Government plans to enable more adults in England to do training courses throughout their lifetimes will have an important role in tackling the national skills shortage and boosting productivity, according to the minister for higher and further education.
Michelle Donelan said the policy to introduce a “life-long loan entitlement” would address the UK’s low productivity growth and lack of key skills by “empowering the individual” to continue learning over the course of their career.
The plan, currently under a consultation that ends in May, will give those aged over 18 access to the equivalent of four years undergraduate funding, currently £37,000, to spend on short or long courses above A-level equivalent.
While the policy has been welcomed by many higher education leaders, some say it lacks the planning and funding required to deliver the skills needed to drive growth in the UK economy.
Lifting the country’s poor productivity has been the goal of successive governments but it has proved elusive. In the decade leading up to the pandemic output per hour worked grew at less than half the rate it had in the years up to the 2008 financial crisis.
Meanwhile, England’s further education sector has struggled for political attention and funding leading to serious shortcomings in technical and vocational training that business groups say are a major drag on the British economy.
The government hopes the loan scheme will increase demand for shorter courses and lead to more universities and colleges offering training in key sectors, which can be joined together to create larger qualifications.
In an interview with the Financial Times, the minister said this will make it easier for older adults to upskill by entering learning at different stages in their lives, while prompting young people to opt for short courses instead of three-year university degrees.
The government aims to roll out the policy in 2025 with 115 short course pilots beginning in September.
Donelan said: “It’s all about empowering the individual to make decisions for their career trajectory and to upskill and reskill . . . which will drive productivity and help our economy.”
The minister added that the life-long loan scheme had been made possible by recent reforms to the student loan system that will result in graduates paying back a greater share of their debt from their lifetime income.
The changes, which come into force in 2023, include lowering the salary threshold at which students begin repaying loans to £25,000 from £27,295, and extending the period after which loans are written off by 10 years.
Donelan insisted the changes were a “sustainable package” to ensure more graduates repaid their student debt and that the same repayment terms would apply to loans for “modular” courses.
Last week, the Tony Blair Institute think-tank criticised government “scepticism” of university courses, calling for 70 per cent of young people to enter higher education by 2040.
Donelan hit back at the idea of setting what she called “one size fits all” targets for the number of people in university, while conceding that the new policy “might result in more individuals taking out more loans”.
But education experts argue that the loan entitlement alone will not tackle the country’s skills shortage. Tom Bewick, chief executive of the Federation of Awarding Bodies representing qualification providers, said low-paid, full-time workers have historically been reluctant to take on loans. He noted that some would struggle to request time off or balance their studies with caring for family.
David Hughes, chief executive of the Association of Colleges, added that issuing loans for short courses did not guarantee that employer needs would be met and called for subsidies to encourage enrolment, as well as more co-ordination between local authorities and employers to plug skills gaps.
“If the market mechanism was going to work it would have worked by now,” he said. “You need supply side intervention.”
Donelan said the government was looking at maintenance support for some learners, and said modular courses would be more accessible than three-year degrees. “It offers innovation into the university market, it enables them to take risks,” she said.