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Tories would swap ‘rip-off’ degrees for apprenticeships

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Hazel Shearing,Alice Evans

PA Prime Minister Rishi Sunak is shown how to splice a wire by a field service engineer apprenticePA

The prime minister visited apprentices in Liskeard, Cornwall, on Wednesday

The Conservatives have promised to scrap some university courses in England to help fund 100,000 apprenticeships per year if they win the July election.

The party says it would replace the “worst-performing” degrees that it considers a “rip-off” because of high drop-out rates and “poor” job prospects.

Labour criticised the government over a decline in the number of new apprentices.

It said it would prioritise “gearing” apprenticeships towards young people.

The Liberal Democrats said the government had treated apprentices like “second-class workers”.

The Conservatives said former Labour Prime Minister Tony Blair’s ambition to get half of young people going to university had “led to low-value degrees ballooning”.

In England, the Office for Students (OfS) can already investigate and sanction a university – for example with fines – if it falls below certain standards.

The Conservatives say they would introduce a new law allowing the independent regulator to go further and completely close the poorest-performing university courses.

They would be determined by drop-out rates, job progression and future earnings potential, the party said in a press release.

Speaking at a railway depot in Cornwall on Wednesday, Prime Minister Rishi Sunak added: “University is great and it makes a fantastic option for young people, but it’s not the only option… And what we do know is that there are university degrees that are letting young people down.”

Schools Minister Damian Hinds told BBC Radio 4’s Today programme there had been a “huge increase in quality” in apprenticeships under Conservative governments. Now was the time to “make sure we’re maximising the available opportunities for young people” and supporting businesses with the new scheme, he added.

Mr Hinds said it would not be “right or fair” on current students to say which courses his party considered to be “rip-off” degrees, and said it varied by individual courses rather than by subject.

“Take computer science – you get earnings outcomes from young people studying computer science degrees which will range from £18,000 to £80,000.”

A graphic which reads 'more on general election 2024'

The Conservative Party estimated that the government would save £910m by 2030 if it scrapped courses that taught 13% of students.

It said this was because the taxpayer “offsets” student loans when graduates do not earn enough money to pay them back. The logic here is that removing courses that lead to lower earnings would result in less unpaid debt.

It said its savings would allow the government to invest in 100,000 more apprentices per year by the end of the next Parliament.

The Conservatives’ calculations are based on the assumption that 75% of the students who would have enrolled on those courses would go into employment or apprenticeships instead.

However, there is no limit on the overall number of students that universities in England can admit – so universities could recruit students to other degree courses if some were closed.

The Institute for Fiscal Studies said this meant it was “unclear” whether savings from scrapping “low-value” courses would be large enough to fund the Tories’ expansion plan.

Birmingham City University (BCU) vice-chancellor, Prof David Mba, said the prospect of more apprenticeships was “great” but he did not want that to be at the expense of university courses.

He said the idea that a degree was a rip-off if it did not reach a minimum earning threshold was “bonkers”, particularly for creative subjects.

“Let’s look at my Royal Birmingham Conservatoire. We train musicians, pianists, over three years; they end up with a degree and it will take them probably a while, as a creative out freelancing, to build up a career and to reach certain earning levels that might be commensurate with what the government think it should be,” he told BBC News.

Birmingham City University Prof David Mba smiles at the cameraBirmingham City University

Prof David Mba has 1,500 degree apprentices at Birmingham City University

Prof Mba said many of his students commuted from deprived parts of the West Midlands, and that BCU’s courses – including its degree apprenticeships – offered “social mobility”.

Sabeeha Anium, who studies computer science at BCU, said her degree was “not a rip-off” as she “gets to learn different things” every day.

Speaking to the BBC on her lunch break, she added: “Every single degree is valuable.”

Aaryan Shabbir, who is on the university’s accelerated two-year digital marketing course, said he would welcome seeing more apprenticeships because of concerns around student debt and finding a job post-degree.

He added: “If I’d [known] more about apprenticeships I would’ve done an apprenticeship.”

BBC/Hope Rhodes Sabeeha Anium smiles at the cameraBBC/Hope Rhodes

Sabeeha Anium studies computer science at Birmingham City University

The Association of Employment and Learning Providers welcomed the announcement and said it hoped other political parties would “match this additional funding”.

Chief executive Ben Rowland said: “Whichever party finds itself in government, there will need to be a commitment to encouraging more employers [to] offer apprenticeship opportunities.”

Neil Carberry, chief executive of the Recruitment and Employment Confederation trade body, said the announcement was “using apprenticeships to denigrate university courses, when we need both to flourish if we’re going to grow”.

Apprenticeships are funded partly by the taxpayer as well as by the apprenticeship levy, which is essentially a tax paid by bigger businesses. Those firms, as well as smaller ones, can access the cash to spend exclusively on training apprentices.

Mr Carberry said the levy made apprenticeships more expensive to deliver – particularly lower-level apprenticeships aimed at younger people – so firms were better off if they did fewer of them.

He said while higher-level apprenticeships were replacing degrees for some people, they did not help people who would not have gone to university and needed a different route to skilled work.

Apprenticeship dropout rates in England are about one in two.

Just over half (54.6%) of apprentices completed and passed a final assessment in 2022-23 – well below the government’s 67% target by the end of 2024-25.

Asked about the dropout rate, Mr Hinds said: “It is true that some young people start an apprenticeship and then they don’t [finish it], and then they take a different turn in their career. When they do that, they’ve accumulated of course skills and experience in that job, and they’ve been earning.

“That has long been true in apprenticeships.”

Labour’s shadow education secretary, Bridget Phillipson, said the announcement was “laughable” because the Conservatives had “presided over a halving of apprenticeships for young people”.

She reiterated her party’s promises to introduce technical excellence colleges aimed at training workers for local industries, and to reform the apprenticeship levy into a “growth and skills levy”, which the party says would allow businesses to spend up to half of their levy payments on “more flexible training courses”.

Munira Wilson, education spokeswoman for the Liberal Democrats, said the Conservatives had “broken the apprenticeship system” and “urgent reform is needed”.

“The shockingly low pay for those on apprenticeships will remain, doing nothing to encourage more people to take apprenticeships up or tackle soaring drop-out rates,” she said.

Additional reporting by Branwen Jeffreys and Hope Rhodes.



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Explainer-What are the Fed’s bank ‘stress tests’ and what’s new this year? By Reuters

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By Pete Schroeder and Michelle Price

WASHINGTON (Reuters) – The U.S. Federal Reserve is due to release the results of its annual bank health checks on Wednesday at 4:30 p.m. ET (2030 GMT). Under the “stress test” exercise, the Fed tests big banks’ balance sheets against a hypothetical scenario of a severe economic downturn, the elements of which change annually.

The results dictate how much capital those banks need to be deemed healthy and how much they can return to shareholders via share buybacks and dividends. This year, big U.S. lenders are once again expected to show they have ample capital to weather any fresh turmoil in the banking sector.

WHY DOES THE FED ‘STRESS TEST’ BANKS?

The Fed established the tests following the 2007-2009 financial crisis as a tool to ensure banks could withstand a similar shock in future. The tests formally began in 2011, and large lenders initially struggled to earn passing grades.

Citigroup, Bank of America, JPMorgan Chase & Co, and Goldman Sachs Group (NYSE:), for example, had to adjust their capital plans to address the Fed’s concerns. Deutsche Bank’s U.S. subsidiary failed in 2015, 2016 and 2018.

However, years of practice have made banks more adept at the tests and the Fed also has made the tests more transparent. It ended much of the drama of the tests by scrapping the “pass-fail” model in 2020 and introducing a more nuanced, bank-specific capital regime.

HOW ARE BANKS ASSESSED NOW?

The test assesses whether banks would stay above the required 4.5% minimum capital ratio – which represents the percentage of its capital relative to assets – during the hypothetical downturn. Banks that perform strongly typically stay well above that. The nation’s largest global banks also must hold an additional “G-SIB surcharge” of at least 1%.

How well a bank performs on the test also dictates the size of its “stress capital buffer,” an additional layer of capital introduced in 2020 which sits on top of the 4.5% minimum.

That extra cushion is determined by each bank’s hypothetical losses. The larger the losses, the larger the buffer.

THE ROLL OUT

The Fed will release the results after markets close. It typically publishes aggregate industry losses, and individual bank losses including details on how specific portfolios – like credit cards or mortgages – fared.

The central bank typically does not allow banks to announce their plans for dividends and buybacks until a few days after the results. It announces the size of each bank’s stress capital buffer in the subsequent months.

The performance of the country’s largest lenders, particularly JPMorgan, Citigroup, Wells Fargo & Co, Bank of America, Goldman Sachs, and Morgan Stanley, are closely watched by the markets.

TEST IN LINE WITH 2023

The Fed changes the scenarios each year. They take months to devise and test a snapshot of banks’ balance sheets at the end of the previous year. That means they risk becoming outdated.

In 2020, for example, the real economic crash caused by the COVID-19 pandemic was by many measures more severe than the Fed’s scenario that year.

After the failures of mid-size lenders Silicon Valley Bank, Signature Bank (OTC:) and First Republic last year, the Fed was criticized for not having tested bank balance sheets against a rising interest rate environment, and instead assuming rates would fall amid a severe recession.

This year’s test is broadly in line with the 2023 test, with the hypothetical unemployment rate under a “severely adverse” scenario rising 6.3 percentage points compared with 6.4 last year.

STRESSES IN COMMERCIAL REAL ESTATE

The exam also envisages a 40% slump in the prices of commercial real estate, an area of concern over the past two years as lingering pandemic-era office vacancies and higher for longer interest rates stress borrowers.

In addition, banks with large trading operations will be tested against a “global market shock,” and some will also be tested against the failure of their largest counterparty.

For the second time, the Fed is also conducting “exploratory” shocks to banks. This year’s test also includes additional exploratory economic and market shocks which won’t help set capital requirements, but will help the Fed gauge whether it should broaden the test in the future. The market shocks will apply to the largest banks, while all 32 will be tested on the economic shocks.

Fed Vice Chair for Supervision Michael Barr has said multiple scenarios could make the tests better at detecting banks’ weaknesses.

WHICH BANKS ARE TESTED?

In 2024, 32 banks will be tested. That’s up from 23 last year, as the Fed decided in 2019 to allow banks with between $100 billion and $250 billion in assets to be tested every other year.

These are the banks being tested in 2024:

Ally Financial (NYSE:)

American Express (NYSE:)

Bank of America Corporation (NYSE:)

The Bank of New York Mellon (NYSE:) Corporation

Barclays US LLC

BMO Financial Corp.

Capital One Financial Corporation (NYSE:)

The Charles Schwab Corporation (NYSE:)

Citigroup

Citizens Financial (NYSE:) Group, Inc.

Credit Suisse Holdings (USA)

DB USA Corporation

Discover Financial Services (NYSE:)

Fifth Third Bancorp (NASDAQ:)

Goldman Sachs Group, Inc.

HSBC North America Holdings

Huntington Bancshares (NASDAQ:)

JPMorgan Chase & Co. (NYSE:)

Keycorp

M&T Bank Corporation (NYSE:)

Morgan Stanley

Northern Trust Corporation (NASDAQ:)

The PNC Financial (NYSE:) Services

RBC US Group Holdings LLC

Regions Financial Corporation (NYSE:)

Santander (BME:) Holdings USA

State Street Corporation (NYSE:)

TD Group US Holdings LLC

Truist Financial (NYSE:) Corporation

UBS Americas Holding LLC

© Reuters. FILE PHOTO: An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo

U.S. Bancorp

Wells Fargo & Company (NYSE:)





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Shadow health secretary ‘disgusted’ by treatment of junior doctors

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Changing the NHS’s funding model and introducing an insurance system for dentistry in the UK would be a “dangerous slippery slope”, Labour has said.

Speaking on the BBC’s Today programme, shadow health secretary Wes Streeting said the issues facing the NHS were not down to the funding model, but were due to “where the money goes.”

Labour has promised to create 700,000 extra dental appointments per year if elected, to manage the backlog of patients requiring treatment. 

Streeting said if Labour were to win the election, he would “get the British Dental Association in” to start the process of reforming NHS dentistry. 

“We’ve got to deal with the crisis that is staring us in the face.”



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The best time of day to exercise, according to science

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Claire Zulkey, a 44-year-old Chicago-area freelance writer, has a well-established morning routine: She gets her kids off to school, turns the television to a favorite show, and gets moving with a full-body workout. Once completed, Zulkey showers and settles in to work.

Meghan Cully, in contrast, puts in a full day’s work before hitting the gym on her way home. The 32-year-old graphic designer from Maryland is a self-described “slow starter” in the mornings and finds it difficult to get moving early in the day.

Each gets their workout, but is one time of day better than the other? 

Consider your fitness goals 

A small study out of Skidmore College examined the benefits of morning versus evening exercise for both women and men. Paul J. Arciero, Ph.D., professor for health and human physiological sciences department at Skidmore, was the lead investigator. 

“We had the groups follow the same multi-modal routine, randomly dividing them into evening and morning groups,” he says. “We found women and men respond differently to different types of exercise depending on the time of day, which surprised us.”

The study revealed that for women who want to lower blood pressure or reduce belly fat, morning exercise works best. Those women striving for upper body muscle gains, endurance, or overall mood improvement should consider evening workouts.

For the male participants, the findings were somewhat flipped: Evening exercise lowers blood pressure, the risk of heart disease, and feelings of fatigue, while similar to women, they burn more fat with morning exercise. To understand the reasons behind the results, additional research is required.

What might be most ideal, then, says Arciero, is adjusting your workouts to the time of day when you can get the most bang for your buck. “If you’re a female, then, you might want to perform your cardio workouts in the morning, and your strength training in the evening,” he says.

Early birds versus night owls

“For many people, [the best time to exercise] will depend on their chronotype,” says Jennifer J. Heisz, Ph.D., associate professor of kinesiology at McMaster University and author of Move the Body, Heal the Mind.

Chronotype is your body’s natural inclination to sleep at a certain time—it’s what determines whether you’re a night owl or an early bird. For the 25% of the population that considers themselves a night owl, getting both enough sleep and enough exercise can be difficult, says Heisz. 

“Exercising at night can sometimes be challenging with societal norms,” she explains. “You might naturally stay up until midnight and exercise late at night, but if you have to be out the door the next morning at 7, you’re not getting enough sleep.”

Sleep–which provides your body the necessary time to recover and make gains from exercise–should always be a priority when it comes to exercise. Regardless of research on the benefits of certain exercises at particular times of the day, your results will be diminished if it doesn’t allow enough time for sleep.

How to shift your workout time

If your goal is to change up your routine to adhere to Arciero’s findings related to exercise time of day, or simply to make exercise more convenient even if it runs against your chronotype, Heisz says it’s possible. 

“If you’d like to shift to a morning routine, for instance, the good news is that both the sun and exercise can reset your biological cues,” she says. “Put them together by exercising outside in the sunshine, and it’s a powerful effect.”

For older adults, whose tendency is to sometimes awaken too early and not fall back to sleep, the desired shift might be to evening exercise. “This might help with falling asleep later and staying asleep longer,” says Heisz.

If you’re worried that evening workouts will impact your ability to fall asleep, shift your workouts to gentler forms of exercise, like yoga. Avoid vigorous exercise like running, which might elevate your heart rate and make it tougher to wind down. 

For evening exerciser Cully, the trick is working out on the way home from work, which is spaced far enough from bedtime not to impact her sleep. “If I went home first, I probably wouldn’t exercise,” she admits. “But then I have my whole evening to wind down.”

No matter when you prefer to exercise, what’s most important, according to Arciero, is including a multi-modal approach. For his study, Arciero developed a program that does just that, called RISE—resistance training, sprint interval training, stretching, and endurance. “We found that when doing each type of exercise once a week, compliance was higher and so was the benefit,” he explains. 

More on workouts and exercise:



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