State funded vs Self funded Higher Education
A state funded and a self funded higher education have always been on opposite sides of the spectrum, with countries such as Denmark, Germany and the United Kingdom(UK) employing a state funded system while others such as Singapore, Hong Kong and China employ a self funded system. A state funded higher education is ideal for students, but there are drawbacks as well.
One of the drawbacks arise from when students are given the freedom of choice to take degrees at no cost. There is little incentive for them to obtain degrees that would secure them a higher paying job, such as business degrees like accountancy as they do not incur the costs of tuition fees. This has resulted in a greater number of students graduating with degrees that are not in tandem with the labour market needs (Higher Education Student Statistics, 2017). As reflected in the Employer Skills Survey 2015 UK Results, there has been a persistent lack of skilled talent in the UK labour market (UKCES,2015). Coupled with an increasing demand for skilled workers, this has resulted in a national skills shortage, particularly for London, with a 30.6% higher demand for skilled labour than the UK average (2019 UK Skills Shortage and Demand By Region,2019).
This essay highlights the problem of the national skills shortage in London and its impacts. It also looks at how large scale collaboration between education institutions and government or private organisations can address this skills shortage in London. It also looks at how models of other countries with self funded higher education can mitigate this skills shortage.
A state funded education gives universities enough resources to improve the quality of education. However, universities may not necessarily equip graduates with the skills they need in the workforce (Steed,2018), and funding for universities has also reduced the number of vocational schools (Lin,Wu & Yang,2019). Steed mentioned that employers in financial and business sectors have difficulty hiring as graduates do not possess soft skills, such as presentation skills and communication, even though they possess a business degree. Similarly, vocational schools teach skills that are not taught in universities, such as sea pilot academies. These factors make it difficult for employers to hire people as there are not many that possess these specific skills, hence leading to a national skills shortage. This has caused companies to be short staffed and has affected productivity of businesses (Skills Gap in London,2018). Furthermore, the national skills shortage has also driven up recruitment costs (Wright and Sissons, 2012). The 30.6% above average job demand for skilled labour in London than the UK is more significant in lucrative sectors, with job demand percentages in London being 55.1% higher than the UK average for the financial sector.
Wages have been pushed up to attract more skilled labour, and retraining workers to better fit the job both increases a firm’s operating costs (The UK skills gap: A problem for employers, an opportunity for workers, 2018). When costs of operating increase, firms are less likely to employ more graduates, leading to further mismatch of skills when graduates take up jobs that they are overqualified for (Nickerson, 2015). Even though students’ higher education is free, society’s benefits from it is marginal, and it is taking a toll on the economy due to its high costs.
Collaboration between universities, industries and government agencies can help reduce the skills shortage. An example of such a collaboration would be the Midlands Engine situated in Birmingham. It is a growth engine, targeted at improving economic growth in the region. This collaboration reduces skill shortages by engaging businesses to understand their present and future skill needs (Skills,2019).
Given that Birmingham is not the largest economic hub in the UK, the Midlands Engine is expected to produce 750,000 apprenticeships to meet employer demands (Midlands Engine Strategy,2017). This is to encourage prospective students to take up apprenticeships than going to university. As apprenticeships offer more specialised, vocational job training, those who have completed their training are more suited for jobs that they trained for than university graduates. According to Shaw(2016), apprenticeships could be the key to closing the skills gap in sectors that rely heavily on digital infrastructure in London. Hence bringing the concept of collaboration to London can help reduce the existing skills shortage. Universities would also be able to channel more resources into degrees and infrastructure that would be in greater demand in the future, allowing for greater enrolment in these courses, and subsequently, more graduates with high demand skills.
Similarly, universities can also come up with new courses catered to London’s economic needs. Likewise, apprenticeships help to specialise students’ skills, making them more fit for their jobs. Apprenticeships such as the partnerships between 3 UK universities allowing computer science students to get a degree and work on projects from a company concurrently help to increase their skillset. Students also often get hired by these companies offering apprenticeship(Does UK business face a growing skills gap?,2018). Thus collaboration between universities and the private sector help to reduce the skills mismatch and hence, the skills shortage faced by London.
Another solution to the skills shortage would be to follow a self-funded higher education model, specifically Singapore. Taking a course in a university in Singapore would be entirely self-funded, unless one applies and qualifies for financial aid. There are many bursaries and scholarships given out to performing students, as well as student loans that are financially repayable due to the no interest scheme (DBS,2019). As a result, university graduates are the highest group among Singaporeans above 15 years old (Census of Population 2010 Statistical Release 1:Education,Language and Religion,2010), making up 22% of the demographic.
According to The Economist(2018), as higher education is self-funded, students want to take courses that have the greatest return of investment, and hence more likely to take courses with skills that are in high demand, such as Science and Medicine degrees. This reduces the skills shortage in Singapore as high demand positions are filled by a large graduate pool. Lower income students can also afford higher education with financial aid. This increases the number of students in higher education, thus reducing the skills shortage. London can adopt this system in its higher education funding policy to ensure a greater number of graduates.
London’s state funded higher education has caused graduates skills to not be in line with industrial needs, as graduates do not possess skills that universities do not teach. With this shortage of skilled workers, London is expected to face a slowing economy. Localised collaboration between universities and industries in London, coupled with varying levels of financial aid for a self- funded education system, London’s skills shortage can be reduced. However, the transition from a state-funded to a self-funded higher education system would definitely be marked with resistance, given that London has enjoyed it for some time.
References
“Census of Population 2010 Statistical Release 1: Education, Language and Religion”. Department of Statistics, Ministry of Trade and Industry, Republic of Singapore. Archived from the original on 6 January 2014. Retrieved 5 January2014.
Does UK business face a growing skills gap? (2018, January 18). Retrieved April 1, 2019, from https://www.standard.co.uk/business/midtown-big-ideas-exchange/does-uk-business-face-a-growing-skills-gap-a3736436.html
Fournaraki, E., & Cole, I. (n.d.). 2019 UK Skills Shortage & Demand By Region. Retrieved from https://smallbusinessprices.co.uk/uk-skills-shortage/Going to university is more important than ever for young people. (2018, February 03). Retrieved from https://www.economist.com/international/2018/02/03/going-to-university-is-more-important-than-ever-for-young-people
Lin, Y., Wu, A. M., & Yang, X. (2019, February 8). The potential negative impact of university expansion. Retrieved from https://www.universityworldnews.com/post.php?story=20190206150524104
Midlands Engine Strategy [PDF]. (2017). Department for Communities and Local Government.
Shaw, R. (2016, March). Are apprenticeships the solution to London’s digital skills problem? Retrieved April 1, 2019, from https://www.computerweekly.com/opinion/Are-apprenticeships-the-solution-to-Londons-digital-skills-problem
Skills. (n.d.). Retrieved from https://www.midlandsengine.org/our-themes/skills/
Skills gap in London. (2019). Retrieved April 21, 2019, from https://www.londoncouncils.gov.uk/our-key-themes/economic-development/adult-skills-0/bridging-skills-gap/skills-gap-london
Steed, S. (2018, January 25). Too many graduates are mismatched to their jobs. What’s going wrong? Retrieved from https://www.theguardian.com/higher-education-network/2018/jan/25/too-many-graduates-are-mismatched-to-their-jobs-whats-going-wrong
Tuition Fee Loan | DBS Singapore. (n.d.). Retrieved April 1, 2019, from https://www.dbs.com.sg/personal/loans/education-loans/tuition-fee-loan
Vivian, D., Winterbotham, M., Shury, J., James, A. S., Hewitt, J. H., Tweddle, M., & Downing, C. (2016). The UK Commission’s Employer Skills Survey 2015: UK Results(pp. 1–242, Rep.). UK Commission for Employment and Skills.
