The mobile economy

Self-flagellation about Britain’s skill shortage has become a regular pastime for politicians and business organisations. And it is certainly true that in an increasingly competitive global market the UK has been found wanting. Britain’s students are less likely to study high value courses. Professional scrutiny of qualifications is patchy. Many students are studying the wrong courses at the wrong level and skills shortages have emerged in critical areas.

The Government’s response to these failings has been to create a centralised skill delivery model for postcompulsory education (soon to be 18+). If Britain’s productivity was dictated by the number of skills bodies it had, it would be the world leader. There are at least four Government departments involved together with twenty nine quangos and numerous initiatives and plans. The result is an unwieldly education maze.

The maze has created individuals, institutions and employers more used to being spoon-fed than self motivated. Brought up on “teaching to the test”, students can lack the meta-skills – initiative, teamworking, capability -required in the fast moving world of modern business. Compared to other countries, fewer British students choose courses that bring the highest financial returns (such as engineering, medicine, law and mathematics). While government tries to deliver ready-made high skilled employees, employers actually have to carry out remedial work for a failing school system. New opportunities such as informal internships are monopolised by those with inside knowledge and financial resources. Higher and further education institutions are strait-jacketed, punished if they recruit too few or too many students and given little incentive to innovate or manage costs.

The education maze has not stifled all of the private sector contribution to training. Employers outspend government on training by four to one (£38 billion to £10 billion per year). The labour market puts a premium on higher skills. The introduction of tuition fees has started to drive greater take-up of high value courses such as mathematics and science. International evidence shows that higher tuition fees, together with a student support package, increase participation. Employer accredited qualifications have risen in number and some professions have created credible brands.

However, for individuals to maximise their talents, these trends need to be radically accelerated. The key change is reallocate the £9.6 billion currently spent by government on teaching and capital to students, through an Individual Education Account. This would be worth £13,000 for every 18 year old. The account could be spent on higher or further education, training and apprenticeships – abolishing the fractious debate about academic versus vocational education that has been running for decades. Apprenticeships and workplace qualifications should be accredited only by employers or their representatives. Educational institutions would be free to set their own salaries, degree contents and fees and new entrants would be allowed to contest the market, both home and abroad.

The consequences would be that:

Other business sectors would follow the example of law, accountancy and medicine and create worldleading professional qualifications. For example, a Chartered Institute of Plumbing would seek statutory approval and set a standard for high quality plumbing apprenticeships and qualifications.

Individuals would enjoy the same level of information about education and training as restaurant goers or car purchasers.

Exports of education and training would rise. Higher education in particular should become a key growth sector in global markets.

Educational institutions – particularly further education colleges but also universities – would develop a new vigour and confidence.

Labour markets would become more flexible as training becomes more accessible.

Most importantly, the best education and training opportunities would no longer be monopolised by people from advantaged backgrounds. This reform programme would contribute greatly to the Government’s forthcoming White Paper on social mobility, as well as supporting a mobile economy.