The big crunch

Two graduate-related stories caught my eye this month which, taken together, expose the folly of the last quarter-century of British higher education. First, Policy Exchange published a report entitled Tarnished Towers. It demonstrates how graduates, burdened by debts accrued from their studies, are finding it increasingly difficult to secure jobs. Among those who graduated in 2024, only 57 per cent were in full-time employment a year later.

At the same time, the government announced that taxpayers will subsidise visas to the tune of £5,000 when British firms hire highly skilled workers from abroad. In a Telegraph article, we learn that this is intended to address skills gaps in “tech and digital, life sciences and clean energy sectors”. This comes against the backdrop not only of graduate underemployment, but also of already mammoth levels of immigration. 

Taken together, the Policy Exchange report and the new government subsidy amount to an indictment of Britain’s approach to skills. After decades of expanding higher education in the name of preparing Britain for the future, we find ourselves with graduate underemployment on the one hand and acute skills shortages on the other.

It is a particular irony that Digital & Tech and Clean Energy are among the areas suffering skills shortages. Anyone who has spent time in higher education will know that it is almost impossible to go more than a few days without hearing about digital transformation or Net Zero. The sector is evangelical about both.

There was a period in the mid-2010s when digital became the watchword. Degrees in subjects that had stood happily without it — from Media to Technology Solutions to Education itself — suddenly found themselves with digital appended to their titles. Those of us who took a mordant amusement in academic fashions joked that it was akin to putting words like Electrical or Printed before subject names. It simply went without saying that the equipment and distribution would be digital going forwards. Yet many of our more fervent colleagues, keen to present themselves as innovative, remained steadfast in informing anyone who would listen that the future lay in digital skills, digital literacy and digital cultures.

Some of them did very well out of it. I still half laugh and half shudder at the memory of one particular colleague who presented themselves as such an authority on all things digital that a parliamentary committee sought their advice, yet this individual struggled to attach a file to an email. An anecdote, certainly. But also a small illustration of a wider tendency within higher education: universities became adept at talking about digital futures, digital literacy and digital transformation, while remaining less certain about what practical skills the economy requires. 

It may be objected that many universities possess sprawling Science and Technology faculties which ought to be turning out graduates adept in data science, cloud infrastructure and, more recently, AI. Yet the institutions best placed to do so remain highly selective, while the former Polytechnics increasingly educate students who arrive lacking the foundations needed for degree-level study. The result is that we have expanded higher education dramatically without expanding the supply of high-quality technical graduates to anything like the same degree.

Clean energy presents a similar irony. Net Zero is promoted with near-religious zeal across the higher-education sector. According to Universities UK, 96 per cent of member institutions have a clear, publicly available strategy to reduce carbon emissions. Some set aside swathes of their campuses for rewilding, some ban beef, and some even go that radical extra mile and sponsor climate-change poster competitions for school-age children. It is often difficult to cross a campus without encountering a librarian shouting at you about the “climate emergency!”

A number of universities do teach the skills to put the clamour for clean energy into action. There are also roughly 25,000-30,000 students enrolled on courses specialising in advanced skills related to hardware, grid integration and thermodynamics. Given this apparent abundance of talent, why are British companies finding it difficult to fill posts in precisely those areas? The Climate Change Committee has estimated that between 135,000 and 725,000 net new jobs could be created in low-carbon sectors by 2030. Yet while universities spent years building up and then dismantling Arts and Creative Industries faculties, they never scaled up clean-energy provision on anything like the required scale.

The forlorn student actor-activist, now diligently paying off his debt by stacking shelves in a supermarket rather than touring that long-envisioned play about the shrinking ice sheets, might have been spared three years of misplaced hope and wasted money. Tens of thousands of others might instead have travelled through a pipeline from school to college to a clean-energy course and into gainful employment in a growing industry. You wonder what the vice-chancellors, not to mention the Department for Education and the various statutory bodies, have been playing at.

Most academics entered the profession through university study and many have little or no experience outside it

The weakness within the universities is relatively easy to trace to its roots. Universities are staffed and led by people who have spent most, if not all, of their adult lives within higher education. Vice-chancellors are usually averagely talented academics drawn from fields as diverse as STEM, the humanities and the social sciences; only one current VC has significant private-sector experience. Most academics entered the profession through university study and many have little or no experience outside it. They inhabit a self-enclosed world of shifting internal politics, and their next move is likely to be to another academic post. It is a closed loop.

When senior managers want to understand future employment trends, they invariably farm the work out to consultants, whilst also keeping an eye on government policy. Yet both the consultants and the policymakers seem to have failed them. I can remember numerous reports cascading down from on high about the skills gaps that were supposedly about to open up in British industry. I cannot recall the shortages that the government’s visa scheme is intended to address ever being particularly high on the agenda. 

But even if they had been, the result would probably have been a frantic shuffling of papers. Universities would quickly have discovered that much of their existing staff base was simply not equipped to teach those skills. Scaling up provision would have required such a radical restructuring of institutions, staffing and priorities that the effort would almost certainly have been judged too great.

The blame for this pickle lies with the university executives, the planners, the consultants and ultimately the policymakers who blithely assumed that more, bigger universities were the answer to every future challenge. The university sector has spent a quarter-century preparing students for a future it has proved remarkably poor at anticipating. 

Those serious about reforming higher education may ultimately conclude that what is required is a dramatic shrinking of the sector alongside the creation of innovative new institutions, at least partly privately owned, where industry helps shape priorities and research feeds directly into economic activity.