Higher Education Funding

Lord Watson of Invergowrie Excerpts

Thursday 12th September 2024 Lords Chamber

[Lord Watson of Invergowrie (Lab)]

My Lords, we are indebted to the noble Lord, Lord Krebs, for securing this debate and for his thoughtful and thought-provoking opening speech. I also very much enjoyed the very well-engineered maiden speech by the noble Lord, Lord Tarassenko; I look forward to his future contributions in your Lordships’ House.

As the right reverend Prelate the Bishop of Sheffield said, universities bring a massive input to local economies. The average across each constituency in the UK is some £58 million, which is an enormous contribution to the general well-being in their communities. According to the Higher Education Statistics Agency, tuition fees account for 53% of higher education institutions’ income. With fees capped since 2017, as the noble Lord, Lord Krebs, told us, it is hardly surprising that by 2026-27, two-thirds are expected to be in deficit. For that reason, international students have become increasingly important to universities, and whether or not that is a good thing, it is a fact of life as we are at the moment. Yet the latest Home Office data, in July, showed a 15% decline in total international student visa applications compared to the same time last year. As the noble Lord, Lord Mair, has just said, the reasons for that are very clear.

It was a bit disappointing that a letter sent to all noble Lords two days ago by my noble friend Lord Hanson, the Home Office Minister, outlining a number of changes to immigration rules, did not have anything to say on the question of the dependants of international students. Of course, immigration rules are not the responsibility of my noble friend the Minister, but Ministers and officials from the Department for Education and the Home Office meet from time to time, and I hope she can indicate that discussions on this important issue will soon take place.

Arguably, the most straightforward option for the Government in addressing the sector’s creaking finances would be to end the cap on tuition fees. The Secretary of State stated this week that she did not want to do so, preferring instead to reform the system overall. I welcome that, but it is going to take considerable time. In the interim, allowing the cap to expire at the end of this academic year, and then increasing fees in line with inflation, would be welcomed by the sector.

I want to highlight a part of the higher education sector whose role is too often undervalued: part-time higher education. It is most notably delivered by the Open University, although Birkbeck also has a long tradition of offering courses to working Londoners. Part-time distance learning is critical to widening access and supporting social justice by allowing adults from higher education cold spots to access higher-level qualifications in their local area. That is evidenced by the Open University, where more than half the students begin their studies without the traditional entry qualifications demanded by other universities.

The lifelong learning entitlement will offer a real opportunity to tackle many of the barriers to people studying flexibly in England. It is not due to be introduced until next year, and I hope my noble friend can clarify the Government’s intentions regarding its rollout. The positive impact of the lifelong learning entitlement could be enhanced by extending maintenance support to all part-time students, including distance learners, through either an extension of maintenance loans or the introduction of targeted maintenance bursaries. The Government should also protect the value of part-time student premium funding in real terms to enable the continued viability of part-time provision.

I endorse the comments of my noble friend Lady Warwick, who recognised the role that further education colleges play in the delivery of higher education. There are more than 100,000 students of higher education at colleges, and often this is the only option for mature students with families and dependants, as well as those looking to reskill or upskill locally. Despite the fact that FE funding has historically compared very unfavourably with both school and university funding levels, the vast majority of FE colleges delivering higher education do not charge the maximum tuition fees. That in itself is a strong reason for the new Government to examine FE funding, as well as that for the HE sector.

Ensuring that the country has a sound base of the skills needed for the demands of an ever-evolving economy should not be seen as a cost. It is, as my noble friend Lord Howarth said, clearly an investment in the future and an essential component in driving economic growth.