Is Britain’s university business model broken?: David Richards

Today, not one works in that field. The promise looks shaky. Two decades ago Tony Blair set a target to get half of young people into higher education. It became a rite of passage, the automatic step after A-levels. The target was met and then treated as a good in itself. The world of work moved faster than the model that feeds it.

We also lost something important along the way. Polytechnics were created for applied learning, close to industry, and focused on getting people job-ready. Class snobbery pushed them to rebrand as universities in the 1990s.

Britain paid a price for that shift. In the United States, it is different. Polytechnic universities such as Cal Poly carry prestige because employers value what their graduates can do on day one.

Start with the signal the market is sending. Researchers in the United States have tracked hiring across nearly 300,000 firms by parsing about 200 million job ads, identifying around ten thousand companies actively integrating generative AI and comparing them with non-adopters.

Since early 2023 junior hiring at the adopters fell about 7.7 per cent more over the next six quarters, while senior hiring barely moved. The squeeze lands hardest on graduates from mid-ranked universities, while vocational routes and the very top tier hold up better.

Treat that as a forecast for Britain. Against that backdrop, do degrees deliver on the test that mattered to those five young people, a good job in the area studied? The record is mixed. Many graduates land high-skilled roles, yet roughly a third do not. A large share never work in a field related to their subject. The graduate premium survives on average, but it is uneven by course and institution and often delayed. If a student borrows heavily and never sees the promised outcome, that is a broken deal.

And it is set to get tougher. AI strips out the routine tasks that used to justify entry-level roles in consulting, law, finance, marketing and software. With fewer stepping stones, employers raise the bar for first jobs and pay up for experience. Practical skills and top-tier brands keep value. Mid-tier generalist routes get squeezed. Financially the trend is clear. International fee income kept the show on the road. Now it is fragile. Policy shifts on visas and weaker demand are starting to bite. A model that relies on ever more overseas students is a gamble.

What should change? Put the scoreboard in the window. For every subject at every university, report salaries, early promotions, and how many end up in high-skilled roles. What should replace the automatic route from A-levels to a three-year residential degree?

Start with the job and work backwards. Expand degree apprenticeships that put people into real teams from day one. Build intensive bootcamps for fast-changing technical skills, refreshed every year. Put the emphasis on judgement, creativity and leadership.

David Richards MBE is a philanthropist and technology entrepreneur.