Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)
The Minister for Universities and Science (Mr David Willetts)
With permission, Mr Speaker, I should like to make a statement on the higher education White Paper, which sets out how our reforms will build on the changes to student support announced last year. We will put higher education back on to a sustainable financial footing. We will put students at the heart of the system and improve the academic experience, with universities and colleges being more accountable to their students than ever before. We will also take steps to improve social mobility without compromising academic excellence or institutional autonomy.
We inherited an enormous deficit, which has required difficult decisions. We could have reduced student numbers or spending per student, or we could have provided less help with living costs, but those options would have been unfair to students, to universities and to the country. Instead, we are introducing a pay-as-you-earn system that provides more support for students, that does not require reductions in student numbers and that increases the cash flowing into higher education. We estimate that there could be a cash increase in funding for higher education of around 10% by 2014-15.
Our reforms ensure that no first-time undergraduate will have to pay fees up front and that they will be asked to contribute to the cost of their education only when they are earning more than £21,000. That increase in the repayment threshold—up from £15,000 under the current system—means that graduates will benefit from smaller monthly repayments than under the current system. For example, someone earning £20,000, which is the median starting salary for graduates, repays £38 a month under the system we inherited from the previous Government; in future they would pay nothing. At the moment, a graduate earning £36,000, which is the median salary for all graduates, pays £158 a month; under our scheme that would fall to £113 a month.
Our reforms also recognise that for many people higher education does not mean a full-time, residential degree. Some students want to work or take care of their family while studying. To support them, many part-time students and distance learners will become entitled to loans to cover their full tuition costs for the first time. Also, I can announce today that my right hon. Friend the Secretary of State for Health and I have agreed that for undergraduate medical and dentistry students starting their course in autumn 2012, the NHS bursary will be increased in years 5 and 6 to cover the full costs of tuition. For graduate entrants starting in autumn 2012, access to student loans will be made available so that there are no additional up-front tuition costs. We will consider arrangements for subsequent years; more information is being placed in the Libraries of both Houses.
These changes to higher education funding enable us to put financial power in the hands of learners, but to make that effective we need to liberalise the system of quotas we inherited from the previous Government so that more students can go to universities that offer a good-quality, good-value student experience. The White Paper therefore proposes unconstrained recruitment of the roughly 65,000 high-achieving students, scoring the equivalent of AAB grades or above at A-level. Quotas for those students will be abolished and funding will go to whichever university offers them a place they accept. In addition, we will create a flexible margin of about 20,000 places to reward universities and colleges that combine good quality with value for money and with average tuition charges, after waivers, at or below £7,500 per year. That adds up to around 85,000 student places—roughly one in four places for new entrants contestable between institutions in 2012-13. We aim to expand this further year after year.
We will also extend the scope for employers and charities to offer sponsorship of extra places, provided that they do not create a cost liability for the Government, and provided, of course, that there is fair access for all applicants, regardless of ability to pay, and no sacrifice of academic standards.
The reforms put students in the driving seat, but if they are to use that power to best effect, more than a liberalising of the quotas regime will be needed. Prospective students also need to know far more about the academic experience on offer. We will therefore transform the information available to them about individual courses at individual institutions. Each institution will make available key items of information, such as contact hours and job prospects. Information will also be available to outside bodies, such as Which?, so that they can produce their own comparisons. That will lead universities to match their excellence in research with a high-quality academic experience.
We also want our universities to work with business to improve the job prospects of their graduates by providing the knowledge and skills employers value. The sandwich course, giving students practical experience of work, declined under the Labour Government; we want to reverse that. We have therefore asked Professor Sir Tim Wilson, who made the university of Hertfordshire one of our most business-friendly universities, to review how we can make England the best place in the world for university-industry collaboration. We want our universities to work with business across their teaching and research activities to promote better teaching, employer sponsorship, innovation and enterprise.
Student choice will be more real if we liberalise quotas and transform information, and if there is a greater diversity of institutions to choose from. We will therefore remove the barriers to more provision from the Open university, further education colleges and private providers. We will simplify the regime for obtaining degree-awarding powers. We will also review the artificial barriers to smaller higher education institutions taking the title “university”.
We want students from a wide range of backgrounds to benefit from the reforms. We are increasing maintenance grants and loans for nearly all students, introducing a national scholarship scheme, and strengthening the Office for Fair Access to make sure that institutions fulfil their outreach and retention obligations to people from disadvantaged groups. That will not be at the expense of institutional autonomy; the director of fair access will continue to have a duty to protect academic freedom, including institutions’ right to decide whom to admit, and on what terms.
So that universities and academics can focus on educating their students, we will strip back the burden of excessive regulation and form-filling. We will explore whether it is possible to reduce costs associated with corporation tax returns. Her Majesty’s Revenue and Customs has today announced a consultation on the possibility of introducing a relief to remove some of the VAT barriers that currently deter institutions from sharing costs. We will reduce burdens that result from information collection. We will give students power to trigger quality reviews where there are grounds for concern, but will cut back the burden of automatic review for high-performing institutions. The Higher Education Funding Council for England will be the lead regulator, taking on a new role as consumer champion for students and promoter of a competitive system.
We are now inviting people to comment on our proposals as part of a broad consultation. Subject to the availability of parliamentary time, that will be followed by a higher education Bill next year, to make the necessary legislative changes to deliver the reforms.
The White Paper offers universities the prospect of more funding, provided that they attract students. At the same time, it saves the Exchequer money by asking graduates to pay back more as their earnings increase. Our universities already transform people’s life chances; we expect them to do even more. We will protect their autonomy and reduce their regulatory burdens. Above all, our proposals benefit students by driving universities to focus on the student experience. They will have real choice, better information, and a wider range of institutions to choose from. I commend the White Paper to the House.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to the Minister for advance sight of his statement. Is it not true that as higher education teaching has been cut by 80%, far more universities are charging £9,000 than the Government planned, causing huge political embarrassment for the Government and creating a funding crisis with the Treasury? Is not the real substance of the White Paper a desperate drive to cut fees, no matter what the effect on quality?
Is not the truth that this is another example of the Government’s failure to think things through, their disregard for the consequences, and the wrong choices being made for the country’s future? Is it not true that the Minister has slipped out on his Department’s website today a report on the impact on exports to this country of the proposal on tuition fees and of visa changes, suggesting that the total impact is some £8 billion of revenue lost to the UK?
It is
“difficult to recall a worse example of public policy making…wishful thinking has followed the apparent failure to do any serious modelling…the whole thing is a mess, and getting messier”—
not my words, but those of Sir Peter Scott, one of Britain’s leading experts on higher education and the former vice-chancellor of the Secretary of State’s local university. Is not the real truth that any expansion in university places is set to come on the cheap, with the Government cutting student places at the majority of universities—so much for student choice now—in order to fund the race to the bottom; an auction of places—who can charge the lowest?
The Prime Minister promised that universities charging the maximum would be the exception, yet is not the truth that two thirds of universities will charge the full £9,000? Is not that a devastating example of the neglect and incompetence that the Prime Minister routinely shows to the hopes and dreams of the next generation? The Secretary of State threatened to cut student places even more or university funding even further. Guaranteed places have been floated for those who want to buy their way in, and last-minute cut-price degrees. Almost 24,000 student places are already axed or are going. The Minister is in secret talks with the banks to help him out.
Forests, the national health service, prison sentences, universities today—it is “Carry on up the Khyber” in Whitehall, the Minister the latest to do the Hattie Jacques role. I am all for vigorous competition, but on for-profit higher education corporations, has he not been warned by both the Higher Education Funding Council and the Higher Education Policy Institute? Too many examples of the worst quality higher education, not for every student, but shocking drop-out rates, appalling degree completion rates, and aggressive recruitment practices that make pensions selling seem a walk in the park, are too often their norm.
The market has not protected against poor quality there. We need to be able to spot and stop students and their families being taken for a ride. Should not new providers have to prove themselves more rigorously, more regularly? How will making it easier to get university title and degree-awarding powers improve quality or the reputation and value of particular degrees, or boost the employability of those studying for such degrees? Nobody could be against the principle of an increase in places at high quality universities, but does it sit with the Secretary of State’s promises on social mobility when 50% of those getting AAB grades are from selective or independent schools? Will contextual data be truly embedded in university admissions or has he caved in to the Tory right?
How will the Secretary of State prevent, as the Institute of Physics has warned, students being deterred from studying the sciences or maths? Student charters and better information will be little compensation for trebling fees. I accept that there have to be safeguards, but will students be able to move courses with their loan intact if they realise that their course is not suitable or if their complaints are not taken seriously? Who will be the consumer champion—the representative of students and their families—at the new providers? Why should not students paying vastly increased fees know if their university has financial problems that might affect the quality of their teaching?
I welcome the end to at least one area of uncertainty today—the NHS bursary increasing for 2012-13—but what about future years? Why no certainty on that now? On research quality, why no mention that the rest of the world is increasing its science spending, yet here in the UK British researchers are having to cope with cuts of 40% or more in the funding to invest in world-class research facilities at our universities? Because of the bungled visa changes, universities face even more intense challenges to recruit the brightest and best research students and their lecturers to work with our brightest and best. No mention of cuts in funding for postgraduate courses or the impact on postgraduate recruitment of graduates leaving university with £40,000 worth of debt. Will we see as a result of his complacency a new divide opening up between those who have a postgraduate qualification and those who do not?
On the day it was revealed that 80 graduates are chasing every graduate job, which is double the figure for last year, all we got on university and business collaboration is a review. Where is the financial plan to incentivise universities to do more to stimulate new jobs in the industries of the future? Regional development agency funding has gone, HEFCE funding has been reduced and Technology Strategy Board funding has been squeezed, so this is yet another example of opportunities for economic growth being spurned, and of Ministers fiddling while Rome burns.
It could have been so different. Why were university cuts not in line with other public service cuts? Tuition fees would have been far lower, with no black hole, and chaos and confusion would have been avoided. Universities would have concentrated on getting their research and skills into businesses to drive jobs and new growth and there would have been a rigorous drive to ensure that every student gained employable skills. The Government did not need to leave the next generation of engineers, police officers and nurses having to pay so much more for so much longer. The Minister did not need—
Mr Speaker
Order. I should explain to the shadow Minister that his response should be no longer than half the expected length of a ministerial statement of 10 minutes, so I think that he is on his last sentence.
Mr Speaker
Order. I was being gentle about it. This is the hon. Gentleman’s last sentence, and it needs to be a short one.
Mr Willetts
I have to tell the shadow Minister that I am informed that Hattie Jacques was not even in “Carry on up the Khyber”, and many of his other statements were no more reliable. There were no questions, only a set of random scares that bear little relation to what we are proposing in the White Paper. Let me make it absolutely clear that there are no number controls on overseas students. We continue to welcome to this country overseas students who have the ability to benefit from studying at our universities.
The hon. Gentleman seems typically confused. One moment he complained about fees of £9,000, and the next he complained about our measures for providing a clear incentive to charge £7,500 or less. Our proposal for 20,000 places to be awarded on that basis is intended to ensure that students face a range of fees as they choose a university, which we think is the right thing to do.
I should also make it clear to the hon. Gentleman that we are reducing the burdens on universities, supporting them and liberating them from some of the impositions placed on them by the previous Government. It was his Government who introduced quotas and fines of £4,500 per student for universities that infringed their quotas. We are liberating 85,000 places from such a quota regime.
I make no apology for the measures that we are taking on access. It was under Labour, despite their claims to care about social mobility and opportunity, that—to quote Sir Martin Harris’ report—the
“most advantaged 20 per cent of young people were six times more likely than the most disadvantaged 40 per cent to enter these institutions in the mid-1990s. This ratio has risen to seven times more likely by the mid-2000s”.
That refers to Russell group universities. Those figures are scandalous. Under Labour’s watch, the ratio got worse. We are committed to equality of opportunity, which is why we have set out in the White Paper proposals for strengthening the Office for Fair Access.
Not only were there no sensible questions from the hon. Gentleman, but there was no indication whatsoever about what Labour would do. Are they advocates of a graduate tax, as the leader of the Labour party is, or do they accept the need to increase fees, as Lord Mandelson did? We are none the wiser after the hon. Gentleman’s random rant.