Augar review has right approach to FE, but must protect funding for universities, say CBI & others

30 May 2019

Top view of students studying
Top view of students studying

The CBI and other industry bodies, including Make UK, the CMI & the IFS have responded to the independent review of post-18 education funding led by businessman & author, Philip Augar.

Largely, the review and its recommendations have been welcomed by industry – with many industry associations wanting to bring the focus back from the mainstream media reporting on higher education funding to further education and the technical and vocational training that many employers, particularly in STEM sectors, need and are desperately crying out for in their businesses.

Josh Hardie, CBI Deputy Director-General, commented: “The interim report of the Augar Review is an honest and thoughtful look at England’s post-18 education system. Universities are a jewel in the crown of the UK’s education system – rightly recognised and celebrated around the world for their excellence in teaching and research, capacity to innovate and ultimately, ability to improve people’s lives. The review must not lead to their funding being cut.

“The stark lack of technical and vocational options for people often frustrates employers. Ending the financial and political neglect of the further education sector is therefore long overdue. With further education funding squeezed significantly in recent years, the Government’s Spending Review is as an opportunity to make the much-needed investment.”

On the welcome return of maintenance grants, Josh observed: “The Review rightly reflects the call from business to bring back maintenance grants to cover living costs while studying. The evidence is clear that businesses that employ people from a diverse range of backgrounds are more successful. Means-tested maintenance grants will help make sure going to university or college isn’t based on the ability to pay.”

Recognising the importance of being able to learn-while-you-earn, Josh noted: “In a rapidly changing world of work, the CBI has argued for more flexible training that enables people the chance to learn-while-they-earn. For many people, if they can’t study flexibly, they don’t study at all.

“The report makes some welcome recommendations in this area, including a single lifelong learning loan allowance. This allowance could help encourage more people to step back into education at a time, pace and location of their choice.

Urging caution on any changes to tuition fees, Josh said: “Any change to tuition fees and the funding universities receive must not lead to a cut in higher education funding.

“A reduction in the graduate contribution, without a top-up from the Treasury, could bring into question the financial sustainability of many universities, jeopardising quality and the high-skilled talent the UK economy needs and which businesses value.

“Undermining the financial sustainability of universities would be a national tragedy given the crucial contribution they make to skills and innovation. They are vital to meeting the Government’s target of spending 2.4% of GDP on research and development.”

Harry Anderson, Senior Policy Adviser for Higher & Further Education at the CBI, summarised the CBI's three key takeaways from the report:

1. Providing students with a range of routes to high-level skills, particularly via FE colleges
2. Widening access to universities, with flexible learning & grants
3. Protecting our world-class higher education sector by maintaining funding

Tim Thomas, Make UK’s Director of Labour Market & Skills said: “UK manufacturers that already invest heavily in both graduates and apprentices have long seen the world of vocational education and training as the poor relation. UK employers are  paying £3.7 billion annually into an apprenticeship levy they too often cannot access, and the majority of public funding considered by the review, over £8 billion in 2017/18, is committed to students in the Higher Education sector. This mismatch needs to be addressed at once.
“The re-balancing of resource and focus between Higher Education and vocational education is long overdue. It must be founded on an evidenced-based approach and focused in areas where UK plc is short of skills that are economically valuable to industry, such as STEM and digital.
“Alongside this re-balancing must come greater and better targeted funding for degree courses which are costly to deliver, costly to fund, but vital for the UK’s future in a world where technology, science and technical skills will more important than ever to consumers, employers and society.
“UK manufacturers, already shouldering their share of the cost of educating the skilled workforce of tomorrow, will look to government to do the same.”

Verity Davidge, Head of Education & Skills Policy at Make UK, added: “Good to see the recommendation to bring back maintenance loans – going to university shouldn’t be based on an individuals ability to pay. Make UK looked at the potential impact of cuts to fees on subjects such as engineering. If fees are cut, funding would need to be topped up elsewhere – and we will need to look again at the current premiums for SIV (strategically important, but vulnerable) subjects. The review also looks at those that don’t go to university, highlighting the need to strengthen and invest in our technical and vocational education system – which is vital to manufacturing.”

Rob Wall, Head of Policy at the CMI (Chartered Management Institute), said of the report: “Lots to digest here, but as Augar notes, the current apprenticeship system is still new and needs time to bed in. If funding is inadequate, prioritising apprenticeships that help deliver the Government's Industrial Strategy might be an option.”

Paul Johnson, Director at the IFS (Institute for Fiscal Studies) noted that the review used IFS analysis, but criticised mainstream media reporting of the findings for being viewed too heavily through the prism of higher education funding. He pointed out that a key recommendation of the report is to increase financing for further education, as well as student numbers going down the FE route, in order to close the gap in level 4/5 qualifications (between A level and degree) that currently exists. Furthermore, he observed that: “...per student funding in FE has fallen by more than 20% since 2010, with spending on adult skills down more than 40%. More support for colleges and students in FE, as Augar proposes, is a clear priority.”

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