Education Funding (Hansard, 9 January 2003)

§ 5. Linda Gilroy (Plymouth, Sutton)
To ask the Secretary of State for Education and Skills what proposals he has to increase funding available for the further and higher education sectors. [89210]

§ The Minister for Lifelong Learning and Higher Education (Margaret Hodge)
We have announced the largest ever investment in further education over the next three years. Funding will rise by £1.2 billion, an increase of 19 per cent. in real terms, as part of a radical and ambitious reform and investment strategy which links funding to college performance. The higher education strategy document to be published later this month will set out our vision for the rest of the decade, including funding.

§ Linda Gilroy
My hon. Friend will know of the importance attached by Plymouth college of further education and Plymouth university to increasing access for young people from families whose members have not traditionally attended universities and colleges of further education. Will she ensure that funding increases, and the vision in the Green Paper, focus on increasing the amount spent on achieving higher rates of access and recognising the relationship between further and higher education?

§ Margaret Hodge
I applaud the colleges in my hon. Friend's constituency for the work they are doing to ensure that more young people from low-income and non-traditional backgrounds have access to higher education. I confirm what was said by my right hon. Friend the Secretary of State: we will put access, and the ability of people with talent to attend university, at the top of the agenda in our strategy paper.

§ Dr. John Pugh (Southport)
Given that many colleges throughout the country are uncertain about their finances because of glitches in the Learning and Skills Council's software, and given that even the helplines do not know how to help, who does the Minister think is responsible for this software silliness?

§ Margaret Hodge
I am aware of the problems experienced by further education colleges because of glitches in the information technology system, and I think the situation is unacceptable. I am having discussions with the Learning and Skills Council to ensure that it sorts out the problems as quickly as possible. I share the hon. Gentleman's concern.

§ Mrs. Lorna Fitzsimons (Rochdale)
It is crucial for many of our constituents that the balance between further and higher education, in terms of funding, remains an issue in the forthcoming review. The much-needed expansion in access for the non-traditional entrants by whom many of our communities are over-represented must be based on access, via further education, to higher education. Will my hon. Friend assure me that the mistakes resulting from the last Government's falsely competitive funding system, 307 which forced higher education institutions to compete for a top-up 10 per cent., will not be repeated in the review?

§ Margaret Hodge
I welcome my hon. Friend's comments, welcome her back to the Chamber, and wish her well as a mother. I assure her that by the time her child enters further and higher education—indeed, by the time her child is at secondary school—we shall have ensured that that child benefits from the highest standards and the best opportunities.
Let me deal with my hon. Friend's serious point about the links between further and higher education, and the way in which those links can support progress. I entirely agree with her views, which will be reflected in the strategy document.

§ 6. Norman Lamb (North Norfolk)
To ask the Secretary of State for Education and Skills if he will make a statement on the financing of universities. [89211]

§ 11. Mr. Andrew Turner (Isle of Wight)
To ask the Secretary of State for Education and Skills if he will make a statement on the funding of higher education institutions. [89217]

§ The Minister for Lifelong Learning and Higher Education (Margaret Hodge)
My right hon. Friend the Secretary of State acknowledged in the issue papers published in November that current public funding for higher education institutions in England was not enough to enable them to compete with the rest of the world. The higher education strategy document to be published later this month will set out our vision for the rest of the decade, including funding.

§ Norman Lamb
Does the Minister agree with the view expressed by the Secretary of State and reported in The Guardian on 19 December that the up-front fee…is the most serious disincentive to people from poor backgrounds coming into universities —although four studies commissioned by the Department, and published on its website, make clear that fear of debt seriously deters students in general, and students from disadvantaged backgrounds in particular, from thinking of going to university? Will the Government's proposals take account of the clear findings of those studies?

§ Margaret Hodge
We accept that both large up-front payments and fear of debt are factors that inhibit some young people from lower-income backgrounds from attending university. We also know that there are other important factors that we need to tackle, the first of which is to get young people to stay on at school to 308 achieve more, and to get them to aim higher, raise their aspirations and see university as an option for them, rather than as an option simply for the middle classes.

§ Mr. Andrew Turner (Isle of Wight)
Reverting to the answer that the Minister gave to the substantive question, what is the size of the institutional funding gap that she is seeking to plug?

§ Margaret Hodge
There have been various assessments of the funding gap, but it would not be helpful to give a specific figure at this time.

§ Mr. Tim Boswell (Daventry)
Is it £9 billion?

§ Margaret Hodge
Well, the figure given by Universities UK is about £9.9 billion. That is one figure, but the answer depends on the options chosen. We think that there is a substantial funding gap and we are looking at ways of filling it over time. However, as I said, giving a specific figure at this time is not helpful.

§ Mr. David Chaytor (Bury, North)
In the context of student finance, is it not true that, in addition to the graduate premium that distinguishes between the earnings of graduates and of non-graduates, there is a differential graduate premium that distinguishes between the earnings of graduates of Britain's leading research universities and of graduates of the smaller universities? If it is logical to make graduates contribute to the cost of their tuition, is it not equally logical to make graduates of the leading research universities contribute an additional amount to their tuition costs?

§ Margaret Hodge
My hon. Friend is right to draw attention to the fact that graduate premiums do differ, both according to the institution attended and to the subject studied. That is one of the factors that we are bearing in mind as we think about future funding of higher education and support for students.

§ Mr. Andy Reed (Loughborough)
I am sure that my hon. Friend is aware that one of the many difficulties faced by universities is the payment and retention of university staff. In making sure that universities offer a future for students, it is necessary to ensure that teaching, as well as research, is of the highest quality. In making certain that that happens, is she taking into consideration the pay gap experienced by those working in higher education institutions such as Loughborough university?

§ Margaret Hodge
I could not agree more with my hon. Friend: if we are to maintain and enhance the quality of teaching in our institutions, we must attract good quality teachers, and if we are to enhance our research capacity, we must attract into the sector, and keep, the best academics. Out of interest, since 1993 the real earnings of male academics in higher education have fallen by 0.4 per cent. That compares with a growth of about 5.8 per cent. in male professional earnings in general. That is one of the issues that we are looking at in our higher education reform.

§ Mr. James Paice (South-East Cambridgeshire)
The hon. Lady is on record as repeatedly saying that this 309 graduate premium—the average earnings of a graduate, compared with a non-graduate—is justification for expecting a graduate to contribute to the unspecified funding gap that she referred to earlier. However, if 50 per cent. of that age group are to become graduates, it is surely logical to expect that, in time, 50 per cent. of the work force will be graduates. Will not the graduate premium be substantially diminished, therefore, thereby completely countering the point that she repeatedly tries to make?

§ Margaret Hodge
Interestingly enough, evidence emerging from the massive expansion in higher education that took place when the hon. Gentleman's party was in government demonstrates that the graduate premium not only sustained itself during that period, but, if anything, gradually went up. Our analysis tends to suggest that, given the demands that will be required of the labour market, there is no evidence that the graduate premium will be diminished as we expand the number of people who attend higher education institutions to fulfil the needs of the labour market.