The notion that the government is capable of ‘levelling up’ the economy, and society in general, has faded fast. Unemployment is rising fast with taxation income falling. The effect on students and their families is just at the beginning of a significant decline that could last for several years. Whilst many universities are preparing for a decrease in international students and their fees, others will be worried about a significant decline in UK undergraduate income. However, the dearth of jobs for graduates will no doubt lead to more of them taking up postgraduate courses through loans as a means of staving off unemployment for a while. This will be yet another challenge for the online and social distancing provision that is already coming this autumn (as an aside, the picture is of a microbial fermenter in my former research laboratory. It cannot be operated remotely or by social distancing). However, postgraduate courses and research may save many jobs in the end if universities can gear their offering to feed a renewed economy. But the main problem to be encountered will be a substantial loss of income across many families and a widening gap between those with means and those without means. There must be a fair system for all and not just for those who can weather the storm. The government must address this with greater urgency.
Unemployment hits families harder if they are not prepared.
The data emerging on the sharp rise in unemployment in the UK are now very grim with eye-watering numbers that are hard to take in. The impact of the lockdown on businesses that serve the public face to face was almost immediate. This meant many students reliant upon part-time jobs were suddenly in terrible financial difficulty (see TEFS 1st May 2020 ‘Bring back Augar and put students first to offer hope’). As a result, most universities have seen a rise in those seeking help from their hardship funds. But this is just the beginning as members of their families also find themselves furloughed or unemployed and seeking universal benefit. Many have never had any experience of the benefits system and will be worried about how they can support their children as students returning later this year or starting for the first time. The result is more and more students will need to find some additional income to continue. Widespread unemployment, and a lack of suitable jobs as universities move online, will make this almost impossible. This will be a huge disincentive to start university as harsh calculations are made in many homes this summer. The horrible conclusion is that increasing numbers of students will contemplate deferring for a year and ride out this period on benefits. They will be the increasing number who find they have little or no family support available. Those from more advantaged backgrounds, and families with capital reserves, will no doubt press on. This will starkly expose the inequalities that infect our society even further. It is therefore astounding that the government’s own Social Mobility Commission does not appear to be responding at this time and its chair has resigned. (see TEFS 8th May 2020 ‘Social Mobility in crisis: A 'Pardoner’s Tale')
The stark fact is the number of staff furloughed, and supported by the state, is rising fast. The Office for National Statistics (ONS) has determined that a large number of businesses had taken up the offer by the 5TH of April. Their latest data was released on the 21st April and showed a 4% level of unemployment earlier this year. Their next release is due on the 19th May and the numbers will no doubt shock everyone in the government. Estimates of more than 9 million workers being furloughed have already shocked us and this may come true in time (see BBC 8th April ‘Coronavirus: More than 9 million expected to be furloughed’). A recent analysis, ‘US and UK labour markets before and during the COVID-19 crash’ (National Institute Economic Review No. 252 May 2020) made comparisons to previous downturns. The authors, David Bell in the UK and David Blanchflower in the USA, estimate that “unemployment will rise by around 5 million workers from 1.34 million to over 6 million by the end of May” in the UK. This includes furloughed numbers and might be a conservative estimate as its takeup expands.
Whilst there is some relief with the furlough scheme lasting until the end of October, this offers little comfort for those making long-term plans. Many businesses will not be able to contribute to the projected £100 billion costs and are likely to fail. Meanwhile, they will start to add to the rising number of those already out of work and claiming universal benefit.
Figure 1 shows the alarming rise in the number of individuals claiming universal benefit in March and April this year and the accumulated total that is already near to 2.5 million (source: Department of Work and Pensions StatX tool). This alone is a massive burden on the government finances that is likely to persist for some time. Many families will be planning for the worst as the furlough scheme peters out in October.
How are universities and the government responding?
Most universities have reacted quickly to the situation and to rising student hardship. Help with accommodation costs and access to IT and laptops has rapidly emerged. This is to their credit. However, the cost will escalate when we hit the next academic year. TEFS (1st May 2020) called for the government to set up a working group to address urgently the likely outcome and impacts on students in the coming year with “Therefore, a working group involving students (such as NUS), staff (such as UCU) university managements (such as UUK and others) and the government must work now in advance of the spending review”. They may come to regret not doing this early as their top priority.
Instead, the government’s response has been to address the future of university research as its top priority. The Universities Minister, Michelle Donelan chaired a meeting of its Research Taskforce this week (Research Professional News 13th May 2020). Its seventeen-strong membership consists of the usual suspects, various government officials, those leading funding and regulatory agencies from around the UK, two Vice-Chancellors from Russell Group universities and one from a Post-92 university. The balance might reflect the likely outcome and influence.
Will students respond to boost postgraduate training?
Whilst many students returning or entering university this year as undergraduates may be looking carefully at their options, the choices for those graduating will also become very important. The lack of a graduation ceremony will focus the attention of all of them as they make the transition online to being graduates and alumni. With the job situation worsening fast, they will look to other options. Even those from advantaged backgrounds who are contemplating a year travelling will find that option closed to them. The most likely backup scenario is that they will look to invest in a postgraduate position. The numbers may expand fast to fill the time and the extra demand for loans will emerge soon. Most will not want to seek benefits in the herd of mass unemployed, just as much as the government will not want this. However, there is a sting in the tail. The government ‘Funding for postgraduate study’ is limited and not likely to cover all living costs and fees. The loan available for a 12-month Masters degree is £11,222 for the coming year and for PhD students, it is a total of £26,445 for what must last for at least three years and probably four years. Some will find that their family can support them by releasing some of their capital and they may opt to work from home to cut living costs. Many others will find little or no family support forthcoming and will need to secure a part-time job. The result will be a bias towards the more advantaged becoming even more pronounced as the numbers of disadvantaged rise.
The impact of postgraduates.
A very detailed and timely report ‘Postgraduate Education in the UK’ by Ginevra House was released by the Higher Education Policy Institute (HEPI) this week. Its 154 pages provide a detailed overview of postgraduate provision and take up in the UK. However, most of the data presented covers the period from 2008/9 to 2017/18 and it is now a pre-COVID-19 historical document. Yet it provides a very valuable baseline for comparison later.
The section ‘Educational (dis)advantage’ was of most interest to TEFS. Using limited socio-economic classification (SEC) data (10% of the 2007/08 cohort and 18% of the 2017/18 cohort), it was concluded that the percentage of postgraduate students from non-professional backgrounds has increased in that time. However, this has mostly been in the area of teacher training and taught Masters courses. “Doctorates and other research degrees” were dominated by those from professional backgrounds. Whilst fully acknowledging the limitations of SEC classifications, the author was left with little choice but to turn to the POLAR (participation of local areas see *NOTE below) quintile (Q1-5) groupings where Q1 areas have lower participation in Higher Education. However, this has also been the subject of considerable criticism in the recent past (see TEFS 22nd April 2019 ‘POLAR whitewash fails to cover all surfaces’). The more recent use of Indices of Multiple Deprivation (IMD) in England, Scotland, Wales and Northern Ireland may be more useful in the future as these break down the data into smaller geographical areas. It is fortunate that the IMD data will span the pre-COVID19 and post-COVID19 periods. The impact of government policies will be laid bare in the next few years.
Figure 2 is taken from the HEPI report and illustrates how students from the most advantaged POLAR Q1 and Q2 areas dominate the postgraduate population (note: it is assumed that there has been an inversion of the POLAR quintiles in the legend but maybe this should become the target benchmark for the future).
Unfortunately, the report has repeated the headline assertion made by the Office for Students in its earlier report of 2016/17 ‘The effect of postgraduate loans’ that considered the effect of introducing postgraduate loans in 2016.
“Following the introduction of these loans, the number of young entrants to eligible courses rose by 59% in POLAR quintile 1 neighbourhoods (areas with the lowest levels of participation in higher education).”
The data (Office for Students (OfS) and HESA data 2016/17), upon which this conclusion is based, is presented here in Figure 3. The intention of the headline was to give the impression that the postgraduate loans had a marked effect on participation by disadvantaged groups and thus enhanced social mobility. As a former editor and senior editor of two prominent science journals in the UK and USA, I can be sure that the conclusion from such data would not be accepted by a mainstream science journal. It is not justified, and I expect many observers would call it misleading.
The simple conclusion is that the take-up of postgraduate courses increased across students from all POLAR quintile areas. But the proportion of students from Q1 areas increased from 9% to 10% between 2015/16 and 2016/17. Also, it had increased by two percentage points from 7% in 2009/10 to 9% prior to the loans coming on stream in 2016. The conclusion must be that the loans had little or no effect on the proportion of Q1 students taking up postgraduate courses. The number of students clearly rose as a result, but this was across all POLAR quartiles. Thus, the loans system was offering most of its financial help to the most advantaged and little had changed overall.
Which students are taking out postgraduate loans?
Figure 4 takes a look at other HESA and OfS data from the same time period and it is clear that students from Q1 areas were most likely to take out postgraduate loans. However, it is striking that a large proportion of students from the Q5 areas also availed themselves of loans. It is not clear from the data available how many were taking up more career-enhancing research postgraduate positions through the loans system. Figure 5 shows the number of students in taught courses and research positions from 2014/15 to 207/18. Clearly, most postgraduate education is through taught Masters courses. These may last for twelve months, whereas research PhD research positions go on for at least three to four years. That makes them a major commitment for any student. My considerable experience in running a laboratory tells me that PhD work in laboratory science is too intensive to do whilst supplementing income with a part-time job. Relying on a loan without family backing would make a PhD impossible. Those from more disadvantaged backgrounds have no choice but to seek out a fully funded position. Mostly these are funded by the research councils through UK Research and Innovation (UKRI). But the numbers available are small (Figure 5 solid line) when compared to the total numbers of postgraduate students and they are very competitive.
Impact on equality and social mobility.
Impact on equality and social mobility.
The simple conclusion is that the COVID19 crisis will have a profound effect on choices made by students and graduates. The employment market will drive many toward further postgraduate qualifications. This may be the only option other than unemployment on benefits. But the current system of funding favours those with family resources and family support backing them. Those without such support will find the situation difficult. They may manage to stay at home and study locally and live off the loan after fees are paid. But this will limit their choices severely. The negative impact on social mobility and fairness will be profound.
TEFS calls upon the government and Universities UK to turn its attention away from research as a priority and onto equal opportunities for students. This will not be resolved by a series of ad hoc changes in hardship funds or other support. The problem will be far too large for most universities to contend with. Instead, there must be a working group set up with urgency and involving those across the whole sector. The Social Mobility Commission might have been a vehicle to navigate this route, however, with no chair and little evidence of a reaction to the COVID-19 crisis, the road seems to be closed.
Mike Larkin, retired from Queen's University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics. He has served on the Senate and Finance and planning committee of a Russell Group University
*NOTE. POLAR refers to Participation of Local Areas and there are now four versions. From the 2018/19 publication onwards, the low participation data uses the updated POLAR4 classification. The POLAR4 data is calculated in a different way to previous POLAR mappings and therefore the two datasets are not strictly comparable. For time series purposes, the indicators for 2015/16 to 2017/18 have been produced using both POLAR3 and POLAR4 data. The POLAR3 classification is formed by ranking 2001 Census Area Statistics (CAS) wards by their young participation rates for the combined 2005 to 2009 cohorts. This gives five quintile groups of areas ordered from ‘1’ (those wards with the lowest participation) to ‘5’ (those wards with the highest participation), each representing 20 per cent of UK young cohort. Students have been allocated to the neighbourhoods on the basis of their postcode. Those students whose postcode falls within wards with the lowest participation (quintile 1) are denoted as being from a low participation neighbourhood. See HESA Definitions and benchmark factors: definitions.