Higher Education: Financial Pressures

Viscount Chandos Excerpts

Thursday 30th March 2023 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, I join other noble Lords in thanking my noble friend Lord Knight of Weymouth for securing this important debate and in paying tribute to his powerful introduction to it. I strongly endorse his analysis of the intense financial challenges faced by the higher education sector and add my voice to the questions he asked the Minister. I declare my interest as vice-chair and trustee of the drama school LAMDA and as a co-opted member of the investment committee of Worcester College, University of Oxford—a rich university with a poor college within it.

I am also privileged to have taken the place of my noble friend Lady Donaghy as a member of the Industry and Regulators Committee of your Lordships’ House. I am therefore currently involved in the inquiry into the Office for Students. I would be as unpopular pre-empting the conclusions of the committee as I would be giving a plot spoiler to the current series of “Succession”—which stars, in Brian Cox, a distinguished alumnus of LAMDA—but some of the points that I will make this afternoon have been formed by the evidence about the HE sector that has already been heard by the committee.

Academic politics is

“the most vicious and bitter form of politics, because the stakes are so low”,

wrote Professor Wallace Sayre in the 1950s. He may have been reflecting the views of President Woodrow Wilson, and subsequently Henry Kissinger has characteristically claimed the analysis for his own. Senior common-room debate can be impassioned on a wide range of subjects, and the intellectual self-confidence of members of the academic community undoubtedly makes the governance of universities and HE institutions challenging.

Professor Sayre’s dictum may accurately represent one aspect of academic life, but it would be completely wrong to interpret it more broadly as implying that the stakes in higher education generally are low. They could not, in fact, be more important. That importance is based on the education and training provided to UK citizens of every age, but particularly as young adults; the research and innovation undertaken of national and global scope; the economic benefits of a vibrant HE sector nationally; and, as my noble friend Lord Knight and others have highlighted, the benefits for local communities. It also includes the contribution to the UK’s international standing and relationships through the foreign students who are drawn to the excellence of our institutions. Where these are all interconnected, students benefit from being taught by academics at the forefront of research and from their interaction with overseas students, for instance.

I believe that there should be greater clarity in defining the priorities and objectives for HE policy. I would argue that it should be first and foremost about providing that education and training to UK students in order to create a productive workforce and a civilised society. The economic benefits arising directly from the sector, such as £20 billion of export earnings, £100 billion of GDP and the driving economic force in many local communities, are hugely important, but they are a welcome by-product of the central objective of providing the best possible education for current and future generations. Research is of course vital but, whereas teaching is universal to all HE institutions, research is more concentrated—not, I should emphasise, in Russell Group universities alone but wherever specialised expertise resides.

I believe that thinking about HE policy in this way is essential for any fair and successful reform of funding. Not only is it necessary to increase the overall funding for the sector in real terms, it needs to be implemented in a way that ensures, as far as possible, that the costs fall fairly and proportionately on the different stakeholders. For instance, there is disagreement about the extent of cross-subsidies between teaching and research most of all, but this issue must be resolved as part of any sustainable changes to the funding of the sector. With the cap on tuition fees for domestic undergraduate courses frozen in nominal terms, and therefore falling in real terms at an accelerating rate, there is increasing divergence between the fees for domestic undergraduates and what the market for foreign students may be able to bear. There must be an increasing risk that, however much vice-chancellors and their governing bodies are committed to the mission of teaching UK students—as I have heard them say—an unreformed system will inexorably increase the pressure to further emphasise the recruitment of foreign students for narrow financial reasons.

In my remaining time, I will touch briefly on the importance of smaller, specialist institutions. LAMDA, of which I am the vice-chair, is one, along with other world-leading drama schools, music conservatoires and the Royal College of Art, which has been rated the number one art and design college in the world for eight consecutive years. Through the OfS, the Department for Education provides additional funding for some specialist institutions in recognition of the higher costs involved in teaching these specialist courses, as well as the proportionately higher costs that come from being a small, stand-alone institution. Sir Michael Barber, the first chair of the OfS, has recorded the importance that he attached during his term of office to protecting and enhancing the position of such institutions. That support is very welcome and, I believe—I would, wouldn’t I?—fully justified. The world-leading reputation of these institutions and the quality of the education and training provided are fundamentally based on their small size and independence; I say that without denigrating the excellent courses in these areas provided by larger, multi-faculty universities. Can the Minister confirm that the Government remain committed to supporting smaller, specialist institutions at historic levels or higher?