Post-18 Education and Funding Review

Baroness Young of Old Scone Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Baroness Young of Old Scone (Lab)]

My Lords, I declare an interest as chancellor of Cranfield University and as chairman-designate of the Royal Veterinary College.

I support calls by many Peers for improvements in further education and benefits for the 50% who do not study for a higher degree. However, I am unsupportive of many of the Augar proposals for higher education, although perhaps I ought to be more statesmanlike and follow the subtle way in which the noble Lord, Lord Patten, praised the report and then systematically demolished it.

First, on the reduction in fees, Philip Augar says that the report is a package that cannot be cherry-picked. He says that the reduction in fees must be reimbursed in teaching grants to universities by the Treasury. I hear the sound of hollow laughter on both these points. This could just end up being a major reduction in university funding. Philip Augar is on the record as saying that he believes universities have had a bonanza time since the introduction of fees and that the amount of capital development currently happening on campuses is a sign of that. He even recommends removing the 10% future sustainability element of the fee structure, which is aimed particularly at ensuring that universities stay well developed, well housed and well equipped for the future. He recommends freezing the average per-student resource.

All these seem very short-sighted. If the Government’s industrial strategy is to be delivered, if the post-Brexit strategy of the UK as a world player in industry, research and economic development is to be delivered, if the research budget is to be increased to the government target of 2.4% of GDP, universities have to be well resourced and have excellent facilities for teaching and research. They must also have good student facilities if they are going to continue to attract the brightest and the best students and teachers globally, as well as benefiting the national economy, the UK’s standing and students and businesses in this country. So a cut in fees that was not reimbursed by the Treasury would come upon universities when they can least take it because they are already facing pressures from a loss of confidence in the UK as a result of Brexit. There has been a reduction in EU student applications, additional demands for funding for pension schemes and growing competition from the global higher education sector.

My second set of worries is: if the Treasury were to have a rush of blood to the brain and reimbursed the loss from fees in the way in which Augar proposes, I would have concerns. Reimbursement being targeted to qualifications that are high-value for students and taxpayers puts excessive emphasis on post-graduation salary performance. I am a classics student with a postgraduate degree in business studies—that denigrated subject—who earned hardly anything for the first few years I was employed. I seem to have come reasonably good in the last half of my life, but I would not be a candidate for a course that was highly valued by Augar. We could face a situation where focusing entirely on economic benefits would denigrate and devaluing courses in arts, humanities and those professions with lower post-qualification salaries. The noble Lord, Lord Blunkett, gave an eloquent exposition of how this would penalise courses taken by entrepreneurs and public servants who take up lower-paid jobs and contribute markedly to their local communities.

The idea of prioritisation also flies in the face of the Robbins principles that he outlined comprehensively and cogently in the introduction to his report. He said that there were four objectives of higher education—skills to play a part in the economy, promotion of the general processes of the mind and its powers, advancement of learning and the transmission of a common culture and standards of citizenship. Robbins added a sneak fifth one: participation by institutions in the life and culture of the community. He said that higher education needed to deliver all these and not just be about, in modern parlance, skills for the industrial strategy and value for money for government and students. We must preserve these Robbins principles because they are important and integrated.

I was taken aback that in his report Augar said that in the face of the changed funding arrangements there should be no bailouts for failing institutions. What about left-behind communities if their local institution that participates and adds hope for the future in the local community fails? Philip Augar says that that is a matter for the Office for Students. That leads me on to another point of concern. If the Treasury reimburses the loss of tuition fees, the money will no longer go directly to the universities but be mediated by the OFS, which does not seem to be the right body to make important decisions on what the national future priorities should be for skills.

My third point concerns the vexed question of cross-subsidy between different activities in universities. I happen to believe that cross-subsidy is an excellent thing. Subsidies are wide and varied: a major one is the cross-subsidy from overseas tuition fees to research and higher-cost courses. But they come into play across the full range of income streams, from the state, corporate concerns, commercial ventures and philanthropic income. The flexibility that this gives universities to spend the money they raise in the most effective way is very important. The changes proposed by the Augar report mean that there would be much more central direction from government and the OFS. Is this what we really want? Is not the principle of academic freedom important? Should we not be encouraging universities to be even more entrepreneurial and innovative, rather than being directed top-down and focusing their efforts on providing things that attract a higher teaching grant?

The Augar report worries me in another way—it feels dangerously close to being politically driven. The scenario goes thus: Jeremy Corbyn and the Liberal Democrats say that they will cancel tuition fees. The Conservative Government have to offer something to students to get their vote. These proposals would benefit only some students, as the noble Lord, Lord Bichard, outlined. So I will finish by putting some questions to the Minister. Will he confirm that the Treasury would reimburse any tuition fee cuts? Will the Government adopt Robbins rather than Augar principles for targeting any reimbursement? Above all, will the Minister commit to the much-needed improvements in further education, but not funded punitively at the expense of our universities? This is not a zero-sum game—this is where Philip Augar got it wrong. What we need is both a thriving higher education function and a thriving further education function.