Higher Education: Affordability and Quality

Lord Trees Excerpts

Thursday 2nd July 2026 Lords Chamber

[Lord Trees (CB)]

My Lords, I join fellow noble Lords in thanking my noble friend Lady Deech for securing this important debate. As we have heard several times this evening, two major problems are converging in the higher education field. The first is the underfunding of universities: the Office for Students has warned that 45% of higher education providers are likely to run a deficit in 2025 and 2026. The second problem, of course, is the colossal accumulation of student debt: in England alone, it has reached the figure of £295 billion and is continuing to increase, and much of it will remain unpaid.

There is no doubt, as we have heard from many noble Lords, that our best universities are world class and a jewel in our crown, and our objective should be to ensure their financial sustainability. But I question whether we need all the universities that currently exist. That may be a heresy from someone who has worked in higher education for 30 years, but we have to be honest about the problems we face and the possible solutions.

The seeds of this problem lie in the policy of then Prime Minister Tony Blair in 1999, who set a goal to have 50% of 18 to 30 year-olds attending university. Following this, the number of UK higher education institutions rose by 45% up to 2021, but the attendant fall in further education colleges was 40% over the same period. What was the evidence for that goal of 50%? It sounds to me more like a political slogan than an evidence-based objective. It created an image and impression that, if you did not go to uni, you were some kind of failure, and it encouraged many young people to pursue expensive degree programmes of questionable worth.

That is not just my opinion: the Augar report in 2019 concluded that

“too many students were being recruited to poor-value higher education courses … with both poor graduate retention … and poor graduate outcomes”.

In January 2026, an analysis by the Centre for Social Justice found, sadly, that over 700,000 graduates were out of work and claiming benefits.

To be kind, in 1999, the incredible recent developments in AI probably could not have been anticipated, but now it is quite clear that AI will have a differential effect on the job market, with vocational and customer contact roles—such as those in social and health care, catering and hospitality, building, plumbing, fixing things in general—less likely to suffer than many roles formerly regarded as for graduates. We are likely to need fewer graduates but more people trained in technical, vocational and practical skills. Indeed, many students will be better served by vocational programmes, preparing for employment and a defined career path. Five years after qualifying, a higher level 4 apprentice earns almost £12,500 more than a graduate from a low-value university course, and £5,000 more than the average graduate.

Although we are likely to need fewer graduates in toto, we will require graduates from those quality institutions providing the academic and technically demanding qualifications we absolutely still need in certain key sectors. Yet, by expanding the total numbers of universities and university students, we have reduced their unit of resource for all such programmes. An example in the HE sector with which I am familiar is that of veterinary education. Our veterinary schools are world class, with five in the global top 20, but their funding for UK students is inadequate, and to compensate for this shortfall, which the noble Baroness, Lady Warwick, reminded us was in the region of £10,000 per student per year, many vet schools are admitting substantial numbers of overseas students. Currently, over 20% of veterinary graduates from UK vet schools are overseas students.

This pattern is repeated in many other degree programmes, which provide the high-value graduates urgently needed for our strategic sectors, yet government support plus fees is inadequate. Because of changing immigration policies, which have been referred to, pursuing large numbers of overseas students is now an insecure and probably unsustainable means of propping up quality higher education. What plans do His Majesty’s Government have to close this funding gap? I suggest that we need to value the huge range of contributions to society by tertiary education in its entirety, ranging from vocational skills to academic degrees, and give targeted and appropriate funding to each element. Currently, I suggest that we are failing the country’s needs and the capabilities of our young people. Let us focus our finite resources in an evidence-based way to satisfy the aspirations of students and the actual needs of society for our economic and intellectual growth.