Universities UK representation to the Autumn Budget 2017

Transcription

1 Universities UK representation to the Autumn Budget 2017 Increased productivity of the economy, together with high employment, are the key determinants of the UK s economic prosperity and ability to compete globally. The UK s universities generate and translate world-class research, drive innovation, and educate the future workforce factors which are all essential to the UK s productivity performance and high employment. As well as at the national level, universities support growth at the local and regional level by providing and creating jobs, and leading on local economic and social issues. Therefore UK universities have a central role to play in the development of the government s industrial strategy, particularly across the themes of skills, innovation and research, and place. In our representation we set out our main policy proposals relating to these themes. The UK also needs to be prepared for the challenges that are imminent and emerging from increased global competition and technological change, particularly in the context of the UK leaving the EU. In our representation we set out our main policy proposals relating to the UK leaving the EU. Skills The post-school education and training system has a number of key strengths: - The UK has been very successful at growing the supply of high level skills between and the number of higher education qualifications awarded each year increased by 91,665 or 14%, and there were significant increases in students in veterinary, biological, mathematical and physical sciences, and engineering This growth is underpinned by a system of sustainable student funding in England which does not put a cap on student numbers, shares the cost between taxpayers and graduates, and is progressive through enabling students from all socio-economic backgrounds to enter university if they have the ability. - Nearly 42% of provision at universities can be classified as providing technical skills. 3 Employers report high levels of satisfaction with graduates technical skills, with 91% of employers very satisfied or satisfied. 4 - Most employers find university graduates well prepared for work (ranging from 80 to 84% across the four nations). 5 87% of recent graduates believe their higher 1 See Table 5 in Universities UK (2017) Patterns and Trends in UK higher education Universities UK (2017) Patterns and Trends in UK higher education Universities UK (2016) Higher education in England: provision, skills and graduates 4 CBI/Pearson (2017) Helping the UK thrive, Education and skills survey 5 Department for Education (2016) Employer perspectives survey The voice of universities Chief Executive Alistair Jarvis Universities UK Woburn House 20 Tavistock Square London WC1H 9HQ Telephone +44 (0) info@universitiesuk.ac.uk website Company limited by guarantee and registered In England and Wales Number Registered charity number

2 - education experience has allowed them to communicate effectively in their work and 88% to take initiative and personal responsibility in their work. 6 - Universities work directly with employers to deliver courses and degrees where there are specific needs for example through higher level and degree apprenticeships, or the co-design of collaborative programmes, or centres of excellence. 7 However, a number of issues exist: - There is a current shortage of higher-level skills, with not enough graduates relative to the number of jobs demanding them, and this shortage in supply is projected to continue up to with estimates predicting a shortage of up to 8%. 8 61% of employers are not confident about accessing high skilled employees in the future. 9 - Problems with understanding the system of fees and loans in England could potentially lead to further shortages of higher-level skills in the future. Concerns have been particularly raised over the level of interest rates that graduates face. The system is not readily understandable or transparent, 10 with income-contingent loans incorrectly considered to be the same as debt. - Students face real financial challenges in meeting their costs of living while studying. Evidence from the Student Funding Panel 11 and the independent review of higher education funding in Wales in showed that current students were more worried about the level of their maintenance costs than about long-term debt arising from student loans. - The current system does not allow for sufficient numbers of individuals, across a wide range of ages, to learn flexibly and the number of part-time students continues to fall. 13 Clearer pathways though to higher levels of technical education are also needed. - While most graduates fare very well, some employers struggle to find the skills they require. Some employers, in specific industries and sectors, cite persistent shortages of subject-specific skills. 14 Skills gaps could benefit from being better communicated to prospective students, so they make the best possible decision around choice of subject of study and future career paths. While the current system has great strengths and is largely effective in delivering the skills needs of the UK economy, we have highlighted some of the problems that exist. Therefore it 6 Longitudinal Destinations of Leavers from Higher Education Survey , Higher Education Statistics Agency UK Commission for Employment and Skills and Universities UK (2014) Forging futures 8 Universities UK (2015) Supply and demand for higher-level skills 9 CBI/Pearson (2017) Helping the UK thrive, Education and skills survey 10 Julia Goodfellow (2017) The Guardian: Friday 14 July, University tuition fees haven t failed but they need a second look 11 Student Funding Panel (2015) An analysis of the design, impact and options for reform of the student fees and loans system in England 12 Independent review panel (2017) Review of higher education funding and student finance arrangements in Wales 13 Universities UK (2013) The power of part-time: review of part-time and mature higher education 14 For example, in infrastructure and the nuclear industry. 2

3 is right to examine the system and consider how improvements could be made. Universities UK makes the following recommendations: 1. Enhance the student funding system in England to make it fairer to those in need: Universities would like to work in partnership with government and students to examine the option of providing targeted maintenance grants for those in most need of this support. We would also like to explore the possibility of a reduction in the interest rate payable for those graduates who are low and middle-income earners, through changes in earning thresholds to which interest rates apply. 2. Make the costs and benefits of higher education much more transparent to prospective students: there needs to be much better communication on the potential lifelong benefits of attaining a degree, the costs borne by government in educating students, and how the student loan system acts as a safety net with remaining debt written off after 30 years - unlike any other conventional loan arrangement. Universities want to work alongside the relevant stakeholders to ensure the current system in England is much more transparent to students, their families, and graduates. 3. Enhance support for lifelong learning: this could be through greater government support for adults to retrain, upskill and to adopt more flexible ways of learning. It could also involve better career advice to older learners and those considering retraining. 4. Address subject-specific skills gaps: universities, employers and government could work together at the national level to ensure long-term employer trends, and persistent skills shortages, are systematically communicated to prospective students through careers information, advice and guidance. Innovation and research Universities play a central role in carrying out the UK s world-leading research, and in generating, collaborating with, and fostering innovative businesses. While the UK has great strengths in research and innovation, the following issues exist: - The UK is far behind the rest of the world in terms of investment in R&D, particularly in relation to private investment in R&D The UK s innovation performance is mixed when compared to that of international competitors. There is recognition that enhancing the entrepreneurship and commercialisation skills among researchers and PhD students could help foster innovative businesses and support the next generation of entrepreneurs There are a number of problems in raising financing for spinouts, including the availability of early stage capital, relatively few investors in the UK with the specialist 15 OECD (2017) Main science and technology indicators 16 For example, the UK is generally regarded as having a weak investment base for innovation and technology. UK universities compare well to their US counterparts on collaboration with industry, spinouts per pound of research income and effectiveness of IP processes, and less well on licensing to existing industries. See McMillan group (2016) University knowledge exchange framework: good practice in technology transfer 3

4 expertise required to evaluate spinout opportunities, and the speed of access to scale-up finance. 17 To address these issues, Universities UK makes the following recommendations: 1. Government should move the UK further towards a target of R&D investment of 3% of GDP through real terms increases in public R&D funding. The additional 4.7 billion of R&D announced in the 2016 Autumn Statement should recognise the UK s world-class dual support system for research, and the current balance of funding within it. 2. Long-term support should be given to the Higher Education Innovation Fund (HEIF) in England to reach 250 million per year. If HEIF is to play an even broader role outside of its current role, then an increase beyond 250 million should be considered. 3. Improve skills relating to commercialisation and entrepreneurship: additional funding should be targeted to supporting measures such as Knowledge Transfer Partnerships, collaborative research council studentships, and delivery of training on commercialisation (such as building on SETSquared s ICURe pilot 18 or supporting universities to deliver training in a novel or impactful way). 4. Strengthen the pipeline of investment-ready spinout opportunities: this could be through supporting universities ability to invest, more risk capital and enhanced tax relief, and regionally focussed initiatives to help build deeper capital markets outside the London and South-East. 19 Place Universities not only contribute to broader economic growth which benefits the entirety of the UK, they also make significant contributions at the local and regional level - these contributions are highlighted in a series of Universities UK regional briefings for England. 20 The role of universities may provide part of the solution to addressing the following issues relating to place: - Wide disparities exist in the labour markets across England in relation to higher-level skills. 21 Highly skilled graduates may wish to live in a particular area, but unable to find work, move to other areas or conversely may choose not to live in an area with skills shortage vacancies based on a number of personal considerations. More balanced growth across England and the UK could occur if there was better matching of graduate skills with employer demand at the local and regional level. - As noted earlier, clearer pathways into, and through, technical education are needed, with clear and understandable information on the options available 17 See Universities UK s response to HM Treasury s Financing growth in innovative firms consultation 18 This is being piloted by the SETsquared Partnership and Innovate UK, and funded by the Department for Business, Energy and Industrial Strategy (BEIS). 19 See Universities UK s response to HM Treasury s Financing growth in innovative firms consultation HM Government (2017) Building our industrial strategy p.110 shows the percentage of the population with a degree level qualification varies widely by geographical area. 4

5 conveyed to students. A collaborative approach at the local level may have much more of an impact on learners. However barriers exist to developing these collaborative approaches. - While some businesses are able to access relevant university expertise, some businesses (particularly SMEs) find it more difficult to access university expertise as required. 22 In Universities UK s response to the green paper on the industrial strategy, we recommended that local collaborations of universities play a key role and provide leadership in addressing local and regional issues. Building on this, Universities UK makes the following recommendations: 1. Better match graduate skills with employer demand at the local level: this could involve government supporting networks of local universities, employers and stakeholders to encourage employer demand for graduate employment and work experience, match the best possible candidates to the opportunities, while ensuring these opportunities are more widely available than currently. These networks could also monitor skills gaps at the local level, encourage collaborative development of courses and programmes to address local needs, and help address disparities in high level skills between local areas. These local networks could build on the experience of the National Collaborative Outreach Programme (NCOP). 2. Create stronger pathways through technical education from greater local collaboration: this could involve systematically reviewing the barriers to increased local collaboration and creation of collaborative models between universities, further education colleges and schools, and addressing these barriers. 3. Better match companies and investors to the relevant university expertise: Targeted support should be given to developing networks of universities (which could have a broad local or regional focus) with a particular focus on signposting, supporting and incubating businesses, and training (for example university-run workshops to support SMEs with business proposal writing). A networked approach would improve the interface and matching between universities and businesses. This support could be through rolling out University Enterprise Zones, through additional funding for HEIF, the forthcoming UK Shared Prosperity Fund, through business rate relief or VAT exemptions, or innovation vouchers. The UK leaving the EU The UK has one of the strongest university systems in the world. It is also one of the most international, attracting more international students than any other country except for the United States, and 29% of our university academics have a non-uk nationality. As the government looks to minimise turbulence and maximise the opportunities associated with leaving the European Union, universities have a vital contribution to make to a successful, dynamic and internationally-competitive post-exit United Kingdom. 22 Universities UK (2017) Response to Building our industrial strategy: green paper 5

6 To ensure that UK universities can maximise their contribution to a globally successful UK, the right support is needed from government to address the following concerns: Increased barriers to recruiting talented European staff Damage to international research collaboration Increased barriers to recruiting European students Loss of funding for research and innovation Reduced outward mobility opportunities for staff and students These concerns should be addressed through a combination of negotiations with the EU and longer-term domestic policy change. The following priorities should be secured through Brexit negotiations: Residency rights for EU nationals currently working in the university sector, and their dependants. This must include full access to public services, an assurance that UKbased EU researchers seeking to obtain settled status won t be penalised for spending periods out of the country, and a guarantee not to introduce a retrospective cut-off date for eligibility Continued UK participation in the Horizon 2020 research and innovation programme to the end of the programme period Close collaboration with European partners to deliver excellent research in the longterm, ideally including through a 9th Framework Programme focused on excellence Continued access to Erasmus+ and the Marie Sklodowska-Curie Actions programmes The following priorities should be addressed through domestic policy change: A simplified and improved immigration regime for international university students and academic staff. The UK s exit from the EU presents government with an opportunity to reshape the immigration system to recognise the value of attracting overseas talent from countries both in Europe and beyond. Reflecting public opinion on immigration, a new regime should prioritise students and highly skilled groups such as post-doctoral researchers, academic staff, and technical and professional staff, regardless of their nationality. New funding arrangements to support collaboration with both European partners and major research powers outside of Europe, with a focus on delivering excellent research Enhanced mobility opportunities for UK staff and students in addition to Erasmus+ A replacement to the European Structural and Investment Funds which includes funding for innovation-focused capital investment projects. There are a number of actions that can be taken immediately to ensure stability and reduce uncertainty for universities in the short to medium term through a post-brexit implementation period, which UUK recommends should be in place for a minimum of two academic years. Universities UK recommends the government undertake the following actions: 1. Provide stability to researchers on Horizon 2020: Universities UK welcomed aspects of the government s new partnership paper on UK-EU science collaboration following Brexit, in particular the priority given to universities and research. However, uncertainty for researchers remains about what will happen in the last 20 6

7 months of Horizon 2020 (including researcher mobility through the Marie Sklodowska-Curie Actions). This may risk the UK becoming a less attractive collaboration partner for leading researchers across the world. Government should therefore signal that it will seek continued UK participation in Horizon 2020 until the end of the programme, and commit to fund UK researchers as third country participants in the event of full UK participation coming to an end. 2. Provide stability on Erasmus+: It is unclear whether students and university staff will be able to go abroad through Erasmus+ after the academic year. This is an urgent matter because students already enrolling in autumn 2017 onto degrees with a mandatory year abroad are likely to be planning on doing so in A reduction in participation through Erasmus+ would negatively affect the student experience and the development of graduates skills. Government should therefore signal it will seek continued UK participation in Erasmus+ post-exit and strengthen the existing underwrite guarantee to cover universities who will have applied for Erasmus+ funding before Brexit, even if they only find they are successful after the point of exit. 3. Prevent immediate decreases in the number of EU students: this should be through the government guaranteeing, as soon as possible, home fee status and access to grants and/or tuition fee loans for EU students taking up university places in the academic year and that the current EU student finance arrangements will remain in place as part of a post-exit implementation period. This is significant given that around 80% of students start their research into where to study abroad more than 12 months ahead of enrolling. 4. Outline its intended direction of travel for managing EU migration in the long term: In order to avoid any cliff-edge, government should confirm, ahead of the next phase of exit negotiations, that no additional barriers will be introduced for EU student and academic migration routes throughout a post-exit implementation period. This phase should cover a minimum of two full academic cycles, to allow universities time to communicate the new arrangements to prospective students and to prepare for a possible increased level of bureaucracy. Contact: Julie Tam Assistant Director of Policy julie.tam@universitiesuk.ac.uk 7