Value of higher education not linked to earnings, says Skidmore

The financial impact of the pandemic meant that the opportunity to measure graduate earnings would “drop off a cliff”, Mr Skidmore predicted, because those most likely to have lost jobs were under 35 years old. 

The university sector was wrong to embrace value-for-money as an argument for higher education, former universities minister Chris Skidmore said today, describing it as a “tragedy” that this was a metric of excellence.

Mr Skidmore – who served as universities minister from December 2018 to July 2019 and again from September 2019 to February 2020 – was speaking at a Higher Education Policy Institute (Hepi) webinar on the same day, entitled ‘What does value for money in higher education look like in a pandemic?’.

He said universities were “boxed in” to justifying courses based on the likely earnings of graduates. As around 40% of students study vocational courses like education, healthcare and accountancy, the value of many degrees was “inherent” because it led to a graduate career regardless of likely earnings, Mr Skidmore said.

Mr Skidmore recalled that, as a minister, he vetoed the word “value” in government press releases on universities because, he said, it was “not his place” to define the value of a higher education experience, only to measure its quality.

Since the introduction of higher levels of tuition fees, value for money “has claimed the argument” for HE, Skidmore opined, adding that the economy was “heading into an era” where the government would need “very different metrics” to measure graduate careers. The financial impact of the pandemic meant that the opportunity to measure graduate earnings would “drop off a cliff”, Mr Skidmore predicted, because those most likely to have lost jobs were under 35 years old.

Mr Skidmore’s comments came on the same day the latest longitudinal education outcomes (LEO) data was released, covering 2018/19, by the Department for Education. The figures show the average employment rates and earnings of graduates one, three, five and 10 years after graduating. The 2018/19 figures account for those who graduated in 2016/17, 2014/15, 2012/13 and 2007/08.

Median earnings for UK-domiciled graduates were higher in 2018/19 than in previous years, figures show. Median graduate earnings five years after graduation was £27,400, an 8.7% increase compared with 2014/15. Inflation-adjusted earnings, however, have grown only by 1.2% in that same time frame.

The figures support trends in graduate earnings highlighted by studies over several years, including a November 2020 Hepi report that described the gender pay gap as “pervasive”.

The graduate gender pay gap has steadily grown this decade, figures show. Female median earnings five years after graduation were lower than male median earnings by 13.4% in 2018/19. These figures are worse than previous years: in 2017/18 the gap was 12.5%, and in 2014/15 it was 10.7%. Male earnings five years after graduation have increased faster on average for men than women, with earnings up 10.7% and 7.5% respectively since 2014/15.

There was also a racial disparity in average earnings. Graduates from white ethnic groups earned, on average, £27,400 five years after graduating, compared to £23,700 for those from Pakistani ethnic backgrounds and £25,200 for those from Caribbean ethnic backgrounds.

A study published last year by the Higher Education Statistics Agency (Hesa) found that the gap between graduate and non-graduate earnings has fallen since 1970.

Last year, universities minister Michelle Donelan said students were taken advantage of by “low value” courses. She later clarified at a speech at the 2020 Conservative party conference that she did not link course value explicitly to earnings, instead implying the percentage of university leavers securing “graduate-level” employment was a better metric.

“If fewer than half of those that enrol on a course never progress onto a graduate job either because the support to complete the course wasn’t given to them, or because it didn’t provide the skills employers value, can we truly look those graduates in the eye and tell them they definitely got a good deal?” she said.

Read more: New social mobility index shows ‘value for money’ of HE, vice-chancellor argues

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