Graduate outcomes should be part of industrial strategy

Could graduate outcomes data be used to inform a future Labour government’s stewardship of the labour market? Michael Salmon makes the case

Michael Salmon is News Editor at Wonkhe

The public largely blames the government for NHS waiting lists being so high. Indeed, the failure of Rishi Sunak’s administration to hit its targets here is a key attack line in the election campaign in England, and a likely large contributing factor to the Conservatives’ defeat.

There are of course a number of complex factors behind the numbers stubbornly refusing to come down substantially, from funding to how the NHS is managed both centrally and on the ground, from public health to the labour market to the cost of living. But it’s pretty widely accepted that the government is ultimately where the buck stops, and that you could lose an election over it.

If you shift over to the higher education sector, the same dynamic is very much not in place. To consider a vaguely comparable headline metric: the employment outcomes, salaries and labour market performance of graduates are seen squarely as the responsibility of those graduates’ institutions, by government, by regulators (we’re again talking England particularly here, of course), and in the popular imagination. Polling from YouGov last week saw 49 per cent of the public in favour of closing university degrees with either high dropout rates or “where graduates earn lower salaries after graduation” – only 29 per cent opposed this. No-one’s suggesting shutting down or forcibly merging NHS trusts that aren’t meeting their quotas.

Stewardship, up to a point

Universities are autonomous and not part of the public sector, ONS reclassification pending. But before you argue that this comparison with the NHS is therefore somewhat spurious, it’s worth bearing in mind that something similar holds true for issues like inflation and GDP, despite these again being phenomena at arm’s length from the government’s actual operation, manipulated only at a distance. There are a huge number of areas of the economy and society for which the government has a clearly understood role of stewardship and of ultimate accountability for the headline performance numbers – but higher education isn’t one of them, not in the same way.

You can’t quite imagine a situation in which the Conservatives on the campaign trail were asked about their record on promoting good graduate outcomes, or where Labour would be asked what its plan was to improve them. In the unlikely event that it came up, both parties’ answers would be about the sticks and carrots they would put in place to cajole the higher education sector to do better. This is universities’ primary job, the framing has become, and ministers will intervene when there is an issue, to protect the national interest.

The whole range of pernicious side effects of using employment outcomes as a political or regulatory tool doesn’t need much rehearsing at this point. We can make the case that graduate outcomes are to a great extent driven not by quality of education but by the health of the labour market in different sectors and regions – the “absorptive capacity” of the economy for graduates’ skills and knowledge, as Debbie McVitty put it on The Wonkhe Show last week. This works as a neat counterargument for those opposed to outcomes-based regulation and/or the same attacks on low value that play out each year. But rather than a rebuttal, this point could serve as an opportunity to think about how graduate outcomes could actually be used as data points and triggers for action, for a government that actually took an interest in stewardship of the labour market in different sectors and regions.

A government with an industrial strategy, in other words – which an incoming Labour administration will definitely be.

Doing things the other way around

Labour’s “opportunity mission” contains a plan for something similar to Longitudinal Education Outcomes (LEO) data to be used to track the nation’s progress over time with social mobility and intergenerational equality. What’s left unsaid here – but which, if it came to pass in future policy, would represent a substantial change – is that the data over time here would contribute to judging the government’s success in its missions and its administrative performance. Rather than, say, in the next or next-but-one round of debates about whether getting a degree is “worth it”.

The party’s draft industrial strategy itself – really more mood music than deep policy plumbing – has little to say about the labour market, and nothing about graduates. But there is here an intuition at least that the movement from student to graduate, from acquiring skills to using them in work, is part of what the government needs to facilitate:

With our world-leading research base and universities, skilled workforce and deep capital markets, the UK is well placed to create new clusters of capabilities. However, the recent past shows this will not happen without an engaged partner in government.

So what if for Graduate Outcomes and LEO, rather than having higher education institutions as the unit of assessment, as it were, the data could equally be turned on its head to look at what industries and what regions are having trouble absorbing the bucketloads of talented potential workers that HE is producing?

There could be a convention that government and regulators would respond to each year’s data with a reflection on how it related to their own missions or strategic duties, and to the wider health of the economy and society – and act accordingly off the back of this (how to do so effectively and meaningfully is a whole separate question, of course). There could also be long-term targets as part of a national industrial strategy, or KPIs for an opportunity mission board, if you must.

Shifting the onus

DfE’s Unit for Future Skills has taken some tentative steps to deploy LEO in this way, looking at graduate employment from the perspective of STEM jobs and the occupations linked to what the current government dubbed “critical technologies”. But without any guiding strategy informing the data gathering at the moment – indeed, the current government’s Science and Technology Framework ambitions were simply to launch the dashboard – it doesn’t amount to much. Yet.

There’s a clear devolution angle too, for a party so minded. Andy Burnham could be asked to set out why Greater Manchester had done a poorer job of harnessing computing graduates this year compared to last (for example). Better that than them moving away and no-one really thinking about why.

This would shift the blame from higher education institutions over phenomena which are to a great extent outside their control – which is not to say that you could easily imagine certain regions or sectors getting hauled over the coals in the way that universities are, when it emerged that there were issues around who’s getting graduate jobs and which industries have lower salaries. No-one would be heaping opprobrium on architecture firms for not managing to place graduates, or on the South West for struggling with chemists.

There would be instead the possibility of a grown-up conversation about how the labour market is working, with a clearer sense in wider society that where graduates go, and what they do there, is a question for the whole country and one that speaks to how its run.

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