There is nothing wrong with getting a degree. I have one, as do many reading this.

But higher education is by no means the only route to success in life. On Wednesday, we will celebrate the fourth national VQ Day, highlighting the stories of people who have achieved vocational success in the last 12 months.

This year’s VQ Day comes at a time when parents are increasingly concerned about their children’s futures. Until recently, parents took it for granted that university offered not just a rite of passage, but a passport to high-status, well-paid careers.

However, there are clear signs that the supply of graduates now exceeds demand, particularly in the arts and social sciences. The Association of Accounting Technicians recently reported that about 40 per cent of new graduates in employment are underemployed, doing jobs that don’t make good use of their degrees.

And that is of the graduates lucky enough to find jobs at all. The association’s research also showed that people with a level 3 vocational qualification (VQ) were more likely to be in employment than those with a degree.

The message is not lost on parents. A survey of middle-income parents by the education foundation Edge found that nearly three-quarters worried about their children’s ability to pay back student loans. More than a third said they used to want their offspring to go to university but now don’t believe it is the best option.

The UK Commission for Employment and Skills describes our current skills profile as a “dumb-bell”. By international standards, we have a good proportion of people with degree-level skills, and lots of low-skilled and unskilled people, but too few at intermediate levels with level 3 to 4 qualifications.

This challenge is likely to get worse before it gets better. More technicians are needed in emerging sectors such as the low-carbon economy, as well as traditional areas such as construction and engineering, to replace the retiring baby-boomers.

Faced with skills shortages, employers typically react in one of two ways: either they recruit graduates who end up underemployed, or they recruit from abroad. If all else fails, they downsize or go out of business.

Common sense says we need to boost the number of young people choosing vocational routes. As I see it, three steps are critical.

First, we must press ahead with university technical colleges (UTCs), which will provide a broad curriculum for 14 to 19-year-olds, but with a clear technical bias. Students will spend a large part of every day learning by making and doing. The rest of their time, they will learn English, maths, science, languages and humanities, but with a twist: German for engineering, not Goethe; the history of invention, not the dates of battles. The chancellor has announced funding for 24 UTCs. With a little stretch and imagination, we can make the money go further - and there is certainly demand.

Second, we have to raise the status of FE and apprenticeships. Colleges have always suffered from a lack of media attention, but initiatives such as VQ Day, Colleges Week and the Beacon Awards are increasingly shining a spotlight on their success. Similarly, apprenticeships are enjoying unprecedented success. Competition for apprenticeships with Rolls-Royce and BT is now fiercer than for places at Oxford or Cambridge. And thanks to support from the Government, the total number of apprenticeships is rising.

Third, we need better careers advice. A study by Edge of 25 to 35-year- olds with VQs found that only 22 per cent said their careers advice had been “slightly” or “very” useful. The Education Bill now before Parliament will require maintained schools to secure impartial careers guidance for pupils aged 13-16, but ministers have said they are willing to extend the age range both upwards and downwards.

We can no longer take it for granted that a degree is a passport to success. Huge opportunities lie in the middle ground. We owe it to today’s young people to provide the information and support they need to make the right choice.

Lord Baker is a former education secretary, now chairman of the independent education foundation Edge. For more information on VQ Day visit www.vqday.org.uk.