Higher Education: Reform

Lord Stevenson of Balmacara Excerpts

Monday 12th November 2012 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I thank my noble friend Lord Wills for securing this debate and all noble Lords for the excellent contributions they have made to this important topic. I complained a couple of weeks ago that there were too few opportunities to debate HE policy in your Lordships’ House. As welcome as this debate is tonight, it has confirmed my feeling that we need still more opportunities in the continuing absence of the long-promised but never-arriving higher education Bill. I will touch on a few of the many issues raised by others this evening, and look forward to hearing the responses from the Minister.

First, on demand, as mentioned by my noble friend Lady Warwick the overall drop in applications and admissions for undergraduate study this year is about 14%, according to UCAS figures. This is a significant drop in itself and of course in terms of future funding of higher education institutions over the next few years, it will be devastating. In terms of future demand, a recent poll by Ipsos MORI suggests that fear of debt may be deterring up to one-third of 11 to16 year-olds from applying to university in the future. This raises a general concern that students’ decisions to invest in their own future are being affected by increased financial commitments and potential debt-burdens. There are also worrying trends for part-time and mature students. Does the Minister recognise these concerns?

On investment in higher education, as the noble Baroness, Lady Sharp, said, the UK now sits near the bottom of the OECD countries when looking at the amount that the state invests in higher education. Looking at public expenditure on higher education alone, the UK’s investment of 0.56% of GDP is one of the lowest in the OECD. Our universities are experiencing cuts while other nations are investing. The UK spends about $16,333 per student, well below the USA at $29,200, Canada at $20,000, and Switzerland at $21,000. Surely new and more innovative ways of funding university places may be required. The recent review of the noble Lord, Lord Heseltine, recognised this. He called for Government to provide incentives for employers to employ more skilled graduates. Can the Minister tell us what the Government intend to do about this recommendation?

On postgraduate study, the recent report by the Higher Education Commission on postgraduate education has argued that progression to postgraduate study is threatened by rising financial pressures on students, and called for a system of state-backed loans for postgraduate study. These points were also made by Alan Milburn in his recent report on social mobility and access to higher education. Does the Minister recognise these issues, and will she consider implementing changes?

On immigration policy, several noble Lords have mentioned the problems that have been caused, particularly the impression being given that the UK does not welcome overseas students. As we have heard, excellent international students are indispensable for world-class universities and a thriving society, culture and economy. There is fierce global competition for the best academic talent. At the moment, the UK is the second most popular destination in the world for both international students and PhD students, behind only the USA. The noble Lord, Lord Heseltine in his recent growth review also argued for a review of immigration arrangements to provide,

“a welcoming environment for foreign students because this is an important market in which the UK excels”.

What steps will the Government be taking to implement this recommendation?

Finally, I turn to private providers—raised I think by the noble Baroness, Lady Morris. These providers remain remarkably unscathed and unregulated as a result of the failure to include a higher education Bill in the current legislative programme. Is this remedy going to be brought forward? There is really a concern here. At the same time, we gather that the Treasury is proposing that a VAT exemption be granted for some of the services provided by these private providers. Can the Minister explain what justification exists for offering for-profit providers with this additional benefit at taxpayers’ expense?