Higher Education Reform

Judith Cummins Excerpts

Monday 4th November 2024 Commons Chamber

[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.

--- Later in debate ---

[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?