Higher Education: Affordability and Quality

Lord Londesborough Excerpts

Thursday 2nd July 2026 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I must thank my noble friend Lady Deech for securing this debate, which has been appositely framed with the words “affordability and quality”. I will tackle these words from an economic angle and from an employer’s perspective, reflecting, in part, on my own experience. Before I go down that path, I readily accept, like many others, that higher education should not be measured purely through the lens of economic impact, jobs, salaries and the ability to pay back student loans. Universities should be character-building through those vital formative years. It is where you develop life, social and communication skills and, indeed, have your beliefs questioned and challenged. You should graduate with much more than a degree, and many students develop friendships or partnerships that last for a lifetime. It would be remiss of me not to mention that I met both my wife and my business partner at university, and both would claim, quite rightly, to be of greater importance to me than my rather modest second-class degree in economics. That said, it is difficult to avoid the economic and financial consequences, and whether you look at this from the Government’s, employers’ or students’ perspective, the data is deeply concerning. Put bluntly, higher education is not working.

Let me start with our public finances. Sitting on the Treasury’s balance sheet is a current liability of £295 billion of unpaid student debt. That figure will reach £500 billion in the next decade, and much of that will eventually be written off. That would be less of a problem if we were a high-growth, low-debt economy, but we are not: our national debt has trebled in size in the last 15 years to almost £3 trillion, and we now spend more in servicing the interest on that debt—£130 billion a year—than we do on our entire education budget. That is a damning statistic.

With productivity growth averaging a feeble 0.5% over the last 20 years, our graduates—who have grown in number by 50% over this period—face double trouble: a sharp fall in the number of graduate jobs and a significant shrinking of the graduate premium on wages. It is no wonder that the latest British Social Attitudes survey found that 34% of people agreed that a university education

“just isn’t worth the amount of time and money”—

that is up from 14% who held that view in 2005.

There has also been a marked decline in those who believe that going to university leaves graduates “a lot better off” in the long run. It is down, from 50% in 2005 to 36% today. I acknowledge that these perceptions are challenged by the data analysis of such bodies as the IFS, but, none the less, the perceptions are there.

Turning to employers, low growth, with significantly increased employment costs, has resulted in much slower job creation—and that is before you take into account the impact of AI. Yet employers in multiple sectors continue to complain about all sorts of skills gaps, many of which could be filled by vocational training rather than university education. Supply is not meeting demand. Fundamental mismatches are growing.

Employers also complain that graduates are often poorly prepared for professional life, not so much in terms of the quality of their degree courses as in terms of personal discipline, social interaction and communication skills in general. This has been compounded by the increasing practices in higher education of working and studying from home and overdependence on online teaching and remote communications, not to mention the productivity-sucking distraction of smartphones and social media, which is an issue not just for schools but for universities and indeed the workplace.

I believe universities need to do a much better job in preparing their students for professional life. Degree courses should be rebalanced to address the broader human skills deficits cited by employers, and much more emphasis needs to be placed from year one on careers advice and development. Employers will often tell you that graduates from Europe are better prepared than their British counterparts for working life, and that was certainly my experience as an employer. We should be less hubristic and learn from our European counterparts, whatever the league tables suggest.

If we want higher education to be affordable, we should focus on quality, not quantity, and develop a more holistic approach to preparing our graduates, and indeed non-graduates, for the realities of the marketplace.