Post-18 Education and Funding Review

Lord Kerslake Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Lord Kerslake (CB)]

My Lords, first, I declare my interests as chair of the board of governors of Sheffield Hallam University and chair of the UPP Foundation Civic University Commission.

Philip Augar and his panel have, in my view, produced a thorough and thoughtful review that deserves serious attention. It describes post-18 education in England as a story of both care and neglect, depending on whether students are among the 50% of young people who participate in higher education or in the other half—the rest. In my view, the report is particularly strong in its recommendations to tackle the neglected part. Many other noble Lords have spoken about this and I will not repeat what they have said, but I shall highlight two recommendations from the report.

Ensuring that the route to further education is as streamlined, consistent and clear as possible, and providing additional capital and revenue support to reverse some of the previous catastrophic funding reductions are the two recommendations that I particularly commend as deserving widespread support. Addressing this disparity is, as Philip Augar said, a matter of fairness. I hope that today the Minister can give us an assurance that the recommendations on further education will be taken forward without delay. The Augar report is also surely right to recommend reversing the decision to replace the maintenance grant with loans and bringing back a grant of at least £3,000 for disadvantaged students.

On a personal level, I am pleased that the report recognises two key issues from the Civic University Commission report that I chaired: the need to restore part-time adult and continuing education and the importance of the civic role of universities.

Where the Augar report is less convincing for me is in its analysis and in some of its recommendations on higher education and, in particular, on student fees and loans. I believe that this is in good part due to the review having to reconcile four conflicting elements in its brief: delivering a headline reduction in student fees; sorting out the chronic funding issues in further education; avoiding a cap on student numbers; and keeping within the current funding envelope.

Those four things individually make sense but collectively they do not. They risk significantly weakening higher education finances, while doing little to assuage young people’s feeling of unfairness about the costs that they currently incur. Freezing fees for a further three years will amount to a real-terms reduction of 14% once the rising costs of pensions are taken into account. Fees will then have been frozen for a decade, apart from a £250 increase in 2017.

Reducing the maximum fee to £7,500, unless fully covered by government funding, will have a drastic effect on the finances of most universities. Some would struggle to survive and all would certainly need to curtail their spending on performing their civic role and on wider student support. The changes in fee levels, interest rates and repayment terms will benefit students on higher incomes post graduation and hit hardest those on middle incomes post graduation, as the IFS report in our excellent Library briefing makes very clear. Equally seriously, students may well see this as a sleight of hand—the headline fee level comes down but the total effective cost increases.

If we go beyond the question of fees, fundamental questions are raised about what universities should provide and how to establish whether that represents good value to the taxpayer and the student. The Augar report looks at these questions but, for me, it does not provide compelling answers. Judging the value of a degree on future earnings, for example, strikes me as a very limited approach, and, as the noble Lord, Lord Blunkett, said, the data is particularly weak.

None of that is to suggest of course that universities should not review their course provision to meet the needs of the local economy or strive to get the best possible job outcomes for their students, as we do at Hallam. However, this is likely to be best done through local initiatives and through the civic university agreements rather than through top-down prescription by government.

In having this debate, we are in danger of forming a perception of a typical student that is some way from being a general truth. At Hallam, for example, over half of our students are the first in their family to go to university; around a third are commuter students who travel from home; and half of them stay in the wider region on qualification.

Finally, I would like to make two important general observations. First, Augar will have done us a great disservice if it creates a false dichotomy between further and higher education. Restoring the deeply damaging cuts in FE and increasing the number of those at levels 1 and 2 who go on to benefit from further education is its own distinct issue. There is no great nobility in austerity that should compel us to transfer funding from one part of the sector to the other.

Secondly, the Government need to move speedily to complete their own part of the review following the Augar report and bring forward recommendations. It is worth remembering that the Augar review was commissioned in February 2018 and was intended to be published in time to allow the Government to conclude their review by early 2019. We now have a commitment to report by the time of the spending review, but with the uncertainty of Brexit it is far from certain that we will get a full spending review in November.

Any delay in the Government’s report will bring a definite planning blight to the sector, for both potential students and the higher education and further education sectors. We need a prompt and definitive response from government. I would be grateful if the Minister could respond on both those final points.