Slashing HE courses will not help the next UK government boost growth

If you’ve just got back from a conference on the moon and I told you that universities briefly became an issue in the UK’s general election campaigning agenda, would you smile and declare: “At last! Politicians are recognising how important our sector is to national prosperity”?

After all, Universities UK estimates that higher education supported 768,000 jobs and contributed £130 billion to the economy in 2021-22. According to government figures, HE exports were worth £27.9 billion in 2021, as much as the chemicals, food and agriculture sectors.

But if I told you that the announcement in question was made by the Conservatives, I suspect you’d be more likely to sigh and ask, “So which was it? A promise to crack down (again) on ‘rip-off’ degrees or (again) on international students?”

Since you ask, it was rip-off degrees. Having abandoned his apparent intention to abolish the graduate route visa last week, Rishi Sunak now plans to cut a reported one in eight degree courses on the grounds that they offer poor employment outcomes. And, yes, the phrase “rip-off” was wheeled out again.

At least the expected savings have been earmarked for 100,000 more apprenticeship places – including, presumably, some degree apprenticeships. Enrolments may have sharply declined recently but there is no doubt that to grow the economy we need many more apprenticeships. The trick will be to make the system flexible enough for companies to spend their levy funds as they wish, but rigorous enough to ensure that courses meet tomorrow’s labour market needs.

In that context, though, the Tory plan is really just tinkering around the edges, while potentially undermining the very universities most likely to embrace degree apprenticeships. A manifesto that valued such institutions would address the financial crisis in the sector by offering a sustainable undergraduate funding model.

In England, the declining value of the frozen fee cap means that two-thirds of institutions will be in deficit by 2026-27, according to the Office for Students. Labour’s U-turn on offering free tuition might be a relief to vice-chancellors worried about what that could have meant for the unit of resource, but the party has been no more forthcoming than the Conservatives about when the cap might be raised. Both should embrace Universities UK’s suggestion of index-linking undergraduate fees – alongside extra support grants for disadvantaged students.

On visas, we need a firm statement from the next government that post-study work visas are here to stay. The Tories have been fixated on reducing international student numbers since Theresa May was home secretary, but the recent clampdown on family members accompanying taught master’s students has already caused the number of international postgraduate students paying deposits for September commencement to plummet by 63 per cent, according to the Migration Advisory Committee, which recommended preserving the graduate route visa. Rather than more restrictions, better to remove students from the net migration figures altogether, especially since only one in five members of the public think student immigration should be made more difficult.

Immigration barriers are also inimical to the Conservatives’ much healthier ambition – first voiced by Boris Johnson – for the UK to become a science superpower. To that end, R&D spending needs to go well beyond the government’s aim of 2.4 per cent of GDP by 2027 (which was actually hit in 2022) since many of our peers are operating at more than 3 per cent.

Moreover, science superpowers don’t translate into super-growth unless you are an engineering and technology superpower too, with the capacity to apply the solutions developed. That needs government attention too – and, while we’re at it, let’s put universities back into the Department for Science, Innovation and Technology to catalyse innovation further.

Government needs to target long-term R&D investment – including through foreign direct investment – into business-university partnerships in sectors where leading UK firms compete, including pharmaceuticals, banking, tourism, big tech and AI, education, alcoholic beverages and engineering. Professional and business services is a good example: despite representing 11 per cent of the UK economy’s gross value added, 13 per cent of UK employment, and 27 per cent of UK service exports, it enjoys limited teaching and research provision.

Enhancing funding to strengthen universities’ pivotal roles in regional economic development is also important, especially as the UK Shared Prosperity Fund is a pale shadow of the European Regional Development Fund it replaced.

In addition, we need more attractive tax incentives for companies to invest in large-scale R&D, in partnership with universities. Simplifying the IP system would help, as would encouraging greater uptake of the patent box tax-relief system. SME-focused entrepreneurship development programmes should also be expanded, and universities could embed entrepreneurship into the curriculum in more disciplines. Senior managers could also establish a more entrepreneurial culture, incentivising them to take on commercial as well as academic work and empowering them to take calculated business risks.

Whoever wins the election will enter Downing Street with pretty bare coffers and a group of Cabinet ministers bleating for extra cash. Why should higher education get more? The answer, as former Labour prime minister Harold Wilson highlighted in his famous 1963 “white heat of technology” speech, is that innovation brings about economic growth – and higher education underpins that innovation.

Paul Baines is professor of political marketing at the University of Leicester. He is co-editor of the SAGE Handbook of Propaganda (SAGE, 2020). The views expressed in this article are his own and are not necessarily shared by his institution.