To solve youth unemployment, Andy Burnham must harness HTQs

While commentators wonder aloud about what position Andy Burnham will take on various issues when he enters 10 Downing Street today, his approach to skills policy is rather easier to predict.

His record as Greater Manchester mayor suggests that he sees skills provision as part of a devolved approach to local growth, tied directly to the needs of local labour markets. It also suggests that there will be less emphasis on traditional full-time degrees as the primary post-16 educational route, undertaken before real labour market attachment begins.

And that re-emphasis would be welcome. Alongside falling take-up of entry-level apprenticeships, the predominance of degrees is the biggest weakness in England’s current system because it leaves too little room for employment-linked higher learning.

Degrees are not the place to turn if we want to reduce the number of 16- to 24-year-olds not in education, employment or training (NEET) – which currently stands at nearly 1 million across the UK, according to Alan Milburn’s interim review of young people and work, published in May.

Milburn, the former Labour Cabinet minister, argues that the number of NEETs amounts to a “generational fault line”. But if Burnham is serious about cutting that number, a better solution is already at hand.

When the higher technical qualification (HTQ) label was introduced in England in 2023, it was intended to raise confidence in technical qualifications at skills level 4 and 5 that meet occupational standards, improving labour market relevance and creating clearer progression into skilled work and further study. But this change could amount to so much more than a niche reform in the post-16 system; HTQs could be a key part of a wider labour market strategy that connects education, health, welfare and work.

But HTQs will not achieve scale through qualification reform alone. Learners and employers value the outcomes associated with higher technical learning, including labour-market relevance, in-work progression, better earnings and more flexible delivery. But that does not yet translate into strong demand for HTQs. The remaining barriers are familiar: weak employer signalling, low awareness, poor progression, rigid design and a funding model that still relies too heavily on loan finance.

HTQs are often discussed almost entirely through the lens of adult upskilling. And it is true that level 4 and 5 qualifications are disproportionately taken by older learners, especially over-25s who are already in work and want to retrain, upskill or progress. But it would be a mistake to conclude from this that HTQs have little to offer younger people.

In fact, they can address both sides of the labour market problem. They can respond to skill shortages by creating clearer entry routes into sectors where employers say they need more technical capability. And they can respond to skill gaps by supporting upskilling and reskilling in the existing workforce.

That dual role is especially important in a labour market where a degree is no longer a simple guarantee of a strong start. Unemployment for graduates remains lower than for non-graduates, but the latest outcomes data still show that 6 per cent of graduates were unemployed 15 months after graduation. And among those graduates who were working, only 72 per cent were in professional-level employment – down from 75 per cent the year before. In other words, more than a quarter of employed graduates were not in professional-level jobs.

Degrees remain popular and continue to deliver above-average lifetime returns for most graduates. But in a system where underemployment is real and the graduate premium is under increasing scrutiny, there is a risk that the system has become too dependent on this route.

The strongest design pressure in the HTQ system is towards smaller, more flexible units of learning. This matters for adults in work but it could also be useful for young people otherwise facing a long period parked outside the labour market. Smaller units of level 4 and 5 learning – carried out in universities, further education colleges or independent training providers – could be combined with employment support as part of new active labour market policies linked to vacancies, local growth sectors, apprenticeships or wage subsidy schemes. That is a different proposition from simply enrolling young people on a course and hoping the labour market catches up later.

Funding must change too. Student loan-funded modules, where learners bear all the risk, are unlikely to generate large-scale demand. A more effective model would share costs more equitably between the learner, the employer and the state, particularly where HTQs are being used to support both youth transition and workforce development. Closer alignment between the forthcoming lifelong learning entitlement, the revamped Growth and Skills Levy and devolved regional funding could make this happen in local economies.

Recently commentary has tended to depict higher education and skills provision as an either/or – often alongside the suggestion that too many young people now go to university. But it doesn’t have to be that way, provided study and work are better linked up.

Over the years, policy has encouraged universities to grow by meeting demand from learners, not industry. That has created volume but also a mismatch between labour market supply and demand. Industry placements should be a more mainstream option in many degrees, and stronger break points at levels 4 and 5 could allow young people to earn, gain experience and convert later to an honours degree if that is the right next step.

The solution to the UK’s NEET problem is not to pitch different post-16 routes against each other. It is to create a seamless system via which everyone acquires the skills necessary for gainful employment in a rapidly changing economy. Pitched correctly, HTQs could be a way of attaching young people to the labour market earlier while still preserving progression into higher-level learning later on.

Mark Morrin is a research associate at the Lifelong Learning Institute and author of The Missing Middle: Unlocking the growth potential of higher technical qualifications, published in June.