Funding Higher Education

Paul Blomfield Excerpts

Wednesday 28th February 2018 Westminster Hall

[Mr Gary Streeter (South West Devon) (Con)]

I beg to move,

That this House has considered funding for higher education.

It is a pleasure to serve under your chairmanship, Mr Hosie, in a debate that I suspect has been slightly snow-affected. No doubt my hon. Friend the Member for Cannock Chase (Amanda Milling), who is standing in for the Minister, will say more about that in a moment. Also, I would like to thank Mr Barnaby Austin, who is a fine young man who is with me for three months. He has helped me to prepare my remarks today, so my thanks to him.

Like many Members, among my constituency duties I particularly enjoy interacting with sixth-formers in schools in my constituency, and I always feel encouraged coming away from those encounters. Not that everyone necessarily supports everything that the Government say or do, but I always feel encouraged that the coming generation is as bright, motivated and impressive as any has ever been. Looking forward, I feel that the country is in very safe hands.

Inevitably, as I am sure we have all experienced, the issue of student finance, student loans and tuition fees come up in those sessions. I have always been very happy over the last 10 years or so to support the system that we have, explaining that it is a generous system that does the job, that no one has to pay fees in advance and that it does not preclude anyone from going on to higher education. I am very happy to support the funding model that we have and always make the point that education is the best investment that any young person will ever make. A show of hands normally demonstrates pretty clearly that no one is ever deterred—or very few are—from accessing higher education as a result.

However, in the last few months I have been less sure about the fairness of the current arrangements and have been looking into some of the statistics on student finance. Therefore, I applied for this debate, to put on record a few concerns that I have and some thoughts about the future. I was both delighted and surprised that, after I had applied for this debate but before it was granted, the Prime Minister herself—perhaps picking up on my thoughts, leading wherever I go—has now announced her own review of student finance, which I greatly welcome. In particular, I support the important focus in the official terms of reference of the review, which seeks to ensure

“a funding system that provides value for money and works for students and taxpayers”.

I hope that this 90-minute debate provides us with an opportunity to explore together in a hopefully thoughtful way—it is a subject that deserves a thoughtful approach—how the system might be improved. I look forward to hearing the comments from colleagues from all parts of the House—I am sure that many have greater expertise in this area than I do—in trying to find a way forward to a system that is both fair and sustainable.

The current system of student tuition fees and loans as a means of funding higher education has achieved many positives over the years, not least an increase in the number of students from lower-income backgrounds entering higher education, which has to be a good thing.

[Paul Blomfield (Sheffield Central) (Lab)]

The hon. Gentleman is making a really thoughtful contribution, and I share his hope that we can have an interesting and useful debate. On the question of providing more opportunities for people from disadvantaged homes, the top-line numbers are clear. Does he recognise that there is a problem in the way that the system is limiting choice—there is substantial evidence that those from lower-income homes are seeking to minimise their financial liability by going local—and that, to give students real choice, issues relating to fees have to be wrapped up with those relating to maintenance?

[Mr Streeter]

I do agree with that, which is one of the reasons I am speaking today. I will talk about that in a moment, because the full-on higher education experience of going away to university and growing up during those three or four years, or however long it is, is an important part of the process. As I will set out in a moment, when a young person chooses to stay local and live with their parents or parent still, to me that is not the full-on experience, which is regrettable. I agree with the hon. Gentleman: I am beginning to see the top-line figures becoming quite a barrier to a number of people. I certainly would not want to be 24 with a debt of £40,000 hanging around my neck as I entered the workplace.

That is why we are here this morning: we have to try to find a new way forward together, and I very much welcome the Government’s review. I will briefly summarise the operation of the current system—although I know that you are an expert on it, Mr Hosie—then I will point out some of the areas in which it falls short and finally present my thoughts about the way forward.

As we know, currently universities in England can charge up to £9,250 a year for undergraduate tuition, with substantial variations in some parts of the United Kingdom, such as Northern Ireland, Wales and Scotland—that is what devolution is all about. Students can apply to Student Finance Ltd for a non-means tested loan of up to £9,250 a year to cover the tuition fees, while also taking out loans to cover the cost of living while at university.

To reflect on that point for a moment, we sometimes look back to the old days of maintenance grants. I came to King’s College in London in the 1970s, between 1974 and 1977—I cannot believe it—and had a minimum grant, based on my parents’ financial circumstances. I do not want to do a Neil Kinnock, but I was the first Streeter in a thousand generations to go to university, and my parents did not really understand that they could top the grant up, so I spent my three years in London with not very much money. It was still a wonderful experience, but it was not all gold in the old days, depending on people’s circumstances. I hope my parents never get to read the Hansard report of this debate, because they are wonderful people.

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[Mr Streeter]

I agree that people who are not able to draw down on the bank of mum and dad have a much tougher time. The figures I am quoting presuppose that someone has taken out loans for tuition fees and support. I think they are the maximum figures. I think the point that the hon. Lady and I would agree on is that there are students who do not rack up that kind of debt because they get support. Once again, there is an issue of fairness for students from disadvantaged backgrounds.

That debt is certainly a hindrance to getting on the housing ladder, to which 85% of young people aspire. It is something that the Government are desperate to encourage. If we are to meet the aspirations of generation rent, we might have to remove some of the burden from their backs. The prospect of having such a large debt hanging over their heads inevitably leads to some mental health worries among higher education students and graduates. In 2015, a study published in the Journal of Public Health, entitled “The impact of tuition fees amount on mental health over time in British students”, found that in the UK,

“poor mental health in students has been linked to financial problems, considering dropping out for financial reasons, financial concern, being in debt and concern about debt.”

It is worth noting that countries such as Sweden, Denmark, Finland and, more recently, Germany have moved away from the tuition fee model.

There are big questions about whether universities provide proper value for money for their degrees and offer favourable returns for graduates. The National Audit Office reported that two thirds of students consider that universities do not provide decent value for money. More students—especially those from poorer backgrounds, to come back to the point we were debating a few moments ago—are choosing to stay at home and attend their local university due to fears over unsustainable debt. That is a regrettable trend, because the whole university experience is partly about moving away from home for the first time, growing up and learning independence.

[Paul Blomfield]

I clearly agree with the hon. Gentleman on his point about the wider university experience, but does he recognise that staying at home narrows academic choice, depending on where someone lives? If people are choosing local, that might give those in London an immense range of opportunities, but in many parts of the country it narrows the choice significantly.

[Mr Streeter]

That is a good point. I represent the city of Plymouth. We have an excellent university, but it is particularly strong in certain fields. If someone is minded to stay local because of cost and debt and they want to become—I had better choose my subject carefully, because I do not want to diss any of its faculties, which are all excellent—a top-notch lawyer, they might not want to choose Plymouth. They might prefer Exeter. I think I have got myself into trouble here. I thank the hon. Gentleman for leading me down that path. Plymouth is an excellent university for all subjects, but he makes a compelling point.

Moving on, what might we do? We are right to ensure that students contribute. We want universities to be properly funded, but how can we make the system fairer and more sustainable? I have welcomed the excellently timed Government review, and I very much look forward to the outcome.

Universities could do more to reduce their costs. They are slightly strange organisations. In one sense, they are neither private sector nor public sector. They are a hybrid and in many ways they are perhaps unaccountable. The salaries of vice-chancellors is just one issue—acting on them would not have a huge impact, but would be emblematic. At the University of Bath the vice-chancellor’s salary is £471,000, at the London Business School it is £448,000, and at the University of Southampton it is £424,000. How can the leader of a university earn three times more than the Prime Minister of this country? I do not understand that, and it has to be tackled. It is a bit like people wagging their fingers at us and saying, “MPs all earn so much money.” Having proper oversight of vice-chancellor salaries would not save much money, but it would send a signal, bearing in mind that students contribute 50% of the cost of those salaries. The salaries are utterly outrageous and something needs to be done. Perhaps the Minister will touch on that when he winds up.

[Paul Blomfield]

Will the hon. Gentleman give way?

[Mr Streeter]

Yes, I enjoy giving way.

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[Paul Blomfield]

Given the numbers here today, there is an opportunity to have a good interactive discussion. I will try not to lead the hon. Gentleman into difficult territory with this intervention. He is absolutely right about vice-chancellors’ pay. The sector has got it wrong, and in some cases spectacularly. Does he accept that the problem is that people have said to universities, “Behave like the big businesses you are”, and are then complaining when they do? Does he think we should have the same approach to unacceptably high pay in all parts of the private and public sectors?

[Mr Streeter]

If an individual sets up their own business and still owns it then it is up to them what they pay themselves, but other than that I tend to agree about large salaries at the top justified by being in a marketplace and having to compete with other organisations. The charitable sector is another one where we have seen massive chief executive officer salaries. I imagine that if many people knocking on doors raising money for charities really knew what was going on, they would not be so happy. There is a job to be done in all these sectors, perhaps sparked by the Government, to have more reasonable levels of pay at the very top. The gap to those at the top must be very dispiriting for those humbly working day in, day out for not very much money. I recognise that we need to do more about that. The Government have talked about it, and I support them.

I have three specific proposals before I sit down. There are two quick ones, and one where I will go into greater depth.

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[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to contribute with you in the Chair, Mr Hosie. I had not intended to speak today, but I was interested to hear what the hon. Member for South West Devon (Mr Streeter) had to say, and I have obviously been inspired by his contribution.

I want to make a few, probably disjointed points, the first of which is about the sustainability of the sector. As has been pointed out, we have one of the best higher education sectors in the world. At a time of uncertainty for the country, we ought to build on our strengths, and not do anything to undermine them. When the Minister winds up, I hope that he will assure us on how the review will maintain, or indeed strengthen, the sustainability of the sector.

There is a fear that, because of the way that the debate has opened up, the Government may intend simply to mitigate the costs by constraining fees without replacing them with teaching grants, rather than looking ambitiously at how the system works, as the hon. Gentleman suggested. Clearly, a move to reduce fees in certain subjects could have the perverse consequence of leading people in a contrary direction to the one suggested by the hon. Gentleman. Likewise, a fee cut that is not replaced by teaching grants across the board, or in any other way, could really bring into question the sustainability of the sector.

[Dr Blackman-Woods]

My hon. Friend is making a really important point, which I hope the Minister can address. There is real concern among universities that the review could result in a huge loss of income. As I said earlier, the whole of the sector is not making a huge surplus. We want our university sector to thrive, compete globally, and give our young people and others the skills that they need to compete in the workforce. My hon. Friend has raised an important point, and it is one that the Minister needs to address.

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[Paul Blomfield]

I agree with my hon. Friend. In his introductory remarks, the hon. Member for South West Devon rightly said that when the new system was introduced in 2012, there was an expectation of a variety of fee options. I shared his scepticism at that time. There was a thinking in Government that the £6,000 to £9,000 range would mean that Oxbridge, obviously, would charge £9,000, and everybody else would neatly rank themselves in accordance with the Government’s perception of quality. Those of us who had a relationship with the sector knew that that was not viable, because it costs as much to provide a degree in Plymouth as it does in Russell Group universities. So what happened was not surprising.

Although the review should focus on value for money, as the hon. Gentleman said, we need to be careful not to reduce higher education to a crude transactional relationship. There is an element within the teaching excellence framework that does that.

I was on the Higher Education and Research Public Bill Committee. Those of us on this side of the House supported the principle of focusing on teaching quality, but were worried that some of the metrics drove the debate in the wrong direction. We are pleased that the Government moved more towards a qualitative evaluation, rather than the simple crude quantitative measures they were initially looking at, but there is still an aspect of the debate that says we should be measuring quality by crude and easily measurable standards. We might take contact hours, for example. If we are going to measure by contact hours, Oxford would be bottom of the table. Nobody would argue that Oxford is the worst university in the country, but that illustrates the danger of crude metrics.

[Andrew Lewer]

Although crude metrics are not helpful, would the hon. Gentleman accept that having some metrics, such as the teaching excellence framework, is helpful?

[Paul Blomfield]

The hon. Gentleman is right. As I said, those of us on this side of the House who were on the Bill Committee, such as my hon. Friend the Member for City of Durham (Dr Blackman-Woods), argued that a focus on teaching quality was right, but we needed to get the way that we measured that experience right.

The other metric that is problematic is employment outcomes. The current Minister’s predecessor, the hon. Member for Orpington (Joseph Johnson), acknowledged that they were crude and, in a sense, unreliable metrics, but they were being used because they were the numbers that were available. I pointed out to the Minister at the time that there is not necessarily a relationship between teaching quality and employment outcomes. If a student had been to Eton and Oxford, like he had, and were from the right family and knew the right people, that person’s employment outcome was likely to be fairly good, irrespective of teaching quality. So when looking at the funding review, my warning is that we should make sure that we look at the educational experience of universities in the round. We argued that there should have been a statement in the Higher Education and Research Act 2017 about what universities were for.

[Dr Blackman-Woods]

I am glad that my hon. Friend has raised the discussion we had in that Bill Committee about what universities contribute to our society in addition to teaching and education. They contribute to sports development, cultural development and social outcomes in our communities. They do a lot of voluntary work. Students from my own university, Durham, do a lot of voluntary work in the local community. If we are going to look at value for money, which I agree we should, we felt that the additional benefits that universities deliver to society should somehow be brought into the equation as well, and there was certainly a danger under that legislation of the wider benefits of universities being completely discarded in the Government’s TEF measures.

[Paul Blomfield]

I thank my hon. Friend for that intervention. Clearly, we are at one on that issue.

[Mr Jim Cunningham (Coventry South) (Lab)]

I apologise for being late for the debate, Mr Hosie. My hon. Friends make an interesting and important point. In Coventry, universities make a major contribution to the local economy, for example. Very often, we find that students are also helpful to community organisations. Sometimes, someone who is doing a law course can give unofficial advice, which is helpful, given the situation we now face with cutbacks. The other point is that further education has taken a bit of a hit as well. In Coventry, there have been 27% cuts.

[Paul Blomfield]

I have visited the university that my hon. Friend represents. It does particularly innovative and good work in supporting small businesses and is a leader in the sector. He makes an important point. At a time when one of the issues we face as a country is the imbalance in the economy between London and the south-east and the rest of the country, universities offer a unique asset in ensuring that economic growth is distributed across the country. They are the one asset that we have in every part of the UK, in its regions and nations. The role that they play in driving economic growth is hugely important. My hon. Friend makes that point very well.

I have three additional points. First, will the Minister answer the question—which the Education Secretary was unable to in the statement the other day—relating to widening participation and fair access funds? There is a concern that one of the ways in which the sector will be squeezed in order to hit ambitions on fees is by reducing the amount of money allocated to widening participation and fair access. Investment in that area was one of the few good things that came out of the 2012 reforms, so I would be grateful if he could give a reassurance on that.

[Mr Gyimah]

I would like to give the hon. Gentleman that reassurance now. He is absolutely right: the widening participation funds—£1,000 out of every £9,000 paid by students in fees—go towards access. We will not be doing anything to diminish that access project. Although many people talk about the fact that we have global, world-class institutions, one of the successes of our higher education system is actually the number of disadvantaged people who are going to university as a result of those funds being available. There is a challenge in making sure that they are successful at university and get well-paid jobs. We will not be doing anything to diminish that.[Official Report, 21 March 2018, Vol. 638, c. 2MC.]

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[Paul Blomfield]

I thank the Minister for that intervention. As we said earlier, fairness of opportunity and the choices available depending on where a person lives are issues in the current system. The widening participation and fair access programmes are hugely important, and I am grateful for the Minister’s assurance that not one penny will be taken from those areas of funding.

I endorse the point that the hon. Member for South West Devon made about nursing, midwifery and allied health courses. When we had a debate on the Government’s proposals in this Chamber previously, some of us challenged the Government and said that taking away bursaries and introducing fees for those courses would lead to a drop in applications. The then Minister, who is no longer a Member of the House, assured us that what the Government were trying to do—you couldn’t make it up, Mr Hosie—was share the benefits of the funding system for other undergraduates with nursing and midwifery courses. Share the benefits! Some of us questioned whether a £50,000 debt was a benefit, and warned of the sort of drop in applications that we are now seeing. I hope the Minister will tell us that the decision about the funding arrangements for nursing, midwifery and allied health courses will be reconsidered as part of the funding review, and that the Government will put on hold the current proposals to extend those arrangements to other health courses that are not currently subject to fees and loans. The Minister is obviously aware of those areas. The Opposition have tabled prayers seeking a halt to those proposals.

As the hon. Member for Glasgow North West (Carol Monaghan) said, a number of things are coming together and will cause an enormous crisis in the NHS, but that is not the only issue. Nursing, midwifery and allied health courses are one of the few areas for second-chance education. They are dominated significantly by mature students, who see them as a route into a professional career and personal advancement, which is not available through the 2012 funding system. Since the 2012 funding system was introduced, there has been a significant drop in the number of mature students.

[Mr Jim Cunningham]

We have raised the issue of education maintenance grants many times in this place. Women often have an ambition to go into nursing when their children grow up, and they are affected because they cannot get education maintenance grants. This is a very important issue, and once again women are carrying the can.

[Paul Blomfield]

Again, my hon. Friend is absolutely right. From the point of view of the needs of the NHS and the opportunities for mature students, and just for the sake of justice, we need to look again at nursing, midwifery and allied health courses.

I will make my third point very briefly, because this is a much bigger topic. I raise this issue as co-chair of the all-party group on international students. Universities’ financial stability is partly based on this country’s enormous success in attracting international students to come and study here. Those numbers are flatlining as a result of measures taken by the Home Office and the inclusion of international students in the net migration numbers, which inevitably leads to policy decisions that discourage international students. The Minister will say that the numbers are holding roughly up, but holding roughly up is not good enough in a growing market, because it means a relative decline.

There is a huge risk as we leave the European Union, because some 125,000 of our 450,000 international students come from the EU, and most universities are modelling on the basis that we will lose about 80% of them. One third of non-EU students said before the referendum that if we chose to leave the European Union, they would find the UK a less attractive place to come to. The Government need to put in place measures within the framework of the strategy to actively encourage more international students. They can start by removing them from the net migration targets.

[Carol Monaghan]

One of the other issues with international students is that we have lost a lot of the diversity within that group. Whereas in the past, students came from India, Australia, the United States and Canada, we are more and more relying on the Chinese student population. That is problematic, because if anything happens politically to change that relationship, our universities could have difficulties.

[Paul Blomfield]

The hon. Lady makes a very important point. The numbers have been sustained only by the huge increase in the number of Chinese students. Of course, Chinese students are very welcome in the UK, but no business would be satisfied with becoming over-dependent on one customer. China is moving ahead in leaps and bounds in developing its own universities, and now has some of the finest universities in the world, doing some of the finest research in the world, so we cannot rely on that market. The hon. Lady is absolutely right that part of the new strategy that we need to encourage people to come from all over the world needs to be about looking at countries such as India, from which the numbers have dropped.