Funding Higher Education

Andrew Lewer Excerpts

Wednesday 28th February 2018 Westminster Hall

[Andrew Lewer (Northampton South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie, particularly as you have experience and this is my first experience of speaking in a Westminster Hall debate. I hope you will be tolerant with me. I thank my hon. Friend the Member for South West Devon (Mr Streeter) for his excellent opening speech and the points that he made. Of his three points I wrote down the one about the 6.1% interest rate, which is almost unarguably a good point. I suppose his idea about the monthly repayments being tax deductible would be a “Yes, Minister” brave suggestion. On the concept of a graduate contribution, I think it may have been better if the present system has been not only set up slightly differently, but described differently at the time it was set up, taking into account the points that both my hon. Friend and the Minister have made about its true nature.

I welcome the fact that the Prime Minister’s speech on education and today’s debate have opened up an opportunity to discuss the reforms that we need to pursue in the funding of higher education. It is often the case, and I think it is here, that the obvious solutions are not necessarily the best. Revising education options for those over the age of 18 is, however, a welcome initiative. As a former member of the European Parliament, I was the lead member for the European Conservative and Reformists group on the Committee on Culture and Education, and therefore had a lot to do with Erasmus, Horizon 2020 and so on. We have as much to learn from other European countries as we have to teach them in showing them innovative ways of working.

I have been a governor of the University of Derby for the past eight years, so I try to keep up to date with the challenges of higher education. The point about vice-chancellors’ salaries is particularly relevant. In many cases, the solution is robust internal governance on the part of governing bodies at universities. I am pleased to say that the system at Derby is robust, but elsewhere there can sometimes be a culture of embarrassment, and of deferring to the vice-chancellor and senior executive members of the university. There can also be a concept that a governor ought to be a cheerleader for the university, rather than providing challenge and pushing back at some of the ideas of those in executive positions. That is not necessarily a call for more rules about governance; it is more a cultural point. It is for the universities to make sure that their governors are providing challenge, and are not just there to say, “You’re doing a great job; keep it up,” even if they are doing that, as is often the case.

Lowering tuition fees for higher education to, say, £6,000 may seem like a good idea in theory, but in practice it may, slightly counterintuitively, benefit only wealthier graduates. Even with that reduction, the tuition fee would remain hefty, and it would become easier for higher-income students to pay it off altogether, while lower-income graduates would still end up potentially with 30 years’ worth of debt to pay. Moreover, the immediate income of universities from the loan repayments of higher-income students would decrease. Smaller, more modern universities, such as the University of Northampton in my constituency and the University of Derby, would be affected the most, because they rely on tuition fees to survive more than the elite, more market-manageable, more international universities with various external sources of funding. Furthermore, it is newer universities that tend to recruit a high proportion of their students and graduates from lower-income families.

The problem, however, is not without a range of solutions, one of which could be the reintroduction of some kind of maintenance grant for disadvantaged students. Although cutting fees may not lead to financial support for those who need it the most, grants would be targeted specifically towards lower-income students. We also need other solutions as part of a toolkit. The format of today’s debate is useful in that respect, because we are not just standing up and saying, “This is the solution to the issue,” which would not be the right approach.

One solution might be to encourage private investment, and partnering up with private sector institutions. High-quality education leads to skills that are good for business. Revising skills and education, and adapting that to economic needs, as has been touched upon, could lead to new sources of funding in the form of grants from the private sector to university students and institutions, and to even more private investment in research—an area in which UK universities are very much world-leaders.

Only a few months ago, in November, the University of Northampton was one of six universities that contributed to an independent review of social impact investment in the UK made by the Treasury, showing that they are very much up to speed with what is going on in the sector. Part of that involves catching the eye of companies for financial partnerships. The university is moving from the constituency of my neighbour, my hon. Friend the Member for Northampton North (Michael Ellis), to an exciting new campus in my constituency of Northampton South, which is leading regeneration. Universities have a key role in that in obvious ways, such as buildings and the presence of the students, and in less obvious ways, such as changing and mixing up the culture of a neighbourhood. That brings potential problems, but if managed correctly it can bring significant benefits.

Another aspect that needs to be considered is that, although graduates can officially leave university with debts of £50,000, as my hon. Friend the Member for South West Devon began by saying—that sum of money is a key point in the debate—many never repay those sums, owing to the nature of the loan agreements, as they do not reach a certain level of income. The level of graduate contributions thus depends on the salary level that the students get after leaving university, which in turns depends partially on the skills and education that they received. However, the fact that that huge burden of debt is not, in many senses, actually there is lost on people due to the way in which the system is set up, expressed, and currently administered. There is scope in the reforms that have been put forward and the review that has been announced to look at the system not just presentationally, but in terms of how it operates.

Investing in universities is a healthy approach to getting funds into the institutions and providing opportunities for low-income students to study. The University of Derby has invested £120 million in facilities over the past five years, and graduate outcomes have improved markedly as a result, which is really the point of all such investments. Some 74.1% of students are in graduate-level roles within six months. We all know that education is the foundation of a good, productive economy and a rich, diverse society. It will always remain a top priority for the Government, and it should not be overlooked by today’s innovators and entrepreneurs, who will be the beneficiaries of it as well.

We have a terrific university sector in the UK. It is the envy of the rest of Europe and attracts huge numbers of international students. Despite changes that have taken place, which have been referred to, those numbers are still very strong. Our changes need to be forward-looking and build on that success. Although I am a great lover of nostalgia, I do not think that solutions should hark back to what was a much more elite and restricted past in the university sector.

--- Later in debate ---

[Paul Blomfield]

I agree with my hon. Friend. In his introductory remarks, the hon. Member for South West Devon rightly said that when the new system was introduced in 2012, there was an expectation of a variety of fee options. I shared his scepticism at that time. There was a thinking in Government that the £6,000 to £9,000 range would mean that Oxbridge, obviously, would charge £9,000, and everybody else would neatly rank themselves in accordance with the Government’s perception of quality. Those of us who had a relationship with the sector knew that that was not viable, because it costs as much to provide a degree in Plymouth as it does in Russell Group universities. So what happened was not surprising.

Although the review should focus on value for money, as the hon. Gentleman said, we need to be careful not to reduce higher education to a crude transactional relationship. There is an element within the teaching excellence framework that does that.

I was on the Higher Education and Research Public Bill Committee. Those of us on this side of the House supported the principle of focusing on teaching quality, but were worried that some of the metrics drove the debate in the wrong direction. We are pleased that the Government moved more towards a qualitative evaluation, rather than the simple crude quantitative measures they were initially looking at, but there is still an aspect of the debate that says we should be measuring quality by crude and easily measurable standards. We might take contact hours, for example. If we are going to measure by contact hours, Oxford would be bottom of the table. Nobody would argue that Oxford is the worst university in the country, but that illustrates the danger of crude metrics.

[Andrew Lewer]

Although crude metrics are not helpful, would the hon. Gentleman accept that having some metrics, such as the teaching excellence framework, is helpful?

[Paul Blomfield]

The hon. Gentleman is right. As I said, those of us on this side of the House who were on the Bill Committee, such as my hon. Friend the Member for City of Durham (Dr Blackman-Woods), argued that a focus on teaching quality was right, but we needed to get the way that we measured that experience right.

The other metric that is problematic is employment outcomes. The current Minister’s predecessor, the hon. Member for Orpington (Joseph Johnson), acknowledged that they were crude and, in a sense, unreliable metrics, but they were being used because they were the numbers that were available. I pointed out to the Minister at the time that there is not necessarily a relationship between teaching quality and employment outcomes. If a student had been to Eton and Oxford, like he had, and were from the right family and knew the right people, that person’s employment outcome was likely to be fairly good, irrespective of teaching quality. So when looking at the funding review, my warning is that we should make sure that we look at the educational experience of universities in the round. We argued that there should have been a statement in the Higher Education and Research Act 2017 about what universities were for.