HC Deb 01 April 1987 vol 113 cc1091-100 3.30 pm
The Secretary of State for Education and Science (Mr. Kenneth Baker)

With permission, Mr. Speaker, I wish to make a statement about the Government's policies for higher education.

Higher education is crucial to help our nation meet the economic, social and intellectual challenges of the final decade of this century. We must ensure that our universities, polytechnics and colleges respond to the country's requirements. Important reforms are already under way; I pay tribute to the efforts that are being made, especially in our universities, to adapt more closely to the needs of the nation. The White Paper we publish today announces new policies in three key areas: first, wider access to higher education so that the United Kingdom gets the skilled people we need for economic success and to compete in international markets; secondly, the financing and management of polytechnics and colleges in England; and, thirdly, the thorough-going reform of the University Grants Committee, along the lines recommended in the Croham report.

It is 21 years since the polytechnics were conceived. They have now come of age. They are successful, mature institutions with a strong national role, complementary to our universities. But they are held back by current planning and funding arrangements. Control by individual local authorities inhibits their progress towards meeting the challenges of the 1990s, and towards managing their resources to best effect.

We therefore intend to legislate to convert the polytechnics and other mainly higher education colleges in England to free-standing corporate bodies under boards of governors. Local and regional industry and commerce will be strongly represented on the boards. We want industry and those colleges to work more closely together. Industry will find it more attractive to place contracts for consultancy and research. We will be setting up a new Polytechnics and Colleges Funding Council which will be independent of Government, although subject to guidance from the holder of my office. The council will succeed the National Advisory Body, and will contract with individual institutions for the provision of higher education.

Local education authorities will retain control of those colleges that do not provide predominantly for higher education. The Polytechnics and Colleges Funding Council may contract for the provision of degree and full-time HND and equivalent courses at such colleges. Other courses, including all part-time sub-degrees, at colleges remaining under local authority control will be a local responsibility: the present expenditure pooling arrangements will end. Responsibility for the 530,000 students on non-advanced further education courses in some 360 colleges across the country will continue to rest with local authorities.

The voluntary and other colleges of higher education that are grant-aided by my Department will be brought within the ambit of the new funding council. For the present, however, those arrangements will not be extended to cover the polytechnics and colleges of higher education in Wales.

Secondly, we intend to introduce legislation to change the University Grants Committee to an independent statutory body on the lines recommended by the Croham committee. We accept the Croham recommendations that that body should be smaller, with broadly equal numbers of academic and non-academic members and a chairman with substantial experience outside the academic world. The new body will be called the Universities Funding Council, and its primary responsibility will be the allocation of funds to individual universities under new contractual arrangements.

Thirdly, I want to encourage more people of all ages to go on to higher education. The Government already have an outstanding record on access to higher education. Student numbers have increased by almost 160,000 since we took office in 1979. After its fall in the 1970s, the participation rate for young people has increased by 15 per cent., and the number of mature entrants has risen by about a quarter. We remain committed to providing places for all with the intellectual competence, motivation and maturity to benefit from higher education.

Over the next decade, however, the number of 18-year-olds will fall by one third, and student demand will no longer be a sufficient basis for planning. A major determinant must also be the nation's demands for highly qualified manpower. The increase in graduate output already planned seems unlikely to do more than keep pace with the nation's requirements until 1990, and may be insufficient by the mid-1990s. This view is echoed in the excellent report published yesterday by the Council for Industry and Higher Education, which is chaired by my right hon. Friend the Member for Waveney (Mr. Prior).

For the present, the Government's best judgment is that they should plan for the student numbers envisaged in the higher of the two projections which I published last November. This projection involves an increase in full and part-time student numbers from 906,000 in 1985–86 to 957,000 in 1990. That is an increase of 50,000. By the year 2000, almost one in five school leavers would then be going on to higher education. The Government want to ensure that within the total numbers the shift towards scientific and other vocational courses should be carried through.

Whether we reach these student numbers will depend crucially on this shift being achieved; on whether the schools and colleges succeed in raising the proportion of young people who qualify; and whether the universities, polytechnics and colleges can admit more mature students and more young people with vocational qualifications. The Government believe that higher education will meet these challenges.

Fourthly, the White Paper acknowledges that the quality of our research is recognised worldwide. The Government are committed to maintaining and enhancing the strength and quality of the science base, of which our institutions of higher education are a major and essential part. We attach particular importance to sustaining the work of the most able scientists and their teams. The Government are accordingly making available an additional £15 million for 1987–88 through the science budget. This funding is in addition to the £39 million increase in that budget for 1987–88 which I announced on 6 November last year, and the extra £17.5 million over three years for AIDS research by the Medical Research Council, announced since November.

The consequences of the increase I am announcing today for later years will be taken into account when we consider the science budget in this year's public expenditure survey. But I emphasise that we, and the scientific community, face difficult choices in the future. We must be more selective. We must concentrate resources. We must get even better value for money from better targeted research. We must exploit our science to the utmost —and that is a matter as much for industry as for Government, the research councils and higher education.

Our country's higher education is among the best in the world. Our policies will secure and develop its distinctive strengths. They will extend its benefits to a wider section of the population and will ensure that it serves our nation.

Mr. Giles Radice (Durham, North)

We have listened with interest to what the Secretary of State has had to say. [HON. MEMBERS: "Welcome it."] I welcome his conversion to the view that a policy of contraction simply will not do. Will he confirm that, according to his own White Paper, by the mid-1990s we shall have no more students in higher education than we have today? Will he also confirm that the CBI has calculated that industry will need at least 4 per cent. more graduates every year and that the report published yesterday of the Council for Industry and Higher Education —the organisation of industrialists and academics chaired by the right hon. Member for Waveney (Mr. Prior) —concluded that the number of students planned by the Secretary of State will not be enough to meet the needs of the economy in the decade ahead?

Is it not also the case that, even with that small improvement in the participation rate that is planned by the White Paper, the proportion of 18-year-olds in higher education in this country by the mid-1990s will still be well behind those of the United States and Japan, as well as of several other European countries? It will also be lower than the 22 per cent. projected for 1981 in the Prime Minister's 1972 White Paper.

Is the Secretary of State aware that, in any case, many people will view his White Paper figures with some scepticism? We observe that the Government have buried away in a Committee the political time bomb of student grants, which are so crucial to access. We note that the Secretary of State is not making any commitments to provide extra resources—again so necessary for access—and we remember above all that the Government have squeezed and cut higher education during the past seven and a half years.

Will the Secretary of State confirm that the welcome increase in research funding no more than meets the cost of the recent salary increases? Is he aware that that leaves the science budget in the position in which the Advisory Board for the Research Councils said that resources fall short of what would be needed to maintain the buying power of that budget?

Is the Secretary of State aware that, as over the teachers and local government, so now over the control of higher education, he is taking power to himself? Why is he rejecting the advice of the National Advisory Body committee set up by his predecessor, that, although the day-to-day running of the polytechnics and colleges should be in their hands, the overall strategic responsibility for them should remain with the local education authorities? Higher education will now be run on the basis of Whitehall diktat, and the view that the Secretary of State always knows best.

Finally, is the Secretary of State aware that for all the glossy exterior of the White Paper and the fine words that he has spoken to the House this afternoon, he has ducked the real challenge of opening up higher education to a far wider group than ever before, and of providing more graduates in the decade ahead to meet Britain's needs? The right hon. Gentleman has failed to do that.

Mr. Baker

The hon. Member has something of a nerve to chide me about the numbers of students in higher education, because the Government of his party cut the number of students by several thousand. I am planning an increase of 50,000 by 1990, on top of the increase of 160,000 since 1979. Those are ambitious targets. I make it clear to the House that achieving them depends on young people coming forward with the right qualifications. It depends also on the polytechnics and universities being more willing to welcome into their studies young people with vocational qualifications. That is an important point.

The hon. Gentleman also chides me for centralising the policy relating to polytechnics. However, I remind him that the present system of polytechnic policy is already highly centralised. I have a statutory responsibility for the distribution of all the money and for approving or disapproving well over 50,000 individual courses. We are putting the polytechnics in the same relation to Government as universities. They will enjoy much greater freedom and entrepeneurial independence.

The hon. Gentleman asked me about the National Advisory Body's good management practice working group. That group necessarily had to operate on the assumption that the existing structure would continue. It was not asked to consider alternative structures, and would not have been the appropriate body to do so.

I am sure that the hon. Gentleman will know that the Committee of Directors of Polytechnics made it absolutely clear in February that it favours the policy for polytechnics that we have announced. It stated that corporate status alone would not solve the problems and without direct funding, they are not convinced that it would go far enough. In support of my view, I quote a former Labour Minister in the Department of Education and Science, Mr. Gerry Fowler, who is the director of the North-East London polytechnic and who has clearly said that he wants the polytechnics to be independent.

Several Hon. Members

rose—

Mr. Speaker

Order. I must have regard to the business before the House. There is another statement after this, followed by a ten-minute rule application and an important debate in which there is enormous interest. I shall allow questions on this statement to continue until 4 o'clock and then we shall move to the next statement.

Sir David Price (Eastleigh)

Is my right hon. Friend aware that the additional £15 million that he has announced for scientific research will be extremely welcome? Does he agree that scientific research in our universities should be a seamless robe, from the acquisition of fundamental knowledge to improvements within existing technology? Will he commit himself to sustaining the whole of that robe and not just parts of it?

Mr. Baker

I thank my hon. Friend for his support; I know that for many years he has taken a great interest in the scientific funding of our universities. The money provided will allow key scientists, programmes and research teams to be kept together. We all want good science—that is common ground across the House—and we want that science to come out more into the market place. It is evident from all our research funding that the link with technology transfer is not sufficiently strong. British industry simply does not spend enough on technology transfer and basic research development.

Mr. Paddy Ashdown (Yeovil)

Is the Secretary of State aware that I am happy to welcome some aspects of the report — [HON. MEMBERS: "Only some aspects?"] The right hon. Gentleman asks for such welcomes and I give them to him—particularly the Government's reversed attitude to cuts in higher educaton and research? With falling rolls, is he not missing a unique opportunity substantially to increase the percentage of people going through higher education? I note that he did not answer the previous question about the numbers in higher education in 1990. Will he answer that now? Is he aware that the Council for Industry and Higher Education, to which he referred earlier, commenting on the 4 per cent. increase, said that this was "at odds" with Britain's ambitions for prosperity and renewal?

Is the Secretary of State aware that we can welcome his statements on corporate status for polytechnics? But why must that once again be centralised? [HON. MEMBERS: "Too long."] This is an extremely important statement on which we have several points to make.

Mr. Speaker

Order. Many other hon. Members wish to take part.

Mr. Ashdown

Indeed, Mr. Speaker.

Why does the Secretary of State believe that, in these circumstances, he must take that power? Will not that concentration of control over the polytechnics result in the polytechnics being less able to meet the needs of their communities?

Mr. Baker

As a result of the decline in the birth rate which started in 1966, the number of 18-year-olds in higher education in the 1990s will drop by a third. The projections on page 6 of the White Paper show that the numbers will dip in 1990–91 and then rise again. If we get our policies in place and change the qualification requirements of young people, I hope that we may be able to avoid that dip.

I have read carefully what the hon. Gentleman has said in the past few days about alliance policy on further education—

Mr. Dennis Skinner (Bolsover)

Can you understand it?

Mr. Baker

It is quite difficult. The alliance policy carries a big price tag which rises into the billions, matching Labour Front Bench policies. But I shall return to that at a more propitious moment.

The hon. Gentleman and his party are not taking the right line if they object to our proposals for the polytechnics. Our policy is to increase their independence. The directors of polytechnics, and industry, want it and I am sure that it will result in much better relationships. I beg the hon. Gentleman not to commit his party to opposing that part of our policy.

Mr. J. F. Pawsey (Rugby and Kenilworth)

May I congratulate my right hon. Friend on this positive statement which, despite the carping words of the hon. Member for Durham, North (Mr. Radice), will be widely welcomed? Can he confirm that the additional 50,000 students will be over and above the 160,000 to which he referred? Will he advise the House what the number of students in place was when Shirley Williams, the president of the SDP, was Secretary of State for Education and Science in a Labour Administration?

Mr. Baker

When the president of the SDP held the responsibility which I now hold, she cut student numbers and froze teachers' pay. When she held that position in a previous Government, she also came out in favour of student loans instead of student grants. I can confirm to my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) that the extra 50,000 students is over and above the 160,000, and that that means that when we came into office, one in eight of the 18-year-olds in our country could expect to go into higher education, but by the end of the century it will be one in five.

Mr. Derek Fatchett (Leeds, Central)

I welcome the Secretary of State's conversion to Labour party policy in terms of wider access, but does he agree that, to make it successful, additional money must be made available for universities and polytechnics in real terms, taking into account the fact that during the lifetime of the Government on average they have suffered a reduction in their real unit of resource? Does he agree that, if we are to get more young poeple from working-class homes into higher education to use their talents and resources, we need a system whereby youngsters at the age of 16 years are persuaded to stay on for further and higher education? On that basis, what plans do the Government have for introducing a system of educational maintenance allowances?

Mr. Baker

We have no plans for the latter, because I do not believe that that will attract more people to stay on, and there is a great deal of deadweight expenditure involved in it. As to funding; we have witnessed over the last seven years an increase of 160,000 students — many of those 160,000 students come from, to use the hon. Gentleman's phrase, working class homes—who have been attracted into higher education because they see the benefits of it. It is as simple as that. As to funding of universities, there has been an increase in funding for 1987–88 of well over 10 per cent. That is the money that I announced before and after Christmas, and figure H of the White Paper shows planned increases over the next three years. By 1989–90, for the first time, the money that is spent on higher education will rise to over £4 billion.

Mr. Robert Rhodes James (Cambridge)

Is my right hon. Friend aware that his positive approach is profoundly welcomed by those of us who care deeply about education and is in marked contrast with the unmourned, and I hope now dead, Green Paper of 1985? Is my right hon. Friend also aware that the attention which has been given to the polytechnics to give them the status that they have earned and achieved is particularly welcome? Cambridge is also grateful.

Mr. Baker

We should, as a country, take pride in the polytechnics. They are excellent institutions. [Interruption.] I said that as a country we should take pride in them. As I visit many of the polytechnics, I see courses and faculties which are often better than in many of the neighbouring universities, and I am glad to see that the number of first-class degrees given by polytechnics rose by 20 per cent. last year. Polytechnics will now have the independence that their maturity deserves and they will be able to establish a close relationship with local companies; that must be good for them.

Mr. Stan Thorne (Preston)

Will the Secretary of State ensure that mature students can gain access to higher education through the provision of adequate family awards?

Mr. Baker

There has been a good increase in mature students—people who are aged 20, 30 or 40 years—going into higher education in the last few years; an increase of nearly a quarter. From memory, I think that they number between 40,000 to 50,000 a year. They tend to be funded in a variety of ways. If they have not gone into higher education first, they qualify for grants. Many of them are sponsored by companies, which is a growing practice that I warmly applaud and whenever I can I encourage companies to sponsor mature students.

Mr. Gerald Bowden (Dulwich)

I congratulate my right hon. Friend on his positively expansive programme for higher education. Is he aware of the warm welcome that his proposals for polytechnics will receive, not only from directors of polytechnics but also from teachers at polytechnics—I was such a teacher before I entered the House — but more importantly, from students in polytechnics, who will benefit from having teaching taken out of the party political arena and brought into an independent academic institution?

Mr. Baker

Many of the teachers, staff and faculties, apart from the directors, will welcome the independence that will come from not being subject to the control of the local education authority. They will be able to raise their own money much more freely. Many industries and companies will be willing to support them in the knowledge that their moneys will be directed to specific institutions for specific courses and disciplines and not merely to the local authority area. I am glad to say that the chairman of the Committee of Directors of Polytechnics, Dr. Rickett, made this clear effectively in a radio broadcast this morning.

Mr. D. E. Thomas (Merionnydd Nant Conwy)

Will the Secretary of State accept that £15 million will be entirely inadequate for research council funding generally, when that is merely the figure required in Wales to bring the Principality into parity with the rest of the United Kingdom? If there is to be a real increase from 2.5 per cent. for research council founding in Wales, the system will require much more than £15 million.

We support the right hon. Gentleman's access policy, but how does he equate the notion of greater access with today's reports that six departments in University college, Cardiff are facing closure? How does he equate that with the £20 million to be taken out of the university of Wales over the next two years? In the absence of a statement from the Secretary of State for Wales, will the right hon. Gentleman announce the Government's proposals for Wales in the light of the Graham report?

Mr. Baker

The circumstances that have brought University college, Cardiff to its present position are peculiar to that institution, as I think the hon. Gentleman is aware. It would not be productive or sensible to generalise on them. No changes are proposed for Wales because the Welsh system is smaller than the English one and only a few colleges concentrate on higher education, which means that the need for change is different from that in England. My right hon. Friend the Secretary of State for Wales will consider making changes similar to those proposed for England if the Welsh Advisory Board does not demonstrate in its current review that it can offer advice based on national and not local considerations.

Mr. Steven Norris (Oxford, East)

Is my right hon. Friend aware that, as befits the senior partner in the Oxbridge duo, Oxford has a university and a polytechnic, which means that his announcement is doubly welcome? Will he take it from me that the key phrase in his statement about polytechnics is that of their coming of age? Many of us who have seen the excellent work that is going on at Oxford polytechnic, for example, thoroughly endorse the phrase and welcome my right hon. Friend's moves. Will my right hon. Friend confirm that the £15 million for research council funding of which he has spoken, which is most welcome, comes on top of the £40 million which is additional grant this year for the councils, and will fund the extremely generous pay award of 24 per cent. for the staff of the research councils and allow them to continue their research?

Mr. Baker

I can give my hon. Friend all those assurances. The money that I made available for the university pay settlement was £170 million over three years. That was made available after Christmas. It allows for an increase in academic pay of about 24 per cent., with 16 per cent. payable from 1 December and 7 per cent. from March 1988. That is a demonstration of the importance that we attach to university teachers. The money is additional and it will ensure that research money is available for key scientists and to keep key teams together. Research grants will be given, but the allocation will depend on the Advisory Board for the Research Councils.

My hon. Friend mentioned Oxford polytechnic, which I remember visiting five or six years ago. My hon. Friend the Under-Secretary of State visited it more recently. It is an outstandingly good and successful polytechnic.

Mr. Norris

Thank you.

Mr. David Clelland (Tyne Bridge)

Is the Secretary of State aware that his announcement reflects the Government's previous neglect of the education system and will be seen to have more to do with the approaching general election than a genuine interest in education? Is the right hon. Gentleman aware also that the university of Newcastle upon Tyne has recently announced a reduction of 140 academic posts as a direct result of the Government's policy, and his announcement will have little impact on that?

Mr. Baker

The hon. Gentleman will know that we have asked universities to examine their priorities, and universities throughout the country are doing that. During the lifetime of this Government, Newcastle polytechnic and other polytechnics have flourished like the green bay tree. Newcastle polytechnic has expanded and developed, as have other institutions in Newcastle. I was impressed by the college of art and design at Newcastle, which is providing services and training for 16 to 19-year olds. That will continue under Newcastle city council. The hon. Gentleman should recognise the enormous expansion in higher education that has occurred under this Government.

Mr. David Crouch (Canterbury)

May I thank my right hon. Friend for the extra £15 million that he has announced for research for the civil science Vote? In doing so he has proved once again that he is a listening Minister and that it is worth while for Back Benchers occasionally to make speeches in the small hours of the morning advocating a change in Government policy. We thank him very much.

Mr. Baker

In the past few weeks there has been a lot to listen to regarding scientific research. The debate that took place on the Consolidated Fund was certainly pointed, because the hon. Members who took part spoke forcefully of their experience of universities in their constituencies as well as their broader experience. I am glad that that debate contributed to allowing me to announce the increased expenditure today.

Mr. Richard Caborn (Sheffield, Central)

Why has the Secretary of State not waited for the report from the National Advisory Body for Public Sector Higher Education, "Management for a Purpose", which I gather his Department paid more than £350,000 to commission? It would have been useful if the Secretary of State had waited for that report, because there is a great deal of scepticism about the centralisation that is taking place. Although I agree about the coming of age of the polytechnics, one of the main functions of those polytechnics has been to bring the university sector into closer contact with their localities and industries—rather than the reverse. We are fearful that that could be lost by this centralisation and the proposals announced this afternoon.

Mr. Baker

When the hon. Gentleman sees the proposals in the White Paper, I think that he will appreciate that the present system is already highly centralised. I am trying to create polytechnics as independent, free-standing institutions funded by an independent council. It will be guided by advice from the holder of my office, but will have the same independence as the University Grants Committee has of Government.

With regard to the NAB working party, I saw the chairman a week ago and explained the Government's proposals. Indeed, I answered that point about 10 minutes ago.

Dr. Keith Hampson (Leeds, North-West)

Does my right hon. Friend agree that in the seven years since my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle) first proposed a polytechnic grants committee, nothing has happened other than to prove that the work of the polytechnics is too important to be left to the whims and prejudices of local councils? Will my right hon. Friend confirm to the House that, since the war, the only Government under whom the proportion of 18-year-olds entering higher education fell was the previous Labour Government when Mrs. Shirley Williams was Secretary of State?

Mr. Baker

My hon. Friend [...] upon me to make the most of that—it is a two-barrelled gun. This failure was both under Labour and also when the president of the SDP was Secretary of State. I entirely agree with my hon. Friend with regard to polytechnics. I believe that. in the past few years, many directors of polytechnics have found it extremely irksome to be dependent upon political control. They have seen me — many of them are not particularly of Conservative persuasion—and have said that they cannot stomach any longer the nitpicking and political interference to which many of them have been subjected.

Several Hon. Members

rose—

Mr. Speaker

Order. I remind those hon. Members who have not been called that if they put down questions this Friday they will be answered during education Questions on 28 April.