Jacqui Smith tells universities to back local skills

Jacqui Smith's message to universities is bigger than a funding speech and broader than a jobs speech. In her address to the 2026 Universities UK conference, the Skills Minister said she would keep working on financial stability, access and quality, but wanted to focus on something else: how universities can help shape local economies and local lives. If you do not spend your week reading education policy, here is the short version. The government wants universities to be judged not only by prestige or research output, but by whether they help people gain skills, move into good work and widen opportunity in the places around them.

Smith said UK higher education still has plenty to boast about, with four universities in the global top 10 and 16 in the top 100. She also described higher education as one of the country's strongest exports, worth more than £26 billion in 2024, and said universities contribute £265 billion a year to the wider economy through teaching, research and innovation. She added that upcoming visits to Saudi Arabia, China and Vietnam would be another reminder of the sector's international reach. That helps explain one of the speech's key ideas: universities as anchor institutions. In plain English, that means they are not just places where lectures happen. They are big local employers, research hubs, training providers and civic partners, often shaping what kinds of jobs, services and investment appear in a town or city.

The speech also tried to shut down a false choice that often dominates education debates. Smith did not present university and technical education as rivals. She said she wants more young people to go to university and more young people to do apprenticeships, while also arguing that further education and technical routes should stop being treated as second best. The figures she used were stark. Nearly 1 million young people are not in education, training or employment, while about a quarter of job vacancies exist because employers cannot find people with the right skills. **What this means:** the government is trying to build a post-16 system where degrees, higher technical qualifications and apprenticeships sit alongside one another, instead of being treated as status labels.

That is why Smith kept returning to higher-level learning. The government's target is for two thirds of young people to take part in higher-level study by the age of 25, whether that is through a degree, an apprenticeship or a Level 4 or 5 qualification. **Why Level 4 and 5 matter:** they sit above school or college Level 3 study but below a full degree, and cover many of the technical skills employers say they need most. She linked that target to a chain of reforms already under way. New technical education routes for 14-year-olds, the proposed V Levels for 16 to 19-year-olds and the Lifelong Learning Entitlement are all meant to make study more flexible. Smith said the LLE will open courses in January and let people fit learning around work or childcare, with 130 providers already approved to offer modular study from launch and another round of expressions of interest due in October.

There was also a quieter but important signal about degrees themselves. Smith said ministers plan to consult on flexible degree reform, so students can keep their options open even while they are studying. That points to a future where moving between types of provision, or combining them, becomes easier than it is now. For students, that could mean fewer dead ends. For universities and colleges, it could mean more shared delivery, more employer input and more pressure to show that a course leads somewhere useful. The government believes modular funding, higher technical qualifications and new degree rules can make that shift possible, but it will ask a lot of institutions that are already stretched.

The most concrete part of the speech came when Smith turned to local examples. She highlighted Leeds Beckett University working with FinTech North and Graduates West Yorkshire to connect graduates with local employers. She pointed to Keele and Staffordshire universities working with the Newcastle-under-Lyme and Stafford Colleges Group on degrees, higher technical qualifications and apprenticeships. She also cited UWE Bristol and University Centre Weston, which are working with employers including Airbus, Rolls-Royce and GKN Aerospace on engineering degree apprenticeships. These examples matter because they show what ministers mean by a place-based approach. Smith tied this to the Prime Minister's promise that growth should not pile up only in places that are already prosperous. **What this means for readers:** your course, your work placement and your local job market are increasingly being talked about as part of the same story.

Smith also welcomed Universities UK's new Future Jobs Roadmap, especially its goal that every undergraduate should have the chance to take part in work-based learning by 2035. That is a long runway, but the direction is clear: employability is moving closer to the centre of higher education policy, not sitting off to one side as an optional extra. To support that, Smith said the Office for Students has been working with the Department for Business, Innovation, Science and Trade, Skills England and others on a new market monitoring tool. The aim is to show universities and local leaders where higher-level subjects are already being taught, where research strengths sit and where gaps in local supply or demand may exist. In theory, that should make local planning less guesswork and more evidence-led.

The speech did not ignore the pressure universities are under. Smith acknowledged economic uncertainty, demographic change, fast-moving technology and the financial strain that has forced difficult choices in recent years. Her answer was to point to the government's decision to raise tuition fee caps with inflation, which she said could bring the sector an extra £6 billion over the next five years. Taken together, the speech reads as both an invitation and a test. Universities are being promised more policy attention and a steadier income stream, but ministers also expect them to prove their value in classrooms, workplaces and local communities at the same time. If you are choosing between university, an apprenticeship or another technical route, the message is that the government wants those options to connect more easily. If you teach, advise or support young people, the bigger lesson is simple: the old university-versus-vocational argument is giving way to a more mixed and, in some ways, more honest picture of what education is for. The whole pitch rests on a promise that education should improve lives without leaving whole communities behind.