Higher Education: Funding

Baroness Sharp of Guildford Excerpts

Tuesday 12th October 2010 Lords Chamber

[Baroness Wilcox]

The noble Lord, Lord Sewel, has me there. It is a wonderful question but at the moment I have no answer for him. However, I shall be only too delighted to check and come back to him. At this stage, I apologise.

[Baroness Sharp of Guildford]

My Lords, I thank the Minister for making the Statement, although, as all sides of the House will know, some of its contents are not totally welcomed by those of us on the Liberal Democrat Benches. Ideally, we should have liked to see a situation in which it was proposed to have no tuition fees, with the costs being met through progressive taxation. Our second best option was a graduate tax. However, we recognise that, given the current financial situation, that is not to be, and we also recognise the very real needs of the universities for extra funding.

As I understand it—perhaps the Minister will confirm this—this is an interim Statement. As she said, we are expecting the comprehensive spending review, which will spell out the details. However, the Government have accepted two aspects in the Statement. One is that a good deal of the extra funding will come from students themselves, and they accept that this will be in the form of repayments relating to extra loans. However, I suspect that the precise mix of loans, grants and dispensations for low-income families will be presented not within the framework of the comprehensive spending review but in—I hope I am right in thinking this—a separate Statement setting out precisely how this is going to be worked out.

I have two further questions for the Minister but before asking them I should like to say two things. First, I am pleased that the proposals suggest a level playing field for part-timers and full-timers. This is an issue for which I and many other people on all sides of the House have fought for a very long time and it is very good to see it at long last. Secondly, I also welcome the simplification proposed for the higher education system—that is, having one higher education council instead of HEFCE, OFFA and the QAA. Indeed, the Office of the Independent Adjudicator is also included, although I wonder whether it is appropriate for that to be subsumed into the single council. Although I recognise that this was not in the terms of reference, I am sorry that the review did not look further and perhaps amalgamate the old Learning and Skills Council element of adult education, as it would be good to see an adult higher education council.

I have two questions. First, am I right in thinking that—although Browne is suggesting no cap on fees, allowing universities to vary fees between institutions and indeed between subjects—the Government are, in effect, suggesting a cap of £7,000? My second question picks up a point made by the noble Lord, Lord Triesman: does the Minister accept that, although raising the threshold to £21,000 is to be welcomed, the introduction of real interest rates on a loan of £30,000 will mean that, even at an income of £30,000 a year, with repayments of £68 a month or £812 a year, most of the £812 will be consumed by interest payments and that very little capital will be paid off? That means that those in that income bracket will retain that debt and probably will not have paid it off after 30 years; they will have it hanging round them, with a 9 per cent extra marginal rate of tax.

[Baroness Wilcox]

My Lords, I thank the noble Baroness, Lady Sharp, very much for that. It is very nice to hear her speak from this side of the Chamber. I was a little confused to start with, as this is the first time I have spoken from here with our friends on this side.

I am very pleased that the noble Baroness likes the idea of the inclusion of part-time students. It is a very good idea. At times, I have been a part-time student, so I think it will be helpful. Yes, we are looking at fees simplification, but as has been pointed out, there are further discussions to be had outside the House and within it. At this stage, nothing is written in tablets of stone as regards the skills council and so on.

The noble Baroness asked what the fee cap would be and, if there is no fee cap, whether fees could be charged at £20,000. Browne makes important recommendations about the structure and level of student contributions. We need to consider the options carefully and work out the implications of implementing them. We are considering a level of £7,000. The noble Lord, Lord Browne, recommends that there may be exceptional circumstances under which universities can price their courses above that threshold, but that would be conditional on them doing more on quality and to promote access for students from less privileged backgrounds. We are considering this proposal very carefully. There are strong views both for and against and we recognise the concerns from some that student contributions over £7,000 would put off some applicants, particularly those from low-income families. Equally, some argue that universities need to be able to charge more if they are to match the highest international standards, but we shall consider the arguments before reaching final conclusions.