HC Deb 24 April 1986 vol 96 cc557-66

Motion made, and question proposed, That this House do now adjourn.—[Mr. Mather.]

10.42 pm
Mr. Mark Fisher (Stoke-on-Trent, Central)

I seek a clear statement from the Minister about the position in which polytechnics and colleges find themselves in regard to their funding for 1987–88, the future of many of their courses and, above all I seek a clear statement of the number of students that will be admitted in that year. The fact that there is widespread confusion on these vital matters is a direct result of the Government's incompetent management and neglect of higher education in our country.

On Monday the Minister described education as being in creative ferment at all levels. He admitted that that made it a "difficult period". What a euphemism. For "creative ferment" he should more properly have said chaos. To appreciate the extent of this crisis it is necessary to describe briefly the present state of higher education—the context in which the National Advisory Body's planning exercise for 1987–88 is taking place.

On Monday the Minister said: British higher education is among the best in the world".—[Official Report, 21 April 1986; Vol. 96, c. 72.] I would agree in many respects. We certainly have some of the best teachers, best courses and best institutions, but our age participation rate is appallingly low at 13 per cent. Japan provides higher education for 20 per cent. of its young people and the United States provides higher education for 22 per cent. In western Europe only Portugal and Ireland have a lower proportion of 18-year-olds entering higher education.

In his reply the Minister may say that the fact that the number of students entering polytechnics and colleges has risen by 70,000 since 1979 is the Government's one single achievement in higher education. However, the Government have made higher education pay a very bitter price for that gain. They have not provided the additional money to educate those students. Indeed, expenditure on higher education has been cut by 10 per cent. in real terms. Britain is the only country in western Europe which is cutting expenditure on higher education. Every other country recognises that to meet the needs of industry, technology and the future they must expand higher education. This country is, however, reducing expenditure on higher education.

The ratio of staff to students has worsened in this country by 25 per cent. and expenditure per student has decreased by 20 per cent. Purchasing for equipment, books, library provision, crucial periodicals, support staff such as technicians and all the resources necessary to provide the high quality higher education, have been cut and are now critically underfunded.

The National Advisory Body, set up to advise the Government, clearly stated that no more savings could be made. That is the context in which the Secretary of State wrote to the Minister as chairman of the National Advisory Body on 3 February and said: I would like to invite NAB for its planning exercise to adopt (as well as the assumption adopted hitherto by the secretariat and the chainnan's study group), the assumption that the 1987–88 Quantum might show an increase of 3.5 per cent. Translated, that meant a shortfall of £23 million. The NAB secretariat went away and attempted to work out what this planning assumption of the Secretary of State would mean in practice.

On 4 April the secretariat wrote to the directors of polytechnics and colleges with their conclusions. These involve a 6 per cent. cut in student numbers in engineering, technology, construction, science, health, mathematics, business management and in design. They would also mean an 11 per cent. cut in modern languages and a 16 per cent. cut in humanities. Specifically, they would mean that the Rose Bruford college would close, in spite of a recent excellent report from Her Majesty's inspectorate. All humanities would cease at Newcastle, Brighton and north Cheshire polytechnics. At the north Staffordshire polytechnic in my constituency, modern languages would go, computing would lose 70 students and social sciences 116. Sunderland polytechnic would lose its civil engineering department and perhaps most damaging and most idiotic of all, Wolverhampton polytechnic would lose all of its engineering, cutting some 600 students over the three years and losing 35 staff. It is idiotic that that should happen in a town that is founded and based on engineering, and it is equally idiotic to cut a department in which the computer-aided design and computer-aided manufacture centre had recently received £70,000 investment from the National Westminster bank. That must be a crazy policy.

Everyone in this country believes that we should encourage computer-aided design and manufacturing: only this Government could have created circumstances which have led to cuts in that provision. In all, the total number of students entering polytechnics and colleges in 1987–88 would be reduced by 9,400 full-time equivalents—that is over 12,000 students in real, human terms who would be affected. What a farce!

Faced by the unanimous condemnation of the education world and the anger of parents and potential students, the Secretary of State and the Minister have done their best since then to dismiss the NAB's planning exercise. The Minister called it a "campaign of alarmism" and the Secretary of State more tersely called it "rubbish", "a single guess". However, the professional staff at the NAB have based the exercise on the Secretary of State's assumption, which he invited NAB to adopt. As the Secretary of State set the assumption for the planning exercise, it does not become him to disown it now.

I understand that the Minister is telling his colleagues and anyone else who will listen that the NAB should have produced more than one assumption that, as the letter said: it might be appropriate for NAB to adopt a range of assumptions". Indeed, his next sentence in the letter of 3 February specifies the additional assumption that the Secretary of State had in mind—the one "adopted hitherto by the Secretariat". It did in fact adopt that assumption which allows for a cut of £42 million and 18,000 fewer students. Is that the assumption that the NAB should have sent to the directorate? Is that the range of options that the Minister is now saying it should have adopted? The Minister does not seem to be very keen to respond and it is no wonder because he was in the chair at the NAB committee meeting on 27 February when the central planning assumption was agreed. He will recall that one other person was there on that day—the Secretary of State. Both of them were in the room. They heard the discussion. They knew the framework laid down by the board. It really is hypercritical of them to seek to dismiss the reality of that now.

The truth is that the Secretary of State and the Minister have bungled this planning exercise, just as they have damaged so many other parts of our education system. They are both zealots for cuts in public expenditure and they have delivered over education for the knife without a struggle. Then they seem to be surprised, or perhaps confused, when such cuts are made. They say, "No, it is not us; it is the directors of the polytechnics, the NAB". Nobody in Britain believes what the Secretary of State and the Minster say. Their hands are not clean. They are responsible for this assumption and the conclusions that run inexorably from it.

The Minister may well say that there was a further alternative for the NAB. It could have chosen to cut the unit of resource, the expenditure per student, still more. But that was never proposed at that meeting of 27 February, as I understand. But, as Mr. Clive Booth, the director of Oxford polytechnic and a former senior official of the Department of Education and Science has said: In polytechnics, spending per student is the lowest ever. As the Council for National Academic Awards has said in a recent unpublished paper, There is little if any scope for further reductions in the resourcing of public sector institutions in England if the quality of courses … is to be sustained at acceptable levels. Indeed the CNAA goes on to conclude that if the present resourcing policies are continued, it will have to choose between accepting lower course quality and withdrawing course approval. That is a stark choice between numbers and quality. No wonder what Mr. Christopher Ball, the chairman of the NAB, has said that cuts are inevitable if we are to maintain the quality of provision.

Tonight in this Adjournment debate we need to know who is right. Is it the CNAA and the NAB and almost everybody else in higher education who say that a reduction of £23 million in 1987–88—which follows from the Secretary of State's own assumption—will lead to either lower quality or to a reduction in students, or is it the Secretary of State and the Minister who say that this is rubbish?

The Secretary of State and the Minister have sought to avoid that question by saying that we should leave it until later in the year and that it will all work out in the negotiations, or, perhaps less honourably in his speech to the directors of polytechnics, the Secretary of State blames teachers in higher education for last year's pay award. That simply will not wash.

If the NAB and the CNAA are wrong, let the Minister answer five important questions tonight. First, what will be the number of students entering polytechnics in 1987–88? Secondly, what courses will be available to them? Thirdly, how many staff will teach those courses? Fourthly, what resources will they have to do that work? Fifthly, what unit of resource and range of teachers will be available?

The Minister may say that those are imponderables because they flow from the planning exercise, although it is a planning exercise which he himself set up. Nobody in higher education would advocate a return to the old system which was clearly indefensible, but surely the Minister can see that the present arrangements for the exercise are fatally flawed. Decisions made in the autumn will not be conveyed to polytechnics until December. That will leave them six, or at the most nine, calendar months to effect those changes. It simply is not possible to make reductions on those scales without knowing before December what courses will be offered. They cannot be advertised honestly or put into effect.

Surely the sensible thing would be to adopt the recommendations of the Jarratt committee on the universities and opt for a three-year cycle of planning for higher education. I believe that the Jarrett committee on the public sector will also adopt that view, but, sadly, it is a view rejected by the Secretary of State's Green Paper. I urge him, as a constructive criticism, to think again to avoid such problems. If the Minister insists that this form of planning exercise, on a yearly basis, is the right method and if he insists that he will not give any undertakings tonight the British people will consider that he is playing games with higher education.

He will fuel the confusion and demoralisation which is already rife in higher education. Parents, students and teachers in higher education are angered by the present confusion and uncertainty. They want, and the country wants, better provisions for higher education and more secure, long-term planning certainties.

We could plan with such a certainty and deliver the skills our higher education is capable of delivering but which, at present, we are sadly lacking. Tonight is an opportunity for the Minister to repair some of the damage that has been caused since 4 April. That damage flows inexorably from the Secretary of State's letter to the Minister and the assumptions which he suggested that NAB should make. If the Minister cannot reassure people, higher education is in a parlous state. I do not believe that is the Minister's intention. This is an opportunity for the Minister to put some certainty into higher education and give us the planning base which we undoubtedly need.

10.55 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden)

I am grateful to the hon. Member for Stoke on Trent Central (Mr. Fisher), for giving the House this opportunity to debate the planning exercise for 1987–88 now being undertaken by the National Advisory Body for Public Sector Higher education—NAB for short. Equally, I welcome the chance to discuss the planning of the public sector more generally.

The National Advisory Body secretariat's consultative student number proposals, which were circulated to institutions on 4 April, have, in particular, received extensive coverage in the press. Not all of that coverage has been careful to distinguish their status. That may not be entirely the fault of the media, since this is the second time this year that they have been invited by NAB to contemplate substantial reductions in intakes in 1987–88. The first time was in January when the putative reduction totalled 18,000 places. Now it is a more modest 10,000. This is all the more regrettable because of the inevitable anxieties to institutions, their staff and to students and parents that confusion about the Government's policies can cause. I am sorry that the hon. Gentleman, for rather transparent purposes, has chosen to try to muddy the waters further.

There are even better examples of this confusion than the hon. Gentleman's speech. On 8 April the Leader of the Opposition asked the Prime Minister:

was the dispatch of a letter from the National Advisory Body committee to the directors of polytechnics a mistake, or did it not take place, or is it another fantasy?" —[Official Report, 8 April 1986; Vol. 95, c. 16.] The answer is yes, it was a fantasy. I am the chairman of the committee in question and no such letter was sent. If the hon. Gentleman wishes to apologise on behalf of his right hon. Friend for misleading the House, I shall be happy to give way to him on this point.

Mr. Fisher

The Minister knows very well that the NAB secretariat sent a letter on 4 April to the directors of polytechnics and colleges. He has a copy of the letter.

I have copies of that letter, sent to several polytechnics. Surely he does not want to deny the fact that Christopher Bull, on behalf of NAB, sent out that letter?

Mr. Walden

I am saddened by that intervention, because it shows that the hon. Gentleman is not prepared to apologise on behalf of his right hon. Friend for misleading the House. and he also seems to be confused about the exact state of affairs. I hope that I can further enlighten him in the course of my speech.

The hon. Gentleman has been careful to avoid the most yawning pitfalls, but he has still not got it right—as we have just seen. I am glad to have this opportunity to set the consultative proposals by the NAB secretariat in context and, in so doing, to allay the anxieties to which I referred. To that end, I should first make clear that the proposals issued by the NAB secretariat are not Government decisions, nor reflections of Government policy.

The proposals are, in fact, the first results of a planning process and the work of the secretariat of the National Advisory Body. The NAB was established in 1982 in response to the need for some form of central planning of the maintained sector of higher education following the "capping" in 1980 of the advanced further education pool which shares the cost of local authority higher education between authorities. Its remit was, and is, to advise my right hon. Friend the Secretary of State annually on the disposition of academic provision within the sector and on the consequential distribution of the advanced further education pool between authorities in respect of their institutions providing advanced work. In 1985 that remit was extended to include the voluntary colleges. As part of its remit NAB conducts a major revision of academic and institutional plans every third year. The first review was in respect of the years 1984–85 to 1986–87 and was completed in December 1983. The second, on which it is now engaged, will cover the years 1987–88 to 1990–91.

It is axiomatic that an exercise of this kind, looking ahead over a period of three years, cannot foresee all eventualities and must perforce adopt some assumptions as a basis for developing its plans. So it is with the NAB secretariat's consultative proposals that were circulated just over three weeks ago, which were prepared with a view to the formulation of draft advice to the Secretary of State for consideration by the NAB board and committee later this year.

The proposals are based on a single assumption about the resources likely to be available for public sector higher education in 1987–88. It was on that assumption that the NAB committee invited the secretariat to draw up proposals which would restore the level of funding per student to its planned 1985–86 level.

Mr. Fisher

Will the Minister give way?

Mr. Walden

No. I believe genuinely that the hon. Gentleman has quite a lot to learn about this, so he must listen very carefully.

It is, among other things, because the committee believes that funding in 1987–88 will not fully compensate for previous inflation that a 7 per cent. reduction in intakes has, for the time being, been embodied in the secretariat's consultative proposals for 1987–88. In fact, the quantum for 1986–87 increased by 6 per cent., which included an allowance of 4.5 per cent. for year on year inflation, whereas I now note that the Government forecast for inflation in 1986–87 has fallen below 4 per cent. This all goes to show how hazardous these projections are and how misleading it can be to try to enshrine them in concrete.

I stress the contingency of all this, however, also because the actual resources available for 1987–88 will not be known until the autumn. Not until then will the NAB committee—I stress the committee—decide how to advise the Secretary of State about the number of students in aggregate who can be accommodated, not about the subject and institutional implications. At that juncture, as the NAB secretariat's letter covering the proposals itself notes, the committee will have to review the hypothesis used to date and, to quote the letter: may wish to consider other options. The NAB normally tenders it final advice towards the end of the year, whereon the Secretary of State has normally announced his decisions by Christmas.

The hon. Gentleman has suggested that the existing assumptions about funding should be given particular credence because I, as chairman of the NAB committee, am a party to them. That is to misunderstand my position. I hope that that is not done deliberately. My colleagues on the committee, who comprise the chairman of the board and six councillors representing local education authorities, well understand that in addition to chairing their meetings I am also a Minister in my right hon. Friend's Department. I cannot, wearing my ministerial hat, compel the committee to reach any conclusion that it was not inclined otherwise to reach or, wearing my chairman's hat, commit my right hon. Friend to accepting whatever advice the committee may choose to put forward to him.

Mr. Fisher

Will the Minister give way?

Mr. Walden

No. If I could do either of these things, what would be the purpose of having a national advisory body?

Mr. Fisher


Mr. Walden

I give way to the hon. Gentleman.

Mr. Fisher

Does the Minister dispute that the board acted on the assumption upon which it was invited to act by the Secretary of State in the letter that I specified earlier? The board projected the Secretary of State's assumption into the hypothesis that it worked out.

Mr. Walden

By referring to the board the hon. Gentleman has given a new stir to the muddy water that he has already created. We are not discussing the functions of the board. We are discussing the functions of the committee and its secretariat. I suggest only that the hon. Gentleman should continue to listen most carefully to what I have to say. Then he may learn how these things actually work.

It remains the case that the Government's position has been the same throughout. Both at the level of the NAB board, on which officials from my Department sit, and in the Committee we have pressed NAB to plan on the basis of a variety of funding assumptions.

The hon. Gentleman also sought to convict the Government of a disregard for the maintenance of quality. The hon. Gentleman deduces a threat to quality from the evidence of declining unit costs in the public sector since 1979. He asserts that the limit of what is an acceptable level of funding per student has now been reached and that the Government cross it at risk to the maintenance of quality.

Obviously the Government are watching very closely the relationship between funding and quality. We are by no means suggesting that the system is infinitely elastic, but there are important issues here about the relationship between resources and student numbers which go to the heart of what planning is about. The hon. Gentleman's charicteristically lavish prescription implied in his speech simply to spend more money does not even begin to address these problems. Perhaps, therefore, in the time remaining, I could take his education in hand.

The background to the fall in unit costs—11 per cent. across the system as a whole—often cited as an index of quality, is the sustained expansion of student numbers, and hence of access, which has occurred in the first half of this decade. Since 1979, the public sector as a whole has absorbed an increase in students of 27 per cent. In polytechnics alone the growth has been about 37 per cent. That is a formidable and impressive achievement. The orderly assimiliation of these additional numbers owes much to the quality of NAB's planning since 1982—and no one is suggesting that NAB always gets it wrong.

There is, however, no general evidence that it has been achieved at the expense of quality. That is because the resources necessary to sustain the expansion were largely already in place. Accommodation and resources which had been laid down in the 1970s in anticipation of student demand which either failed to materialise, or materialised at a slower rate than expected, were filled up only in the 1980s. The fall in unit cost is thus in practice a measure of the more efficient and intensive exploitation of spare capacity.

The proof of this is to be found in the performance of the student/staff ratio, which, across the system as a whole, has taughtened from 8.2:1 in 1979 to 10.8:1 in 1984, but still remains below the target of 12:1 established by NAB itself—I emphasise that—as a basis for its planning. Thus the National Advisory Body, in its strategy advice to my right hon. Friend the Secretary of State about higher education in the late 1980s and beyond, published in September 1984, judged, in the light of the views of Her Majesty's Inspectorate and the validating bodies, that the fall in unit costs was not in itself a ground on which it could argue for an increase in the funding per student. I do not accept, therefore, the hon. Gentleman's thesis that we are witnesses to a protracted attenuation of resources. One man's fall in funding per head is another man's efficiency saving.

Nor do my right hon. Friend or I accept—and this appears to be NAB's current thesis—that there is no further realistic scope for a more cost effective distribution of provision across the system. Within the public sector of higher education, the polytechnics as a group are now operating what is evidently a tight ship. The average polytechnic student-staff ratio in 1984–85 stood at 11.5:1, close to, though still below, the 12:1 target. I recognise that there is concern within some polytechnics about the stringency of resources and that this concern has played its part in the NAB committee's decision to accord priority to sustaining a particular level of funding per student—the unit of resource. However, I remain sceptical of the invariable relationship which the unit of resource presupposes between funding and student numbers: namely, that each student comes at an average cost and that, for every rise or fall in the real level of funding, access should be increased or diminished commensurately.

A recent paper by the Council for National Academic Awards, to which the hon. Gentleman has referred and which was submitted to the National Advisory Body, encapsulates my own doubts in stipulating that the relationship is not a mechanical one. Common sense surely confirms that judgment. How can the unit of resource hold good as a description of the relationship between resources and numbers when a significant proportion of the system's costs are attributable to its buildings and other facilities which are relatively inelastic to demand? Thus I note that the CNAA paper, which is far more complicated than suggested, though estimating that the present resource level may create difficulties for the maintenance of quality in the longer term, also implies that current funding is above the resource level necessary in the short term. In other words, across the system as a whole the existing infrastructure is equal to the demands now placed on it.

I particularly regret the pretext which dependence on the unit of resource supplies to those unwilling or unable to scrutinise how the system might be better organised to make resources go further and to sustain quality. The efficient allocation of places and resources is not only the key to orderly planning but is NAB's job and fundamental to the partnership between Government and local authorities which NAB embodies and which has worked well a number of times.

It is undeniable that there is overcapacity to be discerned in the system. By contrast with the efficient polytechnics, the student-staff ratio elsewhere in the local authority higher education sector stood at 9.6:1 in 1984–85. That is indicative of substantial spare teaching capacity. I think that not only the taxpayer and ratepayer but those institutions currently experiencing financial stringency have a right to ask why that spare capacity might not be rationalised and resources freed to flow to those parts of the system which are under presssure. If I were the director of a polytechnic which had played its part in the expansion of access in this decade, I should ask that question insistently.

It is my firm belief that we do ourselves no service by turning our back on these complications, and I am sorry that the hon. Gentleman chose to do that. I do not doubt the sincerity of the directors of individual polytechnics who have expressed to me concern about resources. I have talked to a number of them. I was interested that the hon. Gentleman mentioned Wolverhampton, because I visited the polytechnic there when the local collaborative project which involved the Westminster bank was being launched. I had a chance on the spot to calm the excessive fears that had been aroused.

I do not dissent from the proposition that our investment in public sector higher education should be such as to build on existing strengths and to maintain quality. I must ask the hon. Gentleman to apply his mind to realistic judgments on educational economics. The arguments about the maintenance of quality and building on existing strengths will not carry conviction unless and until it can be shown that existing resources are being used cost effectively. I hope that what I have said makes it clear that there is some way to go—I would not exaggerate how far—before we can truthfully say that. In the meantime—I stress this—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twelve minutes past Eleven o'clock.

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