University Funding (Yorkshire)

Ed Davey Excerpts

Tuesday 20th July 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing the debate. In the last Parliament, as Chair of the Select Committee on Children, Schools and Families, he was a very authoritative voice on all aspects of education and he brings that knowledge and skill to today’s debate. I am very sorry that my right hon. Friend the Minister for Universities and Science is not here, but as I am sure the hon. Gentleman is aware, he is attending the Select Committee on Business and Enterprise. My right hon. Friend sends his apologies—I am very much a stand-in.

The hon. Gentleman is passionate and knowledgeable about this subject and he has shown that today. I thank him for the role he plays in partnership with Kingston university in my constituency. He is a trustee of the Rose theatre in Kingston, which has a partnership role with the local authority, local business and Kingston university in relation to creative arts. That is the sort of partnership he was talking about during his speech.

[Mr Sheerman]

I am an honorary doctor.

[Mr Davey]

The hon. Gentleman is also an honorary doctor. I should put it on the record that I am an honorary fellow of Birkbeck college, London, which is showing the way in how we can be more innovative in the higher education sector. I was interested to note that he referred us to Sir Keith Joseph’s reading list. I am not sure if he wanted us to read the books on that list—probably not; I think he was creating his own reading list. I was delighted that he included a mention of the recent speech made by my right hon. Friend the Secretary of State for Business, Innovation and Skills. He was generous enough to say that it was a good and balanced speech, although he made the point that it did not mention innovation, which was the main focus of his speech today.

I reassure the hon. Gentleman that the Government are keen to do what they can to promote innovation. We share his desire to ensure that higher education institutions in Yorkshire and, indeed, across the country are able to maintain their reputation for world-class research, which has been one of Great Britain’s key comparative advantages in recent decades. Although there will be some tough decisions to make, we are determined that when we make them, we will not put that huge reputation and the benefits that the wider economy gets from the work of our great universities at risk.

[Alec Shelbrooke]

On the point about innovation, something to which the hon. Member for Huddersfield (Mr Sheerman) did not refer—or he may have done in part—is that when universities in the Yorkshire region come together, they have an outstanding opportunity to be the leading nanotechnology specialists in the world. Indeed, York university has one of only four machines in the world that can photograph molecules down to that level and see them lined up, and Huddersfield university has one of the most precise measuring instruments in the world.

Overall, innovation is part of the bread and butter of universities. Will the Minister give some thought to how he can free up universities to enable them to capitalise on the intellectual property that they develop? At the moment, they struggle to do so because their charity status means they are unable to make a profit. If they did, they would be hit by VAT, which would be bad for them. If we can change some of the rules that they play by, a huge income stream would be available to universities, which would bring into universities the investment that we all want to see.

[Mr Davey]

I am sure that my right hon. Friend the Minister for Universities and Science will want to reflect on those remarks, because we will be searching for new revenue streams. It is incumbent on this Government to do so as we make some difficult decisions about public funding. The hon. Gentleman’s comment is therefore very helpful. The university of Huddersfield is exceedingly expert in that area and has a unique nano-lab facility. As he was saying, that shows the great research facilities that are in the Yorkshire higher education institutions and how they benefit when they work together either across Yorkshire or, indeed, in the N8 group more broadly across the north.

[Mr Sheerman]

Yorkshire ranks No. 1 in all the regions in terms of attracting inward investment—£28 million a year—for new start-up businesses.

[Mr Davey]

I understand that. It is one of the reasons why I wanted to say to the hon. Gentleman that, although there will be a difficult funding climate—as colleagues are well aware—it is worth putting it on the record that Yorkshire universities tend to fare reasonably well compared with their counterparts in other parts of the country. That is in no small part due to their strong research performance. Yorkshire universities receive a level of research funding per higher education institution that is above the UK average, and two of its institutions are among the 20 that receive the most research funding in the United Kingdom. He is absolutely right. The Government are keen to ensure that they can build on that success.

The higher education sector is a success story for Yorkshire. The university of Huddersfield in the hon. Gentleman’s constituency illustrates what Yorkshire universities can achieve. I have mentioned the nano-lab, but the cutting edge Centre for Precision Technologies is also showing what Yorkshire universities can do for precision engineering. Huddersfield university has other areas of expertise, including automotive engineering, motor sport, computer games, electronic and electrical engineering, and multi-media and music technologies. Kingston university in my constituency also has many areas of expertise in engineering. Given Kingston’s past, those are particularly related to the aeronautical industries. I share his commitment to ensuring that universities are able to develop the innovative capacity they have shown in the past. Despite the problems that will arise over the next few years in ensuring the funding is fair, we must ensure that such a capacity to innovate is not lost, as it can play its part in reducing the public sector deficit.

The hon. Gentleman said that we should not talk down the state of the British economy. There is no desire to talk the economy down, but there is a desire to deal with the huge challenges we face—a public sector deficit that is 11% of GDP, and the highest public sector deficit within the OECD. The Government cannot sit by and do nothing. I am sure he will admit—he is such a reasonable person and is very knowledgeable—that the previous Government were considering some significant reductions in funding in this area for this year. If anything, compared with the grant letter of December last year, this Government are putting more money into HE this year for the 10,000 places, which has led to some debate. The previous Government were planning £600 million of spending reductions to take place in future years. On financing the HE sector, this Government have not uniquely decided that they want to consider reducing spending; they are taking on the previous Government’s proposals.

[Mr Sheerman]

I am sure that the Minister’s officials will have looked at the speech I made in this Chamber in January, in which I complained about the previous Government’s cut to university funding. So I agree with him on that. However, what does he think our competitors are thinking? Higher education is the one sector in which we are the world leaders—we compete with the Americans, the Australians and the Canadians—but suddenly we are going to start cutting it by 25%. That is what he is predicting—25%.

[Mr Davey]

I am glad to see that the hon. Gentleman is claiming consistency in that he says that he criticised the previous Government for their spending cut proposals. We share his vision of the crucial role that universities and innovation play in our economy, the productive sectors and so on. There is no dispute in that area, but there is a dispute about the role that the university sector must play in facing up to the immediate public finance problems facing the country.

I apologise to the hon. Gentleman because I am running out of time. I shall conclude by saying that there are no easy solutions to the challenges that this country—this Government—faces on public spending. We should not run away from those challenges, because it will be in the long-term interests of our university sector if we face up to them. With the help of Lord Browne’s review, which will conclude in the autumn, we will have the knowledge base and understanding to put forward a fair and equitable settlement. Such a settlement will ensure that our universities have sustainable funding and that access to universities is not undermined.