Higher Education (Registration Fees) (England) Regulations 2019
Roberta Blackman-Woods Excerpts(5 years, 6 months ago)
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The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
It is a pleasure to serve under your chairmanship, Mr Davies. I welcome the opportunity to debate the regulations.
We have come a long way since the passage of the Higher Education and Research Act 2017. The Office for Students is taking shape as the new higher education regulator. As of 26 April, it has registered 352 higher education providers, including all English universities, since its formation, and to exacting standards. It has ensured that all registered providers with fee caps at the higher level have comprehensive access and participation plans to improve access and support for students from under-represented groups. All students should have equal opportunities to complete their courses, get a good degree grade and go on to graduate-level jobs and postgraduate studies.
Those are some of the other priorities of the OfS, which the hon. Member for Blackpool South has not touched on, but which are equally a part of its operation and benefit all universities and their students. The OfS has also included academic freedom as a core principle of the governance of all registered providers, and is working in partnership with the Department for Education on the best way to enhance and improve the information given to students on the quality and standard of teaching that they can justifiably expect.
The 2017 Act gives the OfS the power to charge higher education providers a fee for their registration, in line with the detail set out in the fees regulations that we are debating. These regulations, alongside a direction from the Secretary of State, will enable the OfS to fund the majority of its operating costs using income from registration. This will result in the administrative costs of regulation being covered by the sector rather than the Government or, I should say, the taxpayer.
During the passage of the 2017 Act, hon. Members on both sides of the House debated long and hard about the future of higher education, and I think it was the most amended piece of legislation in the history of the British Parliament. Irrespective of different views about how we finance higher education or how it should be regulated, there will always be that imperative to ensure that students get a high-quality experience and positive outcomes from the time and effort they put into their education.
Diversity of provision is important to help to achieve those aims. Therefore, registration fees for providers are designed to support the broader intentions of the 2017 Act, encourage that diversity and provide meaningful choice for students. The Treasury’s guidance for managing public money suggests that financing certain public services through charges rather than general taxation is a good way to allocate resources, because it signals to consumers that those services have real economic costs. Charging registration fees is consistent with that cross-Government guidance.
It is normal for regulators and sector-owned bodies to be funded by those whom they regulate. These regulations bring the approach to funding the OfS in line with other established regulators, such as Ofgem or Ofcom. The fees are an integral part of the new regulatory framework. Successful registration with the OfS brings providers under the new regulatory framework and secures students’ interests, value for money and quality.
Providers need to register for their courses to be eligible for student loans, and they must register to the approved fee-cap part of the register in order to be eligible for grant funding. The benefit for the student is that the registered providers are regulated. The OfS has duties to have regard to things such as value for money, and it can take action to ensure that providers provide quality HE.
To reassure hon. Members, we have consulted carefully and considered the impact of these fees on providers of all sizes. We believe that the overall impact will be relatively small. The total amount of funding raised by the fees would represent less than 0.1% of the annual income that the sector generates. Fees will be proportionate to provider size, which we think is the fairest basis. That approach was supported by the majority of respondents to the DFE’s consultations.
We acknowledge that this new system will need careful monitoring for the future and perhaps some adjustment over time. For that reason, a full review of the system will take place after two years. We have estimated that the operating costs of the OfS in its first year of operation, 2019-20, will be £27.2 million, which represents a 4% efficiency saving. As has already been stated, the Government will provide £0.8 million of funding in subsidies for new providers and micro-providers, which I will touch on in a moment. Therefore, the required amount raised by registration fees is £26.3 million.
Providers have influenced how the fee model has been designed through a two-stage consultation process. I have had the opportunity to talk to all university groups, including MillionPlus. Speaking with Greg Walker, I will continue to listen to their concerns and ensure that those are raised in the Department. However, there will be that other chance for providers to influence the fees via the plan review after the first two years of full operation of the OfS.
All fees published before the final fees in the statutory instrument have been indicative. The fees published in a second consultation document in October 2017 were suggested to initiate the discussion with stakeholders as part of that consultation. As was made clear, the indicative fees published in the response to the second consultation in February 2018 were updated to take into account concern expressed about the impact of the fees on smaller providers, and this meant that fees for medium and larger providers necessarily increased. At this point, an early estimation of 25% Government funding for the OfS was replaced with specific subsidies that targeted Government funding where it would be most effective—at new and very small providers.
In addition, the Government funds other aspects of the OfS’s operations outside this regulatory regime, such as the teaching excellence and student outcomes framework, Prevent administration and student information. The final fees have increased since February 2018 because the actual number of providers who applied to join the register has been lower than anticipated at that date. It is in students’ interests that HE is well regulated, and the OfS has been set up in their interests.
When it comes to varying registration fees by providers, we believe that size is the fairest basis on which to introduce the regime. That was supported by 62% of responses to the consultation on this topic. Provider size offers an objective, transparent and simple measure that can be applied effectively across all providers. There are 13 bands, which allows the fees to be proportionate while being efficient for the OfS to administer.
As I said, the bands were adjusted following responses to the second consultation on registration fees—a clear demonstration that we are listening to the sector and taking action on the consultation responses. That adjustment was made to reduce the impact on smaller providers. The smallest 20% of registered providers—those with up to 75 full-time equivalent HE students—benefited from the restructuring of the fee table with lower fees. The final fee model has narrower bands at the lower end to reduce the impact of fees on smaller providers. Making the fee increase between bands regular, at 25%, allowed the fee levels to start lower.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Can the Minister tell us how many of the respondents who were in favour of the new fee regime were smaller providers seeking to enter the market? Of course, based on what he just read out, they could become quite a high percentage, but they are not the mainstay of our higher education sector.
Chris Skidmore
I can certainly write to the hon. Lady with details of the number of providers that took part in the consultation and their size, but it is important to look at the cost per student of the registration fees. For some of the larger institutions, which, as she correctly says, are mainstays of our higher education sector, those range from £9 to £15 per student, whereas they are significantly higher for some smaller institutions. It is right that we take that into account. Analysis of the 132 publicly funded providers that the Department holds finance data on—finance data taken from the Higher Education Statistics Agency plus 2015-16 data—shows that none of those providers will pay more than 0.7% of their total income in registration fees.
Turning to the definition of micro-providers, which the hon. Member for Blackpool South mentioned, and to why the subsidy is in place, micro-providers are the very smallest providers—those that fit the Companies Act 2006 definition of a micro-entity and have 300 or fewer full-time equivalent HE students. There are approximately 14 on the register at present. They will be exempt from registration fees for as long as they remain within that definition. That is in line with the better regulation framework guidance.
I turn to the issue of ensuring that the OfS remains accountable and efficient, that it provides value for money for students and the general taxpayer, and that providers get value for money for the registration fees they pay. The OfS is statutorily obliged under section 2(1)(f) of the Higher Education and Research Act 2017 to have regard to the need to use its resources
“in an efficient, effective and economic way”.
Under section 2(1)(g), the OfS must have regard to best regulatory practice, which includes ensuring that regulatory activities are proportionate and
“targeted only at cases in which action is needed.”
As the hon. Gentleman mentioned, that is a risk-based regulatory framework that is expected to drive down the costs of regulation and, consequently, the overall costs to the OfS and providers. The duties written into the Act will help to ensure that registration fees represent value for money for registered providers.
There are also several mechanisms in the Act that allow the Secretary of State to hold the OfS to account for both the performance of its functions and value for money. Under section 2, the OfS must have regard to guidance issued by the Secretary of State; under section 74, the Secretary of State has the power to attach terms and conditions to any grants given to the OfS; under section 77, the Secretary of State has powers to give directions to the OfS; and under section 78, the Secretary of State has the power to require information and advice from the OfS about any of its functions. Of course, under schedule 1, the OfS must also provide the Secretary of State with an annual report on the performance of its functions, which the Secretary of State must present to Parliament.
In summary, the Government firmly believe that giving students real and well-informed choices is the most effective way achieve quality higher education, and that the regulatory system should be designed to support that. The regulations support the regulatory ecosystem in line with accepted best practice across the public sector. The fee structure is designed to subsidise fees for new and very small providers of higher education to encourage diversity in the sector.
The 2017 Act established the Office for Students, which is already operational and will become fully operational on 1 August 2019. The regulations provide a strong incentive to ensure that the sector can hold its regulator to account for efficiency. I hope that the Committee agrees that the regulations are ultimately beneficial to students and the sector alike.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I, too, was on the Higher Education and Research Bill Committee and at the outset we raised a number of issues with the funding regime for the OfS. Despite what I have just heard from the Minister, a number of questions about the OfS and its funding still need to be addressed.
To date, the Government have funded the OfS, but the SI will change that, and from 1 August, universities will largely have to pay for the OfS. That shift, as the Minister said, is entirely due to a policy decision by a Government who believe that regulated bodies should fund the cost of their regulation. Unfortunately, in the case of the OfS, I do not think that the Government have understood the implications of that, not just for the university sector, but for students themselves.
Paragraph 7.2 of the explanatory memorandum states that the funding model that the Government are setting up will
“reduce public spending and will encourage those regulated to hold the OfS to account for its efficiency.”
To date, efficiency savings have not been made by the OfS, so we can see from the outset that that is a complete policy failure. The OfS—never mind the institutions that it regulates—is not being held to account by anyone. That is the key point about accountability raised by my hon. Friend the Member for Blackpool South. The Minister must explain what he will do to make the OfS more accountable.
During debate on the fee rise in the Higher Education and Research Bill Committee, it was pointed out to the Minister—I accept that it was not the Minister who is before us today—that the cost of regulation, although borne by universities, would in fact be borne by students, because universities are mostly funded by income from students. The last time I checked, student fees were still called “tuition fees”; they were not called “funding-the-complete-costs-of-universities fees”.
I hardly need to remind the Minister that students bear those costs through their fees, and that once they earn above the threshold, they pay back to the Government not only the cost of their loan, but interest, which varies between 3.3% and 6.3%, meaning that they leave university with debts of at least £40,000 to £50,000. As tuition fees are currently held constant, while the cost of the OfS is increasing, over the years more and more of the student fee will go towards regulation. That funding model is not fair to students. What does the Minister think about that?
Thanks to the work of Universities UK, we know—I am not sure that we would have known through the Minister—that since the first impact assessment was carried out in 2017, the average increase in university fees has been a massive 62%. Since the DFE consultation last year, there has been an average increase of 18%.
The table the DFE has published about the funding of the OfS is interesting. From it we can see that, far from the OfS being efficient and required to cover its costs, the Department thinks that in three years it will cost another £3 million and in five years it will cost another £5 million; that is £27.2 million in 2019 and £32.6 million—almost another £5.5 million—in 2024. I do not think the Minister really answered our question: why are the costs rising in the way that they are and why is the amount of money that the Government are putting into the OfS so small? In 2020, the cost will be £28.6 million, with only £1 million coming from the Government.
Dr Blackman-Woods
Yes, from the Government. We can talk about the sources of Government money. Why are these costs going up? In a response to me in 2016, the then Minister made it clear that fees would only be charged on a cost-recovery basis—it is in Hansard and I am happy to pass it on to the Minister—yet that is not the system that we have in front of us today. This SI does not seem to marry with what we were being told in the Bill Committee.
We have to return to the points made by Universities UK. I am not sure that the Minister answered those questions, so I will ask him again. First, Universities UK makes the point about accountability in relation to the overall costs of the OfS and the reasons why the costs for providers have increased so substantially from previous estimates. We have not had a clear answer from the Government or from the OfS about why that is the case and we have absolutely no idea why the Government think the cost will increase by another £5 million in the next five years. We need an answer to that.
The Minister should be concerned about the way in which the OfS is growing like Topsy. It is a quango; what happened to the Government’s desire to see a bonfire of quangos? This one is being let grow more or less out of control.
The second point was about a commitment to move to a model of charging fees that properly reflects the costs of regulating different providers, rather than just size. The Minister reiterated the importance of looking at size today, but in our initial discussions, the Bill Committee felt that if fees were charged on a cost-recovery basis, particularly for universities that have clear systems and can easily provide information to the OfS, that would perhaps result in more limited costs than for new providers coming into the market and that would be reflected in the fees. That has not happened; quite the opposite. In fact, what the Government appear to be doing through exempting smaller providers is ensuring that their marketisation agenda continues apace, rather than reflecting the cost to universities.
The third point is that there should be appropriate funding from the DFE so students are not paying for Government policy priorities.
Chris Skidmore
It is important, because this is about the scope of the OfS. Our debate today has focused simply on the financial role of the OfS in regulating universities. It also has a role in promoting access and diversity, to ensure that all students have the opportunity and the freedom to study. That work is not some spread of a quango, as the hon. Member for City of Durham said; it is really important work. We should be able to look at how we ensure that hate crime is addressed effectively and that we adopt a collaborative approach. The OfS as a body provides a national focus to ensure that these measures are taken forward constructively.
When it comes to the development of the OfS, I urge all Committee members to support it and look at its work in universities in their region, because it is an important organisation that will benefit students, and not just by providing best value for their courses. We can talk about the cost of the registration fees; I think the OfS will pay back the cost of the registration fees to the universities more, and not just in kind, but by being able to look at what is an incredible value-for-money argument.
It is important that we work to ensure that the OfS can continue to develop its plans for the future. I have already helped to sign off the access and participation plans framework guidance for the OfS this year. I am keen to ensure that we work on developing that for next year and the years after and on ensuring a positive relationship with the sector.
Dr Blackman-Woods
Just for the sake of clarity, I would not wish the Minister to get the impression that we do not think that ensuring a strong role for our universities in their local communities or widening participation are important. The real question for us today is how all those laudable things are paid for. Our real question, which the Minister is not answering, is: why should all that fall on the cost of student fees? Why should students bear that cost?
Chris Skidmore
Without getting into a wider debate about access to university finance, we are talking about 0.1% of universities’ income. Not all income is simply from university student finance; there are other sources of income. I think it represents incredibly good value for money for universities, as registered providers, to be able to demonstrate their commitment to improving access and participation, and to demonstrate their role as civic bodies, working alongside other universities and collaborating with other access and participation charities. The OfS plays a crucial linking role in that, which is why, when it comes to registration fees—I am afraid that we will have to disagree about the cost to provider; it is not the Government paying—I personally believe that it is right that those who are regulated should pay. That is widely accepted practice right across government, and I urge all members of the Committee to support the regulations.
Tuition Fees: EU Students
Roberta Blackman-Woods Excerpts(5 years, 6 months ago)
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Chris Skidmore
As I stated, since 2017 there has been a 3.8% increase in EU students applying and a 4.9% increase in non-EU students. It is welcome that last year we had a record number of international students, both EU and non-EU, applying to our British universities. I congratulate all universities on being able to be so welcoming. We want that to continue.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
The Minister must know that the university recruitment cycle for 2020 is already under way, and the ability of UK universities to attract and recruit students from the EU will be seriously affected if the fee status remains uncertain. He has the ability to settle this matter today. We do not need to vote for a flawed withdrawal agreement; the Minister could simply roll the current arrangements forward.
Chris Skidmore
I recognise the hon. Lady’s point, which was made to me by Vivienne Stern, the director of Universities UK International. The recruitment procedures are ongoing. Applications for the 2021 academic year will open in September, and I am keen for the Government to make an announcement shortly. We have to go through cross-Government processes, which is one of the reasons why we have seen this unfortunate leak in the first place. As a Minister, I am keen to ensure we can put that security in place for universities. I hope to ensure that we can do so in due course.
Mineworkers’ Pension Scheme
Roberta Blackman-Woods Excerpts(5 years, 9 months ago)
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Stephanie Peacock
I thank my hon. Friend. He is absolutely right that a lot of former miners are taking a great interest in this debate, not least because the Government have taken £617 million this year alone, on top of £102 million over the past two years. As if that was not already enough, they plan to take another £427 million over the next three years.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is making a really powerful speech. Does she agree that pensioner miners in areas such as mine in Durham should be getting an enhanced set of benefits from the scheme, rather than the Government creaming off this money? It is an absolute outrage.
Stephanie Peacock
I thank my hon. Friend for her contribution. I know that her constituency hosts the Durham miners’ gala, which celebrates the coalfield communities. She is absolutely right about the money that the Government have taken out. I repeat that they have not contributed a single penny from their own funds. These are huge sums of money.
Budget Resolutions
Roberta Blackman-Woods Excerpts(6 years ago)
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Chi Onwurah
Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.
The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.
We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.
On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.
What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.
Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.
The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.
The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government
“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”
The CBI responded:
“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”
Yet the Budget contained no commitment to a review of business rates.
The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is making an excellent point about the high street. Does she agree that it is ridiculous of the Chancellor to ask that local authorities develop a plan for their high streets, which is something we support, while he is taking away the means for them to be able to plan for their high streets by introducing yet more permitted development?
Dr Roberta Blackman-Woods (City of Durham) (Lab)
The Budget, as we all know, delivered a pathetic £400 million for schools, which many professionals have said is an insult when they are facing staff redundancies and cuts to pastoral and special needs services. Indeed, Paul Johnson, director of the Institute for Fiscal Studies, said:
“Many public services are going to feel squeezed for some time to come. Cuts are not about to be reversed. If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate. I would be preparing for more difficult years ahead.”
That needs to be seen against the backdrop of an 8% cut to school funding in real terms since 2010. As the National Audit Office has made clear, £6.7 billion is needed to bring English school buildings up to a satisfactory standard. That capital funding shortfall is made worse by the £3.7 billion cut from the capital budget since 2010. This has left three schools in my constituency—Belmont Community School, St Leonard’s and Framwellgate School—in urgent need of replacement, but the Government continually say that there is no money to pay for replacement.
This is not just about cuts in capital funding. In September this year, the cabinet member for children and young people’s services in Durham County Council wrote to the Secretary of State for Education. In a very detailed letter, she set out the impact in Durham of the cuts to education, estimating that the council had lost £46 million from the schools budget, which equates to a loss of 15 teaching staff in a secondary school. She pleaded with the Government to listen to authorities such as Durham and to provide more funding, so that young people in Durham can get the education they deserve.
We know that further education fares even worse from this Budget. There has been a 45% cut in real terms to adult education and apprenticeships and a 12% cut to student funding for 16 to 18-year-olds. The Government need to explain how much of the figure outlined for skilled jobs and apprenticeships will go to colleges to support them as they seek to do the important job of skilling and reskilling adults and young people, so that they add to a dynamic workforce for the future. Even if they get all the £125 million, FE colleges will still have lost £3 billion since 2010.
I am also concerned that the Chancellor has done nothing to reduce the burden of debt on university students, particularly to lower the crippling interest rates applied to student loans. Some of the money in the Budget for start-ups, research and development of technology might end up in universities; again, that is not clear. It would be good to know how much will go to the HE sector, and we especially expect more detail about university funding after the post-18 review has reported.
In the last minute or so of my speech, I want to say something about cuts to local government. We all know that local government has borne the brunt of cuts, losing 60% of its funding. It is absolutely outrageous that the Government did nothing in the Budget to try to bring about a fairer system of funding for local government. Councils such as Durham are dealing with increasing pressures on social care and on young people’s and children’s care services. There was hardly a mention of that in the Budget, despite the massive cuts to and the shortfall in local government funding, which is estimated to be £7.8 billion by 2024-25. The Exchequer Secretary is not listening at the moment, but I do hope that he will read this speech in Hansard and come back to the House with a commitment on how the Government will make up the shortfall to local government funding so my constituents can get the services they deserve and need.
Funding Higher Education
Roberta Blackman-Woods Excerpts(6 years, 8 months ago)
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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.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Does the hon. Gentleman agree that we need the Government to look at sustainability in the sector? The briefing for this debate said that the forecast surplus for the university sector is only 1.3% this year, so it is not a bloated sector. It does not mean there is a differential outcome for various institutions. In fact, university budgets are under threat from Brexit, from the cuts in research funding, from the fall in part-time students, and from a possible fall in international students, not to mention demographic trends in our country. We have to be careful to ensure a sustainable funding system.
Mr Streeter
I agree. When the panel reports its findings, I hope the Government take action to help us put in place a system that is both fair and sustainable. We have a world-class university system in this country that we must not in any way seek to undermine. It is hugely important that, as young people increasingly compete with people from other countries, we keep our highest university standards.
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.
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.
Carol Monaghan
We also have to look at the retention rates for young people from disadvantaged backgrounds who do not have full support.
Ultimately, this debate should be about who benefits. We educate children in schools not simply for their own economic benefit, but for the benefit of society. We have got to ask whether the young people embarking on tertiary education courses will contribute economically and societally to our nations, or whether we are simply providing them with a service, for which they must pay. As legislators, we must be clear about that. Post-Brexit, the UK’s economic success will rely on a well-educated population. We have skills shortages in science, technology, engineering, healthcare, education and digital. Graduates are needed now to ensure that the UK remains competitive outside the EU.
The hon. Member for Sheffield Central (Paul Blomfield) mentioned the variance in fees. I have difficulties with that. If as has been rumoured we lower the fees for less expensive courses, how will we encourage our young people to study the more expensive science, technology, engineering and maths subjects, graduates of which are so desperately needed? EngineeringUK estimates that we have an annual shortfall of 20,000 engineering graduates alone. The hon. Member for South West Devon mentioned the impact of removing the nursing bursary. Again, who benefits? We should encourage young people to study those courses, not put additional barriers in their way.
Fees are not the only difficulty for English students. The interest on student loans has risen sharply—it is currently 6.1% for some students. Maintenance grants have been scrapped, and it is rumoured that student debt on completion has reached £50,000. Many young graduates will be left saddled with debt throughout most of their working lives.
The hon. Member for South West Devon mentioned students staying at home for their university experience, and was concerned about the impact on the whole package experienced by students at university. In Scotland and Ireland there is a cultural predisposition to stay at home. It is not necessarily financially driven—my son is staying at home during university—so there may be other factors at play. His education is not impacted. Students have opportunities for other life experiences, such as summer placements, industrial placements and travelling abroad. The hon. Member for Northampton South (Andrew Lewer) mentioned Erasmus, which is a rich experience for students even if they stay at home during university. I push the Minister to make a commitment on Erasmus, because university students and many people across the sector want that commitment as part of the Brexit process.
We are often told that our free tuition policy in Scotland prevents Scottish students from accessing available places, but since 2007, the number of Scottish-domiciled full-time degree entrants has risen by 12%. Since 2013, the total number of funded places available at Scottish universities, including additional places to widen access for students from Scotland’s most deprived communities, has also increased. The hon. Member for Sheffield Central mentioned the metrics used in the teaching excellence framework, and graduate success as an indication of our universities’ quality. Graduate salaries are a lot lower in many geographical areas in the UK, so students graduating in parts of England and Scotland will automatically have a lower salary than those in south-east England. That is a flaw in that metric.
We often talk about the number of young people going to higher education as a measure of economic success. I could not count the number of times I hear people talking about encouraging people to do high-quality apprenticeships, yet that seems to be forgotten when we talk about higher education. I would like there to be parity among apprenticeships, further education colleges and quality employment. In fact, we should look at positive destinations, not just the number of young people going to university. For many young people, a high-quality apprenticeship—degree level or otherwise—allows them to make excellent progress in the workplace without necessarily saddling themselves with debt.
Dr Blackman-Woods
The hon. Lady makes an important point. Does she agree that it is important not to talk in binary terms about university or technical education? Our universities deliver some of the best technical education in the country, and we should aim for a route to whatever form of education is best for the young person or older person retraining. We should not get stuck in the binary divide, but ensure that we make connections between them.
Carol Monaghan
We have a problem if we educate only graduates—we need a full range of different people with different skills. I usually speak about tertiary education because, in Scotland, the lines between further education and higher education are less defined than they are in other parts of the UK. In fact, a lot of our degree courses are delivered in further education colleges. The movement between FE and HE is a very important part of our educational landscape in Scotland.
Positive destinations should be a measure of success, and we should encourage young people of all backgrounds into whatever is appropriate for them. That includes those from the most advantaged backgrounds considering apprenticeships. We need to try to break down that barrier. I agree with the hon. Member for South West Devon that vice-chancellor pay has reached a ridiculous level for some. Lecturers were out on strike this week and last week because their pensions are under threat. I agree with him that perhaps the time has come to look at the pay package that we offer all staff.
Paying for education is a duty of Government, business and society, including the taxpayer. We need to ensure that we have a well-educated population that can provide economic growth in different businesses and sectors. Post-Brexit, there will be a struggle to create economic growth. We all have the duty to pay our taxes so that they fund the education of our young people, benefit society and fuel economic growth. The Scottish National party is fully committed to guaranteeing fair access to higher education, so that every young person, regardless of background, has an equal chance to go to university. My party will continue to work hard to ensure that.
Gordon Marsden
No, I am not going to take another intervention. The Minister will have plenty of time to say what he wants to say.
My hon. Friend the Member for Sheffield Central (Paul Blomfield) rightly talked about the sustainability of the sector and some of the key issues in terms of Brexit. My hon. Friend the Member for Coventry South (Mr Cunningham), who is no longer in the Chamber, absolutely rightly drew us back to further education and nursing bursaries, and the hon. Member for Glasgow North West (Carol Monaghan) spoke about issues post-Brexit.
The point is very straightforward: since coming to office in 2010, Conservative-led Governments have repeatedly raised tuition fees. They trebled fees to £9,000 and subsequently increased them to £9,250. That agenda has hit students—particularly those from disadvantaged backgrounds—harder and harder since 2012. The cutting, one by one, of all the concessions that David Willetts introduced to temper the impact has been just as damaging. Those concessions were dismantled deliberately. The National Union of Students lists them in its briefing for the debate: the Government abolished maintenance grants, NHS bursaries, the disabled students allowance and the education maintenance allowance, and ended Aimhigher.
The Minister has inherited that. He is not responsible for it, but he would be wise to show due humility about its incremental impact on the people concerned. If he reads the “Fairer Fees” report published by the Sutton Trust late last year, he will see, as Members have already said, that the average debt for students in England is higher than the European average and twice the US average. As a result, the Government have racked up an unenviable record of nudging people away from, rather than towards, aspiration in higher education and chipping off many of the rungs of the ladder of social mobility that were designed to protect them.
The July report by London Economics for the University and College Union suggested that thousands of graduates would suffer a mid-life tax crisis, analysis undertaken last year by the Institute for Fiscal Studies shows the level of debt, and only this week the Sutton Trust gave us figures that show disadvantaged students across the UK are more than three times more likely to live at home while attending university. The hon. Member for Glasgow North West made that point, too.
The Prime Minister finally admitted last week, after months of us, the Sutton Trust and an impressive range of stakeholders all saying the same, that the current funding system leaves the most disadvantaged students with the highest debt, yet behind the warm words and soft soap that were ladled out by the Prime Minister in Derby and by her Education Secretary in the Commons, it seems that no new money is available and there is the potential for HE funding cuts. In her speech, the Prime Minister tried to talk the talk on social mobility and aspiration, but she did little to walk the walk and address either the FE sector, in which 10% of HE is delivered, or the problems with 16-to-18 provision that many colleges are suffering, including the one in which she chose to make her speech. It will take more than a brush-by in Derby one afternoon in February to remedy those issues.
The terms of reference published by the Department state that the review cannot make recommendations on tax policy and must make recommendations in keeping with the Government’s fiscal policies. Will the Minister confirm that that means there will be no new money for the policies in the review? Does it mean that savings will have to be found elsewhere in the FE budget if changes are to be made? My hon. Friend the Member for Sheffield Central challenged him and, to give him credit, he made a commitment that access and widening participation funding will not be diminished as a result of the review. I warn him that the Treasury has a long reach and he will need a stout shield to resist it in this area and others.
Dr Blackman-Woods
Does my hon. Friend agree that, unless the Government are at least prepared to put more money into the sector, it is difficult to understand how we will get a sustainable system for funding universities? The Minister needs to be clear about that.
Gordon Marsden
I absolutely agree. As the Minister is eager to explore our policies, I remind him that Labour’s policies and our message of progression were taken on board so strongly by would-be and existing students, their families and their parents during the recent election because we had a cohesive narrative. Whether we were talking about adult learning, college learning or traditional cohorts of young people going into higher education, we said that we wanted to lift barriers and financial burdens to make a step change in social mobility. The Conservatives did not put that message across, and suffered accordingly. Given the restrictions on the review, they will miss another opportunity.
The Conservatives continue to falter on the reintroduction of maintenance grants, to which we have been committed for nearly two years. The Prime Minister engaged with that tortuously last week. Our position is echoed by the education sector, Universities UK, MillionPlus, the Chair of the Education Committee, the Treasury Committee and even the vice-chancellor of the private University of Buckingham, Sir Anthony Seldon. UUK has said that there are ways in which the current system can be improved, such as by reintroducing maintenance grants, as has MillionPlus, but it is likely that colleges and universities will be expected to cover any extra costs. The Prime Minister implied that in her speech last week when she said the Government will have to look at how
“learners receive maintenance support, both from Government and universities and colleges.”
We have some idea of how that extra funding might be delivered under her policies: by robbing Peter to pay Paul. We saw the same sleight of hand from the Secretary of State in The Sunday Times, on the BBC and in his statement last week, when he talked about cutting the cost of tuition fees.
The bottom line is that those who already have a lot will be given more. Wealthy students and graduates will benefit the most, because they can pay off debt the earliest. Over the next 10 years, there will be 13 million vacancies but only 7 million school leavers to fill them, yet great swathes of our university extramural departments, institutions such as the Open University and Birkbeck, and new providers, have been swept away or at least crippled by the tripling of fees since 2012.
There is a social dimension. One in five undergraduate entrants in England from low-participation neighbourhoods chooses or has no option but to study part time. The Government need to address that. However, when the Prime Minister talked about lifelong learning last week, there were no words of contrition for what the Government have done: tripling fees, scrapping maintenance grants and introducing adult learning loans, half of which have been handed back unused to the Treasury.
What we need to know from the Minister—apart from why, curiously, there has been no reference to 16-to-18 education—is what he is going to do to reassure people. No direct grant has been available for university courses in the arts and humanities, social sciences, computer science, design, architecture or economics since 2014-15. Will there be anything in the review to support those? The Prime Minister and the Secretary of State have talked about two-year courses easing financial burdens on students, but where is the commitment to the continuous professional development that will be necessary in HE if those are to go forward correctly?
Finally, what are the principles behind the timing of the report? Of course, the report will not be independent but will have input—that is all it is—from the panel. However, that input may be quite weak. Why will there be no consideration of that? What will the Minister do to reassure us all that it is not just a PR exercise?
Henry Ford famously said that a customer can have any colour so long as it is black. If the Minister and his Government do not take proper regard of the various elements described in the debate, they will be just as guilty of that as Henry Ford.
Office for Students
Roberta Blackman-Woods Excerpts(6 years, 8 months ago)
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Dr Roberta Blackman-Woods (City of Durham) (Lab)
I start by thanking all Members who signed the letter to the commissioner for public appointments asking for his investigation. I also thank him for yesterday’s response.
Despite what the Minister says, the report clearly shows a lack of proper process in the appointment of Toby Young and in relation to the student appointment. We need to hear a lot more from the Minister about how lessons will be learned. The commissioner did not look at the person specification, which required candidates to want to contribute to the delivery of the Government’s priorities—not that they should have experience of higher education—but that politicised the process right from the outset. What will the Minister do to address that and to get the person specification checked?
Mr Gyimah
If the Government were interested in politicising the process in our favour, we would not have a former Labour parliamentary candidate as the chair of the Office for Students—he has advised Labour Prime Ministers and Conservative Ministers. All the candidates had to declare their political affiliation, which was subsequently published.
In the case of Ruth Carlson, for example, there are no discernible political views, but she is very well qualified. She is a student ambassador at the University of Surrey. She was also her second-year course representative and a member of the scholarship committee. When we think of these representatives, we should not always default to the lobby organisations or to people we think fit the bill; we should cast the net wider to bring in the widest possible experience and fresh thinking.
Points of Order
Roberta Blackman-Woods Excerpts(6 years, 8 months ago)
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Dr Roberta Blackman-Woods (City of Durham) (Lab)
On a point of order, Mr Speaker. I asked the Minister for Universities, Science, Research and Innovation whether the person specification for the board members of the Office for Students had been checked properly and if we could be assured it met the requirements of the code for public appointments. He did not address that issue, so I wonder whether you could give any advice as to how we can take it forward.
Mr Speaker
That is not a point of order for the Chair. Whether it momentarily slipped the Minister’s mind or for some other reason he chose to focus his remarks elsewhere, I do not know. The Minister is welcome to come to the Dispatch Box if he wishes, but he is not under any obligation to do so.
Oral Answers to Questions
Roberta Blackman-Woods Excerpts(6 years, 11 months ago)
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Greg Clark
My hon. Friend is absolutely right. That is why we have the Automated and Electric Vehicles Bill before Parliament. We are taking a lead in ensuring not only that we invest in research and development, but that we are ahead of the world in having the right regulatory system to support the adoption of this technology.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
UK participation in Horizon 2020 has held up remarkably well since June 2016. We remain one of the strongest performers across the EU system. As the hon. Lady will have seen, last Friday’s joint report between the Commission and the UK Government painted a very positive outlook for our continued participation in this valuable programme.
Student Loans Company
Roberta Blackman-Woods Excerpts(7 years ago)
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Mr Speaker
Order. I am looking at all these very academic colleagues, and of course my eye immediately focuses on Dr Roberta Blackman-Woods.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Thank you, Mr Speaker. I hope the Minister appreciates that the problems at the SLC go beyond the actions, or lack of them, of the previous chief executive. The Jenkins report pointed to “bad behaviour” among the whole of the executive leadership team. Will the Minister tell us what that bad behaviour is, how long he has known about it and what action is being taken to stop it?
Joseph Johnson
The SLC board has taken prompt action to address the shortcomings in the leadership of the company that were identified in the two investigations that I have mentioned: the Government Internal Audit Agency report and the report by Sir Paul Jenkins. I have every confidence that the new chief executive we have put in place, Peter Lauener, who has worked successfully across a range of Department for Education partner organisations including the Institute for Apprenticeships, will do the job that we need him to do.
Higher Education Funding
Roberta Blackman-Woods Excerpts(7 years, 1 month ago)
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Joseph Johnson
My right hon. Friend is absolutely right. It was the increase in tuition fees that enabled us to take the limit off student numbers and release student number controls. That change is what has driven the sharp increase in participation in higher education by people from lower socioeconomic deciles. It has driven a huge expansion of people from disadvantaged backgrounds getting a chance to go through university and higher education. The Labour party’s policies would reverse all that progress.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
It is right that the Government have frozen tuition fees, but I wonder whether I could nudge the Minister to go a bit further and get rid of this unsustainable fees system altogether. When is he going to guarantee that universities and their funding will not be adversely affected in any way by the changes the Government are proposing?
Joseph Johnson
Universities are well funded. As I said in my opening remarks, funding per student per degree is up by 25% since the reforms the Government introduced in the previous Parliament. We are confident, having assessed the financial position of our institutions, that they can sustain a freeze in the level of fees for this coming financial year and that is the policy the Government set out.