Union makes case for education investment

In March, Chancellor George Osborne assured us in his budget speech, “Our reform of schools, universities and apprenticeships is probably the single most important long-term economic policy we’re pursuing.”

Now with his Spending Review looming large, speculation on where the axe will fall is rife, and despite Mr Osborne’s supportive comments, colleges and universities are not expecting to come through unscathed for 2015/16 – unlike schools which are on a promise to be protected.

It is baffling how with his emphasis so firmly on economic growth, Mr Osborne is poised to strike at the heart of the institutions that can underpin it – colleges and universities.

Shockingly, spending on education in the UK as a proportion of Gross Domestic Product (GDP) is 5% lower than the average of competitor countries according to the Organisation for Economic Co-operation and Development (OECD) – an estimated funding gap of £4.2bn.

Public spending by the UK on higher education as a proportion of GDP has fallen by one-third, putting us below Finland, France, Germany, Japan, and the USA.

Evidence clearly shows we need more highly skilled workers: in 2000-10, more than half the annual GDP growth in the UK on average was related to labour income growth among those with higher education. Cedefop (European Centre for the Development of Vocational Training) forecasted those with higher level qualifications are to increase as a proportion of the European labour force from 29.8% in 2010 to 37% in 2020, while those with low qualifications are set to decline from 23.4% to 16.4%.

In its spending review submission, the University and College Union (UCU) makes the case for greater investment in education and calls for UK spending on Research and Development (R&D) to catch up with the average for OECD countries. Again, many will be surprised to learn that spending on R&D as a proportion of UK GDP is currently 20.6% lower than the OECD average, despite innovation being a key driver of productivity growth and in turn economic growth.

In 2005/6, for every £1m of output in our further education colleges, a further £1.42m was generated in other UK industries. A more recent (2011) government report showed that vocational qualifications delivered in the workplace and apprenticeships delivered a return of around £35-£40 per pound of funding. UCU has called for public spending on further education to be maintained at 0.6% of GDP in the short-term, rising to 1.0% in the medium term.

And if young people aren’t learning new skills and getting qualifications the result is a huge cost to us all. Each young person not in education, employment of training costs an average of £56,000 in public finance costs before retirement, and the entire 2008 group of young people on a scrapheap of inactivity could cost over £13bn. That’s before you take into account billions more in opportunity costs – loss to the economy, welfare loss to individuals and their families and the impact of these costs to the rest of society.

In its Spending Review Submission 2013, UCU makes the case to show that only through greater investment in higher levels of education can Britain thrive in the rapidly developing ‘knowledge economy’. Nowhere is this made clearer than through the striking prediction that 65% of children entering school now will end up working in careers which have not yet even been invented!

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