University Tuition Fees

Michelle Donelan Excerpts

Monday 25th October 2021 Westminster Hall

[The Minister for Further and Higher Education (Michelle Donelan)]

I thank my hon. Friend the Member for Ipswich (Tom Hunt) for opening the debate, which I am very pleased to participate in. The petition, as we have heard, considers a wide range of topics, from tuition fee levels, representation of students in Parliament and accommodation costs to the impact of covid-19 on the prospects of future graduate careers.

My hon. Friend the Member for Ipswich passionately spoke about the importance of the Government’s skills agenda and investment in alternative and vocational options, as well as higher education, which I will come back to. It has been a privilege to work so closely with the higher education sector; it has enabled me to see at first hand the extraordinary way in which students have dealt with the challenges they have faced over the last 20 months. Many Members spoke about those challenges, from the restrictions placed on face-to-face teaching to being in lockdown away from family. All that is on top of students’ fears and concerns for their own health and that of their family and friends, which will be familiar to us all.

I want to put on the record that the resilience that students displayed has been nothing short of extraordinary. Being their voice in Government during this difficult time has been a privilege. I want to sincerely thank staff across the higher education sector, who have faced unprecedented challenges and have shown that they are resilient, resourceful and innovative while maintaining the delivery of teaching and learning at the quality expected by the Government and the Office for Students. I have visited numerous universities and have spoken with many staff over the past 20 months, and I have heard incredible stories of how staff worked to move content online and adapt their teaching almost overnight. To staff and students, I say a heartfelt thank you.

However, I am not here just to thank the sector. Members will be aware that I pledged at the very start of the pandemic to prioritise getting students the support that they need, and students and staff have been given unprecedented financial support as a result. I thank all Members who supported those important interventions. We made an additional £85 million of student hardship funding available for higher education providers to distribute to students in the academic year 2020-21, in addition to the sizeable £256 million of student premium funding already available for providers to draw on to support students experiencing hardship, or to provide mental health support. We also worked with the Office for Students to create a new mental health support platform with £3 million of funding.

Last week, I announced that the maximum under-graduate loans for living costs will be increased by a forecasted inflation of 2.3% for loans issued in the 2022-23 academic year. The same increase will apply to the maximum disabled students’ allowance, to the grants for students with child and adult dependants who are also attending full-time undergraduate courses, and to the non-means-tested loans that the Government provide for students undertaking masters and doctoral degree courses. Such statistics are easy to overlook when they are fired off in debates, but those with students in their constituencies, as we all have, will know the very human and personal stories that make those financial interventions so important.

The first point raised in the petition is the important and complex issue that we have heard about regarding the rate of tuition fees. The petition asks for the maximum cap to be reduced drastically from £9,250 to £3,000. I understand the importance of, and the motivation behind, that view. Like those supporting the petition, the Government want a fair system that offers value for money; is sustainable; and provides enough funding to support high-quality teaching that leads to good outcomes, meets the skills needs of our country and maintains the world-class reputation of our higher education providers. Tuition fee levels play an important part in all those goals, but when we boil it down we cannot get around the fact that tuition fees must be at a sufficient level to achieve those aims. That leads me to the most obvious point: the funding implications of reducing tuition fees by so much.

Higher education providers in England gain, on average, approximately half their income from student fees. Therefore, reducing fees by more than two thirds to £3,000 for domestic students would create an estimated funding loss of a staggering £6.5 billion per year. Total funding for university courses would cover less than 40% of their cost of delivery in that scenario. Positive motivations aside, the consequences would therefore be disastrous for the higher education sector. We would force many providers out of the market overnight, and remaining courses would not have the funds required to deliver the high-quality tuition and experience that students deserve.

The only other option would be to force the taxpayer to pay the difference. To me, that prospect seems incredibly unfair, given that graduates will go on to earn, on average, £100,000 to £130,000 extra during their working lives than non-graduates—a point that my hon. Friend the Member for Ipswich made. That brings me to my next concern: many of those who would benefit would be the higher earners, and it is likely to make university harder to access and to excel at for the lowest earners. Rarely do I agree with the hon. Member for Warwick and Leamington (Matt Western), but I do on that point.

Our student loans system, on which the vast majority of students rely, is rightly based on the principle that those who gain the most will make the greatest contribution. That is why the size of an individual graduate’s loan repayments depends on their earnings—if they earn a lot, they pay more; if they earn less, they pay less. In many cases, people do not finish paying off the debt. A reduction in the amount that graduates need to pay back through a tuition fee cut would therefore benefit higher earners by thousands of pounds, while lower earners would see little to no change on their repayments. In fact, the very lowest earners would see no financial benefit from this at all.

Worse still, those thousands of pounds, now in the pockets of already high earners, would have come at the expense of universities, who would no longer be able to give such generous financial support and bursaries to students. People who know me well will know that I fought tooth and nail for better access and support for disadvantaged students, so the idea that we would do anything that would take away from their ability to go to university if they desire to do so is completely contrary to my views and those of the Government.

I also remind the hon. Member for Poplar and Limehouse (Apsana Begum) that, actually, we have record numbers of disadvantaged students who have gone to university this year, and we had record numbers of disadvantaged students going to university last year. In fact, a disadvantaged student in 2020 was 80% more likely to go to university than they were 10 years ago. That staggering statistic shows that the impact of tuition fees is certainly not the one being painted by Opposition Members.

As I mentioned, I think we all have very similar motivations for being here today. My focus, when looking ahead, is on how we can get the best value for students and support the most disadvantaged while maintaining the highest quality and standards that we are internationally renowned for. Although a cut in tuition fees would not help, it is also clear that raising fees would be equally wrong, so last week I was pleased to confirm that tuition fees will be frozen for the fifth year in a row. Compared with a situation where tuition fees had risen in line with inflation each year, that freeze means that a student on a three-year degree course has saved over £3,400—a real-terms reduction that I am sure supporters of the petition would welcome.

[Carol Monaghan]

May I ask the Minister when we are likely to see the recommendations of the Augar review implemented, including significantly reducing the student fees that are being paid?

[Michelle Donelan]

We are considering the remaining recommendations made by the independent panel chaired by Philip Augar, including on fees, funding and student finance, and we plan to set out our full conclusion on that shortly. I urge colleagues not to refer constantly to media speculation, because we have not yet made an announcement, but it will be coming shortly.

Following on from that, as part of our consideration of the recommendations made by Augar, I and my ministerial colleagues are still in the process of building a post-18 education system that massively improves the value and quality of learning and equips learners with the skills they need to get those high-wage, high-skills job opportunities. The way we drive up quality in our higher education system is not by diverting money from universities to high earners, but by investing in a system that focuses on high-value skills. That is the way to promote genuine social mobility. We have already delivered on several of the recommendations made by Augar in our first response to that, including investment in the further education estate, increasing funding to 16 to 19-year-olds, a commitment to introduce a lifelong earning entitlement and the Prime Minister’s lifetime skills guarantee.

[Matt Western]

This is not a difficult question, but I want to pick up on the point made by the hon. Member for Glasgow North West (Carol Monaghan). When the response to the Augar review is made—I think it is now two years, or two and a half years; I have lost track—will the Minister commit today to making that in the Chamber to us and not through the media?

[Michelle Donelan]

I look forward to when we announce our response to Augar shortly, and I am confident that there will be several opportunities for hon. Members to question either me or the Secretary of State for Education in the Chamber. I will pledge to ensure that that happens.

Moving on to the next element of the petition, I am very pleased to see the issue of student representation raised here today and I agree with the hon. Member for Slough (Mr Dhesi) on just how important that and listening to students really is. I know that Members present here today are no doubt excellent campaigners. I am sure we would all agree that no one holds us and higher education providers to account on these issues better than students. The view that has driven our work —from the National Union of Students, the Office for Students, Universities UK and the Office of the Independent Adjudicator for Higher Education—is to ensure that students know their rights with regard to higher education and can feel confident in exercising them.

For those less familiar with this, I recommend the excellent work done by the Office for Students’ student panel, which I have met several times since I have been in post. I am meeting it again next week. Over the past two years, the panel has made some really important points, pushing me and other Ministers, and it has certainly been a positive influence in the Office for Students. I am passionate about giving students more of a voice and more direct influence over student life than ever before, so seeing the panel directly inform the policies and decision making of the Office for Students is really inspiring. I know that the panel has played a fundamental role in informing the early development of the Office for Students’ next strategy—on which it will be shortly consulting—in shaping its statement of expectation on harassment and sexual misconduct, and in informing how student hardship funds can best be utilised.

I remind hon. Members that there is a process in place for students who feel that they have not had the expected quality or quantity of lessons, and they can complain to their university. If they are still not satisfied, they can go to the Office of the Independent Adjudicator, which is helping students to reclaim thousands of pounds where the quality of learning has fallen below standards. In fact, the OIA has already made recommendations for financial compensation totalling £450,000—again, showing just how important it is that the student voice is not only heard, but listened to and acted on. I encourage any student with a particular issue or concern to speak up and engage with the process.

The petition also raises the important issue of accommodation costs for students, which was raised by hon. Members. Again, it is an important factor in our mission to achieve genuine social mobility in the wake of covid. Higher education providers and private accommodation providers are of course autonomous and responsible for setting their rent agreements, but that should not stop the Government being there to advocate for and, where necessary, directly support students, which is why I ensured that providers were able to use the additional £85 million of student hardship funding to support students who were struggling with accommodation costs last year. I have also worked hard to ensure that providers’ rental policies have students’ best interests at heart, and that providers are listening to those interests that are being advocated strongly. If students have concerns about any issues relating to university-provided accommodation, they can of course complain to their university and then go to the Office of the Independent Adjudicator.

[Matt Western]

On accommodation costs, the Minister will be aware that there are many campuses across the country where there is no accommodation owned by the university itself—it is all in private hands. Will she provide the data that show the rate of increase in cost and how that has tracked over the past five years, relative to inflation? My understanding is that it is exceeding inflation.

--- Later in debate ---

[Michelle Donelan]

I will take that away and write to the hon. Member with the specific data that he has requested.

I will bring my speech to a close by picking up on the final point raised in the petition, which is particularly dear to my heart as a result of speaking to many hundreds of students about the uncertainty of their future careers. We have talked a lot today about universities, but job security and our economy also depend on the skills revolution going on in the whole of the further and higher education system. Apprenticeships, higher technical qualifications and T-levels are just some of the skills-focused offerings that will allow thousands of people to gain the skills and experience that they need to secure a high-wage, high-skilled job in future. New skills really are the fuel of social mobility, and universities are just one way to acquire those skills. I am proud to advocate for limitless ambition in what we can achieve through higher education, and I will continue to work to give students the best chance to succeed in the post-covid world.