The policy questions in higher education that the spending review should solve

The first long-term spending review in more than five years is a chance to solve some vexing policy questions. University Alliance's Ellie Russell has some suggestions

Ellie Russell is the Deputy Head of Policy at University Alliance

The first multi-year spending review since November 2015 could directly address, or allow departments to begin resolving, several open policy questions for the higher education sector.

Among the issues with far-reaching implications for University Alliance members is the progress and coherence of the Westminster government’s skills agenda. This spans several departments and a range of short-term interventions and longer-term reforms, one of which was recently described by a Tory peer as the most “outrageous constitutional act by any government” they have seen (and not in a good way!)

The risk of policy churn

You only need to look at our still woefully underfunded further education sector and the stack of reviews of the skills system to see there has been a lack of political will to drive long-term policy making in this area. The Institute for Government describes the final phase of a long-term policy lifecycle as the “long tail of diminishing political interest” wherein the policies, institutions and targets put in place to solve a problem nevertheless need to be delivered. Since the publication of the Augar report in 2019, we have arguably circled back to the first phase, “a period of rising salience”.

Some of this attention has come right from the top. It was just over a year ago that the Prime Minister’s Lifetime Skills Guarantee was announced. More recently in his speech to Conservative Party Conference, the PM responded to mounting supply-chain problems by declaring that the country is heading towards a “high wage, high skill, high productivity” economy (although it’s difficult to look at this in isolation from the accompanying tactics of berating businesses and a dog whistle on “uncontrolled immigration”).

Elsewhere in government, the skills for jobs white paper was published by DfE in January; skills is a stand-alone pillar of the Treasury’s plan for growth published in March; and the UK Innovation Strategy in July emphasised the importance of aligning innovation with a strong pipeline of skills in order to support productivity gains. Rachel Wolf, one of the architects of the 2019 Conservative Party manifesto, has consistently argued that skills should be considered a lever for levelling-up, which has its own white paper due shortly after the spending review.

Yet without investment through the spending review, ideally accompanied by a strong emphasis on joining-up this activity across government, plans will stagnate and the willingness to invest political capital in this knotty issue will inevitably decline.

The policy detail for universities

Beyond how the spending review might help this agenda to hang together, there are various specifics that universities will be looking out for over the coming weeks which sit squarely in DfE’s portfolio.

Level 3 qualifications

There is, finally, growing political interest in the reforms that will see the funding for the majority of BTECs removed, following impassioned interventions in the House of Lords and the unrelenting work of the #ProtectStudentChoice campaign. Funding for qualifications that overlap with T levels is due to be withdrawn in full by August 2024, the final year of this three-year spending envelope, and the expansion of T levels to adults will likely wait to be tackled in the next Parliament. To prompt serious consideration of a recalibration within DfE, it will be incumbent on likeminded universities to join and sustain a continual drumbeat on the impact of these proposals, particularly as the Skills and Post-16 Education Bill enters the House of Commons with its new amendments on level 3 provision.

Higher technical qualifications

There is now a phased opt-in approvals process and accompanying quality mark for higher technical qualifications (HTQs). Several universities will be recipients, either individually or through their involvement in Institutes of Technology, of the £18m Higher Technical Education Growth Fund, but the main funding incentive that will drive most universities to opt in is dependent on the spending review. It is the intention to add HTQs to the list of eligible courses for student finance, but the government has also committed to exploring the Augar report recommendation that non-approved qualifications should receive lower funding.

Any changes will be implemented on a phased basis, but there are currently no plans to have more than one approval window per year, which could present challenges in aligning university validation processes. Qualifications that do not align directly to an occupation or provide only incremental steps towards occupational competence will not be in scope for approval, so universities will also need to consider early on whether there are gaps in the relatively shallow pool of occupational standards at level 4 and 5 that would impact on their existing qualifications.

Apprenticeships

Higher and degree apprenticeships fared relatively well during the pandemic, and it is more likely to be evolution than revolution on apprenticeships policy at all levels. However, assuming the overall funding settlement remains at a similar level, there is still pressure for the government to give either more or less direction to the Apprenticeship Levy. Less direction could include broadening it into a Flexible Skills Levy to cover a wider range of training. More direction might mean implementing the Augar report recommendation to make most people that already have a publicly supported degree ineligible for a level 6 or 7 apprenticeship.

Many universities are committed to growing their apprenticeships offer to meet employer demand, including undertaking long-term strategic partnerships with the public sector to deliver their workforce needs, but many will also be operating at least some of this provision at a loss. The Education and Skills Funding Agency review of eligible costs of training is due to be concluded at the spending review, which will inform a new model for apprenticeship funding band recommendations.

The Lifelong Loan Entitlement

The Skills and Post-16 Education Bill, described by Lord Adonis as a “bill in search of a policy”, provides very little detail on how the Lifelong Loan Entitlement (LLE) will actually work in practice. We must hope the long-awaited consultation on LLE design follows on the heels of the spending review to avoid any further carts before horses and that with it comes with an openness to addressing the tensions between increasing flexibility and the approach to regulating HE quality. The Office for Students short course trial will hopefully produce some useful insights after a somewhat baffling start that required providers to quickly pull together bids, on provision that should be highly collaborative in nature, within a very short period just before the start of term.

In the end, perhaps one of the most productive shifts in this agenda might come from the reshuffle rather than the Spending Review. A greater willingness from the new Secretary of State for Education to collaborate with the sector on the building blocks for a high skill economy will be met with enthusiasm and solutions from anchor universities embedded in their local skills and innovation ecosystems.

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