Budge(it) Over Osborne! Apprenticeships Vs. Higher Education?

George Osborne recently announced that 3 million new apprenticeships will be created by 2020, funded by a levy on large employers. Firms that are committed to training will be able to get back more than they put in. So what will be the knock on affect to the higher education sector?

I suspect what this means, is that school leavers will be far more incentivised to find an apprenticeship than they will to attend university. What with climbing tuition fees, maintenance grants becoming maintenance loans and what seems a never ending rise in cost-of-living, potential students are facing the most expensive higher education ever seen in the UK. A report last year estimated that the average student will leave university owing between ￡40,000 and ￡50,000 – but this is only set to rise from 2016/17 as the changes to the maintenance grant/loan system take effect. Figures also showed that 27 per cent of graduates earned less than the average wage enjoyed by apprentices – seems a little unfair in my opinion.

Certainly if I had to make the decision again now; I don’t think I’d go down the traditional higher education route. My two oldest nieces have just completed their final year of A – Levels and neither are planning to attend university. One has just been accepted on to the Aldi Management Development Programme (apprenticeship) scheme, the other pursuing a career as a veterinary nurse through apprenticeships. Both very worthwhile and rewarding career paths set to provide great earning potential without the crippling debt hanging over their heads before they even start-out.

So what then, does this mean for the UK Universities moving forwards? Where will their funding come from? What will they need to do to ensure their survival?

Firstly, universities are having to find other sources of income rather than relying on tuition fees and grants. The Higher Education Business and Community Interaction Survey identified that higher education institutions are pushing to increase their number of ‘commercial’ activities to drive new income. Knowledge exchange activities such as undertaking contract research, providing consultancy or training, and licencing access to intellectual property. They are also running more conferences and events, and renting out accommodation during holiday times.

Secondly, demands for them to diversify their business activities and processes to make savings and increase the annual surplus are also increasing. They are doing this in various ways, including (but not limited to):

• Sharing Services; ranging from IT & digital solutions (Jisc), through to finance, HR, and even application management (UCAS), there are heaps of organisations offering shared platforms for universities to share the workload, and of course the investment required to run these functions.

• Collaboration; also a form of shared services, certain institutions are joining forces on a small-scale. One key area and example of this is within Procurement – The Universities of Surrey and Roehampton have been successfully sharing senior procurement resources for a number of years in pursuit of maximising efficiencies and minimising duplication. And it seems to be working really well, so much so that others are starting to follow suit.

• Contract compliance; this is being driven not only from a savings perspective in the literal sense, but also from a legal mitigation perspective. Legal fees are expensive, and rogue purchasing can lead to approved suppliers taking action. One way of ensuring compliance is to provide access to only approved suppliers – by implementing an eMarketplace solution for your staff and students to browse and compare products to their hearts content, this gives the illusion of choice to end-users while still giving the procurement function full control.

• Asset Sharing; Equipment is a huge expense, particularly at research intensive institutions. By utilising sharing of these assets both between and within Universities, they’re sharing the initial purchasing investment and the maintenance & running costs – leading to big savings.

Overall, it seems that driving cost and efficiency savings is playing a big-part in the changing higher education landscape, and even seems vital to protect them from spiralling debt in the face of a possible reduction in numbers of students. So does this mean that the procurement departments often seen simply as the custodians of the purchasing process within a university, must now focus their efforts on strategically decreasing costs and increasing efficiencies both within these processes and across the purchasing landscape? The answer, of course, is yes. But how can this be achieved?