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There’s a lot to talk about in today’s news. The Augar Review launched with 53 recommendations for post-18 education. So did a new report from Resolution Foundation on low pay and the minimum wage. And the UK2070 Commission is looking into regional inequality, claiming the UK North-South divide is comparable to that of Germany’s East-West divide at the end of the Cold War.
The first two reports are light on the geographic element of the issues they touch on, but their implications have much to add to the debate about regional inequalities.
First, let’s look at the Augar Review. Its main aim is to give greater policy focus to post-18 education after decades of prioritising universities. This is very welcome: in the last year, £8 billion went to support 1.2 million undergraduates in higher education, while £2 billion supported 2.2 million adult further education learners.
If we look at the geography of university take-up, it is clear this £8 billion wasn’t spread evenly across the country, but benefited mostly places in the South East of England. Almost one in two 18-year-olds in Cambridge chooses to study a degree. And, in London and Reading, more than 40 per cent of 18-year-olds go on to university. That is twice as many as in Hull and Barnsley, where only 19 and 22 per cent of 18-year-olds choose higher education respectively.
Even if we assume the bulk of the £2 billion for adult further education went to the places with the lowest university take-up, that would not even nearly match the amount of funding for post-18 education from which residents in the South of England and London benefited.
Looking at where young people move after graduation only reinforces these patterns. London and the South East exert a strong pull on new graduates, as job opportunities are greater there. And while many leave the capital after a few years due to changes in their lifestyle, they tend not to go very far, staying in the Greater South East.
How do graduates move around the country?Read more
These findings become even more relevant in the context of the Resolution Foundation report on Low-Pay Britain and the minimum wage. When looking at the geography of low pay, the picture is completely reversed. Fewer than one in 10 jobs in Cambridge and Oxford are paid less than £8.07 – the threshold set by the Social Mobility Commission to identify low pay. In contrast, the share is much higher in cities in the North of England: in Doncaster and Wigan for example, almost three in 10 jobs are low paid.
Hence, the places with the lowest university take-up are also those with the highest share of low-paid jobs. Given that getting a university degree is associated with higher earnings and low-paid jobs are much more likely to be automated by 2030, these patterns are likely to further widen inequalities across the country.
The minimum wage has gone some way to reduce low pay and some of these inequalities. The Resolution Foundation reported that low pay is now falling for the first time in the last four decades. However, to be sustainable, any increase in wages needs to go hand in hand with increases in skills. Without that, increasing the minimum wage will only accelerate the automation process, making issues around displacement and retraining even more pressing, particularly in weaker economies.
Luckily, some of the recommendations from the Augar Review could help in this direction. It is good to see a bigger emphasis on further education, in particular around lifelong learning, with the recommendation of introducing lifelong learning loans allowances and free tuition for adults that don’t hold a level 2 qualification (equivalent to a good GCSE). Given the importance of skills, these recommendations have the potential to promote social mobility and reduce inequalities between places.
Questions do still remain about some of the recommendations of the Review, particularly around higher education. While the recommendation to rename the student loan as ‘student contribution’ would help change the perception around university debt, hopefully encouraging more young people to go to university, lowering tuition fees and freezing the repayment threshold will need to be thought through carefully in the context of improving access and widening participation. If not, these recommendations could end up widening, rather than reducing the divide between places.
That said, the Augar Review very helpfully highlights the lack of policy focus that adult education has received in recent years. Putting many of its recommendations into practice will be crucial if we are to see more jobs (as the UK2070 commission would like to see) and better-paid jobs (a focus of the Resolution Foundation) in the UK’s weaker city economies.
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