Greater investment in post-16 education to compete in Knowledge Economy

UCU today makes a case for greater investment in further and higher education, demonstrating how a highly-skilled, highly-educated workforce will be the bedrock of Britain's future economy.

The union's Spending Review Submission 2013, asserts that only by greater investment in higher levels of education will Britain thrive in the rapidly developing 'knowledge economy': illustrated by the striking prediction that 65% of children entering school now will end up working in careers which have not yet been invented.

In its submission, UCU calls for public spending on further education to be maintained at 0.6% of Gross Domestic Product (GDP) in the short-term, rising to 1.0% in the medium term.  A 2011 government report showed that vocational qualifications delivered in the workplace and apprenticeships delivered a return of around £35-£40 per pound of funding. UCU also urges a rethink on the introduction of tuition fee loans in further education as the government's own research has shown they are most likely to have a deterrent effect on lower skilled individuals.

The union's submission comes as it launches its Knowledge Economy campaign to secure greater investment in education, and just weeks after Chancellor George Osborne used his budget speech to say that education was the most important long-term economic policy the government is pursuing. More on the campaign can be found at www.knowledgeeconomy.org.uk and more on the Chancellor's speech can be found here.

UCU general secretary, Sally Hunt, said: 'There is mounting evidence to suggest that in our rapidly evolving knowledge economy, high-level skills and education are the key currencies. What stronger case could there be for government to invest more in our colleges and universities knowing they are the hothouses of our natural talent - the very bedrock of Britain's future economic success?'

In higher education, UCU calls for the proportion of GDP spent on higher education to rise to the Organisation for Economic Co-operation and Development (OECD) average in the medium term. Public spending by the UK on higher education as a proportion of GDP has fallen by one-third, putting us below Finland, France, Germany, Japan, and the USA.

The union points to evidence that those with the highest skills will be most demand in the future. In 2000-10, more than half the annual GDP growth in the UK on average was related to labour income growth among those with higher education. Cedefop (European Centre for the Development of Vocational Training) forecasted those with higher level qualifications are to increase as a proportion of the European labour force from 29.8% in 2010 to 37% in 2020, while those with low qualifications are set to decline from 23.4% to 16.4%.

The submission also calls for UK spending on Research and Development (R&D) to catch up with the average for OECD countries - spending on R&D as a proportion of UK GDP is currently 20.6% lower than the OECD average, despite innovation being a key driver of productivity growth and in turn economic growth.  OECD data suggests a positive correlation between higher education attainment among 25-64 year-olds and GDP per head of population in 33 member states.

• UCU 2013 Spending Review Submission, May 13 [93kb]