Viscount Younger of Leckie
Main Page: Viscount Younger of Leckie (Conservative - Excepted Hereditary)Post-18 Review of Education and Funding
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Viscount Younger of Leckie (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made earlier today in the other place by my right honourable friend the Secretary of State for Education. The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement on the Government’s review of post-18 education and its funding—the first review since the Robbins report in 1963 to look at the totality of post-18 education. The Government will carefully consider the independent panel’s recommendations before finalising our approach at the spending review.
I would like to take this opportunity to thank the independent panel, led by Philip Augar, for its exceptional work. Alongside Dr Augar on the panel were Professor Sir Ivor Crewe, Jacqueline de Rojas CBE, Professor Edward Peck, Beverley Robinson OBE and Professor the Baroness Alison Wolf. The panel consulted with a wide spectrum of experts, leaders and senior figures and received almost 400 responses to its call for evidence. I would like to also thank all those stakeholders, including colleagues from across this House, who contributed to the review. We will continue to engage with stakeholders now that the independent panel phase is complete and as we work towards the completion of the review.
A lot of the attention will be on what this report says about higher education, but the majority of students in post-18 education are not at university. The report identifies the importance of both further and higher education in creating a system which unlocks everyone’s talents. As the Prime Minister said last week, further education and technical colleges are not just places of learning; they are vital engines of both social mobility and of economic prosperity. Colleges play an essential part in delivering the modern industrial strategy and equipping young people with knowledge and skills for the jobs of today and tomorrow. And of course, we are very conscious of the need for reskilling and upskilling at a time when we are all more likely to have multiple careers during our working lives.
We are already carrying out a major upgrade to technical and vocational education, including the introduction of new T-levels for young people and developing proposals to introduce employer-focused, higher technical qualifications at so-called levels 4 and 5. These will provide high-quality technical qualifications to rival traditional academic options, and we have overhauled apprenticeships to provide people with the skills and career paths they need for great jobs and great careers. But appropriate attention to our college sector—the backbone of technical education in this country—is required to ensure technical education is an equally valid path for a young person as a degree route. I believe that the principles set out in this report will help lay the foundation for a sector that is stronger and more robust and will help cement its reputation as being among the best in the world.
Our higher education system transforms lives and is a great contributor, both to our industrial success and to the cultural life of the nation. It can open up a whole world of opportunities and broaden horizons. Whatever decisions we make about how best to take forward recommendations in this report, it is vital that we support these institutions to continue to offer world-leading higher education to students in future.
The opportunity to study at university should be open to anyone with the talent and potential to benefit from that experience. Gaining a university degree has benefits both for individuals and for society—or, in the jargon, it has both a private return and a social return. On average, doing a degree has strong earning returns, equating to over £100,000 extra lifetime earnings per graduate after tax. So we believe it is right that contributions to the cost of higher education need to be shared between the student and the taxpayer.
The scale of the government subsidy today is in fact much larger than most people imagine—close to half the total—and it is a progressive system, where those on the highest income contribute the most and those on incomes lower than £25,725 make no contribution. As Government we believe it is essential that we provide the right support to enable people from all backgrounds to access and, most importantly, succeed at university and on other higher-level courses.
In 2018, we had record rates of 18 year-olds accepted to full-time university, up 0.4 percentage points to 33.7%. Students from the lowest-income households have access to the largest ever amounts of cash support for their living costs. Already this year, we have increased living costs support for the 2019-20 academic year to a record amount.
However, although 18 year-olds from disadvantaged backgrounds are now 52% more likely to go to university than 10 years ago, there is more progress that we need to make. Disadvantaged students are still less likely than their more advantaged peers to attend the most selective universities, have the support they need to successfully complete their degree, and are less likely to achieve a 2.1 or a First. The panel’s proposals on support for disadvantaged groups are an important contribution to the debate in this area.
I very much welcome the focus that the panel has placed on making sure that all higher education is of high quality and also delivers well for students and the taxpayer. There are very high-quality courses across the full range of subjects—from creative arts to medicine—but there are also courses where students are less well served. I have also spoken in recent months of bad practices not in the student interest, such as artificial grade inflation and so-called conditional unconditional offers.
The panel’s recommendations on student finance are detailed and interrelated and cannot be considered each in isolation. We will need to look carefully at each recommendation in turn and in the round to reach a view on what will best support students and the institutions they study at, and ensure value for taxpayers. In considering these recommendations, we will also have regard to students currently in the system, or about to enter it, to ensure any changes are fair to current and new cohorts of students.
I am sure the House will recognise that this comprehensive report, with detailed analysis and no fewer than 53 recommendations, gives the Government a lot to consider. We will continue to engage with stakeholders on the findings and recommendations in the panel report, and conclude the review at the spending review. But I am clear that whatever route a student chooses, and whatever their background, post-18 education should set them on a successful path for their future. With this vision, I strongly believe that the HE and FE sectors can and should continue to thrive together. I commend this Statement to the House”.
Baroness Garden of Frognal (LD)
My Lords, this report has been long awaited and I do not doubt that the Minister is quite relieved that he is at last able to tell us about it. We owe a debt of gratitude to Philip Augar and his team for the amount of work that they have put into it. It makes some really welcome recommendations on further education and skills, as the noble Lord, Lord Bassam, set out. Successive Governments have neglected the importance of colleges and lifelong learning, so this change of emphasis is to be commended.
Over the last 10 years colleges have had to deal with an average funding cut of 30%, while costs have increased dramatically. Further education is the only part of the education budget to have had year-on-year cuts since 2010. Funding for adult education has had a cut of 62%; in the last 10 years, we have seen total enrolments for adults drop from 5.1 million to 1.9 million; funding for students aged 16 to 18 has been cut by 8% in real terms since 2010; and colleges have been tasked with the new T-levels, which may or may not turn out to be an improvement on the well-respected vocational qualifications which are around at the moment.
We note that Augar’s proposed lifelong learning loan allowance is restricted to a limited range of courses. Mature students may not want to take out a loan late in their careers and this funding model may not work for those who have financial constraints, such as a mortgage or children. Taking out a loan is unlikely to be the most effective way of triggering a revolution in lifelong learning. Will the Minister consider expanding it to cover a wider range of education and training, and to provide grants rather than loans so that no one is unable to afford the education they need to advance their careers? Giving everyone, no matter their age, the right to a free level 3 qualification—equivalent to A-levels—will ensure that no one is denied the basic skills they need to advance their career.
We welcome the recommendation that:
“The unit funding … for economically valuable adult education courses should be increased”.
I still think it sad that the general interest programmes which colleges used to provide have gone. They were a valuable source of social mobility and improved health and well-being. They encouraged adults into learning for the fun of it. I taught French and Spanish classes way back when to people who were inveterate learners, and all the better for it, but those days of happy free learning have—alas—gone.
The capital investment of at least £1 billion is well overdue, as is the recommendation that:
“Investment in the FE workforce should be a priority, allowing improvements in recruitment and retention, drawing in more expertise from industry, and strengthening professional development”.
The FE workforce has been underpaid for far too long.
As was mentioned, anyone who does not have an undergraduate degree will be entitled to a lifelong learning loan allowance. This will allow them to receive tuition fee and maintenance loans for any level 4, 5 or 6 course. It is welcome that the ELQ rules that prevent students receiving public funding for a course at the same or lower level than one they already possess should be abolished for levels 4 to 6. This rule has prevented many people retraining for fresh opportunities.
On apprenticeships, we should also like to see more emphasis on the Richard review recommendations:
“An apprentice must be new to the job or job role”,
and that the,
“upskilling of the adult workforce … should not be bundled with apprenticeships”.
The apprenticeship levy seems to be having the reverse effect of encouraging adult upskilling at the expense of new entrants to the workforce.
It is good that universities offering degree-level courses at level 6 should award an interim qualification to students who complete their first one or two years, allowing those who drop out to still have a certificate to show for their efforts. This might in time encourage credit accumulation and transfer to enable them to take their part-qualification on in the future. This has been on the cards for years and has never found a market. Will the Government encourage a new push for credit accumulation and transfer between colleges and universities?
With many good things in these parts of the review, we do have questions over the university proposals, as the noble Lord, Lord Bassam, set out. We regret that the review has been undermined by a shoddy, regressive change to student loans, which we rather suspect has been influenced by No. 10. How much less will students now repay? This is, of course, a trick question. Graduates will now pay their loans back earlier and for 10 years longer. Most new graduates will pay about £15 a month more than under the current system. Bringing maintenance grants back will ensure that students from the poorest homes do not have the most to repay. Augar’s proposal for student loans for higher further education learners is a good start but it is not radical enough. As our economy changes rapidly, everyone will need to retrain and upskill throughout their lives.
I have some questions for the Minister. First, does he agree that the Government must compensate universities in full if the tuition fees cut goes ahead? We hear that teaching grants should be increased to reflect the loss of funding to universities that a cut in tuition fees will bring. However, the grants should be allocated to reflect the cost of teaching the subject and the subject’s social and economic value. Where will subjects such as ancient history sit and will pure research become a thing of the past? If the funding is not made up, universities will doubtless cut their widening participation budgets and drop subjects that are too expensive to teach; I do not include ancient history in that group. Secondly, will the Government curb the sky-high interest rates put on loans after people graduate? The Government make a great deal from middle-income graduates because the interest rates bear no relation to the cost of government borrowing. Thirdly, given the crisis in NHS recruitment, will the Government bring back nurses’ bursaries?
We probably need to go further. As Martin Lewis has argued, for most graduates, the current system works a bit like a graduate tax, so why not turn it into one? All the frightening language about “fees”, “loans” and “debt” disappears overnight. Students from wealthier families, who bypass the system by paying tuition fees up front, instead pay their fair share. The system becomes more progressive and most graduates would pay a little less. There are, of course, problems with a graduate tax too. We would want to review the proposals to see what impact it would have on widening participation and on universities’ budgets. However, it seems that the Conservatives have encouraged Philip Augar to put a catchy headline on reduced fees above the truth. Does the Secretary of State realise that Augar’s positive recommendations for further education have been undermined by these regressive proposals for student loans? Has the Treasury approved an increase in teaching grants to cover the tuition fees cut? If not, the Prime Minister will have achieved the impossible: charging seven in 10 students more to go to university, but paying universities less to teach them.
Our party would be keen to create personal education and skills accounts, giving every adult over 25 the opportunity to learn for free wherever they want, whenever they want, with careers guidance in place to support them along the way. Good careers guidance is key to much of the benefit in these proposals. The more people enjoy learning and the more they learn, the more ready they are to learn more, which in the long term benefits our economy, making it easier for employers to find the higher-skilled and more creative people they will increasingly need as technology develops. We hope that the Government will support the FE proposals to the hilt, but look again at the changes to tuition fees which may well disadvantage those the Government most want to help.
Viscount Younger of Leckie
I thank the noble Lord, Lord Bassam, and the noble Baroness, Lady Garden, for their comments. I am pleased that he said that there were some positive measures in the review. In answer to her, I say that I am relieved that the review is now upon us at last.
The noble Lord referred to the proposed reintroduction of maintenance grants and teaching grants. The noble Baroness also spoke about this. As they would both expect, I cannot comment on these aspects now but we will certainly look at the 53 recommendations which came out of the Augar review. On teaching grants, as Augar says, many courses produce extremely good value for money and have a high student satisfaction rate but some do not. Under his proposals, the teaching grant perhaps needs to be better targeted. I cannot comment on that, but we are going to look very carefully at what the review has said and report back at the spending review.
The noble Lord raised the subject of tuition fees. The proposed cut in tuition fees needs to be considered in the round, as I said in the Statement. It needs to be considered in conjunction with the proposals on in-study interest rates, the reduction in the threshold and the extension of the repayment period, which he referred to. These things are all related and it is essential that they are looked at with great care. He stated that the Labour Party’s policy is that it would scrap tuition fees immediately. I have known that for a while but it is interesting to have it straight from him. As he will know, the panel in the Augar review set out the principle that:
“Getting the taxpayer to pay for everything is unaffordable. Getting learners to pay all their own costs is unfair to those of limited means. Getting employers to pay for the whole system would put too much emphasis on economic value alone. A shared responsibility, in our view, is the only fair and feasible solution”.
The Government and the panel agree that maintaining an income-contingent repayment system is the fairest way of sharing the cost of higher education between the taxpayer and those who benefit directly. Even early in their careers, at age 29, earnings of students who attended higher education are increased by around 26% for women, and 6% for men, compared to similar students who did not attend. On average, doing a degree has strong earning returns—over £100,000 over a lifetime—as mentioned in the Statement. The repayment system is fair and progressive. Students do not need to make any repayments on their loans until they are earning £25,725 per year. However, we must remember that the 2012 fee reforms enabled the Government to lift the cap on student numbers, since when we have seen record rates of 18 year-olds entering full-time higher education. Having said that, the Government will consider the panel’s recommendations carefully and conclude their review at the spending review.
I also took note of the comment made by the noble Lord on the lifetime cap. That will also be part of the mix. With great respect, I beg to differ with what the noble Baroness said about funding. We continue to engage with stakeholders to deliver a post-18 education system that is both joined up and supported by a funding system that works for students and taxpayers. I point out that since 2012 the total income for universities in England has increased by around £6 billion, and resource per student is at an historic high. The IFS estimates that the 2012 reforms increased real funding per student by almost 25%.
The noble Baroness also spoke about T-levels. The good thing about T-levels, as I have said in the Chamber before, is that they are employer-led. They are put together in conjunction with employers and it is very important that we remember that.
Baroness Garden of Frognal
May I just point out that all vocational qualifications have always been employer-led? That is not something new for T-levels—all vocational qualifications are led by employers.
Viscount Younger of Leckie
I take note of what the noble Baroness said. I suspect that it is all a matter of degree, because in addition to apprenticeships now being employer-led, more than ever has now been done to include employers in helping to set the standards for apprenticeships, for example, and to help put T-levels together.
I also note the interest the noble Baroness has often shown in further education and her comments about workforce pay. We are currently focused on listening to a wide range of feedback from many sources and are considering how effective our funding and regulatory structures are in supporting high-quality provision. We will continue to engage with stakeholders to ensure that the review delivers a post-18 education system that is joined up and supported and works for students and taxpayers.
I think I have covered all the questions and I may say a little more about T-levels later.
Viscount Younger of Leckie
I accept what the noble Baroness said and I note her point that we are not the only Government to have focused on education. Her point is noted and I will go back and read the part of the Augar review that she pointed to. On her point about the proposed reduction in fees to £7,500, as I said before, we are going to look carefully at the proposal. Of course, what we are trying to do is create a balance between how we fund higher and further education and how we give value for money for students and more focus on courses. The quality of courses is terribly important, not just for the students but for Britain as a whole and for helping with productivity.
On the timetable, as I said earlier, the pledge is that the Government will conclude this review at the time of the spending review, which is sometime in October.
Baroness Blackstone
Would it be possible just to say when the spending review is likely to take place?
Lord Cormack (Con)
My Lords, like others I welcome the review, but I have two concerns. One is that I do not believe that the quality of careers guidance is anything like as high as it should be, a point touched on by the noble Baroness, Lady Garden. Nor do I believe that citizenship education is of a quality that the country deserves and should demand. Will my noble friend agree to talk to the Secretary of State and others in his department and tell them that unless we get these two things right, many of the other admirable proposals in this report will in fact come to naught?
Viscount Younger of Leckie
My noble friend is absolutely right. He will know that we are working very hard on improving careers guidance, not least in schools, and we have the National Careers Service. The quality and spread of advice is also important, particularly in disadvantaged areas. He will know that, through the Baker clause, there is now a legal obligation on secondary schools to include careers guidance to pupils. As for character development and all that, that is really left up to head teachers to decide upon. More usually than not—I do not have any statistics on me—that comes under the heading of PSHE.
Baroness Young of Old Scone (Lab)
My Lords, I declare an interest as chancellor of one university and chairman-elect of another, and commend the report for one thing—I am quite critical of many of the issues raised in it—which is the bringing together of further and higher education into one system and thinking about them together. I think that is absolutely important, but the risk is that this is a zero-sum game: if there is no further funding to bring forward that increase in priority for further education, will that reduce the funding for higher education, with catastrophic impacts not only on teaching but especially on research, as a result of the quite substantial cross-subsidy that exists between different funding and spending streams within each university? How does the Minister see that fitting with the Government’s commitment to increase research funding to 2.4% of GDP, if universities are to be constrained in their very important role of taking that research increase forward?
One other issue has not yet been touched upon. Dr Philip Augar’s report talks about apprenticeships for the future, and the Statement stressed the Government’s consciousness of the need for reskilling and upskilling. That is particularly true of people who are mid-career. As skills and jobs change dramatically at the moment, mid-career people need upskilling just as much as others, yet the report recommends that apprenticeships at postgraduate level should not be allowed for someone who has already had a publicly funded degree qualification. I hope that the Government will reject that proposal.
Viscount Younger of Leckie
Yes, I take note of the feedback from the noble Baroness and I am sure it will be passed back to the department. I totally agree with her that bringing further and higher education together is a very good thing. As I said in the Statement, it is the first time since 1963, in the Robbins report, that they have been looked at together, and that is very important indeed.
The noble Baroness also made a very good point about the importance of research, the university sector and joined-up thinking. I reassure her that this is very much at the forefront of the Government’s thinking. It goes back to what I was saying earlier about the importance of the UK remaining competitive in a global world and of upskilling and reskilling, as she said, to have the right skills to meet needs looking well ahead—not just five or 10 years, but 20 or 30 years. Through the industrial strategy we committed £406 million of investment into education and skills. In addition, through last year’s Autumn Budget the Government invested over £1 billion to support students through their education. I hope the noble Baroness is reassured that this is very important for our economy.
Lord O'Shaughnessy (Con)
My Lords, despite declaring an interest as a visiting professor at one university and as a former visiting fellow at another, I am delighted that the debate in this House has focused so much on further education. I agree that in some ways these are the most radical parts of the report. For me, the most shocking statement in the report is in the principles, which shows that even while access to university has increased dramatically,
“the total number of people involved in post-18 education has in fact declined”.
That is because of a decline in further education. I am in no doubt that this dreadful state of affairs is one of the key reasons behind our poor productivity as a nation. I encourage my noble friend to take back to the department, the Secretary of State and whoever will be our next leader that they should have the courage of their convictions and follow Philip Augar’s very sensible advice to shift public subsidy away from low-value degrees into high-quality technical education that will deliver much better economic growth, productivity and social mobility.
Viscount Younger of Leckie
Again, I am happy to take the message back, but I am not in a position to make any commitments—which, admittedly, my noble friend did not ask me to do. I say again that it is so important both horizontally and vertically to have a system whereby individuals’ careers are managed from a pretty early stage and that the right guidance is given to them on whether to go up through the academic route—through university, for example—or through the vocational, technical route, using T-levels or apprenticeships. My point is that it is all joined-up thinking. It must be, because vertically, through the career path, and horizontally, in what you can actually offer, it is very important that we get it right. That is all part of our thinking. The Augar review is extremely informative to our thinking.
Lord Liddle (Lab)
My Lords, I declare an interest as the chair of council at Lancaster University. I endorse the welcome from these Benches of the Augar review’s emphasis on the improvement of further education and the integration of our further and higher education efforts. This has always been the Cinderella of our education system, and we have to correct it. However, does the Minister accept that there are dangers in the line of thinking that one can improve the further education sector by making economies and redistributing money from the university sector? I do not believe that this is a feasible course of action. Indeed, the reintroduction of maintenance grants and the cut in the fee to £7,500 proposed in Augar will require increased spending on universities if their standards are not to fall. If there is a cut in the income of universities, my noble friend is correct that the research is not fully funded by the Government, and that, therefore, there will be pressure on research budgets. Also, if the headline fee is cut without any comparable increase in the teaching grant, universities will find that they are under pressure to cut what they spend at present on wider participation and bursaries. That would be a tragedy for equal opportunities in this country.
Viscount Younger of Leckie
I take note of what the noble Lord, Lord Liddle, has said. I think the assumption he is making out of Augar is that there could be a skewing of funding—robbing Peter to pay Paul. That is noted, and it is perhaps understandable that it has come out of the Augar review. As I say, I cannot comment on that at all. We will need to think about it. As I said to my noble friend Lord O’Shaughnessy, we need to look at all these important institutions and at what we are trying to do as part of the industrial strategy as a whole, because they are all important. It is very important that we have a world-class technical sector and a world-class university sector. It all has to go together.
Lord Haselhurst (Con)
Does my noble friend agree that if we are to achieve the worthwhile aim of ensuring a parity of esteem between what might be done post-18 by our young people, perhaps more work has to be done pre-18 before people get stuck in a mindset of believing that if they are not for university then they are not going for something that is an equal or better alternative?
Viscount Younger of Leckie
Yes, and that plays nicely into the question raised by my noble friend Lord Cormack about careers advice. My noble friend is absolutely right that it is very important that, through schools and bringing employers into schools, the right advice and opportunities are given to all young people to suit their particular needs, talents and skills. That must be done, in my opinion, at an early age. I note that in Australia, career management or development is started as young as eight. Presumably, that is done at a pretty childish level, but it is important to get the young to think about what they might want to do and to take that as a seamless line right through their careers and onwards.
Lord Storey (LD)
My Lords, everybody seems to be very much in support of the Augar review. I have real reservations about the funding proposals for higher education. When the noble Lord, Lord Bassam, and my noble friend Lady Garden raised the issue of how the funding model, interest charges, the extension and all the rest will favour the rich and not the poor, the Minister kept saying that we will see it in the round. What does “in the round” actually mean? I agree with the noble Lord, Lord O’Shaughnessy, but we have to be very careful, because there are degree courses that are undersubscribed. We are seeing those courses cut, but they are courses that we need to develop, such as modern foreign languages. Fewer students are doing modern foreign languages because there are fewer studying them in secondary schools. It is the same with music. Music is hugely important to the creative industries, which is one of the major growth industries in this country, and yet we are seeing music in secondary schools, because of the EBacc, being scaled back and back. That has a knock-on implication for our universities, where music degree courses are declining as well. If we took the idea of the noble Lord, Lord O’Shaughnessy, all these courses would be cut, much to the detriment of our country.
Viscount Younger of Leckie
I must admit, I was hoping that the noble Lord would be slightly less pessimistic about the Augar review. What I meant by “in the round” in response to questions raised by the noble Lord, Lord Bassam, was that the proposals in the review for the tuition fee cut, the in-study reduction in the interest rate, the reduction in threshold and extending the repayment period from 30 years to 40 years are all interrelated. By “in the round”, I meant that they are all interrelated and that therefore it is quite right that we take the time to look at them all and come back to give our review, which we intend to do at the spending review.