Universities: Impact of Government Policy

Baroness Northover Excerpts

Thursday 13th October 2011 Lords Chamber

[Baroness Brinton]

My Lords, I am grateful to the noble Lord, Lord Giddens, for instigating this debate. However, I take very gentle issue with his memory of the past Labour Government’s higher education policies, given his statement that he was concerned about the speed with which the coalition Government have implemented some of the reforms. It seems to be forgotten that the Labour Government introduced tuition fees in the first place a year after Tony Blair had promised not to do so in 1997, and that the same thing happened again as regards the introduction of top-up fees two years after they had promised not to do so in the 2001 Labour manifesto. They also commissioned the Browne review. I understand that the noble Lord, Lord Mandelson, said in March in this very House that had Labour still been in government it would have needed to double tuition fees at the very least, given the financial situation in which we find ourselves.

It is no secret that had the Liberal Democrats won the general election, we would have done things differently. However, I am proud of the coalition agreement which incorporated more than two-thirds of our manifesto pledges. Unfortunately, tuition fees policy fell into an area that remains unfulfilled, not least because of the size of the deficit and the need to reduce it firmly and to get the UK back to financial balance. However, following careful negotiations, the system with which we have ended up is significantly more progressive than the Labour system we inherited. That is not only our view but that of the Institute for Fiscal Studies. There are no upfront fees for students so that should not deter them from applying. Graduates will start to pay only when they can afford to, once they are earning £21,000 and there will be lower lifetime contributions for the poorest group of students compared with the system that Labour left behind. Importantly, there will also be more support for the Cinderellas of the higher education and further education systems, part-time students—now 40 per cent of our undergraduates—who had previously been shamefully shunned by the Government in a system geared entirely towards full-time students.

I always felt it was iniquitous that the previous Government did not provide any access to loans for fees for part-time students, many of whom come from low-income backgrounds and stay at home in order to study. However, there is an anomaly that I have raised with the Minister in the Education Bill where it is proposed that part-time students should start to repay their loans from the April three years after they commence studying, if their earnings reach £21,000. As I said in Committee on the Education Bill the other day, while I think this is probably a fairly small group of students, I know from my experience in higher education that mature students often make the decision to study while continuing to work part time. While an income of £21,000 sounds like a good deal for a 21 year-old, it is not a high salary for someone with home and family responsibilities to juggle alongside their study. I worry that this may deter some excellent prospective students from taking up their places on courses. There is also the fundamental question of equity. A full-time student undergraduate on a four-year course, whether an engineer or a linguist, will not be asked to start repaying until their course ends whereas part-time students are being asked to start repaying at three and a half years, regardless of whether they are close to finishing their course or not.

I had some involvement with Aimhigher in my previous role as the executive director of the Association of Universities in the East of England, and while I regret its demise—it has done some good work—I welcome the clearer direction on universities to actively target students from backgrounds where they may not have previously considered a university education.

For me a surprising element of the White Paper Students at the Heart of the System was the proposals regarding extra places for those HEIs taking students with AAB or equivalent qualifications. It seems to me that this may have a law of unintended consequences, with the possibility of bidding wars, and a real impact on recruitment for some of the middle-ranking universities. I hope that I am wrong. I give an example. Certain specialist courses such as medical or pharmacy courses might well be affected if numbers fluctuate fairly strongly in either direction. We are discovering that it is fairly easy to close down a university department but I know from experience that it takes a very long time to build up expertise, plan and then implement a new department. It is not always possible therefore to respond as quickly as is the case with more straightforward courses at, for example, a further education establishment. The impact on medical and healthcare education could be quite serious.

Today I have received a letter from the noble Viscount, Lord Hanworth, who is unable to be in his place. He writes wearing his professional hat as an academic at Leicester University about the difficulties that universities are having with the UK Border Agency in recruiting international postgraduate students who are partly funded by being employed by their host university and partly by bursary. In a bizarre decision, UKBA is now refusing to accept a university's guarantee that it will be paying that salary and maintenance grant, and so the students are being refused entry visas. This has long been a perfectly acceptable way of making up a package for postgraduate students which benefits both the student and the university in the short and the longer term. As a result, the university now finds itself short of teaching assistants. UKBA accepts guarantees from overseas governments and foreign institutions but not our own class one universities. I hope that the Minister will be able to find out more about this for the House and report back in due course.

Finally, I welcome the coalition Government’s focus on improving and widening participation. Funding provided by the Higher Education Funding Council has already enabled the Open University to attract 20 per cent of its newest students from the 25 per cent most disadvantaged communities. I hope that these priorities, and, indeed, the funding streams that support them, remain in place beyond 2012, as this work in delivering real results for individuals, universities and this country as a whole must continue.

[Baroness Northover]

My Lords, I remind noble Lords that this is a time-limited debate. When the clock hits six you have had your six minutes.

--- Later in debate ---

[Lord Smith of Clifton]

My Lords, I, too, thank the noble Lord, Lord Giddens, for this debate. It is very timely, coming as it does 12 months after your Lordships debated the Browne proposals. When I spoke in last year’s debate, I said that the proposals of the noble Lord, Lord Browne, would be a further acceleration towards the privatisation of tertiary education. I said that, while it would not be my preference, it is perfectly rational to have a free, untrammelled market in higher education, or to maintain the “mixed economy” that has been the main operating principle followed by successive Governments during the last half of the 20th century. The worst of all worlds would be to have a largely privatised system subject to bouts of ministerial interference.

I predicted that the consequences of the Browne proposals would be the adoption of a spate of rationalisation and consolidation schemes in both top and bottom-tier HEIs. That is already happening: north of the border, Glasgow has announced the abolition of courses in Czech, Polish, German, Italian, Portuguese, Russian and Catalan, leaving only Spanish and French as the modern languages it offers. This was reported in the Independent on 24 April. In the Guardian of 3 May it was reported that London Metropolitan University, itself the product of a merger, intended to axe two-thirds of its courses, including history and philosophy. This is only the start of the latest round of closures; previous years witnessed the abolition of many chemistry departments and the total demise of any fully fledged nuclear engineering provision. The process will continue and gather pace in the coming years.

Leaving individual universities to decide what they do means that the overall pattern of English university provision will not be based on any coherent strategy. As I said by way of example, how many departments of palaeontology should there be? At least one, presumably, but that is by no means guaranteed in the current haphazard and fragmented state of decision-making. David Willetts claimed in the Guardian on 20 September last that his policy was in line with,

“all three major postwar reports”—

Robbins, Dearing and Browne. This is an absurd contention: the Robbins committee had a very wide remit to review the entire system across the UK, whereas the other two were much more circumscribed, being limited to financing and fees without regard to any other consequences. David Willetts was not comparing like with like.

Not that that is his only failing; there are many to choose from. First, he forecast that relatively few universities would charge the maximum permitted fee of £9,000, whereas a considerable number have already said that they will, including a number of second-tier ones. Secondly, he forecast that while a proportion of graduates—those earning very low salaries—would not have to repay their loan debts, there would be an overall saving to the taxpayer. Reversing the ratio of costs of higher education from 60 per cent public funding with 40 per cent private, to 40 per cent public funding with 60 per cent falling on the individual will not, it now appears, achieve the savings to the Exchequer originally predicted. Mr Willetts got his sums wrong. With average fees of £8,678 per annum, this will lead to a shortfall of £450 million by 2014, as reported in the Guardian of 21 April. A similar calculation came earlier from the Institute for Fiscal Studies. Will the Minister, in winding—I have given notice of this request—please state what the current DBIS estimates are of the savings that will accrue to the public purse by 2014 and will she provide the data that support such calculations? These are crucial statistics that must be updated and published on a regular basis. Furthermore, it is clear that large numbers of graduates will remain in debt for most of their working lives. Mr Willetts was accorded the sobriquet of “two brains” some years ago; a ratings agency might reasonably now reassess this assessment.

There are further problems. First, the rate of return on a first degree has declined. The lifetime earnings premium that went with a degree is now much less than it was. Secondly, the world recession has seriously reduced the prospect of graduates securing well paid careers. It is no wonder that many school leavers are questioning the value of going to university. A decline in HE participation rates is predicted by vice-chancellors and UCAS. Furthermore, today’s newspapers are reporting a significant decline in applications to FE colleges from 16 year-olds. The combination of these new factors will lead inevitably to many university closures, mergers or takeovers and certainly to massive reductions in course offerings across the board.

In response to the emerging chaos, Ministers have come up with a number of policy refinements, if that is not too grand a description of the series of knee-jerk reactions they have been forced to turn to. Ministers continue to assert that the new system of fees and loans will be more equitable than the existing one. The deputy leader of the Liberal Democrats, my right honourable friend Simon Hughes, was co-opted by the Government to improve access. He suggested 10,000 means-tested scholarships of £3,000 per annum to be allocated through schools to bright, disadvantaged pupils, but this will be but a mere sticking plaster. A government advertising programme to explain and promote the new system was also announced, but this and the Hughes proposals will not really tackle the problem. The stark fact is that the new fees/loans scheme is so complicated that it cannot be easily or simply explained and that makes it very bad politics, which further compounds the problems.

The Government need to undertake a thoroughgoing review, on the scale of Robbins, of their HE policies for England, or risk a decline, as many noble Lords have said, in the international reputation of our universities and the quality of the service they give to our citizens. There must also be a radical reordering of our policy priorities, in particular away from military adventurism, so that proper resources can be allocated to our university system. Within the coalition, the Liberal Democrats need to insist on these measures if they are to recover any credibility with the electorate on tuition fees and the costs that fall on individuals who undertake higher education. The chaotic system of English higher education must be addressed and remedial action taken.

[Baroness Northover]

I remind noble Lords that when the clock reaches six minutes—there are many academics here and I am sure that they can work this out—they have reached the end of their time. Otherwise, we risk not leaving enough time for the Minister to reply to noble Lords’ questions.