Universities: Impact of Government Policy

Lord Stevenson of Balmacara Excerpts

Thursday 13th October 2011 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I add my thanks to my noble friend Lord Giddens for securing this debate, which has given us a long overdue opportunity to discuss the future of our universities. It has been an excellent debate, with expertise, history and passion, including, in the evocative words of my noble friend Lord Bragg, several thoughtful contributions from the men who “cut the hay”, who we are of course adjured to listen to very carefully.

In that context, it is very sad that we have not had the benefit of contributions from the Conservative Back Bench today. That is obviously a huge vote of confidence in the policies that they are pursuing.

[Lord Lucas]

My Lords, it is a reflection of what a hard time the Opposition have given us over the past three days and the general state of exhaustion on our Benches.

[Lord Stevenson of Balmacara]

My heart bleeds.

In his contribution the noble Lord, Lord Krebs, quoted extensively from John Masefield. In fact he must have been reading my speech over my shoulder, because I was also going to quote John Masefield, although I was going to use a quotation that the noble Baroness, Lady Wilcox, gave about a year ago. There were additional lines from where the noble Lord ended up:

“There are few earthly things more beautiful than a university: a place where those who hate ignorance may strive to know, where those who perceive truth may strive to make others see”.

The noble Baroness, Lady Wilcox, went on to say:

“I cannot emphasise enough that our universities are and must remain centres of free thought and discovery, and seats of learning in both the sciences and the arts”.

She confirmed that the Government would,

“never lose sight of the wider purposes of higher education”.—[Official Report, 27/10/10; col. 1222.]

Given what has been said today in this debate, perhaps the Minister could confirm when she responds that this remains the position of Her Majesty’s Government.

What are our universities for? We know, first of all, that the recent report of the noble Lord, Lord Browne of Madingley, confirms that we currently have one of the best, and certainly one of the most cost-effective systems of higher education in the world. We can contest exactly where we are in the rankings but we are certainly near the top. As the noble Lord, Lord Bragg, said, like the cultural industries, this is one of the things that Britain does best and it is something that we should cherish. So the first question is whether the changes now being proposed will assist us to retain and improve our higher education system. It is hard to believe, as the noble Lord, Lord Morgan, reminded us, that the decision to cut the block grant, to cut science funding by 10 per cent in real terms over this CSR period, to curtail overseas student visas and to make university fees three times more expensive is indeed the right way to build on the presently successful system. Indeed, it may get worse.

As my noble friend Lady Howells of St Davids said, the Government’s proposals will undoubtedly create three categories of degree-awarding institutions: an elite group, with almost all their students in the high-achieving category, defined as AAB or better, which will charge headline fees of £9,000 and will be allowed to grow; a large number of perceived second-rank institutions, which will charge £7,500 in order to be eligible to bid for those students that they lose to a pool through the “core and margin” reduction mechanism; and, as the noble Lord, Lord Smith of Clifton, predicted, a third group of private degree-awarding institutions, FE colleges and others, which will bid at very low fee levels to the pool, but which will have to provide a lot more for less if they are going to survive as universities. The experiences that the third group offer, including shorter programmes and minimal contact time, will not begin to match the experience offered at the other two groups.

If that turns out to be the long-term position, I have grave doubts about whether it will build on where we are today. The Russell Group universities—though not all of them—will prosper, but these changes clearly threaten the coverage, resilience, capacity and effectiveness of the sector. Like the noble Lord, Lord Krebs, I do not see a growth in the overall contribution that science and technology needs to make to our economy; and it will surely reduce the capacity to civilise our society that several noble Lords mentioned. We cannot rule out some closures of good and long-established institutions, with all that that implies. This strategy could destabilise the higher education sector and damage quality.

Related to this point, several noble Lords have mentioned postgraduate courses, a matter unaccountably omitted from the Browne review and the White Paper. It is of course inevitable that the postgraduate landscape will shift significantly as a result of the withdrawal of most central funding without any compensatory student loan support, and, as the noble Lord, Lord Krebs, said, because of the heavy indebtedness of future undergraduates. The changes in the visa system referred to by the noble Baroness, Lady Brinton, are also affecting the flow of potential overseas postgraduate students, with a knock-on adverse effect on teaching on undergraduate courses. Urgent work is now needed to develop a response to these pressures, and perhaps the Minister could respond on this point.

My second point is whether the new voucher scheme, which underpins the assertion that students will be at the heart of the system, will deliver a better and more cost-effective system going forward. It may well be that putting the student at the heart of the system—with good information, allowing them to make a rational decisions on what course they want to follow—could create a market in undergraduate course provision, and hence improve standards of teaching. The noble Lords, Lord Giddens, Lord Bilimoria, Lord Morgan and Lord Judd, have rather demolished that canard. Even so, it seems to be based on a wrong premise. According to the supporting analysis provided by BIS, high entry qualifications is one of the two key indicators that many universities try to maximise. High entry qualifications enhance an institution’s reputation, which further attracts entrants with high entry qualifications. The result is a large degree of rigidity in the ranking of universities by reputation and prestige. This in turn creates a large number of small markets, with products defined by entry qualifications and subjects, so that each institution or department is effectively in competition with a very small number of others. It is this product differentiation that restricts competition. Most students, after all, will make only one purchase and will not be able to compare different providers directly, and even an improved information system will not entirely compensate for this. In any case, how are prospective students going to get better informed so that, in the words of the White Paper, they will drive teaching excellence,

“by taking their custom to the places offering good value for money”?

This is cod market orthodoxy. But nevertheless, the more students know about what to expect, the better prepared they ought to be.

However, despite appearing to recognise the importance of accurate and meaningful information, the Government proposals do not provide this. The BIS impact assessment says:

“The Government does not have the resources to develop commercial standard information tools (such as consumer price comparison websites) .... so our long-term strategy is to ensure that relevant student data is made available to third party providers, so that they can turn the raw data into meaningful information, innovatively presented”.

Don’t you just love that “innovatively presented”?

Perhaps we can persuade the Government to think again on this point. I cannot see that British analogues of what is already on the market will take the trick here. Take, for example, the US-produced ratemyprofessors, a website which boasts that it has 10 million student comments, and no doubt a huge hit list. Promoted,

“as a fun way to choose the best courses and professors”,

it includes ratings of a professor’s appearance as “hot” or “not”, and ratings of “easiness”—said to be useful for finding a module which will not involve hard work. David Mease, of San Jose State University, currently tops the list with a 4.8 score out of 5 and, you might not be surprised to know, a chilli pepper for “hotness”. There is no photo so I cannot enlighten the House further, but you get the message. For completeness, Brigham Young University, with an average professor score of 3.62 out of 5, tops the college lists. Surely this is not the way to go.

My third point, which has been widely raised already in the debate, is about social mobility. The new methods of allocating resources and controlling student numbers look likely to reinforce relative disadvantage rather than remove it. The removal of the need to pay fees up front for both full and part-time courses, the provision of maintenance loans, and the bursaries and scholarships that may be available to students from low-income backgrounds, should make participation in higher education a more attractive proposition—I accept that. On the other hand, and crucially, we simply do not know whether, and to what extent, the likely assumption of increased debt will reduce participation in general, and by those from low-income backgrounds, women and ethnic minorities in particular. As my noble friend Lady Howells said, the effect of the “core and margin” system will be very likely to create a race to the bottom, bringing in third-tier institutions that are much less attractive to students, which is where many students from disadvantaged backgrounds will end up, because, as we have heard, they are less likely to have good qualifications and will be obliged to accept a place at a third-tier institution; or if they are unwilling to do that, will miss out on higher education completely.

The impact of Government policies is making the future of our universities very uncertain. As we have heard in this high-quality debate today, the restructuring of university funding, which passes the state’s contribution largely on to the student, undermines the compact between student, state and employers that has long been the basis for our university system.

Universities are not an extension of school or, as my noble friend Lord Giddens said, utilitarian providers for people to receive training in the limited range of disciplines for the workplace. They have other noble missions which, to our mind, requires that the state ought to be a major stakeholder in higher education, not merely a provider of off balance-sheet loans at penal rates of interest.

Whereas the Government’s early rhetoric, and clear ideological preference, was to rely on market forces and students exercising choice to create competition that would hold down fees, these aspirations have had to be emasculated in favour of a much more direct control over the level of fees that are charged. The result is not a proper market but even heavier-handed state control, effectively controlling how much the majority of universities can charge and how many students they can take.

I predict that there will be chaos and confusion as universities have to make up their minds about how to play the game without knowing the rules. Will the Government keep cutting their core? What further changes will they make to the AAB regime? The arrangements they have introduced, removing a large group and a growing number of students each year from the majority of institutions, is hugely destabilising. They clearly have no regard for the health of a vital component of our public realm.

From what has been said in this debate today it is hard not to feel that we are at the brink of a major experiment in social policy. As my noble friend Lord Judd said, so much of what is being proposed is untested and the impacts unknowable and the costs of what is being proposed are still in dispute. Like the health service, a major reform is being pushed through with very little understanding of the impact it will have on individuals, institutions, intergenerational relationships and society as a whole.

In closing, I make a rather unusual suggestion to my noble friend Lord Giddens. This debate has succeeded in covering the ground in this policy area, and it has also revealed a large number of flaws in the arguments that have been made. I know that part of the process in these debates is to withdraw the Motion, but the second part of the Motion also says that it is moving for papers. It would be jolly interesting to see the papers supporting these policy initiatives. I therefore suggest that he might leave the Motion in place.