grand Old Duke of York rollercoaster, in which we march up the hill to a million applicants in 2030, only to have marched back down by 2040?
My view is that the fall in numbers is not inevitable – even if the demographics are. I think this for one major reason: in 2030, the idea that only 18-year-olds going to traditional higher education should dominate our thinking will be out of date, if it isn’t already.
Other drivers and economic reality will be much more powerful factors than simple demographics:
- adult learners will become the norm, especially as AI and digital expertise become as much an essential skill as teamwork or literacy;
- the apprenticeships revolution of the last 10 years has opened up a whole new area of higher level training;
- universities and colleges will continue to innovate, including through the Lifelong Learning Entitlement (assuming the new government doesn’t abandon this much needed reform); and
- online learning will make education and training much more accessible.
Adult learners become the norm.
Many adults are already engaged in learning. Institutions like the Open University, Birkbeck, FE colleges and training firms across the country offer a wealth of opportunities to adult learners – often those most in need of a leg-up or a second chance. However, it can hardly be called ‘the norm’, sadly, with adult education still overlooked in the policy debate. As analysis from the Institute for Fiscal Studies shows, we saw a peak of about 3.3 million adult learners in 2012, which had fallen to 1.5 million by 2020. This decline happens at the very point skills shortages in the UK economy (and globally) are acute, and productivity has remained stubbornly low since the 2000s.
At the same time, employer investment in the workforce has waned. The Learning and Work Foundation found training spend per employee has fallen 28% in real terms since 2005, from £2,139 to £1,530 per year. This is less than half the European average.
The glimmer of hope nestled in this rather glum analysis is the Lifelong Learning Entitlement (LLE). Done correctly, it represents a revolution, and will, for the first time, create a joined-up system where all people, not just 18-year-olds, have a path to training and learning – and not just as a big three-year degree block, but as smaller credits that can be taken alongside work and family commitments. The LLE also sets the foundations for joining up higher and further education, opening the possibility of addressing the Augar Review’s stark finding that, in 2017-18, over £8 billion was committed to support 1.2 million UK undergraduate students in England, compared to £2.3 billion to support 2.2 million adult further education students.
The LLE has huge implications when considering shrinking demographics after 2030. There are currently 30 million people in the UK labour market, opening the door to millions of adults looking to retrain or upskill. The new government should recognise the value in this reform and will hopefully see it to fruition.
Apprenticeships, apprenticeships, apprenticeships.
My view on apprenticeships is simple: they are an amazingly effective way for people get the skills they need. Especially at higher and degree level.
The reason I said earlier that the Apprenticeship Levy (a 0.5% tax on employers with a payroll over £3 million) is a glimmer of hope, is that it has doubled government funding for apprenticeships since 2010. Alongside the Levy, the quality of apprenticeship training has dramatically risen; employers are now involved in designing the content of apprenticeships, so it stacks up against the real world; and there is a guarantee that at least 20% of an apprentice’s 30-hour week will be high-quality training, not just work. That’s not to say the system is perfect, but it’s undeniable that the Institute for Apprenticeships & Technical Education (IfATE) has led a transformation in apprenticeships. I hope Skills England (due to replace IfATE) will build on this legacy, not start again.
UCAS figures show this transformation has had a real impact on applications. 40% of people who use them for careers advice and information are interested in apprenticeships – an increase of over quarter of a million since 2021. That’s a meteoric cultural change, and one I think will grow and grow – their current forecast is that at least 500,000 students will be interested in apprenticeships in 2030.
For that to happen, the number of apprenticeships on offer will need to grow dramatically. Currently, the Levy ringfences around £3 billion a year for apprenticeships, but this is nowhere near enough to meet the evident demand.
The 0.5% Levy will therefore either need to increase or we will have to drive up employer expenditure on apprenticeships another way. My personal preference would be for a new Skills Tax Credit as already exists for Research and Development to unleashes employer investment. It would see employers reducing their taxes for every pound they invest in high quality apprenticeships or T Level placements (in addition to the Levy). This could be extended to other vocational and technical qualifications where quality is high. As a result, the Levy funding could be focussed on young people, smaller firms, social mobility, and lower levels, while my proposed new skills tax credit would boost degree level, adult, and senior staff development.
Growing the number of apprenticeships would also help address the problem identified in the Sutton Trust’s research that twice as many degree apprentices come from wealthy backgrounds. Ensuring apprenticeships continue to be a driver of social justice, rather than exclusive or rare opportunities, will be critical as demand continues to rise.
A generous but targeted (to avoid deadweight loss) Skills Tax Credit would drive up applicant numbers, regardless of demographics and give the millions in work the opportunity to change to retrain or upskill. It would also ensure there are enough opportunities for the 50% of young people who don’t go on to higher education, bolstering the 2030 one million forecast dramatically. The number of universities embracing apprenticeships already demonstrates how key this is.
Universities and colleges continue becoming innovative in their provision and do not jump straight to degree level.
The blanket approach of a campus-based block of three or four years learning at an institution is starting to feel dated, and most universities and colleges have already innovated and moved away from this model by offering more flexible options alongside the traditional route.
This is where Level 4 and 5 qualifications, often referred to as the ‘missing middle’ of our system, could open new opportunities for young people and adults alike. Foundation degrees, NVQs, CertHE, and Diplomas have attempted to grow this underdeveloped part of the system in the past, each with mixed success. Scotland has had more success where Higher Nationals have become embedded.
More recently, the growth in Higher Technical Qualifications, the short courses pilots, and the LLE’s requirement for large qualifications to be broken into credits is driving the system in one direction: nimble, more flexible, and more bite-sized chunks of education or training. This is important because, by diversifying options alongside traditional campus degrees, with apprenticeships and shorter Higher Technical Qualifications (typically a year long, sometimes two), there is massive potential for universities and colleges to keep the growth in numbers going well beyond 2030 – regardless of demographic change.
Seizing the potential of online learning.
The increase in remote learning stimulated by the pandemic provoked serious debate about the role and quality of online learning in the future. Some point to universities and colleges using online learning as a means of reducing the cost of running a course, but argue that it risks reducing quality and the student experience. On the flip side, many (including students) see significant benefits, especially through a hybrid approach of in-person and online learning. A common view from students is that big lectures are just as effective online, but seminars or lab time are a red line – here, face-to-face time with instructor or lecturer come out top in student experience surveys.
Technology, therefore, offers the potential to improve access for people from less well-off backgrounds, or those with family responsibilities, such as being a carer. It also creates the potential to innovate how education is delivered; a great example is the OpenScience Observatories from the OU where students can gain access to an astronomical telescope from their kitchen table.
Bringing these factors together, I don’t believe a peak in numbers followed by a decline after 2030 is inevitable. As we ride the demographic wave over the coming years, we mustn’t forget that innovation, adult learners, and apprenticeships will expand the ways people can take advantage of education and training. The potential for millions more people – including those already in the workforce – to upskill and retrain is enormous.
Therefore, while Bahram Bekhradnia is right to express concern about demographics, with the right policies in place, there’s no reason we can’t sustain growth in the numbers entering high-quality education and training. This is crucial not just for the financial sustainability of our education system but also for the UK’s economic productivity and the broadening of opportunity.
Spot on! WE do seem have got a bit of a stuck with Function following Form. If Form follows Function multiple possibilities of the sort illustrated, open up for bringing the many strengths of HE to all sorts of different learners throughout adulthood.
And some pulling together of the fragmented policy and funding levers to create more enabling and supportive conditions for this shift would be helpful.
I agree with John Cope that if Universities make radical changes to offset a decline in the number of 18 to 21 year old students applying for 3 year undergraduate places, most institutions will survive.
However, the sector needs to accept the need for radical change and recruit more students from a wider age range and to respond to changing customer demand.
Bahram Bekhradnia needs to take a wider look at the issue.
I think he is incorrect when he says on page 17 “……… because there is no reason to think young men are less able than young women nor that those from disadvantaged backgrounds are less able than their better-off peers, there are reasonable grounds for thinking
that over time some catching up will occur.”
It seems clear to me that young men are less able than young women. Women already outperform men and achieve higher grades at A levels. I doubt this will change.
Those from disadvantaged backgrounds are also less able than most of their “better-off peers” when they apply to be undergraduates and are still less able when we look at their grades at graduation and they will continue to be in “second position” for the rest of their lives.
To say otherwise does not fit the facts, no matter how much we would wish we were wrong.