Higher Education Reform

Bridget Phillipson Excerpts

Monday 4th November 2024 Commons Chamber

[Mr Speaker]

Mr Holden, you don’t help yourself, do you?

The Secretary of State is here to make a statement, so hon. Members will have the opportunity to question her. If the premature media reporting is due to an unauthorised leak, that is a great discourtesy to this House. I hope the Secretary of State will be able to identify the guilty party, take appropriate actions and brief me accordingly. I hope the Secretary of State will announce a leak inquiry, we will get all the details of how this information could have got out and the House will be informed as that goes forward.

[The Secretary of State for Education (Bridget Phillipson)]

Mr Speaker, may I begin by expressing my deep regret that the content of the statement that I am about to make appeared in the media earlier this afternoon? It had always been my intention to come before this House to make the statement first, given its significance and importance. I appreciate that you, Members across the House, and our conventions, rightly demand and expect that. I hope that you can accept my deep frustration and regret at what has taken place. I will take whatever steps I can to keep you updated on the matter, because I do respect the conventions of and my responsibilities to this House.

[Mr Speaker]

Can we take it that there will be a full inquiry into how this has happened—that everybody will be brought in and questioned, and you will then update us on that full inquiry? That is what I really want.

[Bridget Phillipson]

I can give you that undertaking, Mr Speaker, and I will speak to officials about the matter, as you request.

[Mr Speaker]

Thank you.

[The Secretary of State for Education (Bridget Phillipson)]

With permission, I would like to make a statement about the future of our higher education sector and the changes that we will be making for students in the upcoming academic year, 2025-26.

Before I go further, I want to make clear the approach that this Labour Government take to our universities and, above all, to the students whose education is their central purpose, because the Conservative Government did not just talk down universities; they talked down the aspirations of working-class families across our country, and they dismissed the ambition of our young people and undermined their opportunities. This Government take a different approach. We are determined to break down the barriers to opportunity, and higher education is central to that mission.

Higher education is part of what makes our country great. It enriches our culture, powers our economy and sustains intellectual traditions stretching back centuries. It is a beacon of opportunity—to students not just from this country, but from across the world—and a sector of which everyone in this House ought to be proud. But when this Government took office in July, we found a university sector facing severe financial challenges. With tuition fees frozen for the last seven years, universities have suffered a significant real-terms decline in their income. We also found a regulator subject to political whim, unable to focus on the challenges our universities face. A succession of Conservative Ministers faced with tough decisions had, for year after year, ducked them time and again.

We inherited in our universities, as across so much of our public sector, the consequences of long years of shameful abdication of responsibility: long years in which I heard too often from students of the gap between the course they were promised and the experience they had, about the trouble they had making ends meet as they worked hard not merely at their studies but often at two or more jobs on top; long years in which I saw the amazing research our universities deliver but how infrequently those triumphs drove wider success; and long years in which I heard from international students, who make such an important contribution to our country, that the previous Government had made them feel neither valued nor welcomed. That is the mess that Opposition Members left behind, but where the Conservatives shirked the hard choices, this Government have not hesitated to grip the challenges we face and take the tough decisions to restore stability to higher education, to fix the foundations and to deliver change.

We have accepted in full the recommendations of the independent review of the Office for Students. We have also brought new leadership to the office and refocused its work to monitor universities’ finances and to hold leadership to account. I thank Sir David Behan for his work both leading the independent review and now as its interim chair. We have paused the commencement of the last Government’s freedom of speech legislation while we consider the impacts on universities, students and the regulator, because although universities must be home to robust discussion and rigorous challenge, regulation must also be workable.

I am here today to make two sets of announcements on higher education reform, addressing the challenges our students and universities face, and gripping these issues as a responsible Government. First, we will fix the foundations. We will secure the future of higher education so that students can benefit from a world-class education for generations to come. That is why I am announcing that, in line with the forecasts set out in the Budget last week, from April 2025 we will be increasing the maximum cap for tuition fees in line with inflation to £9,535—an increase of £285 per academic year.

I understand that some students may worry about the impact that the increase will have on their loan debt, so I want to reassure students already at university that when they start repaying their loan, they will not see higher monthly repayments as a result of these changes to fee and maintenance loans. That is because student loans are not like consumer loans; monthly repayments depend on earnings, not simply the amount borrowed or interest rates, and at the end of any loan term, any outstanding loan balance, including interest built up, will be written off.

Increasing the fee cap has not been an easy decision, but I want to be crystal clear that this will not cost graduates more each month as they start to repay their loans. Universities are responsible for managing their own finances and must act to remain sustainable, but Members across the House will agree that it is no use keeping tuition fees down for future students if the universities are not there for them to attend, nor if students cannot afford to support themselves while they study. I therefore confirm that we will boost support for students with living costs by increasing maximum maintenance loans in line with inflation, giving them an additional £414 a year in ’25-26. I also confirm that from the start of the ’25-26 academic year a lower fee limit of £5,760 will be introduced for foundation years in classroom-based subjects such as business, social science and humanities. The Government recognise the importance of foundation years for promoting access to higher education, but they can be delivered more efficiently in classroom-based subjects, at a lower cost to students.

The change that the Government are bringing about must go further, so my second set of announcements signals the start of deeper change for our students, our universities and our country. Today, I will set out the scale of our ambition to build a higher education system fit for the challenges not just of today but of tomorrow. In the months ahead, we will publish our proposals, because in universities, as across our public services, investment can come only with the promise of major reform. The contribution of higher education to our economy, our communities and our country must grow and strengthen. That begins with universities doing more to spread opportunity to disadvantaged students, in both expanding access and improving outcomes. Our most recent data shows why. The gap between disadvantaged students and their peers in progression to university by age 19 is the highest on record. I will not tolerate that shameful divide any longer. Universities can and must do more, and they must rise to the huge challenge of technological change, supporting adults with the flexibility that they need to retrain. That is why we confirmed in the Budget that we are pressing ahead with the lifelong learning entitlement.

While the UK is home to many world-class universities, it is time that all students in higher education in this country feel the benefit. It is time to raise the bar further on teaching standards, to improve our world-leading reputation and drive out poor practice, and it is time to ensure that all students get good value for money, which, if we are honest, has not always been the case in the past. Furthermore, universities must do more to raise their impact beyond their gates. They must do more to drive the growth that this country sorely needs by attracting talent from around the world, joining with Skills England, employers and partners in further education to deliver the skills that people and businesses need, and shaping world-class research to create good jobs across the country. Members across the House will know how important universities can be for the areas that surround them—not just local economies but local communities. I want universities to work harder to embed themselves in those local communities, as civic anchors—the beating heart of local life in our towns and cities—not ivory towers far from local concerns.

Lying beneath those challenges must be a further transformation: a renewed drive for efficiency. Students and taxpayers support the costs of our universities. They are right to expect that every penny is spent effectively. We will not accept wasteful spending. Universities must rise to the challenge, which means ensuring that the pay of their top teams is fair and justifiable. I am determined that our world-class higher education sector does not merely survive in the years ahead but thrives, supporting students in every corner of our country and at every stage of their lives. I am determined that our universities become all that I know they can be. The scale of our ambition demands a new approach, rooted in partnership, so I look forward to partnering with the sector, the Office for Students and UK Research and Innovation. I will work closely with Ministers across Government, in particular the Secretary of State for Science, Innovation and Technology, to deliver a reformed and strengthened higher education system for our country.

As today the Government look to the future, I am reminded that more than 60 years have passed since the Robbins report on higher education was presented to this House, with its famous principle

“that courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so.”

That principle drove the expansion of higher education over the decades that followed, under successive Governments of both parties. It is central to the thinking of this Government today. That is why responsible Governments must treat universities not as a political battleground but as a public good. It is why Government Members want to see the continued success of our young people, and it is why we are determined to ensure the sustainability and success of our higher education sector, not just in the years ahead but for decades to come. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

[Laura Trott (Sevenoaks) (Con)]

I thank the Secretary of State for advance sight of her statement.

The Budget last week declared war on business and private sector workers, and on farmers, as we have just heard. It seems that today the Secretary of State wants to add students to that list. Not content with pushing up the cost of living for everyone with an inflationary Budget, and pushing down wages with a national insurance increase, we are now in a situation whereby students will suffer from the first inflationary increase in a number of years, at a time when they can least afford it.

Yet again, there was no sign of that in the Labour manifesto. Indeed, in only 2020, the Prime Minister made scrapping university tuition fees a centrepiece of his leadership campaign—perhaps we should start putting sell-by dates on his statements. But it is not just the Prime Minister: in July this year, at the time of the King’s Speech, the Secretary of State said that she had “no plans” to increase tuition fees, and yesterday the Chancellor said that there was

“no need to increase taxes further.”

Yet what is happening today apart from a hike in the effective tax that graduates have to pay? Students have not had a chance to prepare for that rise. They will have fairly expected, based on all the statements that I have mentioned, that the last thing a Labour Government would do in office is put up tuition fees.

We have some of the best universities in the world here in the UK, but we need to do much more to reform the system and make it better and fairer for students and universities by ensuring that courses provide students with an economic return, helping universities to harness the growth potential of the innovations that they foster, and ensuring that students and lecturers are free to express and debate their views. We are willing to work with the Government on all those things. It is also right that we consider university funding, but pushing up costs for students at short notice in an unreformed system will lead to students up and down the country feeling betrayed.

How much of the increase will be absorbed by the national insurance increase for employees at universities? Does the Secretary of State intend to increase fees every year, or should students expect this to be the only increase? What is the impact of the change on public finances, and has the Office for Budget Responsibility been consulted? Why was the change not announced in the Budget? How much longer will it take the average borrower to repay their tuition fees as a result of the change? And why was Labour not up front about the measure in its manifesto?

In June 2023, the title of an article written by the now Secretary of State proclaimed:

“Graduates, you will pay less under a Labour government”.

Well, it turns out they will pay more—more broken promises.

[Bridget Phillipson]

Amid the faux outrage that we just heard from the shadow Education Secretary, I did not hear whether she will support the measure. She, like her party for many months during the election campaign, had nothing to say other than doing down the ambition and aspiration of young people and their families who want the opportunity to go on to university. The Conservatives went into the last election determined to ensure that fewer young people had the chance to go to university. That is shameful, and it is something that Labour will never back. Young people with talent and ambition, and their families, want a Government who recognise it.

It is little wonder that, at the ballot box on 4 July, the right hon. Lady’s party got a clear message. It is just a shame that in the time since, there has been no reflection on why that was. The Conservatives have learned nothing from their years of failure. They ducked the tough decisions for years. I make it absolutely clear to the House that I do not take any pleasure in this decision—it is not one that I want to take—but I am determined to secure the long-term financial sustainability of our world-leading universities. She is right to recognise their success. They are beacons around the world, and that necessitates tough decisions—decisions that she and her colleagues in the Treasury ducked year after year. They put a Conservative peer in to chair what should have been an independent regulator. They picked fights with the sector time and again, and over the course of 10 years, the Conservative party never had a serious plan to reform the higher education sector. I am determined to bring that reform, and in the months to come we will set out further plans to reform efficiency, access and participation for our young people.

To answer the precise questions that the right hon. Lady asked, as we lay legislation before the House, we will publish an impact assessment alongside it.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Education Committee.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

First, let me put it on the record that I am the parent of a young person in her first year at university.

The Secretary of State has set out very clearly the case for our universities and the justification for her announcement today. However, as young people who might be applying for university as the announcement is being made might see only the headlines, what steps is she taking to ensure that it is communicated effectively, so that it does not deter young people from low and middle-income backgrounds from applying to university in the first place?

[Bridget Phillipson]

I am grateful to my hon. Friend for her question, and I look forward to speaking with her and her newly constituted Select Committee about this issue and many others.

I recognise the importance of communicating the message that university should be for all young people who have demonstrated that they have the qualifications and talent required. This was not an easy decision, but as Secretary of State, I need to ensure that we secure the long-term financial sustainability of the sector. Alongside that, I am absolutely clear with the sector—with vice-chancellors and others—that it must do more to provide better support and to widen access and participation so that more young people, especially those from more disadvantaged backgrounds, have the opportunity to benefit from higher education.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

I thank the Secretary of State for advance sight of her statement.

It is clear that the current university funding system is broken. Not only is it pushing many universities into a financial crisis, but the changes made by the previous Conservative Government have left us with a system that is deeply unfair in how it treats students. It simply cannot be right to raise fees without taking steps to substantially reform the system to make it fairer.

By abolishing maintenance grants for disadvantaged students in 2016, the Conservatives put up a barrier between disadvantaged students and higher education. The Liberal Democrats opposed that abolition at the time, and we have consistently campaigned to restore those grants ever since. The previous Government also cut the repayment threshold to £25,000, so today’s students have to repay hundreds of pounds more per year than older graduates on the same salary. Perhaps worst of all, they lengthened the repayment period from 30 years to 40 years for those starting courses from August 2023 onwards, so today’s students will still be paying back their loans in 2066.

Does the Secretary of State accept that the first priority must be to fully reform the system, fixing the damage that those changes made and creating a system that is fair for all students? That, rather than simply putting up fees without those much wider reforms, has to be the best way forward. The crisis in funding for universities must be addressed, but have the Government considered how to support universities without raising fees? Does the Secretary of State agree that an important first step would be to recognise the benefits of international students and give universities stability in that area of policy? Does she also agree that any reform must examine how universities currently spend their allocation of £10,000 per student per year, so that that money is spent as efficiently as possible?

[Bridget Phillipson]

I thank the hon. Gentleman for his questions. I gently observe that although it might have been slightly before his time in this House, his party has got a bit of form on this topic, but I will address his questions in the spirit in which he asked them. I appreciate the constructive approach that he has taken.

As part of the reform that we want to deliver for our young people and our sector, the hon. Gentleman’s questions about making sure that young people are supported to succeed are important ones. Since becoming Secretary of State, I have also been very clear that our international students play a crucial role, not just in our communities and our country but in the contribution they make to our local economies—I see that myself as a constituency MP. As we take forward our programme of reform, working with the sector and others, I will of course be happy to discuss that further with the hon. Gentleman.

[Rachael Maskell (York Central) (Lab/Co-op)]

The last Government nearly bankrupted a number of universities. Indeed, one of the two excellent universities in my constituency had to go through a significant redundancy programme to stay afloat. However, I recognise the challenges that students in my constituency are facing, not least because of the high cost of living. As part of my right hon. Friend’s reforms, will she also look at the cost of housing students, so that they can pay their way when they are studying?

[Bridget Phillipson]

My hon. Friend makes an important point, and we will absolutely take that into consideration. It is important that we look at student accommodation, which is a big challenge in many university towns, including in her constituency. I believe the sector should be doing more to address issues around student accommodation, working with local councils. We will be setting clear expectations of how that should work in future.

[Sir Julian Lewis (New Forest East) (Con)]

The Secretary of State mentioned having paused the Higher Education (Freedom of Speech) Act 2023. Does she accept that, given that the Act got Royal Assent in May 2023, it remains the law of the land until repealed by this Parliament? How long does she expect that pause to continue?

[Bridget Phillipson]

I am grateful to the right hon. Gentleman. He is correct in the question he asks; what I would say about the commencement of the provisions and the wider, long-term future of the Act is this. I believe it is important that our universities are places of robust challenge and disagreement, and that students should be exposed to a range of views, some of which they may not agree with. However, alongside that, it is important that regulation is workable. That is why we are taking our time to make sure that we get this right, listening to a range of voices across the sector who hold differing views. That work is under way. We will make sure that we act having listened to those views, and that will be at the heart of further steps we take in this area.

[Darren Paffey (Southampton Itchen) (Lab)]

I would not be standing here today were it not for the incredible opportunities of a university education. I was the first in my family to attend and I spent the next 20 years as a higher education lecturer, watching culture wars break out and the financial system become increasingly broken. Does the Secretary of State agree that we now have an opportunity to restore universities as machines of opportunity and economic growth?

[Bridget Phillipson]

I agree with my hon. Friend, who recognises, both in his professional life before coming to this House and as a constituency MP, the crucial role that our universities play in towns and cities, as well as by providing opportunities for lots of young people. Alongside that, one area where we need to make more progress—and in which I know that my hon. Friend has a real interest—is care-experienced young people and their opportunities at university. There is a lot more that the sector must do to support young people coming through the care system who want the chance to go on to university, to ensure that the additional barriers they face are overcome, and I would expect it to be doing more.

[Christine Jardine (Edinburgh West) (LD)]

Does the Secretary of State accept that it might have been better to hold a wider review of the whole system—it is broken; we know that—instead of jumping immediately to putting up tuition fees? She says that we all respect and want to protect our world-beating universities, but how does she square that with her Government removing the funding for the exascale computer at Edinburgh University, which would have maintained not only its position, but our whole university sector’s position?

[Bridget Phillipson]

What I am announcing today is very much in line with the approach that we took at this Budget—a one-year settlement that allows us to fix the foundations, given the need to bring financial sustainability to the sector, because we recognise the acute financial pressures that many universities are facing after years of falling income from fees. That was not an easy decision, but it cannot be the entirety of what we do. I am determined to reform the sector. I will happily work with the hon. Member’s party to look at ideas for how we do that, but she will know as well as I do that the record on progression to university for young people from more disadvantaged backgrounds in Scotland is not a strong one.

[Matt Western (Warwick and Leamington) (Lab)]

I commend my right hon. Friend for making such a bold and difficult decision here when so many of her predecessors shied away from it. Putting the sector on a sound financial footing is crucial, but I also welcome the move on maintenance support. Can she assure me that, when she talks about increasing efficiency in the sector, she is talking not about vice-chancellors balancing staff and workload, but about addressing the overspend in some capital projects that might be viewed as particularly wasteful, so that good money does not follow bad?

[Bridget Phillipson]

My hon. Friend has long championed our fantastic universities. He is right to draw attention to the need for further efficiencies, but he is also right to identify that efficiencies do not mean making staff do more with less, or indeed with fewer staff. They do mean reeling in needless or excessive spend and waste, and he is right to highlight that.

[Mr Richard Holden (Basildon and Billericay) (Con)]

Ten million pensioners, almost 30 million workers who the Institute for Fiscal Studies says will now see lower wages because of national insurance rises, tens of thousands of farmers, hundreds of thousands of small businesses seeing business rates rising, and today millions of students. Is there anyone that this Government told before the general election “Don’t worry!” who they have not since shafted?

[Bridget Phillipson]

I remain slightly bewildered by the right hon. Gentleman’s approach. He has clearly learned nothing from the election campaign we have just been through and clearly was not listening when he heard time and again about the £22 billion black hole his party left behind and the difficult decisions it ducked year after year. That is the Conservatives’ record, and he should reflect on it.

[Adam Thompson (Erewash) (Lab)]

Through a 10-year career in the higher education sector and now as chair of the all-party parliamentary university group, two things have become abundantly clear to me: first, the Conservative party left the sector in utterly dire straits when it left office, and secondly, today’s measures are absolutely necessary for our universities to avoid bankruptcy. What steps is the Secretary of State taking with universities, students and campus unions to develop a new financial model—one that delivers excellence and value for students, and stability and security for university staff and management?

[Bridget Phillipson]

My hon. Friend brings real expertise on these matters to the House. While the Government ensure that we play our part in securing financial sustainability, I have been clear with the sector that it too must do more. That involves playing an expanded role in driving economic growth, including in towns and cities across the country. The sector ought to be considering how it can do more, including working with further education providers to look at different ways of delivering provision, especially for adult learners, who often need a different approach in order to upskill, retrain and take on new opportunities. I have seen some great examples of that and some fantastic practice around the country, but there is more that the sector should be doing.

[Richard Foord (Honiton and Sidmouth) (LD)]

I welcome the Secretary of State’s announcement on increased maintenance loans and what that will do for equality of opportunity. I agree with her that the last Government did not properly value the contribution of international students. For more than 15 years, the much higher fees charged to international students have cross-subsidised British students, to say nothing of what international students do for British soft power. Will the Government remove international students from the net migration figures, so that that cross-subsidy can continue?

[Bridget Phillipson]

I agree with the hon. Gentleman on the important contribution that international students make to our country and the reach they give us around the world through soft power, influence and the business and trading links that they grow and develop, but I am afraid I cannot give him the answer he seeks on his wider question.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Keele University and the University of Staffordshire, two of the wonderful universities around my constituency, have been warning for a long time of the dire financial circumstances they face. We often forget that they are also major employers in my constituency, so I welcome the announcement of this financial support—if nothing else, to protect jobs in those institutions that currently face a desperate budget round. I share the Secretary of State’s ambition to widen participation; in my patch, Uni Connect’s Higher Horizons scheme is doing a lot of work to help disadvantaged students to access higher education. What is her Department doing to ensure that that funding is in place, so that more young people from places such as Stoke-on-Trent can have a higher education experience?

[Bridget Phillipson]

My hon. Friend is right to raise those issues and to highlight the important contribution that universities make to employment opportunities, and not just for academics and others engaged in research and teaching, but for a wide range of jobs right across the board. From security staff to hospitality staff and library staff, there are many jobs across higher education that play a crucial role. The Department is looking at how we can work with the sector to deliver an expansion in the civic role of our universities. It is important that they do more when it comes to economic growth, but also to widen participation, because it is shameful that too few young people from disadvantaged backgrounds have the opportunity to go to university.

[Jeremy Corbyn (Islington North) (Ind)]

I welcome the Secretary of State’s announcement that

“universities must be home to robust discussion and rigorous challenge”.

That is very welcome, but she must be aware that many students are put off going to university by the already very high fees. There were no proposals in her statement to reform university finance; there was only a proposal to charge students more. Will that not drive more people away from university education rather than to it? Universities should not be dependent just on student income to survive. Should we not be moving in the direction of lowering fees, or indeed removing them altogether, in order to make higher and further education genuinely open to all in our society?

[Bridget Phillipson]

I agree that there is more that universities can do to ensure that they have a wide source of income. That includes greater work around economic growth, around spin-offs and much more besides—I will be working with my right hon. Friend the Secretary of State for Science, Innovation and Technology on precisely those questions. The reality is that it is necessary to bring forward this increase next year to stabilise the sector. It is a difficult decision but a necessary one, because it is no good encouraging young people to go to university if their institutions continue to be in financial peril.

[Bell Ribeiro-Addy (Clapham and Brixton Hill) (Lab)]

I thank the Secretary of State for her statement. I fully understand that something needs to be done. Tuition fees were introduced just before I went to university. It never sat well with me that Members of this House went to university free of charge, or with a grant too, and then seemingly pulled the drawbridge up behind them. I am pleased that the Secretary of State mentioned disadvantaged students and her plans to conduct an equality impact assessment, but we know that university applications have been slowly declining. Has she any plans to review her actions if the equality impact assessment shows that there are issues for disadvantaged students?

[Bridget Phillipson]

We will be setting out further plans in the coming months around the wider reform that we intend to bring to the sector. I recognise my hon. Friend’s genuine concern about making sure that talented young people who want to expand their minds and benefit from university have the chance to do so. There is much more that the sector can and must do to improve outcomes for disadvantaged students, including around progression. Sadly, it is not just that fewer disadvantaged young people are thinking about university, but that the progression rates in terms of completion are just not good enough. More needs to happen on that front, too.

[Ian Roome (North Devon) (LD)]

Universities work in collaboration with FE sector institutions such as Petroc college in my constituency. Government funding for the FE sector has fallen significantly in real terms over the past decade, leading to falling teacher pay. What are the plans to fund the FE sector so that it can remain a viable and accessible option, particularly in rural areas such as mine, for people to access university courses?

[Bridget Phillipson]

The hon. Gentleman raises important points not just about the state of our further education sector, but about the important collaboration between further education and higher education providers, including in communities where travelling times might be longer, and about ensuring that access to education is available to a much wider range of people. I have seen some really great work going on across the country, but there is more that the Government can encourage higher institutions to do.

The Government inherited a real mess in further education, a sector that had been ignored for so many years. We are determined to put that right. That is why in this Budget we invested £300 million into further education, alongside a £300 million capital allocation, for the first time in a number of years: to ensure that we are investing in our further education colleges, which are crucial parts of our towns and cities.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

We have thousands of international students at the University of Hertfordshire in Hatfield—they are most welcome and they make a great contribution. However, when the Conservative party was in power, the independent Office for Students concluded that the entire higher education model was reliant on international fee income. Does my right hon. Friend agree that that was a completely unsustainable model—another example of the Conservative party ignoring a problem and leaving it to us to rescue and reform our higher education sector?

[Bridget Phillipson]

International students play an important role in our communities and make an important contribution to our economy, but my hon. Friend is right to draw attention to the fact that there can sometimes be pressures. I know that can be especially acute where expansion happens and the right levels of accommodation do not follow. We will be setting clear expectations of the sector that it has to work with local councils to ensure the availability of high-quality accommodation. Alongside that, as a Government we are legislating to make sure there are higher standards in the private rented sector through the Renters (Reform) Bill, because too many students are expected to live in substandard private rented accommodation.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I put on record that I am the parent of three students—two undergrads and one postgrad—who are all paying their fees. Does the Secretary of State agree that courses offering just eight hours a week of contact time do not represent good value for money? Will she ensure that that element is fully evaluated in the reforms that are coming? Will she advise the sector that if students are getting only eight hours of contact time, which is effectively a part-time course, they do not need to charge the full fees?

[Bridget Phillipson]

We are working closely with the Office for Students on the areas that the hon. Lady identifies. She is right that we need to do more on quality, particularly teaching quality, and we will be discussing that further in the months to come. I would be more than happy to discuss that issue with her and her party.

[Shaun Davies (Telford) (Lab)]

Universities are critical for students, of course, but also for economic growth, town and city regeneration, and much more. Reform and accountability are also important. Will the Secretary of State outline in a bit more detail the accountability to which she will hold these university vice-chancellors on teaching contact time, helping vulnerable students and ensuring that universities play a huge part in the wider communities of the towns and cities in which they are anchor institutions?

--- Later in debate ---

[Bridget Phillipson]

One of the first actions I took as Secretary of State was to refocus the work of the Office for Students on precisely those areas that my hon. Friend identifies, because it is important that we ensure that the student experience at university is strong and that students have the opportunity to take part in a wider range of activities. I am also acutely aware of the financial pressures that many students are experiencing, and that is why we have taken the decision to increase maintenance loans at the rate of inflation. I have set out five priorities today for reform of the higher education sector. We will expect higher education providers to play a stronger role in expanding access and improving outcomes, especially for disadvantaged students. Such institutions should make a stronger contribution to their communities and to economic growth.

[Mr Joshua Reynolds (Maidenhead) (LD)]

It was not that many years ago that I was at university—[Laughter.] Who would have thought it? Just before the Secretary of State took to her feet, I checked my student loan balance, and it is just over £60,000. For many students at university, the elimination of maintenance grants was devastating, and the reintroduction of maintenance grants will mean that living costs are not barriers to university for those disadvantaged students. Will the Secretary of State confirm the reintroduction of maintenance grants, so that no young people are put off university for fear of the costs?

[Bridget Phillipson]

I can tell the hon. Gentleman that we will look at this issue as part of wider reform, but he will appreciate that after 14 years of Conservative failure when it comes to our universities, there are no easy options. This is a difficult decision and a difficult choice, but I can give him the assurance that I want to ensure that university remains an attractive option for all young people who want the chance to learn, to expand their minds and to take all the opportunities that come from a university education.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I welcome my right hon. Friend’s leadership not just on the funding, but on the reform that the sector needs. The previous Government’s approach to regulation put ideology over evidence, and one example of that is in the role of the designated quality body. It was there to check on quality and standards in higher education, but it had to give up that role because the regulatory climate that the previous Government brought in was non-compliant with international standards. Can the Secretary of State assure the House that the regulatory approach that she will take will be different from that of the previous Government and ensure that our higher education sector continues to be world-leading?

[Bridget Phillipson]

My hon. Friend brings real experience on these matters to the House. He will know it is important that the independent regulator retains the autonomy to act, but we will work with it closely on quality, student outcomes and much more besides. As he will know, under the last Conservative Government, that regulator was increasingly fixated on political matters and political whim, and did not have enough focus on teaching quality and students’ outcomes. Under its new interim chair, Sir David Behan, it has changed that approach and is focusing on ensuring not only that our universities are sustainable, but that they deliver better outcomes for students.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for her statement. With fees to increase, how can we expect students to stay and work within the United Kingdom when the fields are much greener on other shores and it is much cheaper to live there as well? May I make a plea about the retention of student and junior doctors? I have repeatedly asked for bursaries or forgiveness of debt against a job commitment of perhaps three or four years. Will she consider that? If enacted, that would mean more students and junior doctors staying, which has to be good.

[Bridget Phillipson]

I am grateful to the hon. Gentleman. For many young people, the chance to go to university is a long-term investment in their future prospects, which offers not just the chance to study and to learn, but the chance to take on a new career in the way he described, particularly in our health service. Of course, this matter overlaps with the Department of Health and Social Care, and he can be assured that we keep these matters under review.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I draw Members’ attention to my entry in the Register of Members’ Financial Interests. Any country that is serious about growing its economy should also be serious about supporting its university sector. In that context, I welcome the promise that a review will be published soon. I hope that it will take lessons from Scotland, where while undergraduate education is free, universities are grossly underfunded to deliver it. The announcement will only widen the gap between Scotland and England in that regard.

I also welcome the confirmation that we need our universities to be able to attract talent from around the world. Both the Higher Education Policy Institute and my union, the University and College Union, have said that the previous Government put blocks in place to that happening. Will the Secretary of State engage with the sector to ensure that we have the right environment to attract the best students and the best staff to UK universities and that the very best international graduates can work here at the point of graduation?

[Bridget Phillipson]

I am grateful to my hon. Friend, who raised a number of important points. In addition to those he made about the record in Scotland, he will know better than most of us the shameful record of the SNP Government when it comes to opportunities for university study for our more disadvantaged students. The share of first-time university entrants from Scotland’s most deprived areas fell for the second consecutive year. He will also know that the SNP Government in Scotland also cut mental health provision for Scottish students.

[Anna Dixon (Shipley) (Lab)]

I would like to put on the record that my husband works for a university. I welcome the announcement that the Government plan to reform and strengthen higher education. I went from a northern comprehensive school to university, and I agree it is vital that we expand access so that students from all backgrounds can go to university. I recently met the vice-chancellor of Bradford University, which has a high proportion of students drawn from the city, but many students fail to progress due to the lack of high-quality graduate jobs. I invite the Secretary of State to come to Bradford, perhaps meet other Bradford MPs and see the civic contribution that the university makes. Hopefully we will see more of that from other universities in the future.

[Bridget Phillipson]

I would be delighted to visit and meet my hon. Friend and other colleagues in neighbouring constituencies to discuss the approach that has been taken there. She made the wider point that our higher education sector is diverse and includes a range of providers who offer different kinds of opportunities, training and study for different sets of students. Of course, young people are often the focus of our attention in these discussions, but the chance to go to university later on in life is also crucial, with the opportunity to retrain, to upskill and to make a change of career. Many of our newer universities have driven so much of the excellent work that I have seen in expanding opportunities for adults to go back into education.

[Peter Swallow (Bracknell) (Lab)]

Before I was elected to this place I was a university lecturer and researcher. I worked hard to expand access to education for all. I agree with the Secretary of State that universities need to do more to ensure that, no matter people’s background, they have the opportunity to access a university education and the social mobility that comes with that. Does she agree that such opportunities are a fantastic route for social mobility, whether students choose to study a science degree, a social sciences degree, or one of the fantastic arts and humanities degrees?

[Bridget Phillipson]

I agree. My hon. Friend will recognise that over many years we heard the Conservatives doing down young people’s ambitions to go on and study. Like me, he will have heard dismissive talk, which I will not repeat, about types of degrees and the kind of study that our young people were engaged in. It is essential for a modern economy that people have the chance to study science and technology and much more aside, but also subjects like art and music, not just because they are good in and of themselves but because, increasingly, they are a key part of driving economic growth in our country.

[Alice Macdonald (Norwich North) (Lab/Co-op)]

The dire state of the finances of higher education institutions such as the University of East Anglia is likely to be improved by this announcement, but can the Secretary of State assure staff and students that mechanisms are in place to ensure that increased income from fees translates into fewer job losses and helps encourage more students from lower-income backgrounds into university?

[Bridget Phillipson]

That is my expectation. Excessive and wasteful spend in universities needs to be reined in. There must be a much greater push for efficiency. As a Government, we have made the difficult decision to increase fees to provide sustainability for the sector. Now, the sector must play its part.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I have Falmouth University in my constituency, which is a world-leading arts university. Unlike the Conservatives, this Government have committed to restore the arts as a large part of the economy in this country. Could the Secretary of State confirm that arts degrees will be an important part of the economy in future, and will be supported by this Government?

[Bridget Phillipson]

Going to university is often a long-term investment in someone’s earning potential and career opportunities, but the chance to study is also good in and of itself. That means that we must value and respect a wide range of courses and opportunities, including subjects like music, art and much more besides, although many well-paid, great careers also result from studying such subjects.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

When I was a student at Morley high school, the University of Leeds reached out to me and students like me to ensure that we considered a place at the institution, despite the fees at the time. Does the Secretary of State agree that, whatever the fees, it is crucial that these universities expand access to working-class students, to truly break down the barriers to opportunity?

[Bridget Phillipson]

I agree very strongly. It is crucial that our university sector does more to open up opportunities, including to working-class young people and those who do not have a family history of going to university. The experience that my hon. Friend described was very much my experience too—not just the encouragement that I received from my teachers but the opportunity to visit universities and see what was available. Although often there is individual good practice of the type he described, universities should do more, particularly within their regions, to collaborate to avoid duplication, ensure that they are serving their communities and draw on the wide range of talent available. They must make sure that university is an attractive option for young people who otherwise might not consider going to higher education.