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Peter Ainsworth is the Managing Director of EM Applications.

The Universities and Colleges Admissions Service (UCAS) has reported that applications to study at University, up to the mid-January deadline, have fallen by five per cent year-on-year: a decline of 30,000 prospective students. After tuition fees were tripled to £9,000 per annum in 2012 it at first appeared that students were immune to the price hike, since applications continued to rise – from 540,000 in 2012 to 593,000 last year. The Government boasted that, despite the much higher costs, a degree remained an attractive investment, and students trusted it.

But that faith was unjustified for many. While it is true that graduates on average continue to earn much more than non-graduates, that average is simply the middle point of a very wide range of outcomes. An IFS study calculated that, for male graduates of 23 higher education institutions, ten years after graduation, half of them were earning less than equivalent non-graduates. The ONS finds that, five years after completing their studies, a third of graduates are in lower skilled jobs that do not need a degree level education. The Chartered Institute of Personnel and Development estimates that 58 per cent of all graduates are in non-graduate jobs.

So conventional is the view that a University education will lead to a better career that the student body has taken several years to adjust to the reality of potentially poor earnings, despite a £40,000+ debt (taking account of maintenance as well as tuition). The steep rise in costs combined with the growing evidence that a degree is of little value to many graduates now risks making a university education fall out of fashion.

I recently visited a top London private day school to meet with some sixth formers. They asked whether, given the fee levels, it was still worth their while going to University. That such privileged children should be asking this formerly heretical question shows how shaken is youngsters’ confidence in the value of a degree.

Companies, too, are changing their approach. BT and some of the accounting firms are reducing the graduate intake in favour of 18 year olds as they can be just as clever and quick to learn, but are less expensive to employ as they don’t have a student loan to repay.

This is unfortunate for the universities. But it’s especially bad news for the country – poised, as it is, on the cusp of Brexit. The Government has made reduced immigration a key objective, and assumes that the flow of people is driven more by their desire to come to this country rather it is by this country’s (employers) desire to have them come. In other words, Ministers take immigration to be supply-driven rather than demand-driven.

The evidence is otherwise. More than two-thirds of UK companies say it is difficult to find sufficient highly skilled staff, and the bulk of immigration is educated people. 62 per cent of migrants from Western Europe, for example, have a degree by comparison with 24 per cent of the British workforce. This is why, despite the fact that the UK has control over non-EU immigration, net non-EU migration in 2015, the last reported year, was an inflow of 189,000, nearly double the Governments overall target. It is not possible to restrict the immigration total without harming business when there is such a significant shortage of UK based highly skilled employees.

So Brexit will not deliver reduced immigration unless the country can produce sufficient quantities of highly skilled employees from its own population – which the higher education sector is signally failing to do. Indeed, there is a parallel between the number of graduates who each year find themselves in non-graduate jobs and the number of highly skilled staff brought in from abroad.

The Government, through its Higher Education and Research Bill, is seeking to introduce a “Teaching Excellence Framework” (TEF) supposedly to improve the value students get from their education; but it uses measures which will have exactly the opposite effect. The TEF will take account of “student satisfaction” and, for example, the number of “contact hours” (time in supervisions etc.). This is like assessing the worth of a doctor by their bedside manner while paying no attention to whether they make a correct diagnosis. It will encourage Universities to employ inexpensive but charming teachers where what student need are those who will challenge them and prepare them for the workforce. Something along these lines was tried in Australia in 2006, and abandoned as unworkable in 2009.

The decline in applications is a wake-up call for the academic and political community. If Brexit is to succeed we need to produce more home-grown, high-skilled workers. If the Universities continue to let down a large proportion of their students, the sector will shrink into irrelevance. The way forward must be to tie University finances to the earnings of their graduates, so that they have a real interest in truly adding value and producing the highly skilled workers the country most desperately needs.

36 comments for: Peter Ainsworth: If Brexit is to succeed we need to produce more home-grown, high-skilled workers

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