Making a market for Higher Technical Education

Today, the Education Secretary, Gavin Williamson, has announced measures to improve the quality and increase the take-up of higher technical education (HTE). These include new qualifications to be available from 2022, which will be aligned to the needs of industry; ensuring the quality of provision is high to improve employer and student confidence; and a public awareness campaign, including careers information, advice and guidance. This comes just few days after the Education Secretary promised “fundamental change, not just tinkering around the edges” in further education. It’s good to see that the government is serious about boosting the take-up and quality of HTE, with measures to tackle both supply and demand – as well as raising the status of HTE.

For too long, the UK has suffered from a ‘missing middle’ in higher technical education (HTE) at Level 4 and 5. Just 10% of the working age population have Level 4-5 as their highest level qualification, compared to 20% in Germany and 34% in Canada.

This missing middle poses challenges, and it is a lost opportunity – with detrimental consequences for the economy, society and individuals. The lack of opportunities for people to gain these skills leaves the labour market excessively polarised, impeding social mobility. Up to 50% of graduates in England may be employed in roles that don’t require a degree, representing a potentially poor return on investment for individuals and the public purse. The weakness of the higher technical skills base can help to explain lower levels of productivity in the UK.

While evidence suggests that there is a growing demand for higher technical skills, HTE represents a small proportion of HE provision – particularly in England compared to other UK nations. For example, in 2014/15, just four per cent of full time HE students in England were studying at Level 4-5, in comparison to 18% in Scotland and 11% in Northern Ireland. While there has been growth in the uptake of higher apprenticeships, driven primarily by employers responding to the levy, this is not on a scale sufficient to meet the need for skills at this level.

So what’s caused this market failure? In short, a lack of suitable provision from learning providers and a lack of demand from employers and individuals are operating in a vicious cycle. A lack of national assurance that qualifications meet employer needs, low awareness and understanding of Level 4-5, a cultural bias towards degrees, and limited delivery capacity in the FE sector all have a part to play. The origin of these factors lies in national policy, which is why the government is right to take action and today’s announcement is so welcome.

Addressing these challenges requires interventions at the local level too. While national policy and funding provide the framework for driving investment in HTE and raising its visibility and appeal, successful local implementation is needed to ensure funding is targeted at local economic priorities and skills shortages. Employers need to be confident that HTE will deliver the skills they need; potential learners want to know that their course will help them to secure a local job.

Learning and Work Institute has been commissioned by the Gatsby Charitable Foundation to identify approaches to making a market for HTE. We will be working with two local areas to develop ways to boost demand and provision to meet local skills needs. While this work seeks to address long-standing challenges, it is particularly important now. The economic impact of the coronavirus pandemic, automation of jobs and the end of free movement are just three key reasons why adults need opportunities to upskill and retrain into new roles. Today’s announcement hopefully provides a strong framework for addressing these challenges.

Emily Jones, Head of Research, Learning and Work Institute