Tough times call for joined-up thinking

The Chancellor faces a huge challenge in tomorrow’s Autumn Statement. One of the critical areas he will need to address is the short-term crisis of soaring youth unemployment whilst at the same time setting out the long-term strategy to keep the UK’s labour market globally competitive. This is crying out for some joined-up thinking.

Youth unemployment figures hitting the one million mark was indeed a wake-up call and urgent action must be taken to address this issue. Apprenticeships are the government’s primary response to get young people into work or training along with other direct incentives to employers likely to be announced in the Chancellor’s statement on Tuesday. While these measures are an essential part of tackling this crisis by getting young people into work, there is another element that is pulling in the opposite direction – if left alone, this could have dire longterm consequences for our capacity for economic growth.

University places down by 10,000

Whilst investing in thousands of new apprenticeships and giving direct incentives to employers with one hand, the Government is taking away 10,000 university places available to young people through the University Modernisation Fund.

Some might argue this is the correct response to the anticipated fall in applications to university this year but they would be wrong (see latest 2012 UCAS application figures here). In a modern, global, high-tech economy, it is human capital that is now the most accurate indicator of the UK’s future economic growth. At a time when our global competitors are increasing the number of graduates in the workforce to increase their capacity for economic growth, how can the UK justify a reduction in places available to young people – especially when there are such high levels of youth unemployment?

India, for example, wants to more than double the size of its university system to become a “knowledge powerhouse”, increasing the country’s student population from 12 million to over 30 million. And it is not just in the fast-growing, tiger economies but right across Europe, the US and Australia Governments are undertaking ambitious strategies to ensure they will have sufficient high-level skills to grow their economies once again. In a recent speech on EU higher education policy Barroso said:

“We see in Europe the number of skilled jobs outnumbering the supply of students with higher education qualifications. While 35 per cent of all jobs in the EU will require high-level qualification by 2020, only 26 per cent of the workforce currently has a higher education qualification.”

“We cannot afford to lose a generation of young people not being either employed, studying or in training. Europe needs young brains. This is why we have set an ambitious but realistic target on educational attainment in the Europe 2020 strategy.”


Beyond drop in applications

Of course we are aware that early indications suggest a slight drop in applications to university for 2012/13, no doubt as a result of widespread misunderstanding about the new student finance system. However, we must not forget how many young people were turned away last year because there were not enough places for them. Even with the anticipated reduction in applications, there will still be thousands of young people who will be unable to find a place at university this summer and will join the growing number who are unemployed.  This is not good for them and it is certainly not good for the UK economy.

Urgent action is needed by this Government. The Chancellor has the opportunity to demonstrate some clear, joined up thinking tomorrow in the Autumn statement. Increasing the number of university places available will have a direct impact on youth unemployment whilst increasing the UK’s capacity for economic growth. No-one is suggesting these are easy decisions to make but for the individuals involved and for the future prosperity of the UK, they are critical.

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