Emily Carver is Media Manager at the Institute of Economic Affairs.

During the 1999 Labour Party Conference, Tony Blair pledged to send 50 per cent of young adults to university “within the next century”. His supporters praised his ambition, while many others simply questioned why. Two decades later, the target has been hit, but the mountain of evidence shows that the goal has neither boosted social mobility nor led to higher productivity.

The crude assumption was this: if 50 per cent of young people go to university, 50 per cent of young people will later secure high-paid, high-status jobs. Perhaps to the bemusement of his father, Blair’s son, tech entrepreneur Euan, has devoted significant time and energy to refuting this falsehood.

In an essay for Policy Exchange, Euan denounced the UK’s “obsession” with sending so many school leavers to university. He argued it left graduates ill-equipped, in terms of knowledge and skills, to be successful in the world of work. His concerns were not unfounded.

As the Institute of Economics Affairs’ Dr Stephen Davies points out in his new paper To a Radical Degree, statistics from the ONS show that close to a third of graduates are now “overqualified” for their job, with graduates in arts and humanities most likely to be “under-using” their education. 

Apart from those taking vocational subjects, such as medicine or engineering, in over 90 per cent of cases, graduates will use little of what they’ve learned at university in their subsequent employment and will instead learn the skills they need on the job. 

The results have been disastrous. We have a dearth of skills in the labour market, a generation saddled with debt, and a higher education (HE) sector on the brink of collapse. The fundamental issue is the “good” universities are selling.

These days, the attainment of a degree certificate largely acts as a signal to an employer that you have achieved a certain level of capability. Over the years, the value of that signal inevitably has diminished as a result of oversupply and inflation in qualification levels, while productivity growth figures remain stagnant.

But this signal is so entrenched, and employers so heavily reliant on it, that every year thousands still apply to HE institutions, many for courses that will add very little value.

Covid-19 has exposed a sector in deep trouble and decision-makers are waking up to the need to radically overhaul of the system.

Even before the crisis, many institutions were in a precarious financial position. In 2018, it was reported the number of universities and colleges in England running a deficit jumped by almost 70 per cent. With Chinese students now the second largest source of income for universities, the pandemic has put the future of many institutions in jeopardy.

There is a desperate need to diversify our HE system away from the “one-size-fits-all” approach that has dominated for so many years. We need to return to a varied system in terms of the type of institutions and ways of teaching, with far more of an emphasis on vocations and learning a trade. The Treasury has made clear that any bailout of the sector will be conditional on reform, including removing “mickey mouse” courses that add little to no value. This is a step in the right direction.

With A-Level results out this week and many missing out on their preferred university, the internet is awash with adverts for clearing spaces. It is a sad state of affairs that many of these young people will find out the hard way that the degree they’re investing in may not be worth the paper it’s written on.

Our HE system is badly letting down young people. Fixing it will be no small feat, but the Covid crisis could at least be a catalyst for much-need change.