Higher Education: Reform

Baroness Garden of Frognal Excerpts

Monday 12th November 2012 Lords Chamber

[Baroness Garden of Frognal]

My Lords, I, too, am grateful to the noble Lord, Lord Wills, for this opportunity to consider the enormous contribution that our higher education sector makes to national life. Our universities are a tremendous national asset, which we need to sustain and to grow. BIS is developing a long-term education export strategy as part of its broader work on an industrial strategy. This will recognise the significance and contribution of the HE sector and be published next year, while 2012 has certainly been a significant year for higher education as the Government’s reforms take effect. These are fundamental reforms designed to achieve a well funded, diverse and responsive sector that values both research and teaching but in which institutions focus on what they do best and are able to attract funding based on excellence within their field.

Inevitably, there is some stress and uncertainty accompanying change on this scale but the higher education system is mature, well managed and financially well prepared to meet the challenges ahead. The sector has an income of more than £22.7 billion per annum and, last week, the Higher Education Funding Council for England published a report on the English sector’s finances, which assessed them as sound with a likely continuation of positive cash in-flows and healthy cash-backed reserves. The OECD has said that our reforms are an exemplary model of how to reform higher education. The research councils continue to invest in the UK’s world-leading research base, which of course includes the arts. Just last week, the Chancellor announced an additional £20 million for synthetic biology.

The new higher education funding regime does not mean that the Government fail to support certain subjects. We are told that the shift from grants to fees and loans somehow penalises the arts and humanities or penalises expensive science courses. In fact, it is a scrupulously neutral policy. Under the arrangements we have put in place it is the source of university funding that will change, not the overall amount. What will dictate whether courses run will be their quality and the efficacy of the institution in making them attractive to students. I well understand that there may be concerns about the fate of particular courses but the noble Lord, Lord Wills, and others can rest assured that Ministers and the funding council will continue to monitor the position and will keep strategically important subjects under review. Arts and humanities can lead to rewarding and fulfilling careers. The British Academy reports that admission figures for 2012 show the humanities holding up, with around half of all applicants. Indeed, Bristol University has announced an expansion in humanities on the back of the reforms.

I listened with interest to what the right reverend Prelate the Bishop of Ripon and Leeds said about diversity and social understanding, and about producing responsible and ethical students. I think we would all support that, but it would be down to the autonomous universities as to how it was implemented. We must remember that the system the Government have introduced is more progressive. The noble Baroness, Lady Howells, expressed concern about access for all students and the noble Lord, Lord Stevenson, expressed concern about adults being put off studying. However, repayments will be made only when graduates can afford to do so and are earning a good salary. We have been clear that university study has intrinsic value, irrespective of any economic or financial potential. We heard powerful inputs from my noble friend Lady Sharp and the noble Lord, Lord Rees, in support of the intrinsic value of universities.

The coalition has protected the budget for science and research. The ring-fenced settlement for 2011-15 extends further than its predecessor as, for the first time, it covers all core publicly funded research activity, including specific support for knowledge exchange. Protecting resource funding inside the ring-fence is a commitment to maintaining activity even in tough times. The research base is among our greatest national assets and vital for our future. The UK relies on a strong base of scientific skills; science and technology underpin much of our economic growth and universities are integral to helping to stimulate growth through dynamic research.

Two weeks ago, seven new university and business research partnerships in sectors including life sciences, energy efficiency and advanced manufacturing were announced by the Minister for Universities and Science. I entirely take the point made by the noble Lord, Lord Wills, that one cannot predict which of these branches of science will result in fruitful outcomes but there has to be funding for blue-skies thinking and research. The new projects double the number of successful projects supported by the UK Research Partnership Investment Fund to 14, covering the whole of the UK and leveraging a total of more than £600 million of private support. Noble Lords expressed interest in having private money coming into university funding. When fully allocated, the scheme will secure more than £1 billion of new support for research from government, industry and charities.

Turning to some specific points that have been raised in the debate, I recognise the concerns of the noble Lord, Lord Wills, about impact. However, we think that there must be some mechanism for assessing impact. For the first time, the RIF for 2014 will include recognition of past impact and explicit assessment of recent impact, but we must get that balance right in measuring the value of universities.

My noble friends Lady Morris and Lord Smith, the noble Baroness, Lady Warwick, and the noble Lord, Lord Stevenson, all expressed concerns about visas and the messages that we are sending to overseas students—that they are not welcome in this country. I assure noble Lords that we are looking closely at simplifying the visa system and trying to ensure that no legitimate students are denied entry and are indeed made most welcome to the country. The difficulty is in trying to deny the false students—those who do not really come here to study—but somehow that message must go out: that the universities in this country are open for business and warmly welcome students from overseas.

My noble friend Lady Morris mentioned her concerns about the University of Bolton in particular. Overall applications for HE were down slightly this autumn, but this is an atypical year. It has been affected by a demographic dip as well as the reforms. It means that some institutions did not have as many students, and therefore for some their income stream was affected. We are encouraged that applications so far for 2013-14 are up. We hope this will be a temporary situation for my noble friend’s university.

My noble friend Lady Sharp mentioned the Dearing report on the four core purposes. Indeed, they are still very valid today, as is so much of Lord Dearing’s thinking. She and my noble friend Lord Smith also referred to the launch of the Council for the Defence of British Universities. We shall be watching with interest the thoughts that come out of that initiative.

The noble Lord, Lord Rees, spoke eloquently about the merits of the US system and the clustering of departments, but I would put the case for the merits of the university system here in the UK. Our institutions are autonomous and are free to determine their own admission arrangements and choose their own mission. There are also exciting times ahead with the expansion of distance learning and online learning, which the Government will consider with keen interest. We note the tremendous work of the Open University in expanding horizons and access for so many people in this country.

The noble Baroness, Lady Warwick, mentioned student visas and international reach. Once again, we will do our level best to ensure that research and innovation budgets are protected because our links with the EU are valuable.

My noble friend Lord Smith mentioned open access. The Government have made £10 million available to pump-prime the formation of publication funds to enable institutions to act on the Government’s open access policy. That is again something we shall be watching.

The noble Viscount, Lord Hanworth, mentioned that the administrative burden on universities exacerbates the difficulties for students. The Government make no apology for asking institutions to focus on an improved student experience and on providing information to help students make informed life-changing decisions. Once again, one needs to get the balance right. The noble Viscount also mentioned the turnover of staff, which one would want to discourage in an academic institution where continuity can often be an enormous benefit. We welcome international academics to this country in order to ensure that students can profit from the most expert and skilled people in each of our institutions.

The noble Baroness, Lady Howells, mentioned her chancellorship of the University of Bedfordshire, and we note the points she made about it and its success.

The noble Lord, Lord Stevenson, raised a number of questions, on which I cannot go into detail at this time, including about the mix of private providers. We feel that it is important that our higher education sector should have a mix of private and public funding in order to ensure that it is as healthy as it can be.

Any new funding system will change behaviour, both of students and of institutions. What we are seeing is a paradigm shift. The impact of such a dramatic change for the sector will be felt both immediately and in the longer term as students become more discerning consumers of higher education, as institutions develop a greater diversity of funding streams and develop a renewed focus on high-quality teaching so that it has the same prestige as research.

I thank all noble Lords who have taken part in this thought-provoking and stimulating debate. If in the short time I had, I have not covered all the questions raised, I undertake to write to noble Lords. Our reforms are intended to make our world-class system stronger. As noble Lords have made clear, we must ensure that our universities continue to encourage reflective inquiry, as the noble Lord, Lord Rees, mentioned in his recent pamphlet; they must encourage thinking the unthinkable, intellectual curiosity and cutting-edge research. The Government are determined that our universities’ international reputation will be maintained and enhanced.