Higher Education: Financial Sustainability

Max Wilkinson Excerpts

Thursday 5th December 2024 Westminster Hall

[Max Wilkinson (Cheltenham) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Erewash (Adam Thompson) on securing this important debate. University funding is undoubtedly in crisis. We have heard mentions of universities around the country, and there is a very similar story at mine, which I will tell later.

The previous Government broke the sector’s finances. That left the country with a system that is unfair to students, while pushing many institutions to the brink. We should not forget, in among that, the lecturers who work so hard in our universities too, as well as all the support staff. On the other side, we have students who increasingly feel burdened by the cost of living crisis and the long-term repayment of loans. When I speak to students today in my constituency of Cheltenham, it is a very different picture from the one that existed when I went to university in the early noughties in terms of how much they pay for rent, food and energy bills.

The previous Government made the tuition fee system unfair. The Liberal Democrats, however, cannot support simply raising fees at this stage without substantial reforms. At this stage, the right thing to do would be to undertake a full review of finance in the sector to consider ways to improve access to, and participation in, degrees, as well as the quality of courses, because value for money for students remains extremely important.

While the sector is struggling, we must absolutely not lose sight of the key challenge—removing barriers to entry for new students. That is why the Liberal Democrats believe that the reintroduction of maintenance grants is a vital first step, and I was heartened to hear the hon. Member for Erewash raise that in his opening remarks. Maintenance grants were scrapped by the Conservatives in 2016, which makes it so much harder for young people from less well-off backgrounds even to get to university in the first place. It is regrettable that the new Government are not yet committing to the full restoration of maintenance grants, and we urge Ministers to consider them as a way of bringing fairness back into the system. Scrapping maintenance grants was not the only way in which the Conservatives made the system less fair for students, lecturers, universities and everyone else. They stretched the repayment period so far into the future that some of today’s students will be paying back their loans until 2066. They also lowered the repayment threshold, leaving students paying back an extra £206 a year.

The earlier mentions of foreign students by the hon. Members for Erewash and for Luton South and South Bedfordshire (Rachel Hopkins) were pertinent, and I will now move on to that issue. The combination of the visa crackdowns and the rhetoric about foreign-born students placed further stress on the sector. The upshot is that the Office for Students suggests that about 40% of universities are likely to run a deficit this year. Locally, the University of Gloucestershire—based in my constituency and those of the hon. Member for Gloucester (Alex McIntyre) and my hon. Friend the Member for Tewkesbury (Cameron Thomas)—tells me that, of a turnover of £85 million, £65 million is from tuition fees, and around £20 million of that is from foreign students, but this year it has reductions in foreign students for both the January and autumn intakes. As I said, this is not just about the visa issue; it is also about rhetoric. The university tells me that its agents who recruit students from abroad say that the feedback from those students is that they are perhaps not quite so wanted in the UK as they once were, so they are selecting degree courses in Australia, America, Canada—elsewhere, where they feel more welcome.

The result is a £4 million hit to the University of Gloucestershire’s tuition fee revenue. That is significant. As a result, the university is closing some courses and consolidating others, reducing student choice. Some courses combining multiple humanities are the first to close; fashion is likely to go as well. That said, the university is doing what the Liberal Democrats have suggested too—cutting non-teaching costs and innovating.

The university is also taking advantage of Cheltenham’s cyber-security future. It recently opened a new £5.8 million cyber and digital centre, which will help cement Cheltenham’s position as the cyber capital of the UK. That places the university in the same sphere as CyNam, the local industry group, and alongside high-performing small and medium-sized enterprises that drive the local economy.

That kind of innovation has to be at the centre of what universities do in the future. However, the university warns that the benefit of the £300 tuition fee increase the Government offered this year is likely to be wiped out by the changes to national insurance for employers. I would like the Minister to respond to that point later.

The challenge for the new Government is to put things right, change the rhetoric and reinstate as much fairness in the system as they possibly can. We know that that is not going to be easy—we have all had challenges in the past, haven’t we?—but the Liberal Democrats cannot support an increase in fees at this stage. Reports now suggest that fees are to break the £10,000 barrier fairly soon and rise to £10,500 over the next five years. Before we could support that, more work is needed to undo the failures of the previous Government and restore fairness to the system.