Higher Education Institutions: Spending
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
That is certainly being discussed by the Government and various stakeholders, particularly the OfS. It is worth pointing out that teaching and research represents 49.2% of total higher education institute spending, which totals £31.3 billion. The teaching grant to which the noble Lord referred represents £1.4 billion in funding in 2018-19.
Lord Forsyth of Drumlean (Con)
My Lords, can my noble friend confirm that the independence of the Augar review was compromised by the Treasury insisting that none of its recommendations should result in increased public expenditure?
Viscount Younger of Leckie
I certainly cannot confirm that; it is the first I have heard of it. After this Question I will follow the issue up with my noble friend and find out where he got that information.
Education: Flexible Lifelong Learning
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
The noble Baroness is correct. I reassure the House that the post-18 review, which aims to ensure that there is a joined-up system, is due to report shortly. It will consider the issues around part-time and distance learning. I will take the opportunity raised by the noble Baroness, Lady Garden, to congratulate the OU on 50 years since its official charter date. Indeed, this is a very participative House today: a number of noble Lords either studied or taught there.
Lord Forsyth of Drumlean (Con)
My Lords, now that the Treasury has been required to change the fiscal illusion funding that encourages all higher and further education to be funded through student loans, should the Government not look at restoring direct grants to institutions so that they are able to run these courses? The Augar review was promised for November last year, and then January—and we are still waiting. What is the delay? The Economic Affairs Committee of this House set out very clearly what needed to be done to sort out this problem. Why can the Government not get on with it?
Viscount Younger of Leckie
I reassure my noble friend that there is no delay, as far as I am aware—“shortly” is the word that I am using. The Government will respond to the proposals that Philip Augar produces by the end of the year. But the Government plan to invest nearly £7 million this academic year for 16 to 19 year-olds in education or training, including apprenticeships.
Student Loan Books
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
It relates back to the first sale of student loans: the Government take a view as to whether it is right to hold on to the loans or to effect a sale and exchange an uncertain stream of future cash flows for a certain amount today. The Government assess whether we are better off retaining the loans rather than selling them by considering the opportunity cost of not having the money now for other issues. Those decisions are very carefully thought out, and that is the case for this second stage.
Lord Forsyth of Drumlean (Con)
My Lords, is it not obvious that this is a piece of fiscal chicanery? My noble friend refers to the decision to sell the phase 1 loan book and to the loans having a face value of £3.5 billion—I think that was the tranche of loans sold at the end of December 2017. They were sold for £1.7 billion, with £1.8 billion written off. Does my noble friend agree with the OBR’s view that the plan to sell £12 billion of plan 1 loans up to 2021 will result in an undiscounted loss to the taxpayer of £28.1 billion?
More importantly, on my noble friend’s point on interest, the Government have been taking credit for the interest which has not been paid and which will be written off 30 years down the line. Given that these loans are going to be sold off to the private sector, with the interest paid to the private sector, why are the Government not adjusting the national accounts to take account of the loans they have taken credit for but which will never be repaid?
Viscount Younger of Leckie
I do not agree with the assessment of my noble friend. The figure I have from the OBR is not £28.1 billion but £23 billion. Whatever the figure, a lot of money has been put down. The forecast from the OBR is based on a nominal undiscounted cash projection, and this implies that the £28.1 billion received 30 years from now—or the £23 billion; whichever we agree upon—has the same value as £28.1 billion today, which is not the case. We have to account for inflation. Similarly, the lack of discounting means that none of the risk or uncertainty associated with those cash flows has been captured in the £28.1 billion. We have to discount for the riskiness of the asset. It is a complex issue, which my noble friend will know.
Viscount Younger of Leckie
Part of the rationale for looking at a sale now is because market conditions are considered to be right. The money is certain money which comes to the Treasury and can then be used to better effect in other areas, which, as I said earlier, is up to the Treasury to decide.
Lord Forsyth of Drumlean
My Lords, we still have time, and my noble friend did not answer my question. Given that the Government have taken credit for interest payments which have not yet been received in the national accounts, will the national accounts be adjusted to reflect that? Also, does he agree with the OBR assessment that it is not obvious why selling these loans at such a loss is of net benefit to the taxpayer?
Viscount Younger of Leckie
There are some further points I can make on my noble friend’s first question. The figure he gave does not take into account the opportunity cost to Government of having the money tied up in loans. My noble friend will know that there are two types of interest rate: the lower rate and the higher rate. I will write to my noble friend with an answer giving him the detail of that.
Apprenticeship Levy: Creative Industries
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
The apprenticeship at the higher level can be defined at quite a senior level. I say again that it is up to employers to engage with the Institute for Apprenticeships to define and describe the standards that they think are right. Some of them are quite senior and would include management levels.
Lord Forsyth of Drumlean (Con)
My Lords, with hindsight, does my noble friend think that setting a target of 3 million new apprenticeships might have been a mistake that encourages quantity over quality? Would it be better to have a target for those who have completed apprenticeships rather than started them, given that 40% do not complete them?
Viscount Younger of Leckie
We have always said that quality comes before quantity. It is good to have a target of 3 million quality apprenticeships that will change the lives of apprentices and the prospects for businesses.
Universities: Contract Cheating
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
I concur that in the passage of that Bill we did not discount the idea of legislating, but we are firmly of the opinion that we should look at the non-legislative approach. I know that the noble Lord is a key member of the academic integrity advisory group, which is doing some good work in conjunction with the QAA to look at the whole area of cheating. It is of course a fast-moving process because much cheating can be done over the internet.
Lord Forsyth of Drumlean (Con)
My Lords, has my noble friend had an opportunity to look at the table in the Economic Affairs Committee’s report on higher education, which shows the huge increase in the number of students being awarded first-class degrees at some universities since the fees were increased to over £9,000? Does he suspect that the market in universities is now geared up to attracting students, and perhaps marketing their universities, on the basis of the number who can get first-class degrees? I exempt the University of Cambridge, which has seen no increase, yet at the University of Oxford those awards seem to have almost doubled, and at some universities it is by a factor of four and more.
Viscount Younger of Leckie
The OfS of course takes responsibility for this and undertakes an annual analysis of degree classification trends at sector and provider level. It will publish its findings and directly challenge the sector where there is evidence. We welcome the UK Standing Committee for Quality Assessment’s work to define the standards for all classifications of degrees.
Part-time and Continuing Education and the Open University
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie (Con)
My Lords, it is a great pleasure to respond to this debate on part-time and continuing education, and I note the specific reference to the future of the Open University. I thank the noble Baroness, Lady Bakewell, very much for raising this subject again. Studying part-time and supporting the education of individuals throughout their lives can bring considerable benefits for individuals, employers and the wider economy.
Let me start by setting the scene. Noble Lords have spoken at length today about the importance of the Open University, and they are right to do so. It has been particularly interesting to hear remarks from those who have been its previous leaders and from its current leaders and alumni, and particularly from those who have taught at it—including, if I picked it up correctly, the noble Baroness, Lady Taylor, and the noble Lord, Lord Shipley. Since 1969, the Open University has brought the opportunity to engage in higher education to people across the country who would not otherwise have had the chance to do so. There has been a theme of social mobility in what has been said today.
I also say at the outset how much I appreciated the maiden speech of the noble Baroness, Lady Bryan of Partick. She gave a particularly warm and thoughtful speech and I am certain that her experience as a graduate of the OU has added greatly to the debate today—and that she will continue to do so in the future. We also look forward to no doubt hearing the views of Keir Hardie transmitted from above via the noble Baroness in the future. Given that football is in vogue, in addition to the importance of study, I hope that she is a keen supporter of Partick Thistle.
The Minister for Universities, Science, Research and Innovation last month described the Open University as,
“essential to our future higher education landscape”.
I agree with Sam Gyimah on this point. I can also report that the Minister took part in an online meeting with Open University students on Monday, making use of the same videoconferencing technology that they use for their studies, to join in a conversation with students from all parts of the country. I am myself looking forward to joining the noble Baroness, Lady Lane-Fox, chancellor of the Open University, and others at a round-table meeting to discuss the work of the OU on 16 July. I note its important work for education in prisons, which we are reminded of today.
It stands to reason that part-time education offers opportunities to many people who are not catered for by the traditional undergraduate model of university. We know that the part-time student population in higher education is different from that for full-time—the noble Lord, Lord Parekh, cited some demographics. Over half of part-time students are older than 30, while this is the case for only 7% of full-time students. As an observation, part-time students also happen to be nearly 10 percentage points more likely to be female than their full-time equivalents. There are numerous testimonials provided by Open University graduates over the years that speak to this. These include people whose caring responsibilities or disabilities made part-time study the appropriate choice for them. Part-time education, however, also carries benefit that will follow an individual throughout their career. Many of those who choose to study through such routes do so because it can complement their existing job roles. Research has found that there are significant employment advantages for those who complete part-time courses, when they start with only a level 3 qualification or below.
Education is of course considered to be a pleasure and a challenge in itself, stimulating and maintaining what Monsieur Poirot referred to as those “little grey cells”. I hope that this will be the experience of the lady wife of my noble friend Lord Northbrook when she graduates. Part-time and continuing education allows this pleasure to be extended to a broader span of the population. Put simply, it is good for people’s well-being and mental health, where appropriate. Contrary to what the noble Viscount, Lord Hanworth, said, we do understand this and I hope that he realises that.
The Open University stands out as by far and away the largest provider of part-time higher education in England. In 2016-17, over a quarter of all entrants to part-time undergraduate study started at the OU. I will though also pay tribute to other universities and institutions, such as Birkbeck—where the noble Baroness, Lady Bakewell, is president, and where the noble Baroness, Lady Blackstone, was previously and the noble Baroness, Lady Garden, is now a fellow. I also mention Teesside University. All make important contributions to part-time study in this country. I also point out that—as the noble Baroness, Lady Bakewell, will know—over 93% of part-time undergraduate qualifiers at Birkbeck were in further study or employment six months after graduating. As noble Lords know, outcomes are a very important part of our government policy.
The noble Baroness’s Motion refers to continuing education as well as part-time education. Continuing education of course extends beyond what we may commonly refer to as higher education and I will return to this theme later on.
Let me now address directly the challenge posed by the changes observed in participation in part-time higher education in recent years. There are now record numbers of 18 year-olds going to university to study full-time, including those from disadvantaged backgrounds. However, we know that there has been a marked decline in the number of people studying part-time in higher education in England. This downward trend goes back to 2008. The noble Baroness, Lady Bakewell, eloquently highlighted the statistics, and a number of reasons for this have been given during the debate, which I will not rehearse again. The Government have taken a number of steps to address the decline in part-time study in higher education. First, noble Lords will recall that, during the passage of the Higher Education and Research Act, the Government brought forward an amendment that gave prominence to part-time study, distance learning and accelerated degrees. This amendment set out that such types of study are included in the need to promote choice for students, which the Office for Students must have regard for in pursuit of its wider functions. The Government also offer part-time tuition fee loans. I am pleased to note that in 2016-17, 47,000 OU students were able to benefit from a tuition fee loan for undergraduate courses. OU students made up around 64% of all the part-time students supported by English tuition fee loans in that year.
I pause for a moment to note that, just this week, the Government have announced that the maximum tuition fees that a university will be able to charge in the 2019-20 academic year will be frozen for the second year running. My noble friend Lord Forsyth spoke passionately on this particular matter. The Government have removed, as he has said, the “equivalent or lower qualification” restrictions—the so-called ELQ restrictions —for all science, technology, engineering and mathematics part-time degree courses. This means that students who already held a degree on these courses were then able to access support through student loans.
Lord Forsyth of Drumlean
My Lords, I am most grateful to my noble friend for giving way, and for the initiative that has been taken in respect of that particular group of students. However, if the Government have conceded the principle, why not extend it more broadly? Am I right in saying that the number of students who have benefited from that are a few hundred? After all, in the whole of England this year, the number of students who did A-level engineering was 10.
Viscount Younger of Leckie
My noble friend will know that I do not have those statistics to hand but I take note of what he has said. It ties into the report that he has produced, and I hope that at a later point we will have time to debate the details of that report.
I turn to HEFCE—now replaced by the Office for Students—which targeted an element of the teaching grant in recognition of the additional costs of part-time study. Twenty-nine and a half million pounds of the £72 million made available through this allocation was granted to the Open University. Importantly, in addition, this Government have in recent months tabled regulations that will allow part-time students on higher education courses to access maintenance loans similar to those received by their equivalents on full-time courses. These loans will be available to students starting honours and ordinary degrees, and equivalent qualifications, on or after 1 August this year.
NHS: US Companies
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
I can reassure the noble Lord again—I know that some Written Answers have been given to him. Protecting the NHS is of the utmost importance to the UK as we leave the EU. The Government will continue to ensure that decisions about public services are made by UK Governments, not by our trade partners. As we leave the EU, the UK will also continue to ensure that rigorous protections for the NHS are included in all trade agreements that it is party to.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend not accept that the anxiety that the noble Lord, Lord Brooke, has would arise if the EU proposals in respect of TTIP were implemented? Is not the glory of leaving the European Union the fact that we will be able to decide this for ourselves?
Viscount Younger of Leckie
My noble friend is right. The main point to make is that the same strong safeguards as we have now will be in place once we leave the EU. These include: that all providers of NHS healthcare in the UK must meet our standards of safety and quality; that staff must be registered with UK regulatory bodies; that decisions on which services to provide are locally led by clinicians; and that NHS hospitals will remain state owned.
Apprenticeships: Levy
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
I have mentioned to the House before that we have a National Careers Service up and running. It is essential in giving proper careers advice that employers in particular can go into schools and address, and hopefully garner, the interest of pupils. We are trying to address the skills shortages. STEM skills and occupational sectors, including the digital side, are well represented in our move from frameworks to greater standards and to increasing the skills level in our country.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend know that the Economic Affairs Committee has been looking at this issue for almost the last year? We have had employers openly admit that they are using the levy to fund training that they would have done anyway. Is it appropriate that the apprenticeship levy should be used to fund people doing MBAs at business schools and so on? Surely the resources should be concentrated on level 3, and in particular on young people, to give them the skills that they need in the workforce.
Public Bodies: Appointments
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean
Viscount Younger of Leckie
There is no evidence that the Minister broke the ministerial code. In terms of the governance code, there are some failings and the noble Lord will be aware of those. This Government set up the governance code following the independent review by Sir Gerry Grimstone and I am pleased that that is the case. The commissioner himself pointed out that in his experience, this episode is unrepresentative of the hundreds of public appointments that take place each year.
Lord Forsyth of Drumlean (Con)
Can my noble friend reflect on the appointments made by the previous Labour Government and perhaps advise the Opposition that people who live in glass-houses should not throw stones?
Student Loans: Interest Rates
Debate between Viscount Younger of Leckie and Lord Forsyth of Drumlean(7 years, 3 months ago)
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Viscount Younger of Leckie
My Lords, the details of the scheme continue to be kept under review, but the student loan system is working well. The Government’s reforms to the undergraduate student finance system have ensured that it is financially sustainable for the taxpayer in the long term, while enabling those with the talent to benefit from a higher education to do so. Young people from the poorest areas are 43% more likely to go to university than they were in 2009-10. This is a very good step in the right direction.
Lord Forsyth of Drumlean (Con)
My Lords, can my noble friend explain why the Government cut the discount rate—their own measure of the liability for the public—arguing that they were able to borrow money more cheaply, and at the same time hugely increased the interest rate that students have to pay? Given that three-quarters of students do not pay their student loan back in full, those who do will be paying back several times what they actually borrowed.