Post-18 Education and Funding Review

Baroness Deech Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Baroness Deech (CB)]

My Lords, I declare my interests as set out in the register. I start by urging the Government to accept the recommendation of the report and restore maintenance grants in place of loans. I do so not solely for the sake of students’ finances but in the pursuit of genuine diversity and choice, which have been diminished in recent years. The Institute for Public Policy Research has reported on this and, taking that together with the Sutton Trust paper from last year, Home and Away, we see that the increased debt load if a student borrows to live away from home results in debt-averse students living and studying at home, with segregation as a result. They choose the nearest university. They will not meet diverse others with the same ambitions, but be reinforced in the social make-up of their home background.

Students from the least diverse areas go to the least diverse universities because they can afford to pick and choose. Ethnic minority students from London worry about studying outside the capital on grounds of racism. Moving long distances to university study has become largely the preserve of the better-off. According to the Sutton Trust, only one in 10 students goes to university more than 150 miles from home, while the rest are daily commuters. Does this matter? Yes, because social mobility is associated with moving to a large city and leaving the region of birth.

The older and higher-ranked universities have the most students who have come a long way from home; the others have the more local students. Therefore, the maintenance element has more social effect than tuition fees, which are the same for most universities. It is maintenance that affects choice. The report does not specify the level of grant that the Government will make available. Will they specify the level of grant that they will support, and recognise its importance?

I turn to an omission from the report—no doubt because of the unpredictability surrounding Brexit—of the financial effect of the recruitment of international students. As we know, the student loan system is in trouble. I will not go into that now. But we must recognise the gap between the fee income received by universities and the actual amount needed to teach and fund their other activities. The top universities—and remember how proud we are of our domination of the world league tables and hence our ability to attract the best international students—will be losing about £17.5 million a year, according to the Oxford University calculation. This is where I come to international students. Will this shortfall be entirely met by increased government teaching grants for subjects that are valuable to society and expensive to deliver, or will it be made up by international students?

I suspect that the Government will, in the end, let down the universities, because they regard some subjects as being more valuable than others. It is likely that the humanities and social sciences will see cuts in the order of 10% to 15%. The report argues that some courses are poor value, with low financial returns for graduates. There is great concern that the Government will accept the cut in fee but will not guarantee to make up the difference by increasing the central grant for teaching. The Augar report is clear that the two recommendations are connected.

Will the Government guarantee that the allocation of teaching grants in the future will reflect the cost of delivery, and abandon the practice of measuring economic value to the student and the taxpayer? Some of the students with the lowest postgraduate incomes, such as nurses and teachers, are of the highest value to society. Creative arts graduates may become stars, attracting audiences and influencing young people, without being rich. Every citizen who has benefited from the work of a doctor, an engineer, a scientist, a civil servant or a clergyman has benefited from their university education. It is not a matter of private benefit but of benefit to the entire society, and it is disparaging to treat university education as a matter of one individual seeking to increase his or her own lifelong earnings. The creative economy is important to the UK’s prosperity and to our reputation the world over. Humanities courses at good universities should not be penalised as a result of targeting low-quality courses at less well-performing universities.

Will the Government guarantee not to use their financial leverage to interfere with what subjects universities teach? Philosophers can become bankers, or someone as valuable to society as the late Baroness Warnock; economics at Oxford has brought us the right honourable Jeremy Hunt; classicists become bankers —or the right honourable Boris Johnson; lawyers become clergymen; and ballet dancers, dance being an academic subject, include the noble and multi-talented Baroness, Lady Bull.

If there is a shortfall in funding from fees, universities will turn even more urgently to recruiting international students in order to make it up. Current EU students are charged the same as home students, but in future they will be treated like non-EU students and charged much higher fees. Some predictions say that the number of EU students will fall, but not by very much. This is because British universities are, after all, at the top of the league tables and those in the rest of the EU much further down, so the bright European student will still want to come here and will go to the US alternative only if he or she can cope with the visas and even higher fees.

It is possible, therefore, that international students will contribute to the increased financing that our universities will need. They will be subsidising home students. Interestingly, the UK International Student Survey reports that prospective students from outside the EU are more likely to be interested in studying in the UK because of Brexit, perhaps because they believe it will be easier to be admitted, or because they feel that they will be treated the same as EU students. There may well be pressure—and there should be—for better treatment of international students in terms of visa restrictions and the ability to stay on after completion of a degree, which would be attractive to them.

There are some real risks here, however. The first is that we forget our commitment to access when it comes to international students, who have to be from wealthy families or supported by government scholarships to be able to study here. Their fees are two or three times higher than those charged to home students. Underprivileged international students will become a rarity, whereas at one time many future opposition leaders and heads of foreign Governments started as impoverished radical student leaders at our own universities.

Secondly, we are not making them as welcome as we should, a topic on which I have spoken before. International students need to be integrated, mentored, befriended in vacations, accommodated and supported to a larger extent than appears to be the case. Some of them feel that they are here only because they provide funding. If our reputation as a welcoming environment is damaged, that important source is at risk. Funding is also at risk if the Chinese or Indian Government, for example, change their policy or find visa rules simply too off-putting. A stoppage in that flow would ruin some universities.

Universities need to consider how they would cope if there were fewer international students. Some Australian universities, oddly, are moving to limit international recruitment because the financial reliance is unsustainable. Yet a cut in fees for home students without a promise that the Government will bridge the gap will mean a renewed chase after international students. The Government expect the total number to rise from today’s 460,000, who contribute £11.9 billion to our economy, to 600,000 by 2030.

Finally, the Augar recommendations come as a package. It would not be workable for the Government to pick, say, a reduction in fees and ignore the other recommendations that are inextricably linked to it. In this time of political uncertainty, can we be sure that a new Education Minister will take the report as seriously as current Ministers appear to do? What guarantee do we have of continuity in policy?