Sharia-compliant Student Finance
Lord Sharkey Excerpts(1 week, 3 days ago)
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Lord Sharkey
To ask His Majesty’s Government what progress they have made towards the introduction of a Sharia-compliant student finance product.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, we are committed to delivering an alternative student finance product that is compatible with Islamic finance principles as quickly as we can. We are making good progress to achieve this. This month we are reconvening the alternative student finance working group for its first meeting since the election, which I am grateful to the noble Lord for being part of. We have also appointed a secretariat to take forward the sharia certification of the product.
Lord Sharkey (LD)
My Lords, Muslim census research shows that over 6,000 students annually miss out on university entirely due to the lack of sharia-compliant finance. I know that the Minister is alive to the problem, its scale and its 11-year history. I thank her and her predecessor, the noble Baroness, Lady Barran, for the work that they have done or are doing in moving the alternative student finance project forward. However, progress is slow, largely because ASF is being produced sequentially to the lifelong learning entitlement, which is delayed in the Budget by a year. What is now the latest date for the full implementation of the ASF? We should surely be able to move faster. Can, for example, ASF development be uncoupled from the LLE and progressed in parallel? What consideration has been given to the use of outside contractors to speed things up?
Baroness Smith of Malvern (Lab)
I think it would be fair to say that that was the question I asked at the point at which it was suggested to me that we should link the delivery of the ASF to the introduction of the lifelong learning entitlement. I think that the last Government were right in making that decision, because the lifelong learning entitlement brings about a fundamental change to the system of student finance, and it is important that, to be able to access the alternative student finance provisions effectively, they are linked to the overarching system for student support. We are introducing the lifelong learning entitlement for applications from September 2026 and for courses and modules that begin from January 2027.
King’s Speech
Lord Sharkey Excerpts(4 months, 1 week ago)
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Lord Sharkey (LD)
My Lords, I join others in warmly welcoming the noble Baronesses, Lady Smith and Lady Merron, to the Government Front Bench. As the noble Baroness, Lady Smith, said in her excellent maiden speech, if the UK economy is to grow, productivity must significantly improve. As she noted, a major engine in this will be our higher education institutions. I declare an interest as a member of council at University College London.
Our universities make a huge contribution to life in the UK. The 2023 London Economics report estimated that their activities contributed well over £100 billion to the economy. They not only educate and train many thousands of young and not so young people but do so across many sectors and all regions. In many places, our universities are critical to the local economy. They play a huge role in supporting SMEs, which are vital to employment in all regions. Our universities are a great and successful national asset. We have 20 in the world top 50 and three in the world top 10.
Our universities now face very severe financial problems, however. The Labour Government are well aware of this; the FT reported in May that “universities going under” was fourth on Sue Gray’s alleged list of key problems. It is not hard to see why. PwC published earlier this year a report on the financial stability of UK higher education, which pointed out that fee income from domestic students had lost a third of its value since 2012 and that by the academic year of 2026-27 international student fees are forecast to become two-thirds of all course fee income. Many of these international students are currently and are predicted to be from China, with the obvious geopolitical uncertainties involved. Disturbingly, 40% of UUK members forecast a deficit in 2023-24, the academic year just ending. There may also be signs of a slowdown in overseas students generally.
In response to all this, more than 50 universities are already making job and budget cuts. Nick Hillman, director of the Higher Education Policy Institute think tank, was quoted in last Saturday’s Guardian as saying:
“When this many universities are projected to be in deficit, you can’t say: ‘This is a market and some institutions will have to go,’ because there is a serious risk of a domino effect”.
The funding model for our universities is not fit for purpose, is getting worse and needs urgent revision. The Labour Party manifesto explicitly recognises this:
“The current higher education funding settlement does not work for the taxpayer, universities, staff, or students. Labour will act to create a secure future for higher education and the opportunities it creates across the UK. We will work with universities to deliver for students and our economy”.
We need to know rather urgently how that will be done. We welcome the Minister’s invitation to input to that.
While we wait for a plan to deal with the funding settlement, some immediate measures could significantly help the sector. The first is to be more supportive of international students, particularly through the graduate visa route. We should correct any impression created by the previous Government that the UK is not welcoming to overseas students and their families and we should, as Members of this House have frequently proposed, disaggregate student numbers from the total immigration figures and report them separately. We could also look at the full economic cost of government research grants, which has now declined to about 70%. We also need a plan in place for emergency support should institutions encounter even graver financial difficulties.
There is one other thing. The Minister may know that I have been campaigning for 10 years for the introduction of sharia-compliant student finance. Progress on this had been glacially slow until the noble Baroness, Lady Barran, the Minister’s predecessor, took charge; I am glad to see her in her place, as it gives me the opportunity to thank her for all her hard work in driving forward alternative student finance. Will the Minister agree to meet our campaign group to discuss progress? We would be grateful if we could resume our helpful conversations about this long-delayed and critical reform.