The Secretary of State for Education (Damian Hinds)
With permission, Mr Speaker, I would like to make a statement on the review of post-18 education and funding. While I am not announcing new policy today, I welcome the opportunity to confirm to the House details of a major review across post-18 education and funding, as announced by the Prime Minister yesterday.
Before I discuss the specifics of the review, I should highlight some of the strengths and successes of our existing post-18 system. We have a world-class higher education system. Sixteen British universities are in the world’s top 100 and four are in the top 10. We have record numbers of young people entering university, including from disadvantaged backgrounds. Our student finance system removes up-front financial barriers and provides protections for borrowers so that they only have to contribute when they can afford to do so. A university degree provides significant financial returns to the individual: graduates on average benefit from their university education by over £100,000 over their lifetime.
The Higher Education and Research Act 2017 sets the foundation for further improvements, with the Office for Students a strong voice for students and to ensure minimum standards. The director for fair access and participation will help to drive social mobility. The teaching outcomes and excellence framework measures are in the legislation as well, as is the facilitation of further diversity with new providers and shorter degrees delivered at a lower cost to students.
The Technical and Further Education Act 2017 extends the responsibilities of the Institute for Apprenticeships to include technical education, as well as introducing degree-level apprenticeships. New institutes of technology will be established, which will focus on higher-level technical skills and will be eligible for access to loans and grants for their students. T-levels are in development—a true, equal-standing alternative to A-levels.
We will build on those important reforms in this review. We will also look at parts of the system that are not working as well as they could be. Although we have seen further growth in three-year degrees for 18-year-olds, the post-18 system does not always offer a comprehensive range of high-quality alternative routes for the many young people who pursue a technical or vocational path at that stage. In universities, we have not seen the extent of increase in choice that we would have wanted. The great majority of courses are priced at the same level and three-year courses remain the norm. Meanwhile, although the funding system is a progressive one with built-in protections, those elements are not always well understood.
It is for those reasons that the Government are committed to conducting this major review to look further at how we can ensure that our post-18 education system is joined up and supported by a funding system that works for students and taxpayers. The review will look at four key strands: choice and competition across post-18 education and training; value for money for graduates and taxpayers; accessibility of the system to all; and delivering the skills that our country needs now and in the future. This means identifying ways to help people to make the most effective choices between the options available at and after 18, so that they can make more informed decisions about their futures. It is also about ensuring that there is a more diverse range of options to choose from beyond the classic three-year or four-year undergraduate degrees.
We will look at how students and graduates contribute to the cost of their studies, to ensure that funding arrangements across post-18 education are transparent and do not prevent people from accessing higher education or training. We will examine how we can best ensure that people from all backgrounds have equal opportunities to progress and succeed in post-18 education, including considering how disadvantaged students receive maintenance support, both from the Government and from universities and colleges. We will look at how we can best support education outcomes that deliver our industrial strategy ambitions by contributing to a strong economy and delivering the skills our country needs.
We are clear that we must maintain and protect key elements of our current post-18 education system that work well already. We will maintain the principle that students should contribute to the cost of their studies, and we will not place a cap on the number of students who can benefit from post-18 education. We will not regress to a system like that in Scotland, where controls on student numbers continue to restrict the aspirations of young people.
The review will be informed by independent advice from an expert panel from across post-18 education, business and academia chaired by Philip Augar, a financial author and former non-executive director of the Department for Education. To inform its advice, the panel will carry out extensive consultation and engagement with the sector, with business and with, among others, people currently or recently participating in post-18 education. The panel will publish its report at an interim stage, before the Government conclude the overall review in early 2019.
The UK is truly a world-leading destination for study and research. Record numbers of young people, including those from disadvantaged backgrounds, are entering university. However, we recognise the concerns and we must look at how we can go further to provide choice, to open up access and to deliver value for money for students and taxpayers. We must ensure that the system as a whole is delivering the best possible outcomes for young people and the economy, joining up the vocational, technical and academic routes and supported by a fair and sustainable funding system. I commend this statement to the House.
Angela Rayner (Ashton-under-Lyne) (Lab)
I thank the Secretary of State for giving me advance sight of his statement.
I welcome the Prime Minister’s admission yesterday that the system is not working. She rightly talked about the choices facing a working-class teenage girl today. I faced those choices as a working-class teenage girl myself, but every part of the education system that helped me has been attacked by this Government. I want to ask the Secretary of State first to clarify one simple point. He has claimed that there are now record numbers of students from disadvantaged backgrounds, but the House of Commons Library has confirmed today that, when we include part-time students, there are now 10,000 fewer students from under-represented areas than there were before the Government raised tuition fees to £9,000 a year. And as usual, the rest of the Secretary of State’s announcement leaves us with more questions than answers.
Let us start with the most important question. Will the review be able to recommend extra funding for education overall? The terms of reference state that it cannot make recommendations on tax and that it must follow the Government’s fiscal policies. Does that mean that the review cannot recommend anything that would increase spending? If so, can the review consider restoring maintenance grants, reducing interest rates or increasing the teaching grant? Can the Secretary of State also confirm that the terms of reference make it clear that it is not an independent review at all but one directly run by his Ministers? Given that, will he ensure that the review’s recommendations are put to this House and implemented in primary legislation that we can properly discuss and amend?
The Prime Minister admitted that the current system
“leaves students from the lowest-income households bearing the highest levels of debt”.
Does the Secretary of State acknowledge that that will always be the case with a system entirely based on loans? Does he agree with his predecessor, who has admitted that this Government were wrong to scrap maintenance grants?
Speaking to The Sunday Times, the Secretary of State said that he wants differential fees, with higher prices for subjects with the greatest earning potential. Is that policy, or was the Government’s Education Secretary not speaking for the Government? Does he understand that charging higher fees for the very courses that lead to the highest-paid jobs makes no economic sense and only widens inequality? So much for social mobility.
The Conservative party manifesto promised a review of tertiary education across the board, yet further education colleges form no part of this review, despite the hundreds of thousands of people aged 16 to 18 studying in them. Have this Government abandoned yet another manifesto commitment?
Can the Secretary of State also tell us whether student nurses are covered by the review? If not, will he give this House a debate and a vote on the regulations he is trying to sneak through to abolish their bursaries? He said that he wants funding arrangements to be transparent. The Treasury Committee, chaired by another of his predecessors, found the funding arrangements to be anything but. The Committee highlighted the “fiscal illusion” at the heart of the system, with up to £7 billion of annual debt write-offs simply missing, allowing the Government to artificially reduce the deficit by saddling young people with debt. Perhaps he can tell us whether he will take up the Committee’s recommendations. Will he finally tell us the latest estimate of the resource accounting and budgeting charge and about how it will be written off?
The truth is that a year-long review is an unnecessary waste of time and energy when action is needed now. Let me offer the Secretary of State a simple conclusion to his review: a fully costed plan to scrap tuition fees, to bring back maintenance support and to reverse the rest of the Government’s cuts to education. It is called “For the many, not the few” and that is exactly what our education system should be.
Damian Hinds
I thank the hon. Lady very much indeed for her response. She asked a number of questions and I will try to get through as many of them as I can. She is right to identify the issues of part-time participation in higher education. One of the things the review will look at is the ways in which it is possible to carry on earning in the labour force while studying. The decline in part-time study predates the 2012 reforms and indeed the change of Government in 2010, so we need to look at some of the underlying causes.
The hon. Lady asked what the review will cover. The review will cover the complete range, but the Government also believe in a framework of fiscal responsibility, and rightly so. It is only when we have a strong economy that we can have a strong education system and that we can carry on investing in our public services in the way that we are doing.
The hon. Lady asked whether it is an independent review. It is a Government review and the Government are ultimately responsible to this House and democratically. We make the decisions, but those decisions are informed and advised by an independent panel, the composition of which she knows. The legislative requirements that would follow from any changes would follow the normal processes. The same goes for the statutory instrument she asked about.
I do not want to take up too much time, but I want to set one important thing straight. When we talk about having different fees for different courses, it is about ensuring diversity and choice in the marketplace. That exists along many different axes, including shorter courses, more part-time courses and courses delivered in different ways. It is absolutely not the same as saying that there is some distinction of worth to be drawn between arts courses and science courses. With how the world economy is changing, it is also true that we are going to need more STEM graduates and more people with expertise in coding and so on, but that is a different point.
I will finish by observing that there is no such thing as “free” in higher education. Somebody must pay, and there are only two types of people who can fund higher education: those who have benefited from it and will typically earn much more over their lifetimes, and those who have not. There is a public subsidy that goes towards higher education that rightly reflects the societal benefit, but it is also right that the people who benefit contribute to the cost. The Labour alternative is to have the tab picked up entirely by other taxpayers, many of whom will not have benefited from the advantages. That is a regressive policy that would mean less money going to universities and fewer people going to university. It would be a policy for the few, not the many.
Justine Greening (Putney) (Con)
Like many Members of this House, I was the first person in my family to go to university, and wonderful universities, such as the University of Roehampton in my constituency, are now giving many young local people the same opportunity. I welcome the fact that the panel will talk to young people, which is vital because they need certainty to be able to start making informed decisions about whether to go to university. I have two points. First, does my right hon. Friend agree that social mobility must be at the heart of the panel’s thinking? Secondly, does he also agree that probably one of the worst things we could introduce would be the regressive tuition fee policy proposed by the Labour party, which would simply benefit the better-off at the expense of the worse-off in our society by introducing a cap on student numbers?
Damian Hinds
My right hon. Friend is of course completely right about the alternative policy proposed by the official Opposition, which would benefit the best-off. In contrast, as she says, we should be focusing on what we can do to promote social mobility and build on the strides that we have made in terms of young people from disadvantaged backgrounds going on to study full-time at age 18. She also mentioned the requirement that young people, or indeed older people, applying to university have certainty now. It is important for us to keep stressing that university is a good deal. If you are someone who can benefit from a university degree, we have a progressive system with plenty of protections in place, and if you can make the most of that, you should.
Carol Monaghan (Glasgow North West) (SNP)
I thank the Secretary of State for advance sight of his statement. The Prime Minister’s speech yesterday had plenty of platitudes and good intentions, but there has been absolutely nothing of substance. We have had an admission that the current system in England is not working for students. Admitting that it is wrong is one thing, but failing to correct the situation is simply incompetent. In Scotland, the Scottish National party has restored Scotland’s tradition of free higher education while maintaining the education maintenance allowance for those at school or in further education and the bursary for young people from disadvantaged backgrounds in higher education—[Interruption.] Contrary to the comments from the Government Benches, that support package works. Scottish 18-year-olds from the most disadvantaged areas are now 67% more likely to apply to higher education than 12 years ago, and they graduate with the lowest debt in the UK. Is it not time that we stopped the nonsense and abolished the fees, and matched not just Scotland but the rest of the developed world? Going to university should be based on the ability to learn, not the ability to pay.
If the fees for some less expensive degree courses are lowered, as has been rumoured, has the Secretary of State considered how he will encourage young people to study the more expensive STEM subjects that are so desperately needed in the UK? We have already seen the impact of removing the nursing bursary, with applications to study nursing in England down by 23%. How will the Secretary of State ensure that that does not happen in STEM?
Both the Government and the Labour party are trying to rewrite the history of their responsibility for the tuition fees fiasco, and it is clear that Scotland is leading the policy debate in the UK. With the average debt on graduation in England now at £50,000, how will the Secretary of State ensure that a flow of talent from all backgrounds will continue? How will he ensure that the industrial strategy is supported? Is it not time that fees were abolished?
Damian Hinds
Additional support is already provided in England for some of those key subjects that have a higher cost attached to them, and the review will consider how to incentivise the take-up of such courses. As for the broader point, I said to the hon. Member for Ashton-under-Lyne (Angela Rayner) that, if there were to be a policy along the lines that she suggested, that would mean fewer people being able to go to university, less money going to universities and disadvantaged students being impacted. She only has to look to her left towards the SNP to see exhibit A of how that works.
Several hon. Members rose—
Sir Desmond Swayne (New Forest West) (Con)
How few students actually pay 6%?
Damian Hinds
The interest rate, to which I think my right hon. Friend is referring, is currently 6.1%, but it varies with inflation. Critically, it means that those who earn more in their 20s and 30s will pay more—[Interruption.] It applies throughout the study period, as the hon. Member for Wythenshawe and Sale East (Mike Kane) should know. Thereafter, the rate varies depending on earnings. It does serve an important purpose, but it cannot be considered in isolation from all the other aspects of the system.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I welcome the Secretary of State to his post, but will he take this matter seriously? Something is deeply wrong with higher education funding. Much has been achieved, but much needs to be reviewed. Will he concentrate on skills in our country? We are not producing the right skills or giving incentives to further education colleges and private trainers—all those who are struggling at the moment.
Damian Hinds
Much achieved, but things to look at again—I could not agree more with the hon. Gentleman, because that is precisely what we are doing. As for skills, some of the ones that we are looking for are being delivered extremely well, but we need to do more. That is why we have had the big expansion in apprenticeships, the Institute for Apprenticeships, the raising of standards and, of course, the introduction of the T-levels, which he will welcome.
Robert Halfon (Harlow) (Con)
I welcome the review and the direction of travel, but my right hon. Friend will know that a fifth to a third of graduates are not getting graduate jobs and that the number of state school graduates has decreased in the past year. Is it not the case that our higher education system is not providing value for money for many disadvantaged people? That is why the review must focus on skills and on addressing social injustice.
Damian Hinds
My right hon. Friend is absolutely right about the need to focus on skills and to have social justice and equal opportunity at the heart of things. I should also mention that those who do not earn above the threshold do not repay their loan, which is an intrinsic part of the system.
Lucy Powell (Manchester Central) (Lab/Co-op)
According to the Institute for Fiscal Studies, three quarters of graduates will not repay their loans, so is it not the case that the system is not working for the taxpayer, let alone students? Therefore, would the Secretary of State have welcomed a more radical review that could have considered some of the deep-rooted problems of the current system?
Damian Hinds
I can understand why the hon. Lady asks that question, but part of the point of the system is that if someone does not earn up to a certain level, or if by the time 30 years have passed, someone has been out of the labour market, they are not expected to pay back the loan. That is deliberate, to ensure that the system is progressive and fair.
Neil O'Brien (Harborough) (Con)
Thanks to the expansion that fees have enabled, the most disadvantaged students are now nearly twice as likely to go to university if they are in England than if they are in Scotland. I am in the first generation in my family to go to university and I want my constituents to have the same opportunity. Although I welcome the review, will the Secretary of State reassure me that we will not put that progress at risk?
Damian Hinds
I absolutely reassure my hon. Friend that ensuring equal and fair access will be at the heart of what we do.
Nic Dakin (Scunthorpe) (Lab)
The Conservative party manifesto promised a review of tertiary education, so I welcome the Secretary of State’s review. However, when will he fulfil the promise to review the most underfunded part of our education system—16 to 18?
Damian Hinds
The internationally recognised definition of tertiary education is largely post-18. The hon. Gentleman is right about some of the challenges in post-16 education. A moment ago, I mentioned T-levels, for which considerably more funding will come forward. There is also the great expansion in apprenticeships.
David Evennett (Bexleyheath and Crayford) (Con)
I welcome my right hon. Friend’s statement and strongly support his review. It is essential that we deliver the skills that our country needs, and give opportunities for all. Will he ensure that the concerns and views of business and industry are taken into account in the review?
Damian Hinds
It is vital that the views of industry and business are taken fully into account. I know that the independent panel will listen to them carefully.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
The terms of reference that the Secretary of State published say that the review cannot make recommendations on tax policy and that it must make recommendations in keeping with the Government’s fiscal policies. Does that mean that there will be no new money for higher education regardless of the review’s recommendations?
Damian Hinds
As I said, we have a framework of fiscal responsibility, which we will stick to. The announcements on tax and spending are made at fiscal events, but the review has a wide remit to consider all the different aspects of the system and make recommendations.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
The Secretary of State rightly stated the principle that those who benefit must contribute. Does he agree that the alternative is regressive and means a cap and a reduction in student numbers?
Damian Hinds
My hon. Friend is right and he has only to look north of the border to see how that works.
Layla Moran (Oxford West and Abingdon) (LD)
The Secretary of State spoke about choices made at and after 18, but he will know that many students make those choices at 13 when they choose their GCSEs. The National Audit Office report on the higher education market identified high-quality careers advice and financial education as part of how we can fix the system. Will the review include that?
Damian Hinds
The hon. Lady is right to talk about the choices that are made early. That is why drawing attention to the so-called facilitating subjects can be useful for keeping people’s options open for higher education. The point also highlights why we need to make clear early in school the routes to technical and vocational as well as higher education.
Giles Watling (Clacton) (Con)
Does the Secretary of State agree that high-quality apprenticeships are key to addressing the UK’s skills shortages?
Damian Hinds
I agree entirely. That is why we have such bold ambition for what we will do on apprenticeships—not just the numbers, but with the Institute for Apprenticeships, and moving from frameworks to standards to ensure that they deliver what business needs.
Margaret Greenwood (Wirral West) (Lab)
The creative industries generate more than £90 billion for the UK economy. Assessing the value of a university degree course on graduate salary or outcomes risks undermining that important sector. What will the Secretary of State do to ensure that we support universities in producing world-class arts graduates?
Damian Hinds
The hon. Lady makes an important point and, of course, we do produce world-class arts graduates, and we have some of the finest institutions in the world doing that. On what she calls valuing degrees, I have said that at least three different considerations need to be taken account of: the cost of putting on the course, the value in earnings to the individual, and also the value to our society as well as our economy.
Michelle Donelan (Chippenham) (Con)
I am delighted that the review will address value for money for graduates. Does my right hon. Friend agree that the system does not currently have the transparency for students to make informed choices, and that that needs to be addressed?
Damian Hinds
My hon. Friend makes an important point. We have moved forward with what is called the LEO—longitudinal education outcomes—dataset to help students make those analyses directly, and indeed to help those who provide information on courses.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
The madness of the current system is that it costs students and taxpayers a fortune. Student debt is spiralling up to £55 billion, nearly half of which will be written off and picked up by general taxpayers. I urge the Secretary of State to look forensically at how we knit together further education and higher education so that we radically expand the number of earn-while-you-learn degree places, which are collapsing in great cities such as Birmingham, where they have halved in the past 12 months alone.
Damian Hinds
That was a question of two halves. In the first half, I think the right hon. Gentleman was describing what is called sharing the cost, which we do. We believe that it is right that the individual who benefits should take on part of the investment, and the taxpayer also picks up part of it. I agree entirely with the points in the second half of the question: we should have proper join-up between HE and FE. Many universities already do important technical education, and many FE colleges also conduct very good HE. We want more of a join-up.
Nigel Huddleston (Mid Worcestershire) (Con)
Many of us, from both sides of the Chamber, come from modest backgrounds and were the first in our families to go to university. Any kind of cap on numbers could seriously jeopardise the system. Will the review therefore ensure that the unintended consequences of popular but ultimately disastrous policy options are highlighted?
Damian Hinds
The review will look at a range of issues, but highlighting the downsides of some policies that may appear outwardly and initially attractive is an important part of that.
Paul Blomfield (Sheffield Central) (Lab)
Will the Secretary of State guarantee that there will be no reduction in funding for widening participation and fair access programmes as part of the review?
Damian Hinds
As the hon. Gentleman will know, there has been some great progress in widening access in terms of social class and, for example, in terms of people from black and minority ethnic backgrounds going on to university. The access programmes that universities run are part of the reason for that. The director of fair access enables us to strengthen that further, learn from what works best and ensure that we spread best practice.
Eddie Hughes (Walsall North) (Con)
We need to build 300,000 houses a year in this country. Does my right hon. Friend therefore agree that a high-quality apprenticeship in construction is an excellent alternative to incurring any debt through a university course?
Damian Hinds
Different people have different talents and orientations and enjoy different things, and it is important that we present a range. My hon. Friend is right to mention the particular requirement for construction skills, and the apprenticeship route is an important part of fulfilling that.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The review does not touch on the excessive salaries and pension pots that many vice-chancellors claim. Does the Secretary of State think that that is an insignificant factor in the current culture?
Damian Hinds
The overall remuneration of senior staff in institutions that have public support must also enjoy public confidence. The Office for Students will look at how we can ensure that that confidence is maintained.
Kevin Foster (Torbay) (Con)
I welcome the mention of apprenticeships and T-levels. Will the Secretary of State confirm that the review will cover the potential of institutes of technology to deliver them, particularly if one was built in South Devon College in Paignton?
Damian Hinds
I am not at this exact moment in a position to go into detail about Paignton, but I can confirm that institutes of technology are an important part of the piece.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Further to the answer that the Secretary of State gave my hon. Friend the Member for Scunthorpe (Nic Dakin) on the international definition of tertiary education being post-18, I point out that the Conservative party manifesto included 16 to 18 education as tertiary. Although it is the Secretary of State’s prerogative to choose his timings for inquiries, will he give an actual date for the FE review, because colleges in Stoke-on-Trent want to know?
Damian Hinds
We are constantly improving things. The level 4 and 5 review that is going on will feed into the review that we are discussing. As I have said to several Members, we want to ensure that the two sides are joined up.
Mr Philip Hollobone (Kettering) (Con)
Yesterday, when I looked, there did not seem to be a readily accessible link on the website to the review team. If members of the public want to share the benefit of their views with Mr Augar, will the Secretary of State ensure that there is an accessible, emailable link?
Damian Hinds
I will indeed ensure that it is possible to do that. There will of course be a call for evidence as part of the process.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Secretary of State has simply criticised the Scottish Government and not taken the opportunity to learn from them. Will he join me in welcoming the 2017 UCAS figures, which show a 13% increase in students from Scotland’s most deprived communities going to a Scottish university, and the overall 2% increase in applicants to universities this year from the 20% most deprived areas compared with last year?
Damian Hinds
The gap in opportunity between the disadvantaged and the advantaged in Scotland is well known to all, including the commentators who look at it, and no plucking from the air of a favourite statistic is going to change that. The fact is that the system we have in England has been effective in helping disadvantaged people to make the most of their talents if they want to go on to higher education.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Student living costs are the most pressing issue at Keele University in my constituency and certainly elsewhere in the country, where it is much more expensive to rent and simply get by. Rather than waiting an age for the conclusions of this review, should the Government not simply address this issue now, as well as the sliding scale of access to maintenance loans and the reintroduction of maintenance grants?
Damian Hinds
Bringing in maintenance loans meant it was possible to get access to more cash, and we know the cash-flow question was an important consideration, especially in enabling disadvantaged students to stay at university. I confirmed in the statement that the review will look at all the different aspects of the system.