Higher Education Funding

Lord Mair Excerpts

Thursday 12th September 2024 Lords Chamber

[Lord Mair (CB)]

My Lords, it is a particular pleasure to follow the excellent maiden speech of the noble Lord, Lord Tarassenko. As a Cambridge engineer, I speak on behalf of the whole House in extending a very warm welcome to an Oxford engineer. The noble Lord is a distinguished electrical engineer and a world-leading expert in the application of signal processing and machine learning to healthcare. His many achievements include being a founding director of the Institute of Biomedical Engineering at Oxford, which was awarded a Queen’s Anniversary Prize for new collaborations between engineering and medicine, delivering significant benefit to patients. This House does not have enough engineers, so we are very fortunate to have the noble Lord as a new Member. We look forward to benefiting from his considerable engineering and academic expertise and to his many contributions to the activities of the House.

I am grateful to my noble friend Lord Krebs for introducing this important debate and congratulate him on his thoughtful opening speech. I will briefly comment on tuition fees and international students, declaring an interest as an emeritus professor of engineering at Cambridge University.

On tuition fees, the current higher education funding model is based on sharing the financial burden between student and taxpayer. However, the value to English universities of the maximum home tuition fee has been steadily eroded by inflation. The current level of £9,250 is worth only £6,000 in 2012 prices—2012 being when the £9,000 fee was introduced. Analysis by the Russell group shows that the average deficit universities incur for teaching each home undergraduate student was £1,750 in 2021-22 and will increase to around £4,000 in 2024-25. This is clearly unsustainable and is already causing serious financial difficulty for most English universities. Indeed, in many cases it is causing a crisis.

Under the present system, the Government may therefore have no choice but to allow universities to increase tuition fees in line with inflation. This would, of course, be unpopular and have a regrettable effect on student debt. However, to minimize the impact, the forthcoming review should consider the key conditions of the student loan: the repayment threshold, the period of repayment and the effective interest rates. Importantly, any increase in tuition fees should be accompanied by an increase in maintenance grants for students from disadvantaged backgrounds, to offset any increase in debt for the poorest students.

On international students, from January this year, those on master’s courses are no longer able to bring their dependants with them for the duration of their studies. Postgraduate research students continue to benefit from an exemption to this rule; it is to be hoped that this permission continues, as it is immensely valuable for universities to recruit postgraduate research students against international competition. The Russell group calculates that a single cohort of international students generates a £37 billion net economic impact for the UK. It is therefore crucial that the UK’s visa offer to international students can compete with that made by other major higher education destinations—the US, Canada, Australia and Germany. The level of fees, the length of post-study leave and dependants’ rights are all important factors in a student’s choice.

The UK punches well above its weight in global research rankings. Our outstanding research plays a key role in attracting investment and boosting the economy, especially in science, engineering and technology. International postgraduate research students play an increasingly vital role in achieving this, as outlined by my noble friend Lord Tarassenko; they and all other international students also play a key role in funding our universities. It is therefore essential for the prosperity of the UK and of our universities that our visa offers remain competitive globally.