House of Lords - Higher Education in Science, Technology, Engineering and Mathematics (STEM) subjects

Higher Education in Science, Technology, Engineering and Mathematics (STEM) subjects - Science and Technology Committee Contents

CHAPTER 4: Supply and demand in STEM Higher Education

50. In 1969, the then Prime Minister, the Rt Hon Harold Wilson MP (later Lord Wilson of Rievaulx), said:

"First we must produce more scientists, secondly having produced them we must be a great deal more successful in keeping them in this country. Thirdly, having trained them and kept them here, we must make more intelligent use of them when they are trained, than we do with those we have got, and fourthly we must organise British industry so that it applies the results of scientific research more purposefully to our national production effort".[63]

51. There are two main aspects to consider when analysing supply and demand in STEM HE. First, whether the UK is producing enough STEM graduates and postgraduates to satisfy demand; and, secondly, whether those graduates are of sufficient quality, and have the right skills, to meet the needs of employers. In this chapter, we consider the first issue. The second is discussed in Chapter 5.

Higher education and STEM

52. According to the Government, a fundamental principle of the HE system is that HEIs are:

"autonomous, self-governing institutions. It is for them to make their own decisions about the courses they provide; their admissions policy; to implement their own funding strategies and to make the necessary decisions to ensure they are responsive to student choice and that their institutions can continue to flourish. These decisions will affect STEM at both undergraduate and postgraduate level."[64]

53. This principle implies that the Government cannot dictate directly to HEIs the courses they should offer. However, because HEIs are the recipients of substantial amounts of public money in the form of grants, subsidies and student loans, the Government have a number of levers with which they are able to exert influence over the HE sector (see paragraphs 94-104 and Chapter 5). Crucially, in an autonomous system, employers also have an important role to play in attracting STEM graduates[65] and defining the needs of their organisations.

PREVIOUS REPORTS

54. Several attempts have been made over the decades to tackle some of the issues raised in this report, many with similar conclusions and recommendations, notably the Robbins Report in 1963,[66] the Dearing Report in 1997[67] and the Roberts Review in 2002.[68]

55. In 1963, the Robbins Committee identified four objectives of HE: instruction in skills for employment; promoting the general powers of the mind; advancing learning; transmitting a common culture and common standards of citizenship.[69] To a large extent, these objectives continue to apply. The Robbins Committee chose to make "instruction in skills for employment" the first objective, not because it was the most important, but because they believed it was often ignored or undervalued. The report stated: "we deceive ourselves if we claim that more than a small fraction of students in institutions of higher education would be where they are if there were no significance for their future careers in what they hear and read; and it is a mistake to suppose that there is anything discreditable in this".[70] Nearly 50 years later, there is still a tension between those who advocate that HE should "train" students for their first job and those who take the view that HE should primarily "educate" students.

56. The Dearing Report adapted the Robbins Report objectives, stating that:

"The aim of higher education should be to sustain a learning society. The four main purposes which make up this aim are:

to inspire and enable individuals to develop their capabilities to the highest potential levels throughout life, so that they grow intellectually, are well equipped for work, can contribute effectively to society and achieve personal fulfilment;
to increase knowledge and understanding for their own sake and to foster their application to the benefit of the economy and society;
to serve the needs of an adaptable, sustainable, knowledge-based economy at local, regional and national levels;
to play a major role in shaping a democratic, civilised, inclusive society."[71]

The conclusions of the Dearing Report suggest that training for employment and education are both key outcomes of HE. We share that view.

57. The Roberts Review, SET for success, looked at the supply of science and engineering skills throughout the education system. Most notably, the Review made a series of recommendations that lead to the introduction of a new funding stream to improve the employability skills of postgraduates.

QUALIFICATIONS IN HIGHER EDUCATION

58. There are a number of qualifications which students can gain in HE. In general, they are classified as either undergraduate (first) and postgraduate (higher) degrees (see Figure 2). First degrees have, in the past, usually lasted three years and resulted in a Bachelors degree. There has, however, been a move towards four year courses in STEM subjects, particularly engineering, leading to an integrated Masters degree and increasingly Masters are seen as a prerequisite for postgraduate study internationally.[72] Such a degree, or its equivalent at Masters level, is essential to achieving Chartered status in engineering and some other areas.

59. After completing a first degree, graduates have the option of continuing their education either through a taught Masters degree or through research. A research Masters degree usually takes a year, after which a student may progress to a doctorate (PhD); alternatively, a student may go directly to studying for a PhD. A PhD may take three to four years. In HESA data, these two routes are classified as "postgraduate research courses". Taught Masters are classified by HESA as "postgraduate taught courses". The purpose of a taught Masters degree is said to be threefold: to specialise in a specific subject or area, to convert from an expertise in one discipline to a degree in a second discipline, or to enhance a Bachelors degree to qualify for a "license to practice" in an area such as engineering. Doctoral graduates may chose to enter general employment or take a post-doctoral position with a view to pursuing a career in academia.

FIGURE 2

Qualifications in higher education

TRENDS

60. The overall number of "qualifiers" (that is, students who have qualified for their award (graduates)) in STEM subjects at undergraduate level in HE has increased from approximately 118,000 in 2002-03 to over 140,000 in 2009-10; although, as a percentage of the overall number of HE students, the number decreased slightly from just over 43% in 2002-03 to just under 42% in 2009-10 (see Figure 3). These figures are based on a broad definition of STEM subjects (see Chapter 3). To achieve a better understanding of the growth in the uptake of STEM subjects, it is necessary to disaggregate them (see, as an example of disaggregation, Figure 4).

FIGURE 3

STEM qualifiers (UK and overseas) from HEIs[73]

FIGURE 4

Number and proportion of UK domiciled qualifiers
of some STEM subjects

61. Data in Table 2 set out in Appendix 6 to this report reveal a decrease or no growth in the number of UK domiciled first degree qualifiers in engineering (-3%) and chemistry (0%) over an eight-year period, from 2002-03 to 2009-10. This is in contrast to an increase in qualifiers for all subjects of 20%. In particular, the number of students studying computer science has dropped by 27%. On a more positive note, there has been an increase in the number of mathematical sciences qualifiers of 11% over the period and a similar 11% increase in physics. This is a turnaround from the previous decade when there was a significant drop in the number of students studying these "core" STEM subjects from 1995 to 2000.[74] However, this increase is from a low starting point and each subject still represents a very low proportion of the overall STEM figure (with only 2,290 students acquiring a first degree in physics and 5,175 in maths out of the total of 122,940 studying STEM subjects in 2009-10). We note that there have been very large increases in student qualifiers in sport science, which make up a significant proportion of the number studying biological sciences (up 122%, from 3,650 to 8,120) and forensic and archaeological science (up 349%, from 360 to 1,615) over the same period.

62. The number of UK domiciled STEM Masters degree qualifiers has risen by 30% over the same eight-year period (see Table 4). This is in contrast to a 34% increase in the number for non-STEM subjects. There has also been a significant decline in the number of qualifiers in computer science (-45%) and chemistry (-12%) with little growth in the mathematical sciences (2%). Engineering increased by 37% and physics by 43%. Again, there have been very large increases in the number of qualifiers in sports science (172%) and forensic and archaeological science (94%). This data relates to UK domiciled qualifiers only. The trends look very different when taking into account EU and overseas students (see Chapter 6).

63. Table 6 shows increases in the number of UK domiciled PhD qualifiers across the board, with a 15% increase in STEM subjects and 15% increase in non-STEM subjects between 2002-03 to 2009-10. There are some areas of concern. PhD degree qualifiers in chemistry, for example, decreased by 11% while biology qualifiers decreased by 16%. There was also little growth within engineering (3%).

64. Historical data on the trends in student numbers in STEM reveal that overall there has been an increase in the number of STEM students, although a significant proportion of that growth has taken place in what the Government describe as the "softer sciences", such as sports science and forensic science. There has been relatively little growth in traditional or "core" sciences, such as engineering and a decline in computer science.

Data

LACK OF DATA ON THE SUPPLY AND DEMAND FOR STEM GRADUATES AND POSTGRADUATES

65. Several witnesses commented on the limited data available on the supply and demand for STEM graduates.[75] The Wellcome Trust, for example, said: "there is a paucity of quality data when it comes to understanding the supply and demand for STEM graduates ... Data sets are not well integrated across Government".[76] On the supply of graduates, the UK Deans of Science stated that "although some data is collected on student numbers (for example, by the HESA on undergraduate and postgraduate students and by HEFCE on doctoral completion rates) we are not aware of any detailed data being collected and properly analysed on an annual basis".[77] LGC, a STEM employer, made a similar complaint about linking supply with demand data:

"We are not aware of any government-facilitated mechanism to feed our demands for graduate skills into the education system, and influence the supply of training. Whilst manpower planning does not seem a realistic proposition, provision of reliable data addressing sector-specific trends in supply of, and demand for, STEM graduates and post-graduates would be of use to all the different communities with vested interests in understanding and addressing labour market gaps and dynamics."[78]

66. HESA maintains a database of all students enrolled on undergraduate courses at HEIs derived from annual returns made by the institutions. Various statistics based on these data are publicly available from the HESA website. Other bespoke statistical data can be produced on request at a cost. HESA is a "private limited company which has formal agreements with Government departments to provide the data which they require, and it is funded by subscription from all of the universities and higher education colleges throughout the United Kingdom".[79] While their mission is to ensure that stakeholders "have easy access ... to a comprehensive body of reliable statistical information and analysis about UK higher education",[80] some witnesses such as Professor Andrew George of Imperial College London, were critical of the data collected, how they are collected, what information is made freely available and its format, and the time lag in its publication.[81]

67. The Headmasters' and Headmistresses' Conference (HMC) told us that "it is notable that in HESA data generally there are large numbers of unknowns for some of the categories where reasonable completeness might have been expected".[82] The British Computer Society (BCS) described HESA employment statistics for computer science as "misleading" and said that they over-estimated the true unemployment situation for computer science graduates "because degrees with very little computer science content are bundled with true computer science degrees when calculating the statistics".[83] We were also frustrated by the inability to disaggregate data beyond the high level subject categories to determine where graduates progress following their studies.

68. The data available about the supply and demand for STEM postgraduates are also weak. Witnesses told us that data collected about higher degree graduates in general are either insufficient or have little meaning. The Academy of Medical Sciences (AMS), for example, told us that "to understand the benefits of postgraduate education and training, UK HEIs should develop and implement a simple system of tracking postgraduates. More data on workforce numbers would allow more strategic appraisal of capacity and re-profiling needs".[84]

69. Professor George, speaking about the data collected by HESA, said: "the data is very poor at the moment ... we collect data, but it is not very good data because the HESA rules for collecting data on postgraduate students make no sense at all".[85] He called for data to be collected in such a way as to enable differentiation between stand-alone Masters courses, research Masters and PhDs. The UK Deans of Science, and other HE representatives from University College London (UCL) and Cranfield University, made a similar point.[86] With regard to destination surveys of postgraduates, it has been suggested that information about the destination of postgraduates six months after graduation gives "a completely wrong picture" because they are usually writing their theses.[87] The University of Greenwich told us: "there is no consistent means of collecting employer demand or graduate destinations for PhD students".[88]

70. Ministers were also critical of HESA. Damian Green MP, Home Office Minister for Immigration, was surprised at the time lag between collection of data and their availability: "every university must know on 1 October who has arrived, what subjects they are doing, where they are from and so on. Nevertheless, the body that is responsible for collecting the data cannot produce them until 18 months afterwards. ... I find that surprising".[89] The Rt Hon David Willetts MP told us with regard to the time lag: "we are investigating whether there are changes we can make to improve that situation. It is an understandable frustration".[90] On the usefulness of HESA data he said:

"I accept that this is a problem; at the moment everybody is unhappy. Universities complain about the burden of data collection. Some data that they collect and send up to the centre are never referred to again, so they complain to me that they are collecting data to no purpose. On the other hand, you are absolutely right that elementary data about outcomes and employment prospects from doing particular courses at particular universities that prospective students should have is very hard to obtain. We are working on this."[91]

71. Lord Sainsbury of Turville, former Science Minister and businessman, told us:

"[there is a] pressing need for the key stakeholders (including young people, university vice-chancellors, and policy-makers) to be regularly presented with reliable, useable data and market intelligence about the supply of, and demand for, STEM graduates ... a single agency—probably HEFCE [the Higher Education Funding Council for England] or UKCES [the UK Commission for Employment and Skills]—must be tasked by Government to collate all of the relevant information and data from the numerous different agencies which currently collect it. This same agency should further be required to publish, annually, a small set of highly readable digests of the information. It is not possible to do long-term manpower planning, but it is important if the labour market is to work well that everyone has information on the current position ... There is a need for regular, reliable and comparable data and market intelligence on the supply and demand of STEM graduates."[92]

72. The lack of reliable data on the supply and demand for STEM graduates and postgraduates makes it very difficult to assess whether there is a shortage of STEM graduates and postgraduates, and in which sectors. More needs to be done to identify areas of shortage so that remedial action can be taken and to enable students to make informed choices about whether the courses they are considering will equip them with the skills needed by employers.

73. We recommend that the Government appoint a single body (or amalgamates the efforts of existing bodies such as HESA, UCAS, UKCES, CIHE, the Higher Education Careers Services Unit (HECSU) or the new National Centre for Universities and Business) to be a repository of relevant information currently collected by different agencies on the supply and demand for STEM graduates with a view to providing comprehensive, real time data analysis and a commentary with market intelligence of where STEM shortages exist, broken down by sector. This body should provide yearly updates to HEFCE, Government and other stakeholders on skills shortages so that remedial action can be taken to protect, or grow, those STEM areas which are needed to support economic growth and where market failure means that supply does not meet demand. All these data should be accessible to all stakeholders in order, amongst other things, to inform student choice.

74. We recommend that this body should also be responsible for holding, monitoring and analysing data for postgraduate education, including the employment of qualifiers from postgraduate courses on an ongoing basis—disaggregated into PhD, research Masters and taught Masters, and by subject areas.

75. We urge HEIs to contribute to the provision of data to this body by putting in place a robust, long-term tracking system for postgraduate provision and destination data.

Supply and demand in undergraduate provision

76. There has been much debate about whether the growing supply of graduates meets the demand for STEM skills within the economy and about how demand might change in the future. STEM graduates and postgraduates are reported to be in high demand by both STEM and non-STEM employers for their analytical thinking, problem solving skills and numeracy as well as for their technical skills or subject specific skills.[93] The CBI found that 41% of recruiters prefer to recruit STEM graduates and are willing to pay a premium for people with qualifications they value.[94]

77. STEM skills also feature heavily in the Government's future plans for growth and various broad projections for future demand for STEM skills to meet these needs have been made.[95] The 2010 UKCES National Strategic Skills Audit highlighted a number of areas of growth in the economy within both STEM and non-STEM sectors that will require STEM skills, including advanced manufacturing, life sciences and pharmaceuticals, low carbon economy, professional and financial services, digital economy and engineering and construction.[96] A CBI report, Mapping the route to growth, estimated that 80% of new jobs are in high-skill areas and require high-tech graduates, and that over half of the jobs to be filled in the UK to 2017 will require people to hold graduate level qualifications.[97] Forecasts for industries in science, technology and engineering alone show a demand for 600,000 professionally trained skilled staff by 2017. According to the CBI, the number of those studying degrees in these areas "must increase by over 40% on current levels if this demand is to be met".[98]

78. Although, as we have said, a lack of data makes assessment of the supply and demand for STEM graduates and postgraduates difficult, the evidence we received suggests that, despite the increased number of STEM graduates over the last 10 years, employers are still having trouble recruiting STEM graduates. The CBI, for example, reported that 43% of employers said they were having difficulties.[99] We, therefore, asked where the STEM graduates were working.

79. In 2009, BIS published a study, The Demand for Science, Technology, Engineering and Mathematics (STEM) Skills,[100] which addressed this issue. The study concluded that the shortage of STEM graduates was specific to certain areas such as engineering and IT, and varied according to region. It is not possible, therefore, to draw many conclusions about supply and demand from national level surveys. We also received evidence of reported shortages in the number of graduates with skills to meet the needs of STEM specific sectors such as the computer gaming and visual effects industry, power electronics sector and nuclear engineering, as well as in-vivo techniques, of interest to the pharmaceutical industry.[101] A number of STEM skill areas also appear on the skills shortage occupations list produced by the Migration Advisory Committee, including engineering and geosciences.[102] The 2009 National Employer Skills Survey for England showed that 31% of high-tech manufacturing firms were recruiting people from outside the UK because of a lack of suitably qualified people within the UK.[103]

STEM GRADUATES IN NON-STEM EMPLOYMENT

80. Classifying employers into STEM and non-STEM is not straightforward. However, it is clear that a substantial number of STEM graduates—almost half—choose to take up employment in what have traditionally been considered non-STEM areas, such as the financial sector. We acknowledge that there are benefits to STEM graduates working in non-STEM jobs in that they increase the overall scientific literacy of the workforce. It is, however, a cause for concern if the diversion of a significant number of STEM graduates away from STEM jobs means that the UK is not equipped with the skills it needs to meet future plans for growth within high-tech sectors. We, therefore, considered why STEM graduates are attracted to non-STEM jobs.

81. The issue was the subject of a research paper published by BIS in March 2011, STEM graduates in non-STEM jobs, which concluded that there was no "clear or simple main reason why some STEM graduates are not in STEM jobs" and that the decision-making process that graduates went through was complex; many factors were at play but "the most likely one" was that students and graduates found non-STEM work "potentially to be more interesting".[104] The research paper also said that the two main reasons seen by employers for STEM graduates to decide against specialised STEM jobs and careers were "the perceived greater attractiveness of careers outside STEM (not least the perception of higher salaries) and the graduates' lack of real knowledge about working in STEM core functions".[105] This is worrying for STEM sectors trying to attract the highest quality STEM graduates into their areas. More promisingly, however, the report concluded that salary was not the leading factor in a student's decision-making process. There is, therefore, scope for employers to play a greater role in raising awareness of STEM careers amongst graduates and offering both financial and non-financial incentives to attract them to STEM sectors. We discuss the role of employers in raising awareness of STEM careers in paragraphs 160-174.

ARE THE BEST GRADUATES ATTRACTED TO STEM JOBS?

82. Current HESA data do not show where the best and brightest STEM students (according to degree level) end up. The evidence is only anecdotal. However, we imagine that STEM employers and the Government would be concerned if the top STEM graduates go into non-STEM jobs for the reasons described above. At present, 4% of physical sciences graduates, 2% of engineering graduates, and 20% of mathematical sciences graduates go to the financial sector;[106] it is not known if this includes the top performers in each discipline. Although the BIS paper concluded that salary was not the leading factor in a student's decision-making process, it will be for some students and it has been suggested that STEM employers in certain areas are not paying enough to attract the best STEM graduates.[107] The Institute of Physics, for example, told us that, to compete with non-STEM, STEM employers "have to offer better pay, which certainly has been the case with the financial sector, which has openly recruited the best physics PhD graduates".[108]

83. We recommend that the Government commission a study to find out the first destination of STEM graduates with a first degree (by degree class) as well as postgraduates. The study should also attempt to find out the reasons that lie behind students' career choices. This information would help to explain what makes STEM graduates and postgraduates choose non-STEM jobs and allow STEM employers to take action to attract the best and brightest into STEM careers, particularly research.

THE SUPPLY OF THE "SOFT" SCIENCES

84. A significant proportion of the growth of STEM graduates in recent years has occurred in newer courses, rather than the more traditional STEM subjects, which have reportedly been popularised by, for example, television programmes on forensic science or by changes in popular culture leading to an increase in sports science courses.[109] The Government call them "soft STEM" courses.[110] Some witnesses argue that graduates from these courses are of significant benefit to the economy because their general STEM skills are just as much in demand as those of other STEM graduates.[111] It is also argued that such courses have attracted a greater number of students to study STEM subjects. Dame Julia Goodfellow, Vice-Chancellor of the University of Kent, for example, explained how these courses attracted students who would not have otherwise considered a STEM degree.[112]

85. Others were more critical of the scientific content of these courses. LGC, an employer of forensic scientists, told us that: "the majority of these courses do not equip students with the right fundamental technical skill-set for employment in our laboratories".[113] LGC also said: "A set of courses have sprung up to appeal to what people are envisaging is a good career in forensic science. You can have a very good career in forensic science ... but the way it is portrayed on television is not reality".[114]

86. We have already drawn attention to the lack of data about the career choices of graduates. Furthermore, the difficulty in disaggregating "softer" science students from those on other courses within the broader STEM categories of the JACS system makes it hard to tell whether these "softer" STEM courses are equipping students with the necessary STEM skills to meet the needs of the economy. We have yet to be convinced about the value added to graduates of "soft" science courses, such as some forensic science and sports science courses, and the value added to the economy, and it is not possible to deduce from the available data whether employers in general, and STEM employers in particular, value such graduates.

87. Given the significant number of students choosing to study "softer" science courses, we recommend that HEFCE and HEIs collaborate in conducting a study into the career progression of students of new STEM courses (such as some sports science and forensic science courses) to enable those undertaking these courses to decide whether they are being equipped with the skills graduates need to succeed in the STEM job market.

THE ROLE OF GOVERNMENT AND HEFCE IN ENSURING SUPPLY OF STEM GRADUATES AND POSTGRADUATES MEETS DEMAND IN TERMS OF QUANTITY

88. In an open market for graduates and postgraduates, the onus is on employers to ensure that they pay the market rate, or provide other means of attracting STEM graduates to stay in STEM sectors. The Rt Hon David Willetts MP told us: "employers should send out a clear signal about how much they value people with these skills. They cannot completely escape that part of the bargain".[115] However, where market failure occurs, the Government have a role to play in ensuring that supply meets demand for STEM graduates, particularly when their strategy for economic growth is based on the existence of a healthy science base.

89. To this end, in 2005, the Government introduced a policy on what were described as Strategically Important and Vulnerable Subjects (SIVS)—subjects about where there was "compelling evidence of a requirement for action to enable them to continue to be available at a level and in a manner that meets the national interest".[116] Not all STEM subjects are SIVS. At present, they include: chemistry, engineering, maths and physics within the STEM subjects, and modern foreign languages, although in recent times biological sciences and computer science have also received some support from this policy.[117] HEFCE spent £50 million a year (£350 million in total) over seven years (2005-12) supporting SIVS while their teaching budget for 2012-13 is £3.6 billion.[118]

90. Examples of interventions since the policy was introduced include: promoting demand and attainment among potential students (for example through the National HE STEM programme); securing and increasing the supply of provision (for example, through additional teaching funding for very high cost and vulnerable science subjects); and, monitoring and forecasting the provision of SIVS. The third HEFCE Chief Executive's advisory group on SIVS concluded in 2011 that, although "individual projects have provided value for money and those on the supply-side appear to have been particularly effective", it was "difficult to disaggregate the impact of investments on the demand-side and to establish whether there has been a sustainable resolution of the root causes of vulnerability, for example levels of student demand".[119] A further analysis in 2011 found that "SIVS have seen a continued expansion, and at a rate higher than other subjects during recent years. However, some concerns remain, for example among the engineering and modern language disciplines".[120]

91. The 1994 Group, a group of 19 research-intensive universities, stated that SIVS "have seen positive effects on raising the aspirations of young people to study these subjects".[121] Others agreed.[122] It appears that the SIVS policy has been, at least partly, responsible for raising the numbers studying SIVS. Universities UK told us: "the strong policy focus given to STEM, through initiatives such as HEFCE SIVS programme, is likely to have contributed to ... increasing student demand for and enrolment in STEM subjects in higher education".[123]

92. Some concerns about SIVS have been expressed. Most are about the subjects included in the SIVS list—for example, that biological science, computer science, geophysics and physiology are not considered to be SIVS.[124]We are concerned that, given the importance that the Government attach to STEM in their strategies for economic growth, they have little obvious input to the decision as to which subjects are to be afforded SIVS support. The Rt Hon David Willetts MP told us: "in the time that I have been in Government alongside the Secretary of State, I do not think that I have ever tried to specify what should or should not be a strategically important and vulnerable subject".[125] This approach differs markedly from the previous administration, which set out strategic areas of provision in a letter to HEFCE, which was then charged with determining which of these it considered to be vulnerable and therefore in need of protection.[126]

93. Following the HE reforms, HEFCE has adopted a new approach to SIVS. In addition to supporting existing SIVS, HEFCE will monitor the health of all subjects and make "selective, collaborative interventions where there is strong quantitative and qualitative evidence of a particular risk to the continued availability of a subject".[127] It is unclear at this stage whether more funding will be allocated to SIVS policies or whether the small pot of SIVS funding is going to be spread more thinly. (HEFCE has also introduced measures to support high-cost subjects, including STEM subjects.

94. CaSE called for additional funding for SIVS:

"we remain concerned that there are not enough incentives for HEIs to increase STEM provision. Current policy is predicated on student choice driving STEM provision, and while we hope that this will indeed occur, we also argue that the importance of STEM graduates to the UK's future is so great that additional safeguards should be put in place. The simplest and most effective change would be to increase the relative subsidy for SIVS from HEFCE."[128]

95. The Engineering Professors' Council also warned that "it will be important to ensure that funds provided for SIVS and STEM initiatives are not used for other purposes. STEM subjects generally need more funding than many others—despite typical student fees being the same for all subjects".[129]

96. Sir Alan Langlands, Chief Executive of HEFCE, offered some assurance:

"the HEFCE support for SIVS, but within that the STEM subjects, I think is pretty secure for the next two or three years. The Government have been clear that they want that to continue to be a priority, to the point at which, even with strains of competition and market running through some of their veins, they have asked us to intervene to ensure that STEM subjects are not damaged by the unintended consequences of the reform process."[130]

97. It appears that SIVS policy has had a positive impact on STEM and the Government should therefore continue to support the initiative. There are concerns that the HE reforms (see Chapter 6) may erode STEM provision in favour of cheaper subjects. The SIVS policy is an important tool to help counteract that. The new approach to SIVS proposed by HEFCE is to be welcomed in that it will allow other subjects, such as computer science, to be offered support if they are deemed vulnerable.

98. We recommend that the proposed body in charge of collecting and analysing data (see the recommendation in paragraph 73 above) should, by providing evidence and analysis to HEFCE and the Government, contribute to the process of establishing which subjects should be given SIVS status.

99. While HEFCE has a legitimate role in determining which subjects are vulnerable and should be supported as part of the SIVS programme, we recommend that the Government should decide which subjects are strategic and should, therefore, be given SIVS status. The Government's decision could be included in the Secretary of State's annual letter to HEFCE.

Demand and supply in postgraduate provision

100. From 2002-03 to 2009-10, there was a 72% increase in the number of STEM Masters qualifiers, both research and taught, against a 70% increase in all subjects. However, more than half of the STEM Masters students who graduated in 2010 were from overseas. UK domiciled students accounted for only 30% of this growth (see Tables 3 and 4 in Appendix 6). Over the same period, the number of STEM PhD graduates increased by 28% against a 26% increase in all subjects, and 42% of PhD students who finished their doctoral degrees in 2010 were from overseas (see Tables 5 and 6 in Appendix 6). UK domiciled students accounted for 15% of this growth. As we have already said (in paragraph 22), these figures mask the drop or lack of growth in some of the more traditional STEM subjects at postgraduate level in UK domiciled students, including chemistry and maths in Masters qualifiers and engineering and chemistry in PhD qualifiers.

101. We should be concerned that we are not attracting more home students to study STEM postgraduate courses in certain STEM subjects. In particular, this relative lack of UK domiciled students could have a substantial impact on sectors that, for security reasons, only employ UK nationals such as defence and the security services.[131]

102. A number of reports have concluded that the knowledge and capabilities of postgraduates are highly prized by business and their skills are critical for tackling major business challenges and driving innovation and growth.[132] Taught Masters courses provide students with the skills they need to specialise and work in a range of careers.[133] Masters postgraduate provision was described by Professor Sir Adrian Smith as playing "an important role in upskilling and re-training the UK workforce".[134]

103. The first ever analysis of employment destinations and the impact of doctoral graduates three years after graduation using data from HESA showed that, of the 2004-05 cohort, 19% were working in HE research roles three and half years after graduation and 22% were employed in HE teaching and lecturing roles. The other 50% were employed in other research positions, doctoral occupations and other roles. As RCUK noted, this means that "only between one quarter and one third of UK doctoral graduates progress to research or teaching and lecturing roles in universities".[135] With regard to earnings, "90% of postgraduates working full time earned between £23,000 and £71,000 with a median salary of £34,000, around £10,000 higher than first degree graduates at the same point in their careers". The study concluded that "doctoral graduates are highly employable and most are employed in 'doctoral occupations' that are different from the majority of first degree and Masters degree occupations".[136]

104. Recent reports and submissions to this inquiry have also highlighted that we know very little about what roles postgraduate provision is playing outside of research, concluding that it has been neglected as an issue by Government throughout the Independent Review of Higher Education Funding and Student Finance (Browne Review) and HE reforms.[137] Professor Sir Adrian Smith noted, for example, that "the value that postgraduate education brings to the UK is under-researched and under-appreciated".[138] As a result, he recommended that Government and others should do more to identify and promote the potential benefits of postgraduate study.

105. A CIHE report entitled Talent fishing: what business what from postgraduates found that "there is a high demand for, and strong satisfaction with higher degrees [postgraduates], but that there are still areas where HEIs and businesses must work together to ensure postgraduates have the skills and knowledge that employers need".[139] The study showed that around 70% of employers sought out Masters graduates because they valued the analytical thinking and problem-solving skills that a Masters degree provides. Of those that recruited PhD students, they valued the "subject-specific skills and research and technical skills" as well as the new ideas and innovation that they brought to their business.[140] The CBI found, however, that "some STEM employers have ... reported difficulty recruiting postgraduate STEM skills—almost a third (28%) of science, hi-tech and IT employers report current difficulties recruiting STEM postgraduates".[141]

106. It is clear that STEM postgraduates are valued and in demand amongst employers, and that they play a significant role in driving innovation, undertaking research and development, and providing leadership and entrepreneurship. The University of Central Lancashire and others told us that the Government should be making the case for postgraduate study and that they would welcome a more strategic focus on the contributions that postgraduate students make to the economy.[142] It appears to us that, although the Government recognise the central role that STEM plays in their strategy for growth, they fail to articulate how they intend to highlight to students the benefits of postgraduate study, to reduce the decline in STEM qualifiers in some STEM subjects, or to improve our understanding about the demand for postgraduates and the value they offer to the economy. They also fail to make clear what support they will give to postgraduate STEM provision in order to realise their vision. This is, in our view, a mistake.

107. We recommend that the Government set up an expert group to consider the supply and demand of STEM postgraduate provision in the UK and to identify weaknesses and areas of skills shortage. The Government, as the strategic leader, should agree the terms of reference of this group with a view to formulating a strategy for STEM postgraduate education in the UK which will underpin their strategies for growth. As part of the expert group, we urge employers to spell out their needs to Government and to identify skills shortages at STEM postgraduate level.

63 On a BBC Horizon Programme. Back

64 The Government. Back

65 Expert Group for Women in STEM, University of Cambridge, University of Oxford, UK Deans of Sciences. Back

66 Committee on Higher Education chaired by Lord Robbins, Higher Education: Report of the Committee appointed by the Prime Minister, September 1963, Cmnd 2154 ("the Robbins Report"). Back

67 National Committee of Inquiry into Higher Education chaired by Sir Ronald Dearing (now Lord Dearing), Report of the National Committee, July 1997 ("the Dearing Report"). Back

68 Sir Gareth Roberts' Review, SET for success: the supply of people with science, technology, engineering and mathematics skills, April 2002 ("the Roberts Review). Back

69 Op. cit., Higher Education: Report of the Committee appointed by the Prime Minister. Back

70 Ibid. Back

71 Op. cit., Report of the National Committee. Back

72 Council for the Mathematical Sciences, Royal Society of Chemistry, Society of Biology, the Science Council, UK Deans of Science. Back

73 The Government. Back

74 Op. cit., SET for success: the supply of people with science, technology, engineering and mathematics skills. Back