By Daniel Hunter

The UK will fail to close its chronic skills gaps without urgent action to boost advanced ‘learn as you earn’ training and more business-designed degrees, a new CBI report finds today (Wednesday).

Tomorrow’s Growth argues that relying alone on traditional university courses will not meet the growing demand for degree-level, technical skills in key sectors like manufacturing, construction, IT and engineering.

It says that government needs to remove a series of barriers to better co-operation and address the 40% drop in part-time undergraduate applicants since 2010-11.

The CBI warns businesses need to tackle the perception that A-levels followed by a three-year residential course are the only route to a good career, with higher tuition fees meaning young people are getting more astute in deciding what to study from 18.

The UK’s biggest business group says there are not enough courses with business links; patchy understanding of student finance; and poor careers advice on options open to young people — arguing a new vocational UCAS-style system could bridge the gap.

It says universities need to boost the number of employer-backed “sandwich” courses and compressed or part-time degrees, which give students practical work experience or allow them to support their studies.

And it says businesses need to expand their commitment to high-quality training schemes — such as higher & advanced apprenticeships; work-based training; and fast-track schemes aimed at school leavers - alongside traditional degrees.

“The UK needs to vastly increase the stock of workers with higher-level skills to drive long-term growth and stop us falling behind our competitors," Katja Hall, CBI Policy Director, said.

“We need to tackle the perception that the A-levels and three year-degree model is the only route to a good career.

“When faced with £27,000 debt, young people are already becoming much savvier in shopping around for routes to give them the competitive edge in a tighter job market.

“Universities must be much more innovative to take advantage of the change in students’ approach. And we need businesses to roll up their sleeves and expand high-quality alternative routes where degrees are not the best option for young people.”

On a vocational UCAS-style system and better careers advice

Ms Hall said: “There is growing demand for ‘earn while you learn’ schemes, yet far too many are shrouded in mystery. Six out of ten young people don’t go to university, so we need to give them much clear advice on the options, costs and finance out there.

“UCAS is a single information point for all young people looking to apply to university — as well as a direct application route. But there is no equivalent of similar standing for people wanting alternative vocational and technical schemes. We need to end this if we want to create real parity of esteem between the different routes young people take to get higher skills.

“The careers advice system is lagging these rapid changes in alternatives to university. The system is too dependent on individual teachers or it’s left to family and friends to try and pick up the pieces — that’s simply not good enough.

“Ministers need to be much less laissez-faire. Careers must be a priority not a bolt-on afterthought.”

Tomorrow’s Growth identifies that key changes need to be made in our education system to ensure universities and businesses can step up to this challenge. The CBI argues the key challenge for the Government is removing the barriers that currently exist to co-operation, around finance, information, relationships and the lack of incentives in the system to focus on employment outcomes.

Its recommendations include:

• Build a vocational UCAS-style system — a single portal with information on the full range of business-backed university courses and industry-run training programmes alongside each other. This should also include publishing clearer information on employment outcomes from courses through the Key Information Set data. It is a big step toward parity of esteem with traditional routes.

• Create more inspiring careers information and guidance by putting in place more support for schools to meet their statutory duties. Careers advisors need to help students navigate information about different vocational options open to them; costs; career prospects; and returns.

• Universities and colleges to get more commercial nous in their business-outreach teams — to identify gaps in skills needs and design tailored curriculum and courses with employers.

• Businesses must strengthen their skills-procurement teams to better articulate their needs and give universities and colleges greater insight into the workplace so they can build better provision.

• Reform student finance arrangements to allow universities allowed greater freedom to design short-courses and tailored programmes for business — including one or two-year compressed degrees.

• Remove Higher Education places that are fully funded by employers from the student numbers quota as they are no burden on the taxpayer. This will help stimulate more business-engagement in universities.

• Route apprenticeship funding directly through employers and consider an apprenticeships tax credit run through the PAYE tax system — with only one in 50 apprenticeship starts at the higher-level, this will increase the demand for more advanced training.

• Exempt strategically important subjects from rules, which bar public funding for part-time degrees for those with equivalent or lower qualifications — holding back older workers needing to reskill. There was a 40% drop in undergraduate part-time applicants so study higher education part-time since 2010-11, following legislation to introduce higher tuition loans.

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