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Last Updated: Tuesday, 13 September 2005, 09:08 GMT 10:08 UK
UK struggles in university race
University lecture
The growth in student numbers has consumed extra spending
Higher education in the UK has been falling behind leading industrialised competitors in funding increases and student entry rates, figures suggest.

The latest international education report from the OECD shows the world's major economies pushing for highly skilled graduate workforces.

The report, up to 2002, shows the UK with below-average rises in university funding and participation rates.

The government says increases, worth 10bn a year, are closing the gap.

In terms of higher education funding, the increase received by UK universities, between 1995 and 2002, was only about half the average for industrialised countries.

The proportion of young people entering university was 48% compared to a 53% average.

Overseas students

In the lucrative overseas students' market the UK remains the second most popular destination after the United States, but the "market share" has fallen, as countries such as Australia have attracted more Asian students.

See how various countries compare on some key figures.

Each year the OECD - Organisation for Economic Co-operation and Development - produces an overview of the educational spending and achievement of the leading industrialised countries.

And this latest publication shows a pattern of developed countries pumping more money and young people into higher education - with the employment evidence so far showing no signs that having more graduates means a lower premium in earnings for degree-holders.

But in the UK, the OECD figures show that between 1995 and 2002, a period overlapping between the current and previous governments, there had been an 18% increase in higher education funding - but this was only about half the OECD average.

The OECD's head of analysis, Andreas Schleicher, also said this increase was matched by a similar increase in student numbers - so that there was no real increase in funding per student.

A government spokesperson pointed to large higher education budget increases being introduced - with 6% annual increases from 2003 until next year, worth up to 10bn per year.

In terms of the proportion of youngsters entering university, in the UK much of the debate has focused on whether the government's target of 50% is too high.

Graduate earnings

But the international comparisons show that this UK target, set for the end of the decade, is already below the OECD average, which is now 53%.

South Korean students

In countries including Australia, Finland, Hungary, Iceland, Poland, Norway, Sweden and New Zealand, more than 60% of young people already enter university.

The government says although the UK lags behind in entry numbers, it has a very low drop-out rate among students - and that in terms of the proportion of young people completing degrees, the UK is seventh among OECD member countries.

Despite forecasts that graduate earnings would be eroded by an expanding number of people getting degrees, Mr Schleicher said that in the UK all the evidence pointed towards graduates continuing to gain substantial returns from better-paid jobs.

More so than in almost any other industrialised country, young people in the UK benefit economically from going to university, said Mr Schleicher.

But he pointed to the downside of this advantage for graduates - that there was a higher penalty paid by those who leave education without degrees.

And Mr Schleicher pointed to the very poor employment prospects facing those young people in the UK who leave school with few or no qualifications.

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