Higher and Further: How education policy might reduce inequality

Further Education (FE) colleges are suffering from severe funding cuts, and with the upcoming spending review it’s feared the sector will suffer yet another blow. But a new report published today by Policy Exchange provides some interesting ideas on how to revive technical education in the UK and protect FE colleges. Some of which could help both to protect this crucial education service and tackle inequality.

FE colleges are drastically underfunded. They have seen their budgets slashed repeatedly and receive less per student than universities or even schools. Teachers are so underpaid that once the hours are taken into account they can earn as little as £4 an hour. On the other hand many universities are sitting on large reserves, and have seen their funding protected by increased tuition fees. Policy Exchange’s solution is for just over half a billion pounds to be diverted from the university system toward FE. This would protect the education of people coming from poorer backgrounds, many of whom don’t go on to earn huge amounts, whilst slightly docking the large incomes of those who attend university.

Whilst a promising idea, there should be some concern about the mechanism Policy Exchange identifies for transferring the £500m to FE. They suggest that the Government cut student opportunity funding (including funding to widen access and improve retention) and expect universities to continue the same programmes to widen access as they currently employ, out of the rest of the budget. This is worrying, and would need to be strictly monitored to ensure that universities do not use the dip in funding as an excuse to reduce support for students from poorer background to attend university. If the plan were implemented, the Office for Fair Access would need to keep a close eye to ensure that universities don’t backslide into being bastions of privilege.

Another important suggestion in the report is that there should be increased parity of student loans between those attending FE and University. As we’ve previously highlighted university students get access to loans which they only have to pay if they are earning over £21,000, and which are dissolved if they fail to pay them back. By contrast, many attending FE colleges can only access commercial loans to cover their living costs. It makes sense for there to be greater parity of support, as well as greater parity of esteem, between FE and university students, as this report points out. The danger is that as the Government is failing to increase the £21,000 earnings threshold with inflation, the system threatens to become less progressive over time. Where possible this threshold should keep pace with average pay so that it is people on higher incomes who pay for the education system.

There are lots of interesting, bold, impressive ideas in the report, I’ve only pulled out three of them and it’s worth considering the report in full. Action must be taken to protect vocational education and the FE system, and this report provides one blueprint through which to do so. Policymakers should consider it carefully.

Tim Stacey, Senior Policy and Research Advisor