Higher Education: Funding

Lord Maples Excerpts

Wednesday 27th October 2010 Lords Chamber

[Lord Maples]

My Lords, that was one of many very interesting speeches in this debate. I share the noble Lord’s concern about a levy and the capping of fees because, if there is a benefit in a competitive model, it is in allowing people to do what they want, which an artificial cap would stifle. I do not share the noble Lord’s concern about competition. I shall return to that, because that concern has been expressed by a great many noble Lords today.

I bring no particular expertise to the debate except as a long-ago consumer of higher education and currently a vicarious consumer through my children. However, I see just a hint of complacency in the status quo. We keep going on about the wonderful universities that we have. An international reputation surrounds about three or four, maybe five or six, of our institutions, but the other 125 do not compete on that international scale.

I am surprised that the higher education industry is so well represented in this House. They used to say in the House of Commons that the third largest party was lawyers; I am beginning to think that the third largest party here is people who work in one way or another in the higher education sector. They have to face up to the fact that the student experience—here I speak with some knowledge, for my son is at a Russell Group university—has deteriorated and is, frankly, awful. I shall come back to why that is so and how these proposals might improve it.

There has been some discussion about whether the benefits of higher education are public or private, material or spiritual. They are all those things, which are all important ingredients in the input and the output. The sector should be expanded so that all those who are capable of benefiting from higher education can do so and are not discouraged by whatever the fee and financial arrangements are. I am glad that the coalition has found in implementing cuts in the department a way of protecting the budgets of science and further education and replacing the income that will be lost to universities through student fees. The happy coincidence of that and the excellent report of the noble Lord, Lord Browne, produces a viable solution.

A noble Lord pointed out that most of us here went to university on a full grant and asked that we speak objectively about it, without hypocrisy. I suppose that the answer is that I went to university on a full grant, which was of huge benefit to me; I do not know whether I would have gone otherwise. However, I think that only one in 12 of the population went to university at that time—they were all male, so it was one in 12 of the men. With a third of the population going to university now, I simply do not think that that model is viable. If we had advance fees, it would be manifestly unfair and discouraging of people from poorer backgrounds. The fees are such that even somebody on an income of £30,000 or £35,000 a year would struggle with them. I, too, do not like the idea of a graduate tax. It would be a way of nationalising universities, because there would be no guarantee that they would receive the money. They would still be knocking on the Treasury’s door every year asking for their budget and it would not create the consumer relationship between student and university that I want to see—I am talking here particularly about undergraduate education. I thought that the figure for what the average graduate earns in excess of non-graduates during their working life was far higher than the £100,000 a year quoted by the noble Lord, Lord Browne. I thought that it was something like £500,000. Whatever it is, they pay a great deal more tax already, anyway, as a result of that—probably more than their education costs. The important thing is that the fee provides a direct relationship between the customer and provider or the client and the institution, however one wants to describe the relationship.

The Government did the right thing in 2004 when they introduced fees, but what they did not do was to allow the logical extension of that; they did not allow a market in higher education to develop. Having a market does not necessarily mean having competition for profit. It can mean doing things in different ways, with a variety of things that might appeal to different kinds of students. The result of a cap on fees and on the number of places was that all universities charged the same and competition and choice were stifled. What I like about the review from the noble Lord, Lord Browne, is that it recognises that letting the market develop and the sector expand will create variety and choice and improve quality. Consumers will, I hope, start to behave more like consumers, which I thought that they would do when the fees were introduced—in 2006, I think. However, because all the fees are the same, I do not think that they do. We need universities to compete for students, which might happen if there were a slight excess of capacity rather than a slight shortage. I urge the Government not to place a cap on fees or to introduce the levy recommended by the noble Lord, Lord Browne. If nothing else, the higher the general level of fees, the more it will encourage new entrants into the sector, which I would like to see. That is why I wanted to spend a couple of minutes talking about choice and variety.

Why are almost all undergraduate courses in this country three years long, with six months a year spent at university? That is based on the Oxford and Cambridge model, when people needed to go home to help with the harvest. It assists people who want to do research, because the burden of undergraduate teaching is imposed on them for only half a year, but there may well be people who would say that they could do their degree in two years. If someone is at university only for 75 weeks, it could easily be done in two years and it would cost that person less. It might cost the same in tuition fees, but the cost of maintenance and living away from home would be less. Why might that variant not be introduced? It will not be introduced with the present system, but it might if we had a liberalisation of the funding of this sector.

Why in this country do we not have liberal arts colleges as we do in the United States, which only teach undergraduates? They do not attempt to do research and there is very little postgraduate education. Many of them do not do expensive science subjects. Why does that type of institution not exist in this country, except for the University of Buckingham, which offers a two-year course?

The research assessment exercise has had a pernicious effect on undergraduate education. I am sure that it is right that a large amount of the funding to our great universities goes on the quality of their research. That is where the Nobel prizes are won and where the international reputation is acquired and maintained. For the undergraduate teaching function, however, we all know that the best teacher may not be the cleverest person. That is true in schools and universities. In my old college at Cambridge, I heard the master say about someone who taught me, “I couldn’t afford to keep him now, because his research output was not enough to get through the research assessment exercise”. But he was a wonderful teacher of lawyers. Several High Court judges and one justice at the Supreme Court were his pupils. That sort of person is very valuable and is not being facilitated by the effects of the research assessment exercise.

Something has been made of local universities, where people can live at home and go to what were polytechnics. We need to see more of that. All this—two-year courses, liberal arts colleges, places that only teach undergraduates, perhaps not doing very expensive subjects such as science and local universities where people could live at home—has to do with choice. This variety will, I hope, be provoked, promoted and encouraged by the mechanisms suggested in the Browne review, which I think that the Government welcome.

I turn to the subject of quality. The system will lead to greater variety and choice. I speak as a vicarious consumer of education. Several of my friends’ children are either at university or have just left it and their experience is so far removed from mine or from that of most Members of this House as to be almost unrecognisable. My son does not have a tutor, as far as I can tell; if he does, he does not meet him or her very often. He has no tutorials, while I had three hours a week of tuition with two or three other people and a don, which was the most important part of my education. He gets one seminar every three weeks with about 30 people in it. When he suggested to the head of faculty that his dad would pay a bit more to find a PhD student who might spend an hour a week with him explaining some of the bits of economics that he did not understand, not only did he get no assistance but he was made to feel that that was seeking an unfair advantage.

There has been a serious deterioration in the quality of undergraduate education. That is partly, of course, a result of the deterioration in the money involved and therefore the staff to student ratio, but it is also a result of the emphasis on research and the attitude in universities that undergraduate education is not really their primary function. If liberal arts colleges and two-year courses were introduced as a result of freeing up the market mechanism, that would give universities a kick and make them think a bit more about the undergraduate education that they provide. If students are paying more and have a choice about how much they spend—it might be £4,000 in one place and £5,000 or £6,000 in another, maybe even more if they want to go somewhere such as Imperial, which provides a more expensive education—they will pay far more attention to what they are going to get. That can only be good in provoking improved quality in universities.

I congratulate the noble Lord, Lord Browne, on his report and the Government on their reception of it. I urge them to take it to its logical conclusion and allow the market to develop. That will lead to improved quality and improved choice. If I ran a university, as a great many speakers in this debate have done, one thing that I would like to be free of is government interference. This seems to be a route to that end.