Examination of Witnesses (Questions 175
- 179)
MONDAY 19 FEBRUARY 2007
MR JIM
HILLAGE, MS
ANNA VIGNOLES,
MR KEN
MAYHEW, MR
PETER ELIAS
AND MR
CARL GILLEARD
Chairman: Before we start, I am embarrassed
that, as in the case of the previous session, we have such a distinguished
group of witnesses before us. We have even more witnesses this
time and so the management process in an hour is difficult. Please
accept our apologies that we are trying to crowd into the timetable
as much oral evidence as we can. Mr Pelling, who has a very important
meeting with the GLA after this hearing, will begin the questions
and then must leave. This is not intended as a discourtesy.
Q175 Mr Pelling: In the view of the
witnesses, why did the Leitch report adopt the approach of benchmarking
UK skills needs for 2020 against international competitors? Is
it an unusual approach to take to analysing skills?
Mr Mayhew: As a preliminary comment,
I do not know why Leitch did it; that is their business. My reaction
is that it is not unusual, but it is a very dangerous thing to
do. It is dangerous because the skills and educational profiles
of countries are so very different, so to try to get an aggregate
picture to show that one country is better or worse than another
can be very misleading unless you are extraordinarily careful
about bilateral comparisons. For example, we look worse than some
comparator countries in the proportion of people with Level 4
qualifications. If one looks at the selfsame countries this country
is better at Level 3. One then finds other comparisons where it
is exactly the reverse. Benchmarking is a crude start, but it
is only that and it must be accompanied by rather more sophisticated
analysis of the economic needs of each country which may be different.
Mr Hillage: If one sets oneself
the task of identifying how this country can be world class, which
Leitch did for himself or had set for him, one has to survey the
world and see where it fits. As I understand it, if one sets oneself
that task however one measures it most of what are called the
developed economies or whatever in the world will have 40 or 45%
of their adults going through higher education and have some kind
of Level 4 or equivalent, taking all of Mr Mayhew's points about
equivalence degrees. That maybe why they set that as a benchmark.
Ms Vignoles: In fairness to Leitch,
they considered the evidence on rates of return as well as benchmarking
approaches. In terms of the evidence of rates of return to degrees
at least it lines up. The UK is exceptional in the highness of
the return generally but specifically to degrees, so that is consistent
with the idea that we still have a long way to go and we can expand
further without causing an oversupply.
Q176 Mr Pelling: Does it matter that
Leitch did not really analyse our needs in terms of the economy's
demand for high-level skills?
Mr Mayhew: In my view it does.
I think there is a huge range of uncertainty as to what the demands
might be. Mr Elias has much more evidence than I on this, but
there is an array of evidence, which is sometimes in conflict,
about just how effectively our present stock of high-level skills
will be used. We have ambitious expansion targets and therefore
we have to think very carefully about usage. I cannot resist just
one comment on rates of return. I totally take Ms Vignoles' point,
but the OECD figures on comparative rates of return show quite
a strong correlation between how high the rate of return is to
Level 4 and how widely dispersed the earnings dispersion is anyhow,
which is capable of many interpretations.
Mr Elias: It is a very complex
picture. We cannot simply talk about comparisons on the international
side looking at the demand for high-level skills or skills more
generally; we must also consider the supply. When we have countries
like India and China producing every year millions of high-level
graduates for whom English is the language in which they have
had their education, or is their first foreign language, we can
see that, comparing the wage costs of graduates from these countries,
there is often a great incentive for employers to take advantage
of the new multinational approach to the employment of graduates.
Q177 Chairman: Does it matter that
we nitpick over this? Is there not a level at which politicians
have to say it is commonsense that we must have more graduates?
I remember interviewing Sir Michael Bischard and asking him about
the 50% target for students going into higher education. I asked
whether it was based on international research or any research
or whether it was just a good round, sexy number. He grinned.
There was no evaluation of that 50%. Everybody thought it was
a good idea.
Ms Vignoles: It matters because
targets drive behaviour, resources and ambition. If one focuses
on the 50% target as a uniform aim one misses the point that when
drilling down in the data one sees downturns in the value of certain
types of degree by particular subjects, or for more recent graduates
there is a slight downturn in the return on their degrees. It
is that kind of evidence on which one needs to focus when asking
whether one should expand further rather than some arbitrary target,
surely.
Q178 Chairman: I thought research
showed that we had three million lower skilled jobs that would
disappear in a very short time and we would have only about 600,000
jobs for less skilled people. Surely, it is commonsense to push
people on to higher skills, is it not?
Mr Mayhew: One could question
those particular demand projections which are very dangerous.
To go back to your specific question and to add to Ms Vignoles'
point, it matters for two reasons: first, there is an opportunity
cost of such an expansion because it is still largely a publicly-funded
system and public money can be spent in other ways, not least
on other bits of the educational system; and, second, it matters
because the degree of expansion must affect the product that universities
provide. Today the typical university student ceases to be the
same person that he or she was 20 years ago and, with further
expansion, there will be a difference in 10 years. That is not
of itself necessarily a bad thing, but it means that university
institutions must look very carefully at the nature of their product
and what they are offering.
Q179 Chairman: It sounds a bit like
"more" means "worse", as Amess would say?
Mr Mayhew: I would not dare to
suggest that, but "more" means "different".
| 
