Degrees are no longer passports to top jobs

Ryan Gray

It is the end of the academic year for students across Britain. A time to sit back, relax and enjoy the summer is now upon them – or is it? It is predicted that around 427,000 graduates will be applying for jobs, which is staggeringly high, especially when there is nowhere near that many for all of them.

No country in the world, however good its economy may be, can produce jobs in this scale just for its graduates therefore it is not surprising to discover that many of those that apply for them will not have secured a role after six months of leaving education (one in twelve graduates).

The latest HighFliers report is damning of those students who go to university but don’t do any work experience while they are there – stating that work experience is now a must. Over half the recruiters who took part in the research warn that graduates who have had no experience at all are unlikely to be successful during the selection process and have little or no chance of receiving a job offer for their organisations’ graduate programmes. The research goes further, stating that students who have done work placements/internships are three times more likely to secure a top role.

This finding is common throughout the world with other countries graduates recruitment pointing to the same issues. A report by GradIreland, the leading graduate site in Ireland, supports findings in the UK, with 89.7% of the top one hundred graduate employers in Ireland stating that having completed a work placement or internship is the most effective way of improving one’s chances of being employed.

Whilst the total number of graduate recruitments is set to increase in 2013 by 2.7%, recruiters have confirmed that over a third of this year’s entry-level positions are expected to be filled by those who have already worked for their organisations, either through internships and industrial placements. Therefore these jobs are not open to other students and so they will never be able to apply.

Despite our world-renowned academic institutions, companies are noticing applications are often generally similar to the previous year’s applications: 46.9% of graduate applications to the top one hundred employers that are no different to one another. And so it is no surprise that they are employing those who have previously worked for them if such a high proportion of applicants are indistinguishable on paper.

University is a great way to improve one’s chances of employment, but it is not being used properly by many students who are wasting three or four years gaining a degree. A growing number of employers do not care what it is in or the classification, they only care about the experience gained outside of university. Young people must be educated in the reality that university is not what it was a few decades ago, it no longer guarantees employment and is a financial risk if things go wrong.

With a growing number of students facing unemployment or underemployment, now is the time for the government to highlight what other avenues there are besides university.

Obviously, it will still be essential and a positive experience for many, but for those who do not get a job or simply end up working in one they could have had anyway, university is not them. The idea that you can go there and do nothing but drink and sleep yet somehow secure a top job is laughable. I do not know if it was ever possible, but it is certainly impossible now.

Follow Ryan on Twitter.

In praise of £9,000-per-year university tuition fees

Matthew Plummer 10.58am

Children in their last year of school are gearing up for what one contemporary Scottish philosopher calls ‘squeaky bum time’. A-level exams in the summer suddenly don’t seem so far away, and shortly the contents of acceptance and rejection letters from institutions will start being broadcast in Facebook status updates up and down the country. 

The deadline for art and design schools is later this month, and last week I had coffee with a student I mentor to look at her portfolio and university application. Her work showed plenty of promise, but as we talked I realised that while she was desperate to do a photography degree, she wasn’t particularly interested in using it as the foundation for a career taking pictures – she just liked the idea of studying photography, and would do something different after her graduation.

She’s by no means alone. We have a large number of students in creative tertiary education, many of whom realise during their studies that enjoying something at A-level (often taken as an alternative to boring ‘academic’ subjects) isn’t enough to sustain them through the long hours of working in the studio at their university. Others quickly find out that that their work simply doesn’t cut the mustard when they enter the saturated graduate marketplace. And – being completely blunt – the tertiary sector’s vast oversupply of creative graduates unable to work in areas where their degree have prepared them for is nothing short of scandalous. 

To someone with a rose-tinted view of the whole university experience this probably sounds harsh. University is about growing up, finding one’s feet in the world, etc. Yet the ease in justifying a degree in the creative arts is symptomatic of the distance we have yet to travel in shifting society’s attitudes towards tertiary education.

The wretched ‘50 per cent of school leavers going to university’ aspiration was a misplaced and profoundly damaging New Labour ploy to seduce parents. It was also politically very smart: ‘thanks to the government my child is the first in our family to have a university education’.

The policy flooded the workforce with graduates, and sent a clear signal to students that choosing not to do degrees made them second best.

At the drop of a hat sixth formers saw areas like photography that really should only be one or two years in duration as the gateway to the newly hallowed university education – albeit in a technical subject that doesn’t give them the transferrable skills and intellectual rigour that employers associate with degrees in subjects like history or geography. Private schools also need to take some of the blame: it’d be a rare headmaster who tells parents that their child isn’t university material having taken £150,000 in fees over the past five years. Better a degree in photography, music journalism, etc, than no degree at all, or so their logic flows. 

The danger is that students are supposedly now paying for the bulk of their education. Fundamentally this is a good thing: America’s dominance of the top 100 universities is plainly and inescapably due to their system of fees – not my analysis, but that of Tony Blair in his autobiography, who (rightly) points out that when it comes to recruiting academic staff “those who paid top dollar got the best”.

Tuition fees also address the small matter of successive governments failing to fund universities properly. And as a Head of Sixth Form friend of mine pointed out, “if you’re not intelligent enough to realise that £9,000 a year to go to a top Russell Group university is a bargain, then you really shouldn’t be applying to those places in the first place”.

The scrum of blue chip firms recruiting on Britain’s top campuses hammers home the value of forking out for the best education the UK can offer, and the new fee levels will help ensure that graduates from UCL, Cambridge, etc, can expect their qualifications to stack up globally (with salaries to match) and help ensure our universities continue to churn out world leading research.

Incidentally, as someone who mentors students in two of South London’s most deprived schools, I was really pleased to hear from the teachers there that the new fees structure and bursary support is more favourable for those from less affluent backgrounds than the previous government’s scheme – which is exactly as it should be. Nevertheless I remain to be convinced that many of the wide-eyed UCAS applicants for photography and music journalism degrees will actually find that their three years of undergraduate study has transformed their employment prospects.

More importantly, will their studies enable them to repay much of the £18-£27k in tuition fees that they’ve taken on, full of enthusiasm for whatever creative A-level subject they dabbled in at school? Or will they find they’ve been sold a pup by institutions who are desperate to prop up their student rolls with courses of dubious value? It’s interesting to hear Pam Tatlow of the Million+ think-tank (representing many former polytechnics) describe this year’s small increase in university applications as a “recovery”, whereas the market behaviour from this year’s students seems to indicate that for some of the institutions Million+ represents the decrease in rolls of 50-60% could well be terminal. And while this plays out the Treasury’s exposure to the student debt it underwrites grows and grows – after all, the government pays for your education until you’re actually in a position to reimburse it.

So where does this leave my enthusiastic photography student? Higher student fees are here to stay – Mr Blair himself saying that “once introduced as a concept, there [is] no looking back”.

For some disciplines this must surely spell trouble for the idea of three year degrees. The higher end providers of vocational courses will flourish, but institutions without the cachet of the Slade and LCC may well have to rethink how they deliver education to increasingly savvy consumers. Photography, journalism, graphic design, etc. are hardly lucrative careers, so the American concept of shorter ‘associate’  degrees for some vocational and creative subjects seems very sensible: students avoid the £10-15k involved with a third year of study, and employers provide the final polish in the initial stages of paid employment.

My student wants to experience tertiary study, so understandably a single year course doesn’t appeal. I did a two-year photography diploma in New Zealand, and by the end of it I was desperate to finish and get stuck into winning clients and getting proper commissions, as well as avoid an expensive third year – the money saved being more than enough to buy a decent studio setup.

Why is it then that our creative universities stubbornly persist with courses that seem aimed at lining their own pockets and propping up a ill-conceived system? Sure, politicians and society at large need to take some responsibility for fostering the often dubious allure of ‘going to uni’, but there’s a horrible irony in institutions aimed at nurturing creativity being so painfully regimented and unoriginal in what they offer today’s young talent – and cheerfully milking them dry at the same time.

Matthew Plummer is a commercial photographer. Follow him on Twitter @mwyp

4G spectrum failure hardly surprising, but what is Ofcom playing at?

Nik Darlington 9.58am

When George Osborne said the Treasury would raise several billion pounds from the upcoming 4G auction, I along with many others feared (or even expected) that wouldn’t be the case. Some technical and financial reasons for why, but largely an informed hunch.

So it has come to pass. ‘Only’ £2.34 billion has been raised by Ofcom, despite the OBR’s forecast of £3.5 billion.

A couple of observations about the reporting of all this: first, £2.34 billion is still a useful fillip not to be sniffed at; and second, this mini embarrassment has given journalists a perfect excuse to ignore the good employment figures also released today.

Yet a mini embarrassment it is. Perhaps Mr Osborne should not have brandished an outcome ahead of time, but auctioneers tend to set target prices with little impact on bidding behaviour other than to focus it around said target. It isn’t a patch on Gordon Brown selling our gold reserves having already announced to the world his intention to do so.

On the subject of auctioneers, however, something odd happened on BBC Breakfast earlier today. Ed Richards, Ofcom’s chief executive and unsuccessful candidate for BBC director-general (despite being the bookies’ favourite), was on talking about the auction. Mr Richards stated that Ofcom’s priority - as auctioneers - was straightforwardly to hold a fair and proper auction and “ensure that a valuable economic resource was brought into productive commercial use”. Ofcom’s priority - as auctioneers - was certainly not to maximise revenue.

Whether or not this was on instruction from the Government doesn’t matter. It is still odd. Tell auctioneers at Christie’s that the whole point is just to shift stuff and not to maximise revenues, you’ll be laughed out of the room. These are, as Mr Richards also said, “very different times” compared to the 3G spectrum auction, which raised £22 billion in 2000. But it doesn’t mean you shouldn’t at least have a go at it.

Follow Nik on Twitter @NikDarlington

Inflation targeting, or what Arsene Wenger and Mark Carney have in common


Matthew Robertson 1.36pm

  • May 2004: Arsène Wenger hailed as Arsenal go entire season undefeated to win the Premier League
  • December 2012: Arsène Wenger under increasing pressure as Arsenal lose to League Two side Bradford City in the Capital One Cup
  • October 1992: for the first time monetary policy in Britain would be based on an explicit target for inflation
  • December 2012: Mark Carney, the incoming Governor of the Bank of England, has suggested abandoning inflation targeting

"When the facts change, I change my mind". A quote that has long been attributed to the father of modern economics, John Maynard Keynes. It is a belief that policy should be implemented to tackle the world as it is today, not as it was yesterday.  

The position of an English football team and the comments of the Governor of the Bank of Canada may not seem interlinked but they do shed light on whether it is beneficial to adapt to changing circumstances or to maintain the current strategy in total belief that it is the correct way.

One of the great success stories of modern economics is the taming of inflation. As Mervyn King, the departing Governor of the Bank of England, stated in a speech in October:

"Over the previous twenty years (1972-1992) inflation had been the single biggest problem facing the UK economy, peaking at 27 per cent a year in 1975. Over the subsequent twenty years (1992-2012), inflation, as I mentioned earlier, would average only 2.1 per cent."

The key to this success was controlling inflationary expectations and the key to that was inflation targeting underpinned by an independent central bank. Exiting the European Exchange Rate Mechanism freed Britain to set their own monetary policy, which culminated in Bank of England independence in 1997.

A target would be set and it would be free of political interference. As long as the target over the long term was met, the expectation was anchored as any deviation would be expected to return to the anchor. This was the case for most of the past twenty years.

This policy was a reaction to the economic difficulties of the time and has been reproduced in many countries over the world. Inflation is well above expectation at the moment but inflation between 2.5 per cent and 5 per cent is low by historical standards and the reason is that the inflationary expectation is still around the 2 per cent mark.

The footballing philosophy of Arsène Wenger when he first arrived in England was equally as successful. His devotion to ‘pass and move’ football led to five trophies in six seasons as well as the first team in 116 years to go a league season unbeaten.

However, times have changed both for the economy and for English professional football. The financial crisis of 2007-2008 precipitated a new thinking in central banking theory. The Bank of England ignored concerns about inflation and reduced interest rates to almost zero per cent in an effort to enhance liquidity and reduce borrowing costs. The greater concern for the Bank at the time was economic output and preventing the economy stagnating into a long term liquidity trap. There were numerous inflationary concerns regarding world food prices at the time but the Bank, quite rightly, decided that the crisis needed urgent, unorthodox central banking. This was further reinforced by a period of quantitative easing where the Bank of England purchased financial assets from commercial banks to inject money into the economy.

In a speech on 23rd January, Mervyn King argued that pursuing a two per cent inflation rate target throughout the financial crisis, would have worsened the recession:

"To bring inflation down ‘would have meant driving down wages by creating a deeper recession, even higher unemployment and lasting damage to the job prospects of many young people."

The question now is whether inflation targeting should be abandoned for nominal GDP targets, something the new incoming Governor, Mark Carney, has suggested. A deeper question is whether the economic circumstances of the economy have altered significantly to warrant a change in approach.  Are the economic conditions so benign that there will be insufficient demand to produce growth without active interference from a central bank?

Central bankers will need to factor in these conditions along with inflationary expectations to assess which approach to take. The history of the 1970s suggests that active GDP targets don’t work but that might have been for a different time with contrasting conditions.

Whatever route is taken it raises the question of whether to change one’s mid when the facts change. The arrival of Roman Abramovich and latterly Sheikh Mansour altered the nature of English football completely. Chelsea and Manchester City have the ability to outbid and outspend any club to attract the best talent from around the globe. There is growing doubt as to whether Mr Wenger’s prudent approach of developing youngsters and buying affordable players can be successful in today’s Premier League. Despite constant criticism, Arsenal’s manager has remained dogmatic about what he considers the correct method.

Is this appropriate when the facts change? We shall see when Mark Carney takes over the helm in the summer.

By that time there may even be a trophy in that Arsenal cabinet.

Follow Matthew on Twitter @FlatFootTory

PMQs review: David Cameron demonstrates the virtue of being oneself

Jack Blackburn 3.55pm

It was not the most inspiring session of PMQs. The Leader of the Opposition’s strategy was non-existent. Questions were a bit scatter-gun and he didn’t really make any points. Perhaps it was the impending Hillsborough statement that made the atmosphere a touch quieter than typical.

But if it was just for the day, Mr Cameron should consider keeping this style.

Edward was calling him “Mr Butch”, but today Dave was Mr Chillaxing. He was quiet, controlled, on top of his brief. He didn’t lose his cool at any point. He didn’t shout. He didn’t even tell a female Member to calm down.

He only changed tone to crack a few jokes (apparently the Labour party has hired a new guru called Mr J. Hacker, who has written a book called The Road to Nowhere, allowing DC to roll out some lines from his “Cheap but effective” line).

There was even some substance as well, as the Prime Minister enjoyed some positive employment figures. Indeed, with his chillax on, Mr Cameron seemed to make more sense. He was (as ever) accused of complacency by the Labour party leader, but he actually came across as thoughtful, and honest, at one point saying the Mr Miliband was “absolutely right, the long-term employment figured are disturbing”.

After a year when the Prime Minister’s fortunes have seemingly mirrored those of Glasgow Rangers FC, one of his smaller problems has been his performance at PMQs, as he became frequently and easily riled by Ed Balls, and seemed to be struggling with Mr Miliband’s improved act.

Today he seemed like a changed man and more prime ministerial than he has been for a while, an impression backed up by his well-judged statement on Hillsborough.

On Monday, Mr Cameron was Boris Johnson’s warm-up man at the end of the Team GB parade, the Mayor of London delivering a rip-roaring speech.

Mr Johnson’s challenges with public speaking are different from the Prime Minister’s, but the Mayor is effective because he is always himself. Mr Cameron could learn from this. He is a thoughtful and intelligent man. If he continues to take his time and bring these qualities to the fore, he may find that he engages better with the public.

Follow Jack on Twitter @BlackburnJA

PMQs review: Score draw but the Prime Minister’s arsenal is worryingly bare

Jack Blackburn 2.08pm

The Government’s fortunes and the composure of its ministers have crumbled over recent months, though it is worth noting that the Leader of the Opposition’s polling numbers have still not managed to match his party’s.

So as we arrived at the first PMQs since April we found a leadership vacuum, created by a Government in disarray, a Prime Minister under pressure from all sides, and a Labour party leader seemingly unable to act like a leader.

This PMQs also took place in a very different context to the last. Disastrous local election results (London’s Mayor aside) for the Coalition parties still sting. The national economy seems to have tumbled into a double-dip recession. We are being badly buffeted by continuing turmoil in the Eurozone, where an anti-austerity Frenchman has just taken up residence in the Élysée palace and Greece is crippled by political upheaval.

To use a recent (and for me painful) sporting illustration, the leaders were level on points going into today’s match, with Mr Miliband ahead on goal difference. This was a mid-term fixture rather than an end-of-season cliff-hanger, but it as was scrappy, messy and confused as the Premier League’s climax, if nowhere near as exciting too.

Mr Miliband has plenty of arsenal at his disposal at the moment. Dreadful growth figures, unhappy nurses, protesting police officers, the controversial Leveson Inquiry, electoral reverses and the seemingly changing political breeze in Europe should have meant that Mr Cameron was in for a torrid time at the Despatch Box. Nevertheless, there was a crumb of comfort for the Prime Minister today in the form of falling unemployment.

Mr Cameron began by using this to his advantage, welcoming a question from his own backbenches, but stressing (as all the Cabinet has done this morning) that the Government is not complacent. There is more to be done. Etcetera. And for once, Mr Miliband also welcomed good economic news, but was quick to try to press home some advantage by questioning what discussions the PM had taken part in with President Hollande about growth plans for France and Europe.

The answer could have simply been, “Well, haven’t really spoken to him since he was elected.” So Edward suggested a text message with “LOL” in it would probably be sufficient. Uncharacteristically funny, and well delivered.

In fact, Mr Miliband’s entire style of performance has improved immensely. He is calm, considered and no longer whiny. Nonetheless, Mr Cameron remains an adept performer himself, and responded strongly: “I may well have used my mobile phone too much, but at least as Prime Minister I know how to use one rather than just throw it at those who work with me”. The Rt Hon Member for Kirkcaldy was, as usual, nowhere to be seen.

Mr Miliband was indeed more impressive today, though still blew it by failing once again to capitalise effectively on the Prime Minister’s all-too-evident woes. He left the economy debate too quickly, so eager was he to cram in questions on policing and nurses, while also failing to pose a question on his sixth time of coming. The eyes were bigger than his abilities.

Yet Mr Cameron also fumbled the ball today, particularly with his final response to his opponent, when he attempted to criticise Labour’s new policy supremo John Cruddas as someone too close to the trades unions. At moments such as those, one realises just how little ammunition the Prime Minister has at his disposal.

Governments can lead industrial strategy, and Lord Heseltine for one should know how

Nik Darlington 8.48am

"Eleven years is a long time in this industry," said technology pioneer Steve McConnell.

It is. Eleven years ago, I was plugging a clunky laptop into a telephone line in order to download a web page in the same amount of time it took Roger Bannister to run a mile. Sometimes even as long as it would take Ed Balls to run a mile. Yet this morning I travelled to work flicking through a variety of newspapers on an iPad.

But if a week is a long time in the industry of politics, on another hand, then eleven years might be considered a lifetime.

Not for TRG patron Lord Heseltine, whose maiden speech in the House of Lords was delivered last week, eleven years after his being elevated to the peerage. Reassuringly steady, I’d say. Don’t pop your head above the parapet until you’ve get the measure of a place.

Flanked by former Cabinet colleagues Lord King and honorary TRG life member Lord Howe, the former Deputy Prime Minister spoke about his new and “expanded” role improving the competitiveness of British industry.

And this morning he has an op-ed in the Times (£), in which he demands brutal frankness about the country’s weaknesses if we have any hope of becoming world-class.

"There are exciting new markets but we rarely ask ourselves how we can compete in them against German, French and Italian business if we cannot compete in our our European home market. In Government in the 1990s, I was told that 40 per cent of our companies were world-class; the German equivalent was 60 per cent. When the Chinese Prime Minister left the UK a few months ago he placed orders for £1 billion. A few days later he placed orders for £14 billion in Germany."

Acknowledging our relative decline is but one step. Lord Heseltine insists we must invest in long-term factors such as infrastructure, R&D and schooling for the young to ensure workers are ready-made with the right skills.

And significantly, Government must have a role in shaping long-term industrial strategy and investment, because the private sector - in search of a quick(er) buck - won’t.

"It is a common criticism that we are too short-termist in our approach to investment. So we need to ask who owns British industry, and whether they see themselves as having a responsibility for anything other than short-term valuations of their shares. Our largest institutional investors are owned and managed internationally, and are thus unlikely to see themselves as a driving force of UK plc. How do we deal with that?

Of course, governments can only set the foundations - individuals and companies must stand up and deliver too. We all have to take responsibility for making Britain more competitive.

"Trade associations can encourage their members to raise their game but are they strong enough to tell their less effective members - the slowest ships in our industrial convoy - that their failure may be their fault and not that of the Government or the economy…

"I intend to ensure that these hard questions are not just grappled with in the heart of Whitehall but that they also get a response from boardrooms and council chambers up and down the country. Otherwise we will not be able to craft an industrial strategy that will give us the growth and jobs we so painfully need."

"From Liverpool to Canary Wharf, Michael knows how it’s done," said the Chancellor, last week. The coalition is an ideal setting, and the economic downturn an apt scenario, for this more dirigeiste approach. And few at the top of politics believe in that approach as fervently as Lord Heseltine.

Why? Because few others have proven how well it can work.

Follow Nik on Twitter @NikDarlington

Government must consider radical action on child care to help women stay in the work

Victoria Roberts 11.41am

Taking inspiration from a recent interview in the Times (£) with the Danish prime minister, Helle Thorning-Schmidt, I would like to set out what we could learn from Scandinavia about child care. The things that could, longer term, keep women at work in those crucial career-building years, so that one day we could see an increase in the amount of women in the highest positions.

We are losing out on too much talent as skilled, educated women depart the workplace in order to have and to raise children.

Whether this happens because child care is too expensive or because of societal pressure or guilt, we need to address this female exodus. I have often joked that the Daily Mail finds itself in a quandary because its editors are never sure who is more deserving of its vitriol: working mothers or single mothers!

In Scandinavia, working mothers do not face the same pressures as they do here. Child care is of good quality (nursery staff are likely to hold degrees in child development) and accepted as a necessity. In Britain, the variations in quality are shocking and guilt is almost universal.

Of course, governments can only intervene so much but they can nudge and adopt policies to promote high quality, affordable child care. And the right policies can work: Denmark ranks fifth in the OECD for female participation in the economy, while Britain is fifteenth; 40 per cent of Danish MPs are women, yet only marginally over 20 per cent for British MPs.

Making changes wouldn’t give us 20 per cent of women on company boards within five years but they would facilitate a natural, longer term trend. Quotas could be a necessary evil in the short term (they are backed by the Tory MP Matt Hancock, while David Cameron won’t rule them out), but only positive changes to child care arrangements will work in the long term.

As important as this topic is, it irritates me that it is seen purely as a women’s issue. If a significant proportion of the population is unable or unwilling to participate in economic activity then we all lose out. And if we expend public resources training women only for them to give up work when they have children, then we all lose out.

Businesses miss out on talented people who could generate more economic activity, more revenue and more taxes.

This really is not just a women’s issue. It is not about tax breaks for ‘yummy mummies’. It should be a national priority.

George Osborne must be radical in his forthcoming Budget. He must simplify our tax system and shift weight of taxation from income to wealth. The first step should be, as Craig Barrett has argued on these pages recently, to end the 50p income tax band and, as David Cowan wrote last month, levy a more effective property tax, such as the land value tax (LVT) advocated by Nick Boles in his recent TRG Macmillan Lecture. A proportion of the revenue generated should then be earmarked for measures to help women stay in the workplace, where they can help to support the British economy.