Universities

Baroness Barran Excerpts

Thursday 14th November 2024 Lords Chamber

[Baroness Barran (Con)]

My Lords, I join other noble Lords in congratulating the noble Baroness, Lady Warwick of Undercliffe, on securing this important and excellent debate. I thank all noble Lords for their insightful and varied contributions.

I welcome the blueprint prepared by Universities UK and its distinguished commissioners. The breadth of the report makes it hard to draft a succinct speech, but it underlines the scale, complexity and opportunities that our universities offer. I also welcome the outcomes that the blueprint aspires to: expanding opportunity, improving collaboration across the tertiary sector, generating stronger local growth, securing our future research strength and establishing a global strategy for our universities.

I am grateful to my noble friend Lord Lucas for being the first and possibly only Member to suggest that the report could have been a bit more self-critical. I would have been fascinated to hear more about how technology in general, and AI in particular, will in future shape our degrees, our teaching, our research and the university experience overall—but that is perhaps for another document. I also absolutely agree with my noble friend about transparency on costings and the differential impact from different universities and institutions—that would be really welcome.

This debate comes hot on the heels of that led by the noble Lord, Lord Krebs, recently on the sustainability of the university sector. The blueprint covers the funding picture in detail, in all its aspects. The blueprint argues that there are two phases to achieving the outcomes to which it aspires. The first is about more funding for teaching, student maintenance and research, and the second phase relates to the transformation agenda, which is set out in the document to be led by universities and supported by government. Both are then underpinned by improved regulation and better measurement of impact. I wonder what the Minister thought when she read that and whether she shares my concern that the two phases need to be linked and that the transformation must be in parallel with any additional funding; otherwise, the delicate balance between what is paid for by the taxpayer and what is paid for by the graduate might tip too far towards the taxpayer.

Similarly, what are the Minister’s thoughts about fees increasing in future in line with inflation? As noble Lords have pointed out, the increase in employers’ national insurance contributions has, in effect, wiped out the increase in fees which her right honourable friend the Secretary of State spoke about earlier this month. If fees will increase in line with inflation in future, does the Minister agree that this must be mirrored by an increase in the quality of degrees as it relates to high-skilled employability? As the blueprint itself states, higher earnings are clearly not the only reason to go to university, but they are an important one which should not be dismissed and without which we will not achieve the faster economic growth that we all aspire to.

Does the Minister agree with what the Institute of Fiscal Studies said in an article published in September this year, in which it talked about potential changes to the fiscal rules? It said:

“Another issue is that departments may also face new incentives to design policies that create financial assets (e.g. student loans rather than a graduate tax to finance higher education) purely”—


I emphasise “purely”—

“because of differences in how the accounting treatment affects ease of compliance with a”

public sector net financial liabilities target. How will the Minister ensure that policy in this area, which is so important, is not distorted and other options for reform are not rejected because of this potential conflict of interest?

My noble friend Lady Bottomley talked about room for more radical and innovative approaches. The blueprint rightly raises important questions about cross-subsidisation of different subjects and of research and, indeed, describes this as “not fit for purpose” and “unsustainable”. I would be grateful for the Minister’s thoughts on that.

The blueprint also raises the thorny issue of the affordability of the teacher pension fund for universities. What is the Government’s attitude to giving universities more flexibility in relation to pensions?

The blueprint sets out an ambitious vision for research in our universities, and Universities UK rightly focuses on the importance of R&D and of full cost recovery. I confess that I am concerned at the prospect of having a target for R&D spend as a percentage of GDP and would rather focus strategically on the areas of research that yield the highest social and economic impact. The data in the report clearly shows that full economic cost recovery is highest in the most research-intensive universities, at 74%, compared with below 50% for the less research-intensive ones, although I totally accept the point made by the noble Lord, Lord Krebs, about the absolute size of the shortfall in our largest research institutes. I wrote in my notes that I am to make “jam” points, and then could not remember what I meant, but I think this is about spreading the jam, which he mentioned. I do not know whether there were recovery percentages by subject in the report, but it would be interesting to understand where we should focus for maximum impact and affordability.

In the debate that the noble Lord, Lord Krebs, led recently, there was a discussion about increased specialisation in our universities, and the noble Lord, Lord Rees of Ludlow, raised the subject again today. Does the Minister have more to say about the Government’s view on moving to more specialisation between research and teaching universities, particularly in a world where the giant tech companies have more to spend on research than all our universities combined?

Despite having more time than other noble Lords, as ever my speech is too long. I am going to skip ahead to the section on local growth. I was glad that the noble Baroness, Lady Prashar, highlighted the impact of Royal Holloway, in financial terms and the partnership that it has created. The report highlights the regional disparities that all of us across the House recognise and which so urgently need to be addressed. I remember when I was academies Minister visiting schools in some of the most deprived areas of England, where those children had exactly the same aspirations as their fellows in London and the south-east but a fraction of the opportunities. On the moral purpose, it is an area where universities do, and can do more to, make a huge contribution. I am really grateful to universities with active outreach programmes in those areas of the country for the work that they do.

Finally, in wrapping up, I echo the questions to the Minister from other noble Lords about the Horizon programme and what work the Government are doing to engage and shape its framework. On regulation, we were delighted and slightly horrified—delighted by the calls to streamline regulation but horrified by the diagram on page 107 of the report showing the extent of regulation in the sector. We remain concerned about the delays in the implementation of the freedom of speech Act.

As ever, it has been a privilege to listen to the points made. I look forward to the Minister’s remarks.