Title: Higher Education in Further Education, and the higher vocational education conundrum

1. Title: Higher Education in Further Education, and the higher vocational education conundrum Presentation by: Nick Davy, National HE Policy Manager

2. Higher Education Question? Is it appropriate and efficient for the state to subsidise mainly young people from middle/higher income backgrounds for ¾ years to study literature and poetry?

3. The Spending review outcome The imperative “The issue is how the higher education sector makes its contribution to deficit reduction” Vince Cable statement to Parliament 12 Oct 2011 The budget to 2015 HEFCE T- grants cut (£5 bil to < £2 bil) Student loans rise (£3 bil to £7 bil) Govt capitalises its expenditure BIS total spending on HE rises University income up an estimated 10%

4. HEFCE Old regime Same funding rates Simpler rules New regime Differential price Medicine £10,000 STEM £1,500 New C1 Price Group - IT W/participation Student Number Control

5. The HE Market: Students at the Heart of the system? The New HE Market – Dynamism and Efficiency? Market Characteristics: • Price - loosened, but controlled. Loans not Price • Entry- yes, but limited; Exit – unlikely • Profit maximisers? • Competition – mainly within a differentiated market; heritage; continuing ‘cold spots’? More demand than supply • Information – PI/KIS • Technology – Productivity – Blend/Flex/ICT? • Regulator - HEFCE

6. Movements since the White Paper Movements since the White Paper? • HEFCE from Regulator to Overseer (BIS Response to WP/TC) • Marketisation to Liberalisation? • Places for High Achieving Students likely to grow (tariff) • Limited Growth for Lower Price Courses (margin) • Private Sector – unregulated until at least 2013 • Possible problems with Access – Adult Level 3 Loans • Evidence: decrease in part time applications • Diversity – new entrants

7. The Problem? England’s economic/training problems: • Low level skills (Leach) • Low skills equilibrium (Low skills work low aspirations) • Lack of intermediate skills (UKCES) But: • All the financial incentives – 3 Years Bachelors degrees • Poor progression ‘structures’ from vocational Q to HEFCE funded HE (L3Voc Q – 50%; A Levels – 90%; AA – 13%, including NPHE) • Separate sectors – secondary, FE, HE • Under-used – Accreditation of Learning • Lack of diversity – 3 year degree part or fulltime fits all

8. Access/WP still a major problem Participation rates of disadvantaged young people (Q1 and Q2) in entry tariff institution groups (OFFA)

9. Higher Vocational Education and the House of Lords: A comparative case study Weakness of (Higher) Technical Education: • Samuelson (1884) – weakness of technical education • Industrial Training Act 1964 – establishment of industry training boards • Employment and Training Act 1973 – the establishment of the Manpower Services Commission • Weiner – the anti-technical education English culture (1981); • the ‘low skills equilibrium’ argued by Finegold and Soskice in 1988 • Dearing (1997) – foundation degree development • UKCES (2011 2012) • The Skills Commission (2011)

10. Higher level technical skills: supply and demand issues The Evidence: Supply - Structure/Systems: “Our study has shown that there is no clear or simple vocational ‘ladder’ of progression to higher levels” [Connor H and Little (2005) Vocational ladders or crazy paving? Making your way to higher levels London LSDA; revisited in 2009 – same conclusions] UKCES has found that “19% of employers reported skills gaps in 2009 and that the highest number of skills shortage’s are accounted for in Associate Professional and Technical Occupations” [UKCES, The UK Employment and Skills Almanac 2010: Evidence Report 26, 2011, p. 116] “we are currently weak in the vital intermediate technical skills that are increasingly important as jobs become more highly skilled and technological change accelerates” [DBIS, Skills For Sustainable Growth, 2010, p. 4]

11. Creating a more diverse HE system; supply/funding decides demand? HEFCE Paper (Diversity: Opportunities and Challenges 2010/11): The major problem of creating diversity is a cultural one – the popularity of the 3 year residential Degree. Some Potential: (a) Part-time (b) FEC HE (c) Accelerated/Intensive – but probably lack of demand. But – Is it not a funding issue? Funding drives institutional behaviour and therefore demand behaviour? • 30% of the £2.1bn spent on adult FE student funding is allocated to full-time students. (0.67 million students) • A rough estimate is that over 90% of the £10.3bn spent on HE student funding is allocated to full-time students (1.1 million students) [Corney/Fletcher (2007) : Adult Skills and HE: Separation or union?]

12. College based HE Claims - HE in FE: • Deliver distinctive higher vocational education [not entirely supported by Parry/Scott] • Short cycle HE; sub degree – HNC/D; FD; NPHE-professional/higher vocational • Complementary to HEI suuply [supported by Parry/Scott] • Local – lower living costs[supported by Parry/Scott] • Access/WP – Localism [supported by Parry/Scott] • Local Regeneration – inward investment; skills; close to employers [Evidence?]

13. New? ? “ taking courses below advanced level and studying part-time. If too many of these colleges were removed from their intimate connection with local industry and commerce there might well be a serious risk that the nation's needs for technicians and skilled manpower generally would be increasingly neglected. The close local relationships that these colleges have done so much to foster must be preserved. Moreover, if the colleges as a whole ceased to be administered by local government there is some risk that the links with school education - which are essential if technical education is to provide an alternative ladder of higher education for boys and girls who are unable to follow, or are unsuited to, a sixth form and university course - will also be weakened”

14. Some encouraging movements: Supply Where structures/ladders (supply) exists demand influenced? Some contemporary data* on progression from Advanced Apprenticeships: • From AA to HEFCE funded + NPHE [2/3 years after completion] – 13% • Accountancy – 50% • Engineering – 21% • Business administration – 19% • Health and Care – 25% • Children’s Care – 19% • Figures also available for L3 Q progression by county/region *Smith S and Joslin H (2011) Apprentice Progression Tracking Project. Centre for WBL. University of Greenwich

15. Some practical measures • Continue to support the expansion of cost-effective HE at non-research providers. (this will allow growth in numbers) • Re-examine support for part time HE • Build on the apprenticeships pyramid for HA in appropriate vocational areas. Address issues with HA – funding, transferability/portability • Develop a CATS for applied/vocational HE; clear progression pathways • Promote QCF at higher levels • Support the credit of quality in-house company/charity training schemes • Create and promote robust APL schemes • Integrate and promote NPHE – Loans? • Allow student numbers quota transfer • Ensure prestigious Universities meet WP targets

16. The Medium Term Some Ideas – and this is the medium term? • Create a system of tertiary education not a sector- Permeability between secondary/further/higher – A tertiary system: collaboration and competition • Colleges – key: sponsorship/links of academies/UTC; supply to HE; apprenticeships at all levels; HE • Use Loans and funding to support a diversity of HE delivery and • Need for a cultural shift – long-term – Political leadership • Promotion of the importance/status of the applied/practical Apprenticeships/Higher apprenticeships • Involvement of the professions – social mobility • One Planning and Funding Body/Greater integration?

17. Questions Thank You Questions and Discussion