Student caps and stricter sanctions: UK Government pledges “crackdown on rip-off degrees”

Is university worth it? 

The CIPD has argued for a number of years that for a growing proportion of graduates, a degree no longer pays off and that for too long the UK skills system has prioritised the expansion of the higher education system at the expense of investing in alternative technical education pathways.  

CIPD research has shown that over the past three decades, the labour market has witnessed a significant rise in the number of graduates, surpassing the creation of high-skilled job opportunities. Consequently, more and more graduates find themselves employed in positions that do not require graduate-level qualifications. Recent trends have also indicated a decline in what is known as the ‘graduate premium’, implying that the job market has potentially reached a saturation point for graduates. This suggests that the economic returns historically associated with a degree might no longer be as pronounced. 

It's also worth noting that for a considerable number of graduates, engaging in non-graduate roles is not a mere transitory phase; it often becomes a more permanent situation. Moreover, research has highlighted that an unfavourable initial job match upon entering the job market can exert lasting effects on an individual's career trajectory and income prospects. 

Alternatives to the university route 

With increasing numbers of graduates ending up in low-skilled jobs, there is a clear need for more and better vocational routes into employment to provide an alternative to the university route. However, achieving this vision requires action across key policy areas that go beyond tinkering with university student caps and sanctions for underperformance.  

One critical aspect is improving the information, advice and guidance (IAG) system for careers. This involves providing clear career paths, details on qualifications and their benefits, and information on potential returns on investment. Yet, current IAG systems are inadequate - a recent CIPD survey indicated that most young individuals feel their schools or colleges don't dedicate enough time to help them understand future career choices.  

The survey also revealed ongoing challenges, including limited career advice variety in educational institutions, with a focus on academic rather than vocational paths. While nearly 60% received assistance for academic options, only 29% received career guidance. Further, a mere 1% received advice on understanding the job market, positions and wages. Similarly, just 1% were aided in applying for apprenticeships. 

This represents a missed opportunity, as the survey demonstrated that more than half of university attendees would have considered choosing apprenticeships if such opportunities had been available in their areas of interest. 

There is a need to support better access to apprenticeships for young people if the route is to become a viable alternative to university. Yet currently, the apprenticeship system in England is failing as a labour market entry point for young people. The majority of apprenticeships go to existing employees, rather than new labour market entrants. The introduction of the apprenticeship levy has exacerbated this trend, with more investment directed towards existing employees. The system needs to be rebalanced to ensure young people have greater access to apprenticeship opportunities. 

Finally, there needs to be much stronger focus from policy-makers on how to create more high-skilled jobs, improve job quality and enhance how skills are used in the workplace. All this requires a renewed emphasis on industrial strategy, which should be designed to support inclusive growth across all sectors and regions of the UK economy.