Are investment banks really draining STEM graduates from other sectors?

Some STEM graduates building a robot. Cool. Image: Getty.

One common answer to why Britain apparently lacks engineers is that graduates who study science, engineering or maths degrees are being lured away by the big bucks of the City. But as the data from our recent report The Great British Brain Drain shows, this is nowhere near as big a problem as some have suggested.

Looking at where STEM  (science, technology, engineering and maths) graduates were working six months later shows that some did go to finance and consulting in 2013-14 and 2014-15. But this figure was low – just 7 percent followed the money to higher paid jobs in these sectors.

They were also less likely than average to be working in London, where finance wages were the highest. Whereas 24 per cent of all graduates were working in the capital six months after graduation, 21 per cent of STEM graduates were doing the same.

So where do STEM graduates go? Manufacturing was the most popular (13 per cent found a job in this sector), while education was a close second (12 per cent). This was followed by computer programming, consultancy and related activities (8 per cent), health (7 per cent) and architectural and engineering activities (6 per cent).


Of these top five industries, the publicly-funded sectors of health and education – which employ close to one-fifth of new STEM grads – stand out as not being directly relevant to STEM subjects. It is therefore these sectors which provide the biggest competition for STEM graduates, not finance or consultancy – with education recruiting double the number of STEM graduates that finance and consulting did.

Of course, we should not be discouraging STEM graduates to go into teaching – it makes sense to have maths and science graduates teaching these subjects. But in the same vein, having maths graduates applying their quantitative skills in finance also makes sense, given the skills that this sector requires and the role that it plays in the national economy.

As such, if the short supply of graduates with STEM degrees is a problem for employers, then it is likely to be down to the lack of graduates overall, rather than a result of competition from non-STEM sectors. And it is on this issue that policymakers should look to intervene.

You can see more of our analysis on the new graduate labour market in the Great British Brain Drain.

 
 
 
 

Two east London boroughs are planning to tax nightlife to fund the clean up. Will it work?

A Shoreditch rave, 2013. Image: Getty.

No-one likes cleaning up after a party, but someone’s got to do it. On a city-wide scale, that job falls to the local authority. But that still leaves the question: who pays?

In east London, the number of bars and clubs has increased dramatically in recent years. The thriving club scene has come with benefits – but also a price tag for the morning clean-up and cost of policing. The boroughs of Hackney and Tower Hamlets are now looking to nightlife venues to cover these costs.

Back in 2012, councils were given powers to introduce ‘late night levies’: essentially a tax on all the licensed venues that open between midnight and 6am. The amount venues are expected to pay is based on the premises’ rateable value. Seventy per cent of any money raised goes to the police and the council keeps the rest.

Few councils took up the offer. Four years after the legislation was introduced, only eight local authorities had introduced a levy, including Southampton, Nottingham, and Cheltenham. Three of the levies were in the capital, including Camden and Islington. The most lucrative was in the City of London, where £420,000 was raised in the 2015-16 financial year.

Even in places where levies have been introduced, they haven’t always had the desired effect. Nottingham adopted a late night levy in November 2014. Last year, it emerged that the tax had raised £150,000 less than expected in its first year. Only a few months before, Cheltenham scrapped its levy after it similarly failed to meet expectations.


Last year, the House of Lords committee published its review of the 2003 Licensing Act. The committee found that “hardly any respondents believed that late night levies were currently working as they should be” – and councils reported that the obligation to pass revenues from the levy to the police had made the tax unappealing. Concluding its findings on the late night levy, the committee said: “We believe on balance that it has failed to achieve its objectives, and should be abolished.”

As might be expected of a nightlife tax, late night levies are also vociferously opposed by the hospitality industry. Commenting on the proposed levy in Tower Hamlets, Brigid Simmonds, chief executive at the British Beer and Pub Association, said: “A levy would represent a damaging new tax – it is the wrong approach. The focus should be on partnership working, with the police and local business, to address any issues in the night time economy.”

Nevertheless, boroughs in east London are pressing ahead with their plans. Tower Hamlets was recently forced to restart a consultation on its late night levy after a first attempt was the subject of a successful legal challenge by the Association of Licensed Multiple Retailers (ALMR). Kate Nicholls, chief executive at the ALMR, said:

“We will continue to oppose these measures wherever they are considered in any part of the UK and will urge local authorities’ to work with businesses, not against them, to find solutions to any issues they may have.”

Meanwhile, Hackney council intends to introduce a levy after a consultation which revealed 52 per cents of respondents were in favour of the plans. Announcing the consultation in February, licensing chair Emma Plouviez said:

“With ever-shrinking budgets, we need to find a way to ensure the our nightlife can continue to operate safely, so we’re considering looking to these businesses for a contribution towards making sure their customers can enjoy a safe night out and their neighbours and surrounding community doesn’t suffer.”

With budgets stretched, it’s inevitable that councils will seek to take advantage of any source of income they can. Nevertheless, earlier examples of the late night levy suggest this nightlife tax is unlikely to prove as lucrative as is hoped. Even if it does, should we expect nightlife venues to plug the gap left by public sector cuts?