Higher Education: Funding

Lord Willis of Knaresborough Excerpts

Wednesday 27th October 2010 Lords Chamber

[Lord Willis of Knaresborough]

My Lords, the first time I spoke in this House was in the debate on the Defamation Bill introduced by the noble Lord, Lord Lester, and 12 QCs and two High Court judges spoke before me. In this debate, it seems that everybody is either a leading academic, a former vice-chancellor or the master of a Cambridge or Oxford college, apart from the noble Lord, Lord Browne, but I am sure he fits into that pattern somewhere.

We are indeed indebted to the noble Lord, Lord Browne, for his report on higher education funding. He has sought to resolve an issue that has been growing in difficulty ever since the nation embarked on a policy of industrial-style expansion of higher education in the 1990s. I suspect that if we do not grasp this opportunity, we will return to it in the not-too-distant future. The noble Baroness, Lady Blackstone, is not in her place, but I make no apology for having opposed the introduction of up-front tuition fees in 1998 and the imposition of variable tuition fees in 2005. I maintain my belief that education should be free to those who qualify on merit to access our universities, and like the Secretary of State I am proud to have fought to offer a generation of students an education that was free to me and has given me such fantastic opportunities all my life. However, I am equally convinced that without continued investment in the high-level skills and research talent of the nation, we will never be able to compete in a world where increasingly knowledge and innovation are key to global success.

In a perfect world, these two ideals could be satisfied through the public purse, but ours is far from a perfect world. The inevitability of a shift from the state to the student for the funding of teaching began in 1998, but was made inevitable when in 2008 the current economic crisis engulfed the nation. The recommendations of the noble Lord, Lord Browne, were inevitable, but they suggest quite alarmingly that the final destination is uncapped fees, a fully fledged market in higher education and a private higher education system. I share the fears of the noble Lord, Lord Judd, over that, although the noble Lord, Lord Desai, seems to be quite excited by the prospect. We are not quite there yet, but make no mistake, that is the journey we appear to be on, and I suggest we think very hard before taking it.

Does it matter? Is that not where the most productive economy—the United States—already is? Are we not merely playing follow my leader in some elaborate game of intellectual musical chairs? Well, yes, it matters. The Secretary of State states that it matters, which is why I applaud his desire for consultation and his willingness to produce a White Paper. The noble Lord, Lord Browne, has set the scene. He has made some shrewd suggestions, and his core proposals for raising the cap on fees, making repayment more progressive and simplifying yet improving the most generous student support system in the world are to be commended. In particular, the move to extend student finance to part-time undergraduates is, as many noble Lords have said, one of the most progressive and enlightened initiatives in decades.

However the belief of the noble Lord, Lord Browne, that the market will raise standards, offer students a better deal and improve teaching and research outcomes needs to be challenged. He must know that without US-style variability, it will be impossible to create a market based simply on price and quality. He also knows that without some restraint in terms of numbers of students and courses offered, we could get further distortions in the workforce, particularly a decline in STEM graduates, as institutions chase low-cost, high-return students. The belief too that a competitive higher education market will improve access to leading research institutions is hugely misguided, although the report rightly recognises that access is more to do with the failure of our schools system rather than the fault of our leading universities.

I do not want to repeat or rehearse the many superb comments and concerns raised by other noble Lords. Instead, I want to point to a serious weakness in the report by the noble Lord, Lord Browne, which I trust the Secretary of State will address when producing his White Paper. The noble Lord, Lord Browne, failed to say that his expertly crafted solution to higher education funding was predicated on an existing model of higher education in the UK that is arguably—I repeat, arguably—not fit for purpose.

The noble Lord, Lord Bilimoria, was right: much of what our universities offer is globally superb, but far too much of the system basks in the excellence of our research output and there are serious concerns, as the noble Lord, Lord Browne, points out. It is time to stop trying to make the post-Robbins higher education system fit the 21st century and to take a long, hard look at the whole of our post-19 education and skills offer. In the past 20 years, we have moved to a mass higher education system with 45 per cent of our 18 to 24 year-olds attending university. I applaud that, as I do the enormous efforts that the previous Government made to increase participation for under-represented groups. But, faced with the dual challenges of budget deficits and increased competitiveness from a rapidly changing global higher education market, surely the starting point for any review should have been the function and then the form of higher education, rather than simply the funding.

Providing universities with a replacement income stream without the sector having to accept serious reform is a lost opportunity. Surely, if local government, the health service and our Armed Forces have radically to re-engineer their services to meet 21st century needs, so should our universities. It is simply not enough to ask for reform within universities. We need to reform the whole sector.

The Minister talks about greater efficiencies following the Wakeham review and of possible amalgamations or joint use of back office facilities, but if these are solutions, why have not cash strapped university chiefs already done them? It is because they and we are locked into a mind set that says fundamental institutional reform is somehow an admission of failure. It is not: it is an admission of reality and of clarity of mission based on what is best for students, the regions and our nation, and not simply the institution.

Our higher education system is there primarily to do two things. It is to provide intellectual and practical skills to our students, and to provide a research base to fuel the knowledge economy in the widest sense, both societal and commercial. To provide the latter we must have world-class research departments and we must foster world-class indigenous talent. It is remarkable that we have four universities in the top 10 in the world, and that with 1 per cent of the population we produce 9 per cent of world scientific literature and 14 per cent of citations. Our aim should be to build on that and not to be satisfied with it. To do that we need greater research and teaching focus. Already 90 per cent of research funding goes to some 30 universities—perhaps 30 is too many.

We must also question the current institutional freedom to develop postgraduate schools. Currently, all 165 HEIs can offer master and PhD courses, even if they have a relatively small faculty. Does this produce the research talent that the nation seeks or does it simply serve to give some institutions status at the expense of that talent? In the US, with 14.3 million students, 2,297 HEIs have degree-awarding powers, 1,094 of which award post-bachelor qualifications, but only 654 award research doctorates. Yet in the United Kingdom, with 1.9 million students, every one of our 165 universities and higher education institutes has the power to offer PhDs, and 149 currently do so. Will the Minister at least confirm that the forthcoming White Paper is prepared to examine the need for a smaller, more focused, research-intensive university sector? A more focused research sector could then be charged with recruiting the very best talent our nation can offer and provide students with sufficient scholarships, bursaries and loans based on one simple criterion—ability.

The premise that such a system is operable across all institutions, as now, is simply not tenable. The pursuit by many higher education institutes of the “research dollar” has changed not only behaviour but has distorted mission to a point where the teaching of graduate skills to meet the needs of our societal and commercial economy has been devalued. Just as we need to review our research and postgraduate offer, we need to seriously look at how we can deliver the higher level skilled graduates our economy needs at a price both our taxpayers and students can afford.

It was interesting that in his analysis the noble Lord, Lord Browne, studiously avoided what the late Lord Dearing called in his 1997 report the third funding stream for higher education—the employers’ contribution. I am disappointed that employers, who, after all, are beneficiaries of a robust higher education system, have not found their way into the funding mix. Yet the need to provide business facing level 4 skills is as vital to the UK as is our research base.

To this end, I hope the forthcoming White Paper will look at encouraging a merging of the missions of our post-19 FE sector with those universities that are predominantly concerned with teaching high level vocational skills—a new sector that matches in teaching vocational skills the aspirations already present in research excellence; a sector that allows our best further education colleges to compete in the skills sector without having to go cap in hand to either the HEFCE or individual universities for the right to accredit their courses.

Such organisations operate elsewhere in both Europe and, particularly, the US, where the community college or liberal arts system is respected and effective. We have the basis for such a system in many parts of the existing FE and HE sectors, and it is here where the new engine room of the 21st century higher education system can emerge—a sector that recognises the close links between social and business enterprise locally and regionally; a sector where students can earn and learn; a sector where exorbitant “hotel” costs and resultant debt can be avoided; a sector where skills can be developed through a myriad of pathways that are directly relevant to local and regional economies.

The Browne report is not a take-it-or-leave-it solution but a catalyst for real change. Now is the time not to be timid; now is the time to be radical—even if it means less vintage port in some of the hallowed corners of the HE empire.