Education, economy and society (blog comment from

October 7, 2015

‘Living within our means’

Filed under: Uncategorized — Tags: — sitemananger @ 7:44 am


 ‘Living within our means’ has become a cliché of late.  George Osborne continues to espouse it as justification for austerity policies,  but Labour’s new shadow Chancellor John McDonnell’s  apparent endorsement of George Osborne’s  ‘ Fiscal Charter’ which commits governments to achieve balanced budgets over a  5 year parliamentary cycle, may seem perplexing;  given his clear commitment to an anti-austerity  economics

McDonnell’s immediate problem has been the shadow left by Ed Miliband’s front bench and its capitulation to George Osborne’s ‘spin’ offensive   -particularly the charge that it was Labour’s ‘overspending’ that  was  a major  reason for the extent of the 2008 crash. But there’s little evidence that there was any  overspending.  On average, despite what Osborne wants us to believe, Labour spent less and borrowed less   than the Tories did before the downturn set in   –  and for 2007-8 the current deficit of was under 1% of  GDP    There’s a huge difference between McDonnell and Osborne of course.  Labour insists that borrowing for public investment is excluded from any fiscal restrictions, as this will form the basis of its alternative programme for growth. 

Meanwhile, ‘living within our means’  continues  to  be impossible for many people, including many of those in work, with wages barely reaching their pre-down levels and easily available credit being used to fill the gap.  As a result   average household debt  (excluding mortgages)  grew  by 9% in 2014 and is set  to reach £10 000 by  the end of 2016 (Guardian  23/03/15) –a  significant factor behind  the Bank of England’s   delay  in raising  interest  rates.

Despite McDonnell’s caution, it’s nonsense to apply imaginary household budgeting habits to government   fiscal policy and indeed until the emergence of neo-liberal  economics as the new orthodoxy, few economists would consider trying to do this. Equally ridiculous have been the accusations that McDonnell’s and Jeremy Corbyn’s plans for a ‘People’s Quantitative Easing’ will lead to the hyperinflation of   Zimbabwe or the Weimar Republic (!) Osborne himself, accepting that in times of recession, low interest rates and near zero inflation, governments can increase the nation’s money supply to promote growth and renew activity (1) injected £325 billion worth of new funds (equivalent to over a third of the national debt)  into the banking system after the crash in the vein hope that it would be converted into loans to businesses and consumers.

With an increasing risk of another downturn in the months ahead –making  it even less likely that  either the national debt to income ratio will  be reduced or  the budget deficit cleared by the end of the Parliament,   a  much more  original Labour economic  strategy will surely be able to emerge

(1) See  3.35 “Review of the Monetary Policy Framework.” (2013)

September 28, 2015

The problem’s the jobs, not the people who do them.

Filed under: Economy — sitemananger @ 8:11 am

Deputy Governor of the Bank of England Ben Broadbent thinks the growth of low-skilled and low paid-employment can be related to the increased availability of low skilled workers from different parts of Europe. (Guardian 24/09/15). Not only has this kept wage levels depressed, Broadbent argues, but it is also a reason why ‘human capital’ –the quality of the workforce and therefore its productivity has been growing more slowly compared to the 1990s.

These arguments can’t really be substantiated. A UCL study (Financial Times 05/11/15) for example, reveals that more than 60% of new migrants from western and southern Europe are now university graduates while the educational levels of east Europeans who come to Britain are also improving, 25% of recent arrivals having completed a degree compared with 24% of the UK-born workforce. Britain is uniquely successful, it argues, even more so than Germany, in attracting the most highly skilled and highly educated migrants in Europe.

In otherwords highly qualified European migrants often ‘trade down’ skills for the highly level of pay they can earn in their adopted country. But it also continues to be the case that many low-skilled jobs are also done by ‘overqualified’ British workers – According to the Office for National Statistics for example, graduates increasingly work as receptionists, sales assistants and many types of factory workers, care workers and home carers.

Broadbent thinks that an improvement in European economies will make the UK less attractive and the reduced supply of labour will help both to push up wages and encourage investment. The labour market is certainly tightening, but there’s not enough evidence so far to show that real wages are rising because of this. Equally significant is the zero rate of inflation. There’s even less sign of any significant increase in investment.

Since the downturn, the proportion of low-paid low-skilled jobs has increased extensively and labour intensive work with low productivity and low pay, continues to predominate. Though more pronounced in the UK, this has been a feature across the developed world as has the mismatch between workers qualifications and the jobs they end of doing.

August 21, 2015

Under-Grads, NEETs and the Apprenticeship Levy

Filed under: Education and economy — sitemananger @ 1:10 pm

The Certified Institute of Personnel and Development (CIPD) considered one the leading commentators on skill development and the labour market, has just published an extensive report about the  ‘mismatch’ between graduates and the work they do.

CIPD estimates that 58% of graduates are now underemployed, doing work for which they are over qualified –even higher than previously thought and in Europe, only exceeded in Greece and Estonia. The ‘pushing down’ of graduates into non-graduate jobs is reflected in a 21% share of administrative, 13% of sales workers , but also 8% of those in unskilled ‘elementary’ occupations. As CIPD note, the UK has had one the highest increases in Higher Education participation in Europe, but at the same time one of the lowest increases in high skilled jobs.

But the report makes clear than even though graduates may experience falls in income, this doesn’t mean the gap between graduate and non-graduate pay is getting less (known as the ‘graduate premium’). On the contrary, non-graduates are pushed into jobs farther down the income scale. In otherwords it emphasises the importance of a degree as a ‘positional’ good and helps explain why despite graduate underemployment, there’ s no let-up in the number applicants for HE.

Also out are the latest ONS figures for NEETs, those 16-24 year olds Not in Education, Employment, or Training.–employment-or-training–neets-/index.html

These show a slight fall in overall numbers, down to 922,000, but that 1 in 8 of all 16-24 year olds are in this category 1 in 7 for 18-24 year olds. The number of NEETs has fallen significantly since 2012 and has coincided with the raising of the ‘participation age’ for education and training to 17 and then 18. But the fall in numbers has levelled off more recently.

Finally, the government has also issued a consultation document about the proposed apprenticeship levy on large employers This has been designed to help pay for the 3 million more apprenticeships promised by David Cameron in the general election, but is opposed by the CBI. Regardless of the outcome, it’s not due to be implemented till 2017.

August 16, 2015

As A-level juggernaut rolls on, is it really ‘university or apprenticeships’?

Filed under: 14-19 — sitemananger @ 8:10 pm

aslevelsWith A-level results announced earlier in the day, UCAS reported 409 000 successful university placements –   up 3% against A level results day in 2014 and including 362,000 students accepted to their first choice. The 5% increase in 18 year olds and a 2% growth in those 19 has been at the expense of older students. There’s also been a fall in those registering as part-time students. These increases have been helped by the removal of the admissions cap as universities increasingly chase students, but they also confirm that, despite the fees and despite new plans to axe maintenance grants for the less well off, what used to referred to as the ‘academic route’ is, at least in the eyes of young people, increasingly the only route that provides at least some security in a world of precarious employment and the ‘graduatisation’ of even routine jobs.

Yet within minutes of A-level results being announced, Schools Minister Nick Gibb went on television reminding young people that the government had also provided apprenticeships as alternative to university, that two million have been created since 2010 and another three million are promised by 2020.   Because apprenticeships are considered a good thing across the political spectrum, supported by both business leaders and trade unions as ways of rebalancing the economy, restoring the importance of manufacturing, maybe even returning to ‘how things used to be’?  

Current problems with apprenticeships continue to be glossed over by most though. First of all, a school leaver with A-levels is going to find it hard to find a Higher Level Apprenticeship – a qualification that is equivalent to at least the early years of a degree – and might also include some university attendance. Data from the Skills Funding Agency (part of the Department of Business, Innovation and Skills) shows just 12,300 starts between August 2014 and April 2015. While this is more than 25% up on previous periods, only 700 have been by those under 19. There are more Advanced Level Apprenticeships, but during 2013/14, less than a third, just 35,600 were under 19. Small fry compared to the 250 000 plus who enrol for A-level. Many young people who do start apprenticeships also have academic qualifications that are at least equivalent to the apprenticeship level at which they start and so are not progressing. The majority of apprenticeships are still only at intermediate Level (equivalent to the GCSEs the majority of school leavers already have) last for 12 months and generally don’t offer automatic progression to an Advanced scheme.

Despite government promises, a lot needs to be done before young people really have a choice between the academic and the apprenticeship route.

Unemployment rises as labour market tightens

Filed under: Economy — sitemananger @ 8:03 pm

Monthly figures from the ONS show the labour market tightening. Average wages have also edged up 2.4% and with inflation at almost zero this represents a real increase in income, though many low paid workers continue to miss out on an annual pay rise.  The total number  in employment falling by 63 000 and the unemployment rate rising by 25 000  indicates that employers are reluctant to pay more for new staff, fearing this will eat into profits –some citing having to pay an increased future minimum wage as an additional problem.

A way out would be a serious increase in investment and in particular, more use of new technology with the aim of increasing both output, but also the current miserable level of productivity. It would also make it harder to justity wages being so low.

There’s little evidence of this happening (with investment expenditure at 15% of the GNP amongst the lowest internationally) and of any serious challenge to the current ‘growth’model, where output has been increased by adding to the size of the labour force and relying on a ‘reserve army of labour’ –zero hour, temporary contracts, part-time employees who can’t get a full time job. And of course, low-paid workers from overseas.

Although some analysts have welcomed the continued fall in youth employment as a sign that, because of increased difficulties with filling vacancies, employers have more incentive to recruit cheaper younger workers, this hardly bodes well for the future. Despite this increased optimism, youth unemployment stands at 16% – after full-time students looking for work are excluded it’s still 14%. Latest estimates for NEETS are due this week.

July 21, 2015

The Coming of Age for FE ?

Filed under: Books — sitemananger @ 8:20 pm

michael-ainleyPatrick Ainley  reviews

Ann Hodgson (ed) (2015) The Coming of Age for FE? Reflections on the past and the future role of further education colleges in England. London: Institute of Education Press. £24.99. Pp.223

Clifford P. Harbour (2015) John Dewey and the Future of Community College Education. London: Bloomsbury. £17.99. Pp.178

                            Read the Post-16 Educator reviews  Here 

July 1, 2015

Apprenticeship starts well below Cameron’s target

Filed under: apprenticeships — sitemananger @ 1:09 pm

election_cameron-h_3253236bFigures released by the Skills Funding Agency at the end of June,  show  just  375 000 apprenticeship starts for the 9 months between August 2014 and April 2015. Only 100 000 of the new starts are by young people under 19 and another 125 000 by those aged 19-24.  In otherwords, 4 out of 10 starts are by those over 25, most of whom will be existing employees.

6 out of 10 starts are at Intermediate (GCSE) Level  – with  just 13,200 at Higher Level. The figures also show more starts by women (52%) than men. This reflects the large number  in Business, Administration and Law (approaching 1 in 3 of all starts) and particularly in Health and Care (1 in 4 ). Just over 1 in 7 starts have been  in Manufacturing and Engineering and only 1 in 20  in Construction.

Despite a relatively high media profile, apprenticeships  are not expanding in the way they are being promoted. On the contrary, start figures are levelling off.  Unless there’s  a  dramatic change in direction  the new government will struggle to get anywhere near its election promise of  creating another 3 million for young people  during this Parliament.

The statistics also show the UK workforce continues to be more highly qualified than ever, with 81% of workers having reached level 2,  62.6%  to Level 3 and 41.0%   to at least Level 4 (equivalent to first year degree). With 80% of the new jobs being created said to be ‘low skilled’ , despite what government leaders might say, standards in education and training remain well ahead.

June 19, 2015

CBI’s curriculum proposals. A step forward, but big questions remain

Filed under: 14-19 — sitemananger @ 4:00 pm


The CBI’s John Cridland has re-opened the debate about the 14-19 curriculum.   


Cridland has called for GCSE to be abolished within 5 years ‘High-stakes exams at 16 are from a bygone era’ and, in a further swipe at the Gove/Morgan examination reforms, for the status of vocational learning to be upgraded.  ‘For too long, we’ve just ‘pretended’ to have a multiple route education system. Yet in reality there has been only one path the system values – GCSEs, A-levels, University.’

Cridland’s comments put him closer to Labour’s Tristram Hunt and his Tech-Bacc,  but also to Tory, Lord (Kenneth) Baker, the instigator of University Technical Colleges.  Cridland also calls  for a more flexible ‘personalised’ curriculum allowing academic and vocational study to be mixed and which would provide ‘Great teachers in classrooms with the freedom to deliver great, innovative teaching harnessing new approaches and technologies’.  He also wants much better careers advice, closer links between employers and schools and the restoration of the careers service.

The GCSE used to be considered the ‘teachers exam’ because of its emphasis on coursework and because it was available to all. Those days are long since gone and as a result, many would support Cridland’s calls for abolition.  Yet on the other hand, there is no reason why some form of assessment at 16 shouldn’t continue, but within a much broader baccalaureate framework providing the main certification at 18.

Cridland’s proposals for vocational education are less clear and much weaker. On the one hand he wants to include more work experience  and like many others in the UK, including Baker and Labour’s Lord Adonis, looks to Germany for inspiration.  At the same time he wants vocational courses to also have the ‘gold standard’ A-level label – even though  the most successful vocational course so far, the GNVQ   was reinvented as  a vocational A-level in Labour’s Curriculum 2000 reforms, but failed to establish itself  as entries dropped to a few thousand.

The main problem with Cridland’s approach and that of Baker and Hunt for that matter is it’s refusal to be critical of ‘academic’ education in itself – only to say that it’s not suitable for everybody. Thus. ‘For many – including me, and most Ministers – that path was the right one. But for many others, it’s not’.   Isn’t this just another way of saying that ‘vocational qualifications are all right for other people’s children…’ ?

A serious analysis of qualifications has to consider the part played by what sociologists call ‘powerful knowledge’. Labour governments have been trying to improve the status of vocational qualifications for years but haven’t succeeded.    Powerful (academic) knowledge has long been upheld by elite universities –where few if any ‘vocational’ students are ever admitted.  It’s powerful knowledge, not it’s vocational or practical content that secures jobs in the City or leading roles in business.  

Not surprisingly this isn’t addressed by Cridland, (MA, History, Christ’s College Cambridge) yet until it is, differences in status between different types of knowledge will also continue.  We could make a start by calling for a general diploma with a mandatory core of academic and vocational study, in otherwords, without different routes or  ‘pathways’ and then  campaigning for  it to be the main entrance qualification across higher education.

Better careers advice should also be encouraged, but has to be in the context of expanding job opportunities themselves. The problem for most young people isn’t that they make the wrong choices –but that there are little in the way of alternatives.  In an economy becoming ever more sharply divided into ‘lovely’ and ‘lousy’ jobs and where people are as likely to be overqualified than lacking skills, there’s no real evidence, at least not yet, that doing an apprenticeship, that’s if you are lucky to get one, will ever allow you to earn anywhere near as much as if you have even a reasonable degree.  

The countries where the differences between academic and vocational learning are smallest, are invariably countries where the level of inequality has always been lower and where vocational and technical education has traditionally been part of a defined route into employment.  Cridland’s proposals should be welcomed by educational reformers, but they still leave as many questions as answers.

June 14, 2015

Low-paid, zero hours jobs won’t close Osborne’s deficit

Filed under: Economy — sitemananger @ 8:30 pm

If George Osborne’s proposed legislation to make budget deficits ‘illev2-osbornegal’ goes ahead,  then public services will no longer be able to be expanded as a way of stimulating future economic growth and activity. Or at least, it will be up to the Office for Budget Responsibility (OBR) to decide whether ‘exceptional circumstances’ allow this to happen.  It isn’t clear whether Osborne would be able to legally bind a future administrations to a future course of action and his actions can be seen as more about pushing Labour ‘Blairite’ leadership candidates to accept even tighter restrictions over economic policy –here he seems to have already been successful.

Ironically, the last Chancellor to run a budget surplus  was Gordon Brown at the end of the 1990s –then,  the City boomed,  consumer credit expanded at alarming rates and it was declared there’d be ‘no more return to boom and bust’.  Osborne’s main line of attack has been to argue that subsequently,  Labour  spent too much, leaving no money aside to cover the cost of a future  recession  (even though going into the 2010 election the Tories committed themselves to maintaining Labour’s  spending levels).   This was then outrageously   ‘spun’ to mean that Labour was at least partly responsible for the downturn –an accusation  Miliband’s team appeared incapable of  seriously challenging in the election campaign.

Deficit reduction has continued to focus on the need to make  spending cuts – but it has been the loss of taxation revenue that has been the main reason why Osborne has continued to have difficulties reducing the deficit and why, as some commentators predict, he may still not have cleared it by the end of his second term – the OBR has already revised its forecasts downwards.  While Osborne brags about creating a thousand new jobs a day,  some estimates put the  annual loss of income tax at over £25 billion (over a quarter of the current deficit and more than twice the amount of the  latest round of welfare cuts).

This is because a large majority of new jobs have been low-paid, irregular/zero-hours  and unable to generate this tax revenue.   Output has been increased by drawing on a ‘reserve army ’of labour, rather than increasing productivity. With technological changes also wiping out many skilled jobs,  there’s  every  reason to think that this situation will continue, especially as  the public sector and in particular, public sector investment  continue to decline, a consequence of Osborne’s  main  political objective – reducing  state activity to a level not seen  since the 1930s.

Campaigns against austerity can be combined with positive proposals for reforming the labour market. Not only  raising the minimum, but also the ‘living wage’, limiting pay differentials between those at the top and the bottom,  guaranteeing hours and security of tenure. Also, ensuring pay levels not only reflect increases in the cost of living but also keep up with increases in profits.

June 3, 2015

The NEET problem is also a jobs problem

Filed under: At Home, YOUTH UNEMPLOYMENT — sitemananger @ 7:12 am

Recently released figures, show a fall in the proportion  of NEETS, down from 13% to 12.3% of all 16-24 year olds. According to Skills Minister Nick Boles, this ‘demonstrates that our economic plan is working’ –yet there are still 943 000 young people being in this category.  Take a look at the figures in more detail though and a less certain picture emerges. There’s been a slight rise in the number of 16-18 NEETs for example, from 6.8% to 7.1%.  14% of 18 year olds are also now classified as NEET (up from 12.6% a year ago).

The NEET rate is not the same as the unemployment rate. The latter includes students who are also looking for work in this case, currently about 250, 000. Only about half of NEETs are unemployed however –the remainder being ‘economically inactive’, not seeking work or not able to work.  Arguably though, NEET statistics provide a better and more accurate picture of youth joblessness.

It’s difficult to make accurate international comparisons, but the UK is well above OCED averages, if well below the 25% rates of Greece and Spain.  There are more female NEETs but nearly two-thirds of these would not be able to enter employment because of home or family responsibilities. Northern areas have a much higher concentration of NEETS (North East 18.1%, Yorks & Humberside 15.2%) compared with London (10.1%).  

Despite the recent increase noted above, the number of 16 and 17 year old NEETs has declined significantly since the start of the 21st century. This has been the result of increased staying on rates in full-time education, – 87% of 16 and 17 year olds now staying on compared to just over 70% in 2000, the raising of the mandatory participation age to 17 and now to 18 from September 2014, was designed to reinforce this trend. Now figures show that the increase in 16-18 year old NEETS is the result of a rise in NETs (those not in education or training)  which suggest that ‘staying on’ has reached a saturation point.

But 16 to 18 year olds constitute only about 20% of total NEETs, compared with 19-24 year old NEETs. It’s these older NEETs which will be the focus of attention for the new Conservative government.   Adopting a new American style ‘workfare’ approach the Tories will (to quote from the Queen’s Speech)  ‘put in place a new Youth Allowance for 18-21 year olds with stronger work related conditionality from Day 1. After 6 months they will be required to go on an apprenticeship, training or community work placement’. Refusal will lead to withdrawal of benefit.

Yet the NEETs problem represents the sharp end of a wider youth employment problem.  While there’s a notable correlation between low levels of qualifications and becoming NEET and that NEET’s are more likely to have lower levels of basic skills,  at the other end of the spectrum is the increased numbers of youth people who are ‘over skilled’ and ‘underemployed’  in  the work they do –OECD now puts this figure at  I in 8.   

This problem is particularly acute in the UK with up to a third of graduates having to take non-graduate jobs, resulting in the bumping down of those who would generally have done these jobs into lower skilled and lower paid employment.  Because there’s been a more than proportionate increase in the growth of unskilled work, there’s been an even larger increase in the number of people or who are able to do it.  Generally employers will favour those with more qualifications. But, something on which UK skills agencies regularly comment, unless there are proper incentives employers are less likely to want to  employ young people without previous employment experience,  when they can take on adults instead.

Department for Education Statistical Bulletin

Parliamentary Research Briefing

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