Higher Education (Industry and Regulators Committee Report)

Lord Freyberg Excerpts

Tuesday 21st May 2024 Grand Committee

[Lord Freyberg (CB)]

My Lords, it is a huge pleasure to follow the noble Lord, Lord Norton, with his wide and extensive experience in this area. I too thank the noble Baroness, Lady Taylor of Bolton, for giving us the opportunity to discuss this critical report. My contribution today will focus on the urgent need for a review of higher education funding and student outcome indicators for creative arts students.

I start by echoing the calls of several noble Lords for an urgent review of higher education funding. The near 10-year tuition fee freeze for domestic students is jeopardising the sector’s long-term viability, particularly at post-1992 universities. Substantial job cuts and forced course closures are, unfortunately, becoming commonplace. The report warns that if the domestic undergraduate funding freeze continues, some universities will have to merge or, in the words of the noble Baroness, Lady Taylor, exit the sector. This is completely unacceptable and entirely preventable. At the very least, fees should rise in line with inflation. Here I entirely agree with the noble Lord, Lord Johnson, in his comments on the “Today” programme last Friday.

In addition, substantial evidence shows that the financial hardship that students have faced in recent years has been a real concern. Joint research in October 2023 by student housing charity Unipol and the Higher Education Policy Institute indicates that rent consumes nearly the entire average loan, leaving students with just 50p per week for all other expenses, including necessary resources such as textbooks. The National Student Money Survey 2023 states that the average monthly shortfall between maintenance loans and student living costs is £582. The Sutton Trust’s 2023 student maintenance analysis report found that median loans of £8,500 in London and £7,000 in the rest of England do not cover the median essential spending costs of £17,287 and £11,400 respectively.

This financial strain impacts on students’ education and university experience. Many students, facing significant gaps between their loan income and expenses, must work to subsidise their costs, often taking on more hours than recommended or feasible for full-time study. Opinium’s 2023 poll of 1,000 university students across the UK found that seven in 10 students have considered dropping out of higher education since starting their degree, with nearly two-fifths citing rising living costs as the main reason. Research by COSMO—the COVID Social Mobility and Opportunities study—also shows that young people from working-class families are more likely to forgo university because they cannot afford it. Here I echo the second point from the noble Lord, Lord Parekh.

Maintenance grants, which provided non-repayable financial support to students from lower-income households and helped mitigate financial barriers to higher education, were abolished in 2016. Under the current system in England, the poorest students incur the highest level of debt. England is the only UK nation without some form of maintenance grant provision for students. As Victoria Tolmie-Loverseed, assistant chief executive at Unipol, said:

“We risk excluding those from poorer backgrounds, forcing middle-income students to take on unsustainable debts, and damaging the student experience for all”.


Another issue identified in the committee’s report was the OfS’s method of evaluating value for money through its student survey results, which was described as “simplistic and narrow”, particularly due to its focus on employment outcomes. This focus on employment outcomes—specifically the jobs that graduates hold just 15 months after finishing their studies—disadvantages creative degrees. The regulator uses these outcomes to measure a degree’s value for money but, as noted in the House of Lords Library briefing, the current measure fails to reflect the value of creative degrees.

Outcomes are important, and it is crucial that universities equip students with the skills they need to succeed. However, this narrow focus overlooks a wide range of valuable outcomes and fails to recognise the unique nature of the creative industries, where many creative graduates find employment. The creative sector is characterised by a high proportion of start-ups and micro-businesses, with graduates often experiencing non-linear career paths, frequently working freelance or on short-term contracts. Graduates may also work part-time while pursuing creative endeavours or building portfolios. Self-employment accounts for 32% of creative industry employment in the UK, compared with 16% for the economy more broadly. Therefore, measuring employment outcomes at a fixed point shortly after graduation is ineffective for determining the success of creative degrees.

This narrow measure has also contributed to the perception of creative higher education as offering low-value and poor-quality courses, despite these degrees being crucial to the UK’s creative industries and the economy. The University of the Arts London, which nurtures the largest talent pipeline to the creative industries, with 22,000 students from 130 countries, advocates for a change in how the Office for Students measures high-quality provision, suggesting a broader approach beyond just graduate outcomes. This should involve a sector-wide dialogue with the Government and the regulator to develop a more holistic way of measuring the value of higher education. At the very least, the context of the non-linear careers of creative graduates should be considered.

The Government urgently need to review higher education funding. Additionally, they should embark on a major reform of the student maintenance system, and rapidly improve how student outcomes are measured by undertaking and publishing a review of this area.