Our post-school education system is broke, says House of Lords

Iona Bain

The post-school education system is broke and needs urgent fixing, a scathing House of Lords report has found.

It says the move to tuition fees funded largely by high-interest loans was “accounting trickery”, and calls for rates on post-2012 loans to be slashed from their current astronomical levels.

The current system entrenches a bias towards full-time university degrees and against any other options, and “offers poor value for money to individuals, taxpayers and the economy”.

A cross-party Lords committee, with former chancellors, Treasury mandarins and leading business figures as members, received evidence from over 150 experts and organisations during its inquiry.

It warns:  “The 2012 reforms to university financing have failed to create an effective market, allowing undergraduate degrees to dominate when this might not be in the student’s or the country’s best interest. The low quality and inconsistent availability of options, caused in part by a lack of funding, have made the problem worse.

“The reforms have led to a collapse in flexible and part-time learning, with student numbers decreasing over the last six years by 60 per cent. Careers for life are disappearing, and the ability to retrain will become increasingly necessary to succeed in the modern economy. Compared to other countries, England is producing far less people with Level 3 (A-Level equivalent) qualifications, and not providing the skills employers in the UK need.”

The report calls for a new deal for post-school education funding which promotes all types of learning regardless of where or how it takes place. It recommends the abolition of the Institute for Apprenticeships, increasing the powers of the Office for Students to act as a single regulator for all Level 4 and above qualifications, including for higher and degree apprenticeships, and the introduction of a single regulator for all other post-school qualifications at Level 3 and below.

Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said: “The way we expect students to access higher and further education is deeply unfair. We must create a single system, including apprenticeships, that offers more choice and better value for money.

“Maintenance support should be available for all students studying at Level 4 and above. The means-tested system of loans and grants that existed before 2016 should be re-instated, and total support increased to reflect the true cost of living.

“The accounting trickery attempted by the Government in 2012, in which the high rate of interest on student loans created the fiscal illusion that Government borrowing is lower than it actually is, has had a devastating effect on the treatment of students in England. It is unacceptable to expect future taxpayers to bear the brunt of funding today’s students.”

The report recommends that the interest rate charged on post-2012 loans should be reduced from the current level of around 6 per cent to 1.5 per cent, and nobody should incur interest while studying.

The committee recommends:

  • Public funding to be better shared between all forms of higher and further education
  • Reverse the decline of part-time and flexible learning with a credit-based system of modular courses
  • Scrap the apprenticeship targets and levy which have promoted quantity over quality, and concentrate on the skills and choices that employers and individuals really need.
  •  The interest rate should be reduced to the 10-year gilt rate, currently 1.5 per cent, from the current rate of RPI plus 3 per cent. Half of student debt will be written off and it is middle-earning graduates who end up paying back most in real terms.
  • The means-tested system of loans and grants that existed before 2016 should be re-instated, and total support increased to reflect the true cost of living.  The switch to maintenance loans has left poorer graduates with the largest debt. The same maintenance support should be available for all full- and part-time students studying at Level 4 and above.

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