University Grants Committee: Croham Report

HL Deb 18 March 1987 vol 485 cc1425-63

3.4 p.m.

Lord Swann rose to call attention to the Croham Report on the University Grants Committee; and to move for Papers.

The noble Lord said: My Lords, this is a short debate and I fear that no one will have as much time to speak as they would like. I shall therefore confine myself to a few of the wider implications and allow a moment or two more for other speakers.

We have before us a beautifully clear and closely argued report, as one would expect from so distinguished an erstwhile head of the Civil Service. I believe that the noble Lord, Lord Croham, has gone a long way to diagnose the malaise of the present university grants mechanism and to suggest a cure. Nevertheless, as an erstwhile professor and later principal and vice-chancellor of one of the older Scottish universities, I cannot resist saying that I am sad that there was ever a need for the report. My time as an academic, from just after the war until 1973, was something of a golden age for universities. Society valued them, governments of every shade valued them, new universities were founded, morale was high and it was a time of great enthusiasm and creativity.

In those days the University Grants Committee was perceived as a benign and friendly institution that coordinated our efforts in a quiet way and stood as a buffer between the government of the day and rightfully autonomous institutions of learning. Things began to change in the 1970s. Inflation started to bite, and before long a Conservative Government were putting the financial screws on the whole system. This, as your Lordships will know well, has become steadily worse. Some universities have had the most massive cuts, and even the ancient University of Oxford is talking of having to use up its £10 million of capital to keep going.

Perhaps it is all inevitable, though I doubt it. I am sure that the third man in the Oxford chancellorial stakes made the wisest contribution to the campaign when he urged the academics to stand up and fight their corner. Certainly persistent cuts have reduced university morale to rock-bottom.

Diminishing staff-student ratios mean that everyone has to spend a lot more time teaching and a lot less time doing research. Pressure to make economies in every direction and pressure to raise outside money from diminishing research Council pools means that far more time is spent on things other than teaching and research. But I shall say more of that in a moment. Because older staff have been given early retirement and very few young staff have been recruited, the age structure is bunched in the middle, with the great majority of staff in their forties, all getting old together and blocking promotion all round. On top of all this, every year sees a fresh squeeze. Even the recent and long-overdue pay award comes with a squeeze attached: it is only partly funded by the Government.

It is not surprising therefore that the unfortunate University Grants Committee, wrestling as best it may with incessant cuts, is no longer perceived as a buffer against government but rather as a menacing tool of an unsympathetic Government. Instead of being perceived as a benign co-ordinator, it is feared as a machine that can, and often does, blight a university's future. I do not mean to sound critical. I believe Sir Peter Swynnerton-Dyer and his colleagues now have an intolerable job, for which the present committee structure was never designed. The UGC has made some mistakes; who does not? I believe, for instance, that its attempt to rank research within universities was ill-conceived and most unfortunate. As I have said to your Lordships before, academic peer review is well known to be a way of cutting out the bad at the same time as the very good. It has always been thus, and one has to be very cautious indeed about deciding orders of merit in something as incalculable as intellectual endeavour. But this said, I believe the UGC has tried hard, and in considerable measure succeeded, in allocating funds in a rational and fair way.

Nevertheless, as I said earlier, the UGC was not designed to oversee a huge part of the public sector at a time of severe retrenchment and under governments more interested in business efficiency than originality—which is what universities are really all about. The report of the noble Lord, Lord Croham, was therefore essential. I believe he has got it right—or rather, I believe he has got it right on paper. I find it difficult to fault his arguments, and his conclusions follow with compelling logic. The streamlined structure he outlines, with a lay chairman and a strong director general, the strengthened secretariat, the manner of allocating resources, the management and accountability of finance, all follow inexorably. I do not doubt that the Government will do most, if not all, of what he recommends.

But the ultimate test must be what it will be like for the people who teach and research in universities, and the students who learn there, when the proposals are actually implemented. Will universities once again become enthusiastic creative places? Or will they be so laden with administrative chores, and so harassed by bureaucrats pursuing dubious performance indicators, that the best people will simply want to leave? I confess to unease. If the proposals were to be implemented by infinitely wise people, then I do not doubt that universities would be the better for them. But no human institution has ever been run by infinitely wise people, and in practice, assessing the quality of teaching and research is vastly difficult and exceptionally uncertain.

I have not the least doubt that false judgments will be made. No matter, you may say, provided there are not too many of them. But errors in assessing what is or is not good research or good teaching are much more dangerous than errors (shall we say?) in deciding which is the best kind of biscuit. Once an individual, or a department, or a faculty or a university is rated as poor in some central, visible unarguable with way, then it stands in great danger of becoming poor. You do not make human beings or human institutions better by labelling them as duds. You help and encourage them privately. And the people and the institutions that really are good can well do without a public label certifying their status.

Given the present climate of government indifference to universities, I think the report has spelt out with inexorable logic what must be the structure and mode of working of a reformed University Grants Committee, now to be called the University Grants Council. But whether this will actually make universities the imaginative, innovative, enthusiastic centre for research and teaching that they should be I find much more doubtful. Where a strengthened management structure is imposed, wise appointments become absolutely crucial.

My real trouble is that I do not like the present climate. I do not think business efficiency should have too much place in a university, and anyone who thinks they have become a haven for leisurely inefficiency should try working in one. And if we really want academics to give of their best, then universities, like other creative organisations (and here let me include my erstwhile organisation, the BBC) should not be continuously harassed from outside, and I can only hope that something of the old style ethos of the UGC will survive.

My Lords, I beg to move for Papers

3.14 p.m.

Lord Quinton

My Lords, I should like to join the noble Lord, Lord Swann, in welcoming the report, which seems to have a number of most estimable qualities. It is extremely well written, which is always a desirable feature in a report on an educationally sensitive matter. The handling of the adverb "only" is quite admirable throughout. It is also an extremely good-natured report in that it alludes to two traditional criticisms of the UGC and broadly, and I am sure correctly, rejects them as without substance.

The first of these, which I must say seems to be much the less plausible of the two, is the criticism that the UGC in times of difficulty has failed the universities. The UGC in a difficult situation has carried out as best it can the pecularily repellent task that it has had to perform, that of communicating to the university population (who, as the noble Lord, Lord Swann, said, had enjoyed some glorious years of rich pasture) the news of bleaker times ahead.

The other criticism alluded to very briefly but also dismissed—I am sure, again, rightly—is that members of the UGC displayed what might even be thought to be an inevitable partiality towards their own institutions. I am sure that that is not correct. I suspect that it may conceivably be true to some extent—and I speak with the perfect ignorance of the academic in the street about this, having never been a member of either body—of the Committee of Vice-Chancellors and Principals; and so in a sense it should be, since that body is made up of delegates, like the 18th century Polish Diet or something of the sort. who come each to fight for his own end. How could such a delegate go back to his parent body and say, "A question arose towards the end of the afternoon of what university to volunteer for extinction, to make things easier for everybody else. I hope none of you mind but I have put Stretch ford forward". It is impossible that such a thing could happen.

This leads into what is the most important general future of the proposals of the Croham report; namely, that the revised UGC (the "C" now to stand for Council rather than committee) is not to be a wholly academic body. It is exceedingly difficult for a wholly academic body, or a predominantly academic body, as the UGC hitherto constituted has been, to take large and long views and in particular to make fairly hard choices. It is quite acceptable—and this principle is applied in a number of other cultural institutions with which the noble Lord, Lord Swann, is familiar—for the ultimate board of a cultural institution not to contain many, and certainly not a majority of, practitioners of the form of culture to which that institution is related. The governors of the BBC are not exclusively broadcasters; the trustees of the British Museum are not museum Officials; and members of the board of the British Library are not predominantly librarians, though many can read.

As the historical evidence of the report makes clear, the UGC, or something recognisably comparable to it—something recognisably continuous with the UGC we have today—was set up about 100 years ago, administering £15,000 a year which, even allowing for inflationary uplift, is an extraordinarily trivial amount and was at that time a small proportion of the income of the universities. Now, the expenditure of universities in this country is more than £2 billion, of which an identifiable amount—more than 68 per cent.—comes from the Government. The bulk of it is funnelled in some way or other by the UGC.

The whole scale of the operation has been transformed to such an extent that it would not be surprising if the original appliance had been found not wholly capable of dealing with the situation. I do not think it has. I think it has been put into an impossible situation. What is needed is a quite different kind of organisation, not just an agreeable intermediary that keeps government and university at arm's length from one another but a body that will do some fundamental thinking about universities.

There is a good deal of, as it were, undischarged business. One problem must be that of merging research facilities. A scientist of my acquaintance said that it is rather uneconomic to have expensive research facilities in all universities; they are needed only to keep good academics. The unfortunate young people have no serious use for them. They are doing things on squared paper. The expensive apparatus is for their teachers. If you want great researchers you have to give them great research equipment but there is no particular reason for reduplicating the facilities.

Equally, I think it is a reasonable view to suppose that there is such a thing as a critical mass in research. You need units of research that are large enough for people to run into one another and go to each other for assistance and support, not to be in small puddles here and there. This would involve the transfer of research facilities to a small number of universities and the making of other universities into what in the United States are liberal arts colleges. This would by no means be derogation or imply a loss of status. Some of the best teaching institutions in the United States are comparatively small liberal arts colleges of the order of magnitude of the new universities of our post-Robbins period.

Another matter which I think it would be reasonable to consider, particularly as our national economy is not producing the wealth that is needed to sustain us in the degree of academic comfort that we have become accustomed to, that of the nearly universal application of the residential principle that every student should take it as a right that he or she should receive a substantial maintenance grant in order to live away from home. Is this an absolutely essential part of the university experience? Is it not something that could at least in part be sacrificed to enable what is surely the centre of the undertaking, the access to good teaching, libraries and so forth, to be provided for more people?

The report briefly mentions the ultimately terrible black cap work of such a body, the thought of closure of an institution, and this is a subject which should be seriously adverted to in the present state of things. At the moment, it seems to me that there is the unfortunate situation where what I might broadly call market principles apply to the periphery of the university system and on the inside there exists a kind of Attlee-like realm of equal bearing of burdens. So there is a complete incongruity between the boundary conditions and the interior of the system. One way to deal with this is to allow the effects of competition and differential rating to show themselves more efficiently.

At any rate—and this is my last point—it is interesting that in the body of the report there is very little reference to other countries. There is a little at one point to a Japanese analogue of the proposed advisory body. Our thinking about our own universities, it seems to me, can be adequately nourished only by comparison with the universities of other major cultural centres of the world. That is something which I hope will follow from the creation of a stronger University Grants Council.

3.22 p.m.

Baroness Lockwood

My Lords, like the first two speakers, I welcome the report as a positive and a realistic approach to the administration and management of our universities. I think it is important to recognise that we are talking about administration and management and not the academic quality of the universities.

I want to make three brief points from my position as a lay person involved with three different universities. My first point is to welcome the balance proposed for the UGC itself and the attempt to simultaneously strengthen the executive function and the public policy function. This is not an easy thing to do but I think the report has tried to do this. The report, while not attempting to enter the field of manpower planning, takes a realistic note of the importance of matching the output of the universities with the needs of the country. The recommended restructuring of the committee, with a wider perspective given to its deliberations, and with its allocations set in the context of government guidelines on expenditure plans is, I think, evidence of this. One might not like the particular guidelines put forward by a government but at any rate they would be in the public arena and I think that is the way to work.

While I am on the subject of balance, I would also commend paragraph 424 which draws attention to the lack of women members of the present committee. Again, although not advocating direct representative membership of the proposed new Council, the report draws attention to the fact that throughout its existence there has never been more than one woman member of the UGC at any particular time. The report suggests that more emphasis should be given to the growing representation of women both in the student and in the staff bodies in our universities. I hope the Secretary of State will take note of this gentle rebuke.

My second point is that central to the success of the recommendations would be the introduction of a longer timescale for funding. Here, I agree completely with everything that the noble Lord, Lord Swann, has said. I would link with the funding and the longer timescale the need to consider the financial as well as the academic viability of a university and the importance of seeing a university as an entity. Universities are not the sum total of their departments; they are institutions in their own right with their own characteristics and their own strengths and weaknesses and I think they should be seen as such and judged as such.

In this context, in addition to the academic excellence which the report mentions it draws our attention to other criteria which have been given less weight in the past. I think it is significant that in the 1981 cuts the three universities most badly affected were the ones that were technologically based; that had good contact with industry; that were more industry-based than research Council-based for research projects and with a good record in the marketability of their students and graduates. Come what may, I hope that this report will give a steer towards the recognition of these factors and also the factor of the growing importance of part-time and continuing education as worthy of Brownie points along with the other criteria.

My third point relates to the complicated position of the medical schools. I think it is absolutely essential that the DHSS and the DES should talk together and sort out their respective responsibilities both at national and at area level. The problem is one of clinical salaries and the funding of clinical salaries in the universities, but it is much more than that and it goes wider than that. When resources were adequate the knock-for-knock principle worked well, but when both university and health authority are being squeezed there is a natural tendency for both sides to try to ensure that one is not giving more than the other. When, for example, as in Leeds, the situation in the area health authority is one of real retrenchment and closures, this obviously could have serious repercussions on the future viability of the university medical school. Such a situation in a region such as the Yorkshire region. where there is only one medical school in the whole of the regional health authority. would be absolutely intolerable.

There is also the problem that in such Circumstances a medical school might have to refuse additional research funding in one of its areas of excellence because the health authority was unable to meet its side of the equation. I think this is something which seriously needs looking at, as does the difference in funding between, on the one hand, the UGC and the health authorities in different university medical schools. There is a very real difference in the contribution that the National Health Service makes to these schools. The Croham report's recommendations in this area are modest but I think they are essential and it is important that they be looked at.

3.29 p.m.

Lord Tedder

My Lords, I am absolutely terrified. I am accustomed to speaking in your Lordships' House at about 10 o'clock at night when there are on average 12 Members present. I have never spoken to such a full House and I hope that, although nervous, I can keep going.

I wish briefly to confirm my general support for the review of the UGC by the noble Lord, Lord Croham. In contrast, like many other university teachers in Scotland, I was very concerned by the McCallum Report, Future Strategy for Higher Education in Scotland. I cannot imagine a more unsuitable time to alter the system by which universities in the whole of the United Kingdom are funded. I was therefore greatly relieved by the recommendation in the report of the noble Lord, Lord Croham, which rejects the concept of a separate system for Scotland.

I feel that it is important to refute the McCallum recommendations because people unaware of the difference in functions of the universities and the central institutions might see some merit in treating them together. The McCallum Report recognises that, by and large, the Scottish universities have deeply held reservations about any transfer of funding responsibility to the Scottish Office. The report states that the research Councils also see practical difficulties in assessing research capabilities and allocating grants under a system in which the Scottish universities were separated from the UGC.

The McCallum Report concedes that if such a transfer recurred. the standing of Scottish universities in the United Kingdom and internationally might be put at risk. The report also realises that funds from the research Councils are available to the public sector institutions on the same competitive—I emphasise, competitive—basis as other universities. However, the central institutions and the colleges of education in practice receive a very much smaller share of the research Councils' allocations.

The McCallum committee recognised that there is a possibility that the Scottish Higher Education Planning and Funding Council might reduce the level of research funding through the recurrent grant. It accepts that under its scheme designated Option 6 some universities in Scotland might well experience an adjustment in funding through the recurrent grant. This clearly means that the Council will be able to transfer funds from the universities to the public sector institutions.

I find it hard to understand how Mr. McCallum and his colleagues can, in spite of all these objections, still wish to dissociate the Scottish universities from the rest of the United Kingdom. It is not the time to fragment our research effort. Speaking as an organic chemist, I require access to mass spectrometers, nuclear magnetic resonance spectrometers, infra-red spectrometers, ultra-violet spectrometers and gas chromatographs. I also require access to a computer and a well-found library. Thus, an organic chemical laboratory requires ancillary equipment well in excess of £250,000. Of course, it is not needed every year, but it requires continual updating: and that is before the employment of research workers and technicians to maintain the equipment. Chemistry, my subject, is a cheap science when compared with nuclear physics or astronomy.

Scotland's share of research money would never be more than adequate to supply the basic equipment. Only a much larger country with a larger budget would he in a postion to afford the more sophisticated equipment essential to current research. Even then, this very expensive equipment could only be purchased for a few departments which would be required to give other universities access to their expensive equipment. Independent Scottish universities would have no such right of access to the apparatus bought south of the Border.

More and more scientific research is becoming international and joint research projects involving two or more universities are becoming common. This is not the time to march the other way. The central institutions and the colleges of education provide a very important service to scientific education in Scotland. They should be encouraged and financed to achieve this role. However, they should not be encouraged to ape the universities, which have different functions and different requirements. I thank your Lordships.

3.35 p.m.

The Lord Bishop of Birmingham

My Lords, like others in your Lordships' House I welcome this report. I should like to begin by commenting on the proposal of the Croham Committee for the establishment of a United Kingdom Education Commission to advise the Government and educational institutions on national needs in relation to higher education.

The university which I used to serve, and over which the next speaker presides, exists to promote education, religion, learning and research, and I would find it difficult to pick out any one of those subjects as more important than another. At the same time, there are national needs, and if national funds are being provided it is only appropriate that we should consider our national needs for tertiary education as a whole and over the whole country.

If this country is to maintain its present position as we approach the third millenium, we shall need more and more intellectual competitiveness and more and more innovative skills. We are in a paradoxical position in which the population curve of 18 year-olds suggests a contradiction of our universities and polytechnics at a time when common sense suggests that they must expand to meet our unmet needs. In this respect, the proposed commission should play an urgent and vital role.

In the time available to me I draw attention to one aspect of what seem to me in general the admirable suggestions of the proposed new University Grants Council. I refer to the replacement of the present committee with a two-tier structure having a lay chairman at the top. Your Lordships will appreciate that I use the word "lay" in the non-ecclesiastical sense. There would be a lay chairman at the top and significant lay membership and influence—indeed, up to 50 per cent.

In this matter I have taken advice from a former colleague of mine at Caius College, Cambridge, Sir Edward Parkes. Unfortunately, the noble Lord, Lord Swann, had left by the time I arrived there. I believe I am right in saying that Sir Edward Parkes is unique in that he has been chairman of the University Grants Committee and is now a vice-chancellor of Leeds University. Therefore, I think that his advice is particularly worth listening to in the light of his dual experience.

I am sure we all agree that the insights and experience of a different profession can be exceedingly useful and can illuminate in a very special way the aims, methods and goals of a university. Indeed, it is generally true that a critique from one discipline is particularly valuable when applied to another. However, one necessary qualification has to be added. A person must be prepared to give sufficient time to learn about the facts and working of a university in some detail if his contribution is to bring something other than, shall I say, prejudice based upon ignorance.

Sir Edward Parkes tells me that during his chairmanship of the University Grants Committee only one lay member was able to give enough time to learn about higher education. As a consequence, his contributions were exceedingly valuable. The rest took on the job with great good will, but, Sir Edward tells me, they had other and more important commitments and the new ideas and insights that they might have brought from their own worlds were lost because they knew too little about higher education, and universities in particular, to make them relevant. Indeed, ignorance in this field could have disastrous results if wrong decisions were made by a Council of which 50 per cent. were lay members, in the sense I have defined, and did not know the facts about universities.

In the world in which we live today, for better or for worse, we no longer have the real leisured amateur. I fear that in our specialist world most amateurs are ignorant. Thirty years ago that may have been different, but today career pressures are such that few can spare themselves the time to be informed about matters which do not impinge upon their own work and profession.

In this situation I wonder whether it is wise to entrust the chairmanship of the proposed new University Grants Council to a lay chairman and whether it is sensible to have such a large and significant lay membership and influence in the Council. I am sure that there ought to be outside influences. We all know that when we judge ourselves we tend to give ourselves the benefit of the doubt. But I wonder whether the Croham Committee does not perhaps give excessive influence to those who do not know or do not have the time to find out about the workings of the academic world.

The single point that I can offer is not a fundamental criticism of the Croham Report, which in general I greatly welcome. In particular I am sure that there will be great relief all round that, however low may be the level of funding that the Government will provide, at least there will continue to be an independent buffer between the universities and the government of the day. Indeed, as I read it, this independent buffer will have far more powers than the present University Grants Committee.

3.40 p.m.

Lord Adrian

My Lords, I hope to speak only briefly, but as a client of the UGC I must declare an interest before I do so. Speaking for myself, I cannot raise much enthusiasm for this report. Doubtless it contains much that is wise and judicious and many good if detailed recommendations, but it seems to me that its wisdom and judgment are confined within the compass of our present arrangements. There is almost nothing radical in what is proposed; only the almost inevitable suggestion of yet another tier at the centre and yet more central planning and control. In the late 1980s are we really convinced that an increase in central control is the right prescription for a healthy and vigorous university enterprise?

A whole section of the report is devoted to university autonomy, explaining what it is and what it is not, why it is a good thing and why it has to be yet further diminished. Indeed, there is praise for autonomy. Its value is seen as lying: principally in the advantages to be gained from reservoirs of independent thought and expertise, and in the necessity for universities as competitive institutions to respond to student preference and the demands of employers". But the main thrust of the recommendations of this report is to drive yet another nail into the coffin of autonomy because, and I quote: The need is to plan a system of mass higher education". The arguments for planning are very seductive and we have heard them over and over again during the last 40 years. But I think that we ought to ask whether the arrangements that have existed for the last 40 years have made our universities more or less diverse, more or less competitive and more or less responsive to student preference and the demands of employers. I believe that the present state of our universities suggests that more of the kind of planning that we have had is a strategy with a meagre chance of success.

The report gives us a tantalising glimpse of an alternative approach, even if only to dismiss it without consideration or argument. Perhaps the most disappointing comment in the whole report occurs at paragraph 2.30 under the heading of "Student Fees": At present, the tuition fees paid by home students represent 8 per cent. of universities' income. The report of the National Data Study…suggested that large administrative savings could be achieved by combining fee income with the UGC grant … Others have favoured the payment of a larger proportion of the Government's subvention to universities through the fee mechanism and less by means of direct grant … We have assumed that a major proportion of the Government's support will continue to be by means of grants to universities". Why was that assumption made? If there is one lesson that the universities have learnt from the imposition of full economic cost fees on overseas students it is that each overseas student who can be attracted brings with him or her money which meets most, if not all, of the cost of his or her education. Home and EC students beyond the target numbers which are set for us by the UGC bring with them next to nothing. Therefore it is not perhaps surprising that a lot of effort is being put into innovations which attract overseas students, and if we continue down that path distortions will inevitably arise. If all UK students brought with them a higher proportion of their costs and universities could compete for them, I believe that we should see comparable efforts going into meeting the needs of UK students.

It is sad that the committee did not take the opportunity—though it is perhaps true that it would have been stretching its terms of reference—to think more deeply on the balance between fees and grants as a means of funding universities. It seems to me that the emphasis on grants is strategically wrong. I realise that any major change will need very careful thought and preparation, not least in the provision of support to students for fees rather than just for maintenance as at present. However, I had hoped that this report might have tilted the balance toward fees as a funding mechanism or at least suggested that an increase in the proportion of funding by fees has much to recommend it and should be seriously considered.

Lord Harmar-Nicholls

My Lords, before the noble Lord sits down may I ask him, in view of the general tenor of his speech and his special experience, whether he subscribes to the criticism voiced by the right reverend Prelate that the existence of the independent lay members is a disadvantage and particularly that the appointment of an independent lay chairman is the wrong way of approaching the matter?

Lord Adrian

My Lords, I have not addressed that question in my speech but, since the noble Lord asks me, I do not take exception to those recommendations.

3.47 p.m.

Lord Beloff

My Lords, I was travelling the other day by bus from Oxford to London in company with an eminent historian and our conversation turned to what would happen if the University of Cambridge were to ask our advice as to the candidates for the forthcoming vacancy for the regius Chair of Modern History. As we went down the list of persons who were academically and personally qualified we discovered, one by one, that each of those people in recent years has emigrated to the United States of America. Our discussion assumed that the University of Cambridge would have the funds to continue to support the chair. So far as Oxford is concerned, frozen chairs are a major fact of the university's life. That is the situation in brief of our two most ancient and famous universities after a long period of care by the University Grants Committee.

As I understand it, it is the view of the noble Lord, Lord Swann, that everything is to be blamed on the parsimony of the present Government. I regard that view as a gross error. If one pours water into a sieve then the rate of flow does not matter; the water still runs away. As the noble Lord, Lord Quinton, pointed out. the University Grants Committee system was developed to meet a totally different situation, a totally different university structure and totally different conditions of finance. It cannot work in the way in which the noble Lord, Lord Croham, and his colleagues hope that it will, even if most of the improvements that they suggest will marginally increase efficiency.

After all, it is not the case that flaws in the system of reliance upon annual grants from the Treasury were only discovered in the last half a dozen years or so. The first evidence that there was going to be a difficulty came when the UGC was absorbed by another major spending department—the Department of Education and Science.

Another warning bell was the imposition, not under a Conservative Government, of differential fees for overseas and home students against the express wishes of every university concerned. Some of us pointed out that there must be a flaw in the system. Indeed, the foundation of the University of Buckingham was merely a test of our belief that that system would not survive. We were derided. We were criticised. Some noble Lords present took a modest part in trying to prevent us from getting off the ground. But the case that we made has been proved correct. One cannot have a university functioning which depends on knowledge of its income one year ahead; or even, if the Croham report recommendations are accepted, if it knows it three years ahead.

Foresight is needed. Planning is needed, not in the sense of national planning but of planning by each institution. We cannot all have foresight, at least not great foresight. A great medieval archbishop had tremendous foresight when, in the fifteenth century, he saw that some time in the twentieth century the London Underground system would need to be extended into the manor of Edgware. My college can supply some of the deficiencies in research provision thanks to that example of foresight.

Although I would not disagree with the noble Lord, Lord Adrian—it seems to me that fees might play a useful part in funding a more useful part than is given credit for in the report—I still feel that only endowment, the possession of property by universities under their own control, to make the best use of it that they can, is a serious guarantee of independence in the sense in which the Victorians talked of persons of independent means.

I believe that it would be possible over a period of years for the system of annual grants to be wound up in favour of universities successively, not obviously all at once, being given the purchase value of that income in terms of government bonds or securities of some kind, and allowed after that to float out and find their own future. I do not think, and I speak obviously with some experience of this, that we can possibly expect industry or foundations to make up the gaps. The appalling gap which has developed between the work of the research Councils and the universities is familiar to your Lordships from recent debates.

Universities which have their own property, which are not in receipt of annual grants from the Treasury, would have a much better case to make for external funding, because donors could be guaranteed that it would not lead to a diminution in their support from the centre.

I hope that the Government will accept most of the report's recommendations. Although I have some sympathy with the points made by the right reverend Prelate, I hope that some future committee of equal distinction will be given terms of reference which will enable it to look at university funding with a fresh eye and as a whole.

3.54 p.m.

The Earl of Perth

My Lords, I shall talk about the Croham report and Scotland. That may not surprise some of your Lordships. The committee was asked, in particular, to look at a report by the ScottishTertiary Education Advisory Council on the future strategy for higher education in Scotland. That report contained six options. Croham concentrated on two of them, and rightly so.

One option was that Scottish education should go it alone; that is to say, it should be excluded from the university grants of England and Wales and should have its own block grant. The alternative was that the UGC should continue but should have a Scottish sub-committee to advise it on certain features of Scottish education which are different and important.

Shortly after that, the Croham Committee met Scottish principals in Edinburgh. Of the Scottish principals, five were in favour of a sub-committee, two of them favoured the go-it-alone approach and one had a different line of approach altogether. Since that meeting, two of the principals have been replaced, not because they did anything wrong but because they have retired. Today, we find that six of the principals favour a sub-committee, only one wants to go it alone and one remains independent.

It is an interesting fact that the six who support working with the UGC are all Scottish. What did Croham say about it all? It was extremely diplomatic. I am not surprised. It is necessary to be diplomatic. In practice, it was saying that it could probably live with the go-it-alone approach but it did not like it. It would damage the overall university system in all three countries. As the noble Lord, Lord Tedder, said, it would hurt certain of the disciplines. On the other hand, the Croham report favoured the sub-committee solution.

I wish to appeal, through the noble Baroness who is to answer, to the Secretary of State for Scotland that the Government accept the sub-committee recommendation. I say that the more because I am told that the Scottish education department at the Scottish Office is more than a little inclined to go along the block grant, go-it-alone route. I can understand that from the point of view of tidiness, There is perhaps almost a vested interest in it, but I know that it would be a disaster for universities as a whole and Scotland in particular.

I beg that at best we make a start on the sub-committee basis. We must remember that it is always possible, if we so wish to change later to the second option if the first does not work. Do not let us start with the block grant; if we do, we shall not only run into trouble but it will also be extremely difficult then to go back.

I see that I have two more minutes. I echo what the noble Lord, Lord Swann, said about the low morale in our universities. It is most depressing to find how true that is. There is no sign of an improvement, rather the opposite.

My last point probably is not appropriate, but never mind! Yesterday evening there was a debate on the community charge. Several noble Lords drew attention to the problem of the community charge being placed on Scottish students. When the noble Lord, Lord Glenarthur, answered, he said that he recognised that point. I want to make a special plea that the community charge should not apply to overseas students. If applied to Scotland and not the rest of the country, Scotland will not only be gravely disadvantaged, but, assuming I am right, Scottish universities will almost certainly go bust.

4 p.m.

Lord Barnett

My Lords, in debating this report of the committee of the noble Lord, Lord Croham, I must start by declaring an interest as a governor of Birkbeck College of London University. I am very much a lay governor, in the words of the right reverend Prelate.

I wish briefly to refer to paragraphs 2.48 to 2.53 of this report. I should say at once that the heading, "National Needs", is the term under which I wish to speak. I would be the first to accept, as a former Chief Secretary to the Treasury, that national needs go even wider than the needs of education, as I know the noble Lord, Lord Croham, also appreciates. I also hope that within the limited resources that will always be available under any government for education in universities it will be possible to find more for education in general and universities in particular. In that sense I very much agree with the words of the noble Lord, Lord Swann.

However, one is bound to recognise that, even with a larger sum available to universities, it will inevitably be finite and demand will always exceed the requirements of the different colleges and universities. One is bound to accept that that is likely to be the situation. Nevertheless, I do not apologise for making a special plea for a college like Birkbeck because it is a very special type of place. It is the only centre in the country that specialises in face-to-face teaching of part-time students for degrees and qualifications in higher education. I have a personal interest in that matter because as a part-time student I obtained my professional qualifications shortly after leaving the Army after the war. I recognise how difficult it is for part-time students trying to qualify during the day in any subject at all who work at nights and at weekends. I hope that nobody in your Lordships' House doubts that effective part-time education such as that which Birkbeck College provides is a national need in any sense of the word.

To meet that need Birkbeck College is not relying on somebody giving it handouts. As your Lordships may be aware, it is looking at ways of making itself administratively more effective and efficient. There has been an excellent report by a committee chaired by Sir Barney Hayhoe, MP. I pay a tribute to the work of Sir Barney and his committee. However, there is a limit to how much any college can do for itself. I hope that it is now widely accepted that the original UGC formula put the whole future of Birkbeck under threat. Indeed, it has been recognised by the UGC that that is the case. It now treats Birbeck College—at least temporarily—as what has been described as "a special factor". But no college can continue on a temporary basis in this way and have so insecure a future as it inevitably would in such Circumstances.

The fee question lies at the very heart of the problem. At Birkbeck College we cannot charge full fees to the unemployed and the poorer members of the community who wish to study part-time, in particular those with family commitments. In its original formula the UGC assumed that we would be able to collect full fees. That is why there was a shortfall of something like £600,000 to £1 million. I hope that the Government will find resources to exempt from fees those part-time students studying for courses where full-time students receive grants. That is surely not an unreasonable request to make. I hope that the Government will accept the request within whatever constraints they wish in the field of public expenditure.

As I have indicated, the college has been making every possible effort to help itself. Under any consideration of value for money—and I readily accept that in university education one should not be thinking in terms of value for money—I can give your Lordships many figures. The cost of a part-time student obtaining a university degree or qualification at Birkbeck is £12,100 against an average UGC funded university qualification of £34,925. By any standards that is pretty good value for money.

However, I know that this issue is about much more than statistics. I would not wish to play with statistics today. I have done enough playing with them in my time. I know that they can be confusing even to those using them. I believe what I say illustrates the powerful case for Birkbeck College.

I wish to conclude by quoting from paragraph 2.48 of the Croham Report: The national interest lies in a multipliCity of autonomous centres of initiative, and for seeking diversity and not uniformity within our system of higher education". I very much agree with that. That is why it is in the national interest—and I urge your Lordships and the Government so to do—to support a college like Birkbeck in its struggle to survive as a college of excellence for part-time students.

4.6 p.m.

Lord Annan

My Lords, I am glad that the Croham Committee followed the advice of Charles Kingsley, Be good sweet maid and let who can be clever". It has given us an excellent report and one which is devoid of silliness. I very much hope that the Government will implement its recommendations.

There is only one recommendation about which I am a little dubious, and that is No.18. I do not believe that the advisory education commission could operate in an administrative void. Indeed, I have rarely known advisory committees in governments ever to have the slightest influence. If the Secretary of State plants this particular acorn he will find that it will not grow into an oak; it will grow into a barren fig tree and the only thing it will bear is a fig leaf to cover the nakedness of thought in the Department of Education and Science.

I readily agree that a fig leaf is needed in the department because the recent Green Paper on Higher Education was the most disgraceful exhibition of nudity I have ever seen. The remedy is to have a committee composed of members of both the UGC and NAB with power to co-opt and to draw on the secretariat of both those organisations. The Secretary of State might then have professional advice which both executive bodies would be willing to put into effect. Such a committee would not be "over-arching"; it would be subordinate to the two parent executive committees.

I agree with the proposals concerning the Council and the director general but I would add this gloss. The model should be nearer the trustees of museums and galleries than the Arts Council. Your Lordships may remember that ever since the noble Lord, Lord Goodman, became chairman of the Arts Council there has not been any doubt as to who spoke for the Arts Council; it has always been the chairman. But in museums and galleries there has never been any doubt that it is the director who speaks, and so it should be with the University Grants Committee.

Just as the vice-chancellor speaks for his university, and the chairman of Council stands at his right hand ready to act a a lightning conductor or as a high priest. so the director general should not have his prestige or powers diminished, because he alone can deal individually with the vice-chancellors and the universities. What he needs, and what the Croham Committee is now providing him with, is a phalanx into whose ranks he can retreat when the going gets rough. It also provides him with a cocktail cabinet as a new source of stimulus to prevent him and his academic colleagues becoming too hound by academic folklore. The chairman should never let the universities deal with himself personally but only with the vice-chancellor and the whole Council.

If there were any question of the director general being bypassed or upstaged, then he would very soon sink to the level of the present secretary of the UGC. That is a perfectly honourable level but it is not one from which one can face down the barons.

Both these bodies are important—the University Grants Council to exercise executive authority and the commission to advise the UGC, NAB and the Secretary of State. The Croham Committee was set up to review the constitutional position of the UGC in the context of expected developments in higher education. We ought to realise that the constitutional changes the Croham Committee recommends will not make it any easier to achieve the Government's objectives. I am not going to argue, because I have not the time, whether those objectives are desirable.

The noble Lord, Lord Swann, thinks none of them is desirable. I think some of them are. I must warn the Government that they will not be able to achieve their objectives and keep universities resilient unless they give the UGC a strategy and a directive for implementing that strategy.

In 1981 the UGC left universities to their own devices to implement the cuts, and what happened? The Treasury had to find a vast sum to enable universities to terminate contracts and enable staff to take premature retirement on very generous terms. The universities let many of their best men and women retire, and they departed with a golden handshake. Numbers of them took jobs in America or part-time work in the very departments they had left. I think the Treasury will be reluctant to do that again; yet it must do so if the very radical changes which need to be made are to be made and also if our greatest universities are to remain centres of international excellence and other universities are to remodel their roles and become, quite frankly, more attuned to vocational studies in both arts and science.

I believe that the Treasury could be persuaded to make restructuring funds available, but only if a Croham model UGC has worked out the costs and convinced the Treasury that this time it will get value for money. That is why I welcome the report. But, even if it is implemented, it is only the first step to saving our universities by transforming many of them.

4.12 p.m.

Lord Greenhill of Harrow

My Lords, this report has not yet attracted the attention it deserves outside the education profession. However, today's discussion, quite rightly, is in the hands of specialists and it is very fortunate that in your Lordships' House there are so many highly qualified specialists on this subject. The contents of the report concern us all and are relevant to the economic future of this country and, for example, to the debate which we held last week on the manufacturing industry in this country. Comments by noble Lords who have not spent their lives entirely in educational matters may therefore be useful and acceptable. I should like to say at once that the report of the noble Lord, Lord Croham, is to my mind a constructive document. Its main defect is that it is overdue.

The chief recommendations of the report ought to be largely common ground between the political parties and give us all an opportunity to unite in an effort to improve our educational system. Any government would be foolish not to ensure that the essential parts of the report are rapidly implemented. I think it is commonly recognised that our educational system falls far short of our urgent requirements. There was, and still is, a distressing tendency to believe in certain quarters that our educational system would necessarily decline, as other things have declined in this country, as our position changes. Many people seem ready to live with a literacy rate in this country which is lower than in some Caribbean islands, and passively watch our universities turn out an insufficient number of highly qualified graduates, many of whom have disappointing attitudes and who end up either being overpaid in the City or underpaid in industry.

The report of the noble Lord. Lord Croham, if adopted, certainly will not change the situation at a stroke, but in time it could do something to correct it. There are three main points in the report which I should particularly like to endorse. The first is the reorganisation of the machinery of the UGC. The proposals contained in the report look very much like common sense—the new type of chairman, the creation of a director general and the system of sub-committees. The director general of course would be subjected to great pressure and would have a very heavy responsibility. It would be hard to find the right man.

The second proposal, which I greatly endorse, concerns the steps which would enable institutions to plan their work over a reasonable period of time without suffering financial anxieties. The shortcomings of our previous systems were vividly brought home to me when I was chairman of a university medical school for some time. The third proposal in the report is the creation of a United Kingdom educational commission which, as I understand it, will concern itself with both secondary and tertiary institutions. I should prefer a standing commission, but obviously there are other ways of organising the proposal. It has not attracted as much attention in this discussion as I thought it would.

Under the system outlined by the noble Lord, Lord Croham, it would be very difficult to recruit the right people of the right age. This difficulty will certainly apply to the educational commission. Therefore, I hope it would interpret its remit widely and would not shrink from being a powerful pressure group on a great range of subjects. For example, I should like to see it show a strong interest in the better teaching of foreign languages or in graduate pay in industry. It would be a very suitable place—if it was founded in time—to follow up the report of Sir Peter Parker to the present UGC on the teaching of Oriental and African studies and the organisation of a national plan for their follow-up and monitoring. But to attract people to serve on these commissions, especially young people, they must have the option of accepting a financial reward. In the case of this commission I hope that the Government will be prepared to pay members of the commission, whether it is permanent or short-lived, at least the rate appropriate for a non-executive director of a first-class company.

I see that my time is up. I should like to conclude by saying that I think we should thank the noble Lord, Lord Croham, for putting forward such useful proposals, and I sincerely hope that they are followed up.

4.18 p.m.

Lord Butterworth

My Lords, as a member of the Croham Committee, I have already had my corporate say. Therefore I should like to confine myself this afternoon to two points which seem to have caught your Lordships' interest; namely, the new organisation within the Council with the new post of chairman, and the Scottish universities.

The report proposes to replace the present chairman. who is also the chief executive, with two men—a non-executive chairman and an executive director general. I have considerable sympathy with much of what the right reverend Prelate had to say on this subject. Indeed, some of my noble friends have been much less polite than he was. It seems that they consider our solution was a typical Civil Service solution—replacing one full-time man by two, thereby ensuring that effective action can only rarely happen.

I hope that the general view will endorse the committee's proposal that the wider national interest can better be represented by a smaller committee or Council with a greater proportion of lay members and a non-executive lay chairman. The post of chairman has been deliberately drawn in wide terms and there are many precedents stretching all the way from the lay chairman of large bodies such as the BBC or the British Council to the lay chairman of the Medical Research Council, or, as had already been mentioned, the pro-chancellor or chairman of a university Council.

In large organisations such as the British Council, the task of chairman is generally expected to take a certain number of days a week and the chairman can be found with an office in the building. The UGC is a small Council with a staff of only 80 and, in my personal view, the precedent that should be adopted is that of the Medical Research Council, where the chairman has a much lighter relationship but is expected to give whatever time is necessary in order to exercise his general oversight.

I hope today that the House will recognise that the UGC has been continuously successful over the years. In the past, that success has depended particularly upon the personality and drive of the chairman. With the new Council, while the non-executive chairman will be important in securing the wider national interest, the crucial person must be the full-time director general, as the noble Lord, Lord Annan, indicated. The report is quite clear on that point and states that the director general should have a status equivalent to the present post of the UGC chairman. In my view, the post of the non-executive chairman must be created in such a way that he will not hinder the emergence of a first-class director general.

On the Scottish universities, your Lordships will already have heard that the STEAC recommendation is that the Scottish universities should be withdrawn from the UGC and put under the control of the Secretary of State for Scotland. This runs counter to many of the principles that lie behind the recommendations of the Croham Committee. The Croham Committee saw the universities of the country as essentially one system. The Croham Committee, and the Jarratt Committee before it, were concerned in different ways to improve the efficiency of universities. The cost of research is escalating. Selectivity, which in my view was very courageously introduced by the UGC, is likely to increase, maybe bringing with it fundamental changes to the whole structure of British universities.

The Croham Committee has already recommended that the new Council should bring with it changes: that there should be better machinery, a better information base, more reliable financial information and better performance indicators, so that not only the universities themselves but also the UGC will be enabled to monitor effectively the performance of the universities.

Are they doing what they promised to do? Are they giving value for money? Why withdraw the Scottish universities from the system at this present time? The universities of this country are national; they produce graduates on a national basis. As the report points out, Scottish universities produce many more graduates for the nation as a whole than the Scottish population would warrant.

When the supply of graduates needs to be changed, for example if we need more doctors, more scientists or more engineers, those questions should be considered by one agency—the UGC. Selectivity, if it is to come about, should again be considered by one agency.

I shall quickly make two final points. The Scottish educational system has its own special and particular needs, which should be met by separate machinery in Edinburgh and the sub-committee recommended for the University Grants Committee. Finally, if the Scottish universities were to be separated, we should have to expect a similar request from the University of Wales.

4.26 p.m.

Viscount Combermere

My Lords, first, I should like to declare an interest as a member of the staff of the extra-mural department of London University. Secondly, I should like to say that I agree in principle with the main thrust of the report. I agree with the intention, as The Tunes Higher Educational Supplement puts it, to concentrate on strategy rather than on administrative detail. I agree, also generally. with the proposal for a smaller Council to take a broad and open view of the future role of universities in the context of wider economic and social questions.

However, there is concern that the proposed representation is not wide enough. I believe that this could be improved without making the Council too unwieldy by, for example, including a representative from the field of adult and continuing education. I shall return to this in a moment for, in spite of the fact that part-time students in higher education number nearly a quarter of a million, according to the statisti-cal list in paragraph 2.39. continuing education has only one passing reference in the whole of the report.

Concern has been expressed to the effect that the proposed revision of the UGC would increase its power to intervene in the internal operations of universities and that it would be made an even closer arm of the executive for implementing government policy. I am not sure that I agree with this view. By its very nature the UGC is part of the machinery of government; yet, as the report itself clearly indicates. the universities are legally autonomous and are not subject to direction by government. To reinforce this, the report goes on to state most firmly in paragraph 5.8 that the Government should not only play no part in the distribution of grant to individual institutions. but that they should not even give any guidance in this respect.

I wish to refer briefly to two specific areas to which the report refers and to one area which is barely mentioned at all. First, the report refers to the desirability of operating to a triennial cycle of funding. I believe that this is a very important consideration and should be most warmly supported. Secondly, in chapter 6, the report emphasises very clearly the importance it attaches to the quality of university teaching as well as to research. This is very important, and I welcome the statement in paragraph 6.12 encouraging the training of university teachers. I agree with the report's recommendation that it would be impractical to tie grant directly to teaching performance, but I welcome the four main approaches which the report has outlined in paragraph 6.12 towards encouraging improvement in the overall quality of teaching.

Finally, there is one area which, as I have said, is hardly considered. This is provision for part-time students in higher education. The importance of adult and continuing education is often referred to by the Government. Indeed, statements have been made to the effect that educational opportunities for adults should be extended. Yet funding appears to be totally inadequate. The current formula when applied in this connection allows only £82 full-time equivalent for part-time students, as opposed to well over £3,000 for full-time students on, for example, arts courses.

On these grounds, one is led to deduce that the Government's view is really that part-time higher education should be largely funded by the students themselves. I should be glad to hear the Government's response on this particular point. I fully support the comments of the noble Lord. Lord Barnett, in connection with Birkbeck College. If present funding in this connection is grossly inadequate, there are ways in which that, to some extent can be rectified. First. I believe that a case can be made for earmarking funds specifically for adult and continuing education, thus giving direct effect to the Government's profession of interest, concern and support in this field. Alterna-tively, the Government might consider funding part-time students in higher education by direct mandatory grant for life-time learning.

The report assumes that the major proportion of the Government's support will continue to be grants to the universities. That assumption could allow some direct mandatory granting to be given direclty to part-time students. As another alternative the Government might consider tax relief on fees paid by students, together with direct mandatory granting for the unwaged and for those on incomes below a predetermined level. However, those issues could be discussed by the Council and recommendations made more effectively if the Council included someone with wide experience in the particular area of adult and continuing education.

If proper funding for adult and continuing education for students in part-time higher education is to be taken seriously, then, in my view, the appointment to the UGC of an expert in this field is essential. I shall be interested to hear the view of the Government in this connection.

Finally, it is essential that the total size of the grant to the UGC is increased by the Government. Every public department indicates its own needs for funds, and rightly so. However, the universities, and education in general, provide the seedcorn on which the welfare and wealth of the country still depends. Funding for education should be high on the Government's list of priorities.

4.33 p.m.

Lord Hunter of Newington

My Lords, the day that I became a member of the UGC was the first day of the new regime. No longer was the UGC to be responsible to a Treasury Minister. After a brief honeymoon under the influence of the Minister of Science, the UGC became firmly established in the Department of Education and Science. On the evening of that first day, there was a cocktail party in the basement of the Treasury to say goodbye. Some concern was expressed by older members of the committee that things would never be the same again. The changes following the Robbins report and later the Todd report on medical education meant that the sums of public money spent were so large that any responsible government had to produce changes in financial control.

In talking about the Croham report, which I have read with great interest, I should like to deal mainly with medical education. I have had two experiences of the medical sub-committee: first, with the reconstituted sub-committee following the Goodenough Report in 1948 when we were developing the clinical department in St. Andrew's University; and secondly, when I was chairman of the medical sub-committee of the UGC during the further expansion following the report of the Royal Commission under Lord Todd. During both those expansions, the assumption was made that the University Grants Committee would create a well-founded clinical research department, and that continued until 1981. It was little wonder that science departments of other universities were jealous of the medical departments with their several sources of substantial funds.

Thinking over those developments, the achievements in the development of university clinical departments in the 1950s and 1960s were remarkable. When the question arose of a capital building paid for by the UGC, there was a rapid development of the Pater formula and later negotiations and guidelines about recurrent costs. It was of great advantage to the National Health Service to have the development of academic clinical departments benefiting research and patient care, as well as carrying out its teaching. There seemed to be no problem that could not be rapidly solved.

At the beginning of the expansion following the Goodenough report, there was a great deal of discussion as to how full-time academic doctors should be remunerated. They were traditionally accustomed to being independent contractors. carrying out a great deal of voluntary work in the charity hospitals and making their living by a fee-for-service. There was therefore discussion as to whether this type of payment should continue: whether they should receive a salary from universities for their university work and a separate income for their hospital work. It was decided that they should receive one salary to be paid by the university in the case of the university staff, and by the NHS in the case of the National Health Service staff who did substantial clinical teaching. I should like to know whether, in recommending in paragraph 6.36 "retention of … mutual uncosted assistance", Lord Croham's committee had in mind that there should be no changes in the salary situation.

In paragraph 6.34, Lord Croham's committee recommends that: the academic and financial plans submitted to the UGC b. universities should … be the outcome of specific consultation with the relevant health authorities'. That sounds fine, but one must immediately ask which are the relevant health authorities. As far as I am aware, the district health authorities do not have the authority for that kind of planning. However, I wonder whether specific consultations and agreements as regards policy between universities and regional health authorities would be acceptable to the health departments without prior consultation. The committee also believes that the current mechanisms for joint policy development between the DES and the health departments are weak, and that these matters should be tackled urgently.

One important aspect that has not been mentioned, although I believe that evidence was given, is the prime importance of the relationship between the health departments and the Medical Research Council. This is very remarkable and intimate, and the result is almost as though the health department had its own research arm. I wonder whether the ABRC and the DES consult the Department of Health and Social Security before funding decisions are made as regards the Medical Research Council. Any arrangement made for the future must effectively incorporate existing machinery which works. That important matter is not dealt with by the committee but it means that the employees of the National Health Service and the university clinical departments have a remarkable opportunity for research support.

There is a natural division between the NHS and the UGC with regard to responsibilities at the level of pre-clinical departments in the medical faculty, although they contribute in some degree to the training of clinical students.

There was a time perhaps 40 years ago when it was of vital importance for the new full-time clinical departments to have the strength and staff support of the medical science departments. However, things have moved on in clinical medicine. Research departments that are now established and supported by the Medical Research Council and the medical charities are in a different situation. It is true that though collaboration with scientists continues, the scientists that one is likely to consult might be elsewhere in the United Kingdom or in the United States. The argument that I am making is that they are no longer dependent on their own pre-clinical schools. The situation is similar to that which arose in the early days of engineering departments in universities which were substantially dependent on physics and chemistry for trained scientists. That situation no longer pertains. Engineering has established its own research base, much of which is supported directly or indirectly by the Department of Trade and Industry.

If the Departments of Health and Social Security and Education and Science are consulting urgently in respect of their joint policy decisions, as is recommended, perhaps they might take this observation into their considerations. If that was the break-point in funding, it might simplify and streamline the whole situation and avoid an enormous bureaucracy of consultation between departments. the UGC and the ABRC. One principal consultation would perhaps be required between the DHSS and the UGC over clinical medicine and one perhaps in the year between the DES and the ABRC over the policy of the MRC. The Croham Committee has not examined this. but perhaps it could be examined in inter-departmental discussions. Moves in this direction might be of the greatest importance in containing the escalating costs of clinical medicine and its associated teaching and research.

I am sorry, my Lords. I have overrun my time and therefore I must stop. My submission is that a case now exists from the point of view of administrative organisation and funding for the clinical academic departments to be absorbed by the health department and work and thinking integrated with the health department and the Medical Research Council.

4.41 p.m.

The Earl of Longford

My Lords, like other speakers, I am deeply grateful to the noble Lord, Lord Swann, not only for initiating the debate but for his profound understanding of what is valuable in the life of universities. I was much interested to hear what the noble Lord, Lord Hunter, said about his joining the UGC at the time of the great changeover. I opened debates on the universities in this House in 1957 and 1963, but it was in 1960 that I ventilated here, in the debate initiated by Lord Simon of Wythenshawe, the idea that the UGC should no longer come under the Treasury, but rather should come under the Ministry of Education. This was regarded as ludicrous. Lord Hailsham and other speakers treated this with good natured derision. However, within a year it had come about and nobody would now dream of suggesting that the other thing was better, though at the time the subordination to the Treasury was considered part of the divine nature of things.

I have been a college tutor like others and like others have voted in Oxford along with distinguished Cambridge graduates such as the noble Viscount, Lord Whitelaw, and, for that matter, his colleague the right honourable gentleman, Mr. Hurd, and two or three outstanding visitors from another university who played their part, not successfully I am afraid, in trying to get Mr. Edward Heath elected. I took the humbler and the easier course of voting for our colleague Lord Blake and of course that did not quite come off either. However, as my wife voted for Mr. Jenkins we were insured.

I have read this report very carefully. When I had finished reading it, so persuasively was it written that I began to feel that it must be right. Then before I came into the Chamber I was handed a letter from the Association of University Teachers. That association treates the report as a dreadful affair. It gives it a gamma minus, in university terms. There is not time to dwell on it or quote at length, but we can take it that the Association of University Teachers could hardly be more severe about it. Their report says: we believe that the implementation of the Croham Committee's proposals would weaken the ability of the UGC to identify, and translate to government, the needs and aspirations of the universities, and would significantly reduce the chances of securing support for its decisions among the academic community. That is the other side of the matter and no doubt in some years hence we shall have sorted it out as we sorted out the question of which department the universities were to come under.

The real truth is that what matters far more than even the most brilliant administrative report is the amount of resources being devoted to the universities. This was touched on by one of the speakers just now and goes to the heart of the matter. However one plays about with committees and organisations and suchlike, if resources are not given to the universities the result will be disaster. I am not surprised that the universities are very hostile in their attitude to the Government. If the Government win this election, which for all I know they may, they will not win it on the university vote. They will have to find their support elsewhere.

Does it really make sense that there should be, frankly, this hostility in the Government's policy towards universities? No doubt the noble Baroness, Lady Hooper, will explain that I am misusing words in talking about hostility, that the Government love the universities as much as anybody. But for some odd reason they are cutting down the resources available to universities. We are told by the right honourable gentleman Mr. Lawson—my old pupil, now I come to think of it though I did not teach him much; I was not teaching him economics anyway—that the economy today is stronger than it has ever been since the war. Yet what are we doing about it in regard to the universities'? Perhaps now it has become so strong, even in the last few days, the noble Baroness will be able to give us some encouragement that more resources than seemed likely will be directed to the universities.

In 1962, 25 years ago, I moved a resolution of censure on the Government from these Labour Benches. I was supported by a good many Indepen-dents in censuring the Government for their failure to provide adequate resources to universities. I am afraid there will be no vote today, but I think I was on the right lines then. In the meantime we have had the Robbins Report, splendidly accepted by the Conservative Government of the day, and now this report. I regard the present policy of the Government towards the universities is quite indefensible and a national disgrace.

4.46 p.m.

Lord Croham

My Lords, I am particularly grateful to the noble Lord, Lord Swann, for initiating this debate, because it takes place so soon after the report of the review of the University Grants Committee was published. I am sure that the discussions this afternoon will be of great value to the Government when they are considering what they want to do about our report.

I stress at the outset that our report was a team effort: it was unanimous and certainly not the work of one man, however much I may be flattered by the attachment of my name to it by some of the speakers this afternoon. Because we worked so closely together I was deeply distressed by the sad death of one of our number, Professor Paul Matthews, at the end of last month.

I have come to your Lordships' House this afternoon mainly to listen to comments rather than to speak, because there are so many here who are closely concerned with the health of our universities, or indeed of higher education as a whole. But I should like to take this opportunity to stress some of the objectives that the Committee had in mind. I believe that most of those objectives have in general been well received by many speakers this afternoon.

First, we wanted to provide a broader basis for the advice available to the Government about the capabilities and requirements of our university system in relation to national needs. For this we recommended the creation of a Council less dominated by the suppliers of higher education and, we believe, more in touch with a wider range of interests. That might make the recommendations of the Council more persuasive to all who have to listen, particularly the Government.

Secondly, we wanted to make clearer the roles and responsibilities of those concerned with the distribution of public funds to the universities, so as to promote the effective use of those resources, but without the excessive centralisation of decision taking. Our recommendations sought to define the role of the UGC itself because in the past there appears to have been a view that it needed to be a kind of pressure group. We think that was a mistake. We envisaged the maximum amount of delegation to the autonomous institutions, the universities, which is compatible with the broad objectives for higher education and their own capacity to manage resources.

Perhaps I may stress the words "their capacity to manage resources". Contrary to what some speakers have envisaged we are not recommending a system which reduces the independence of universities. If these objectives are kept in mind the reasons for many of our detailed recommendations will become more evident—for example, that there should be better financial data throughout the system, more professional staff and a longer period of funding.

As other speakers have pointed out, many of' our recommendations represent a further development of trends and ideas already in existence. Several noble Lords have regretted that the report did not make specific recommendations on subjects which interest them. We believed that a report which concentrated on our terms of' reference and was produced relatively quickly afforded the best chance of progress.

The review committee's remit was concerned with machinery and procedures: it was not concerned with larger questions such as whether we devote enough resources to higher education or whether the results of our higher education system are commensurate with national needs or with the resources which are put into them. We did not try to "second guess" the decisions taken by the UGC in the recent past. We did not try to prescribe in detail how the restructured UGC we recommended should organise its future work. Similarly we were not asked to advise how many students the system should provide for: nor the amount of public money it should receive.

It may seem, therefore, that the questions we investigated and the advice we gave arc concerned with the relatively unimportant. This would be a sad error. This country evolved some decades ago a method of financing universities from public funds without excessive state intervention. That method is particularly British: namely, the University Grants Committee. It has served us very well but current problems are different from those of the 1960s and 1970s, whether we look at them from the national point of view or from the point of view of the university system itself. Those problems will not be solved by machinery alone but the review committee believe that the reconstitution of the UGC which we recommend could make a major contribution. We believe it is very important that action should be taken.

4.52 p.m.

Lord Dainton

My Lords, there are no less than 40 recommendations in the Croham Committee's report. Fortunately many of them are either formalisations or logical extensions (to meet today's Circumstances) of practices which were current when I was chairman of the University Grants Committee. So your Lordships will not be surprised to hear that I regard them as entirely praiseworthy. Since quinquennial funding and its associated inflationary protection disappeared during my first term of office and I spent four unforgettable years, trying, in the end successfully, for all the reasons given in the report, to achieve a planning horizon of at least three years, I also warmly endorse the recommendations for triennial funding. Very much I hope that the Government will pay heed to that part of the report and will institute such arrangements. Likewise, the recommended arrange-ments for staffing, financial management and control of the new Council, including the designation of the director general as accounting officer. are practical and sensible, in my view.

I am also glad to see the acknowledgement, referred to already in your Lordships' House, of the special difficulties concerning medicine and dentistry which in my day consumed about 20 per cent. of the current resources and provided for only 10 per cent. of the student numbers. There are many prickly problems in this area, including the dual responsibility of clinical academic staff for teaching and patient care, lack of time for research, disparities of salary between the health service and the university, and cases of' imperfect liaison between a university and a district health authority. All those problems require, and I hope will receive, urgent attention at the highest level.

Some readers of the report may be alarmed—indeed, some speakers have referred to their alarm—at the proposals for membership of the new Council, despite the high status to be accorded to the director general. I am much less concerned than might be expected, because my experience in chairing the old University Grants Committee and other bodies with compositions resembling that proposed for the new university grants Council has led me to the clear view that what is of overriding importance in achieving the effective working of quangos—far transcending any details of composition and constitution—is to secure members of the highest quality and most relevant experience, who are willing to commit themselves unreservedly to the work that is to be done. The ultimate test of a constitution is whether such members judge it to be an adequate instrument, appropriately placed within the machinery of government, for each of them to feel that it permits him or her to make a full contribution to discharging the remit of the committee or Council in the best possible manner. I see no reason whatever to fault the report's recommendations on these grounds. Nevertheless, if asked to serve on the proposed Council—an infinitely remote possibility, given my background—I should be reluctant to do so on two grounds.

In the first place. this country lacks a forum in which the issues relating to the whole of higher education are discussed and where the University Grants Committee, or its successor, would have an effective voice. The Croham Committee evidently shares this view and puts the matter admirably. I quote: The absence of such a focus now represents a major gap in the overall advice available to government—. I hope that the Government will fill that gap. but the passage in Croham, which is quoted from the Government's own Green Paper, gives little grounds for optimism.

Secondly, it is quite clear that there is no longer any clear affirmative policy for higher education in Britain. It is notable that those European countries, and also Japan and the United States of America, which have surpassed the United Kingdom in economic performance all have substantially higher proportions of graduates in their workforce. The higher figures achieved by our competitors have been possible because of enlightened policies in regard to industrial recruitment and because of a higher proportion of the age groups entering higher education. My discussions over the years with educators, industrialists and Officials in all those countries have left me in no doubt whatsoever that in their opinion the policies they have adopted are wise. I share this view. There was a time when Her Majesty's Government also shared it.

May I draw your Lordships' attention to the White Paper, Education: a Framework for Expansion, which was issued in December 1972 and then presented to Parliament. Paragraph 118 of that White Paper reads as follows: The Government would expect to be providing by about 1981 for something of the order of 200,000 entrants (to higher education) annually from within Great Britain, aged under 21. -this would represent about 22 per cent. of the age group then aged 18, as compared with 7 per cent. in 1961 and 15 per cent. in 1971". In fact, as the Government's Green Paper of 1985 shows, the figure for 1983—and it was much the same for 1981—was around 130,000 entrants, correspond-ing to about 13 per cent. of the age group. Such figures do not encourage me to think that the gaps between our age participation rate and those of our competitors will be closed when the third millenium, which has already been referred to, dawns. This is perhaps surprising in view of the fact that in the previous paragraph of the same White Paper it was stated in reference to higher education—and I quote— [the Government] value its continued expansion as an investment in the nation's human talent in a time of rapid social change and technological development". If the higher education forum were to be established and if these wise policies were being implemented now, I would pull every string and employ every ruse I knew in order to be appointed to the proposed University Grants Council.

However, if I were so appointed, I would part company with the Croham Committee's recommen-dations and its seemingly enthusiastic endorsement of full-scale formula financing in the allocation of resources to universities. I suppose it is because, paradoxically, I am a physical scientist in a highly quantitative subject that I have a high regard for the proper design and use of formulae.

But for such a method to work, both the methodology and the numbers have to be correct. Such a state of affairs is not attainable in this field. While there are figures of historical costs for particular subjects as a function of the number of full-time equivalent undergraduate students, the scatter of the data is so great as to preclude any firm relationship which could be applied. Even worse is the fact that the use of historical costs in such formulae, by projecting the past into the future, is a way of perpetuating past errors. So I hope that the new Council, if implemented, will disregard those recommendations of the Croham report.

5.1 p.m.

Lord Grimond

My Lords, I dissent from two common attitudes to the universities. The first is that they are really technical colleges and that their job is to turn out whatever skilled workers industry requires. I hold the old-fashioned view that they have a much wider job than that. I also hold the view that the main troubles of this world are not lack of engineers or lack of production but what we are going to do about nuclear power and bio-technology, how we are going to spread wealth throughout the world and preserve peace. These are subjects which are pre-eminently within the field of universities.

Secondly, I do not think that universities are grossly badly managed. There seems to be a view about that they are inefficient. In my experience, which is very limited, they are very efficiently managed. I once was rector of Edinburgh University when it was under the charge of the noble Lord who initiated this debate, to whom we are much indebted, and his secretary, Mr. Stewart. It was oddly administered, but I do not think inefficiently administered. In my view the universities have a good deal to teach government departments and big industry about how to manage what are very difficult operations.

We must remember that you cannot order people about in universities. You cannot order them to read this subject or that. You may provide endless engineering laboratories, but if they will not read engineering you cannot compel them to do so. It was widely said at Edinburgh that one of the reasons why there was such a comparative failure of engineering students was that the noble Lord, Lord Swann, seduced them all to read biology through his charismatic character. I am not sure that was true. But we cannot abolish the noble Lord, Lord Swann, and order that he should go elsewhere and that people should read engineering instead. Against that background, I believe that the structure of the administration is much less important —though not unimportant—than the people who run it. The University of Birmingham had a most extraordinary structure, but owing to the extreme ability of the vice-chancellor, the secretary and the registrar it worked very well.

I share almost entirely the view of the noble Lord, Lord Adrian. about this report. It is an excellent report and extremely well written, but I doubt whether it will make much difference. Any difference it makes will be due entirely to the sort of people who are appointed to this new Council. To, begin with, it has too many lay members. I do not think that industrialists, lawyers and so on are any more necessary for the wider view than academics. I hold a good view of academics and I do not think they need their hands held constantly even by people such as ex-Lord Chancellors.

I now come to the phrase "eminent persons". The Council will be headed up by an eminent person. We all know who are eminent persons. They are all round this Chamber. Their common quality is that they are old, and there is a very great need in universities to have younger people on the main bodies. Science advances at a very alarming rate and even middle-aged scientists are getting out of touch with new developments. So let us have a few young people and not too many eminent lay persons.

Another field which we should look at is the armed services. They provide the best technical training in Britain. As we know, during the war people were taught to fly a Spitfire in six weeks. Even I was taught to dismantle a machine-gun and to understand a bank account. They are extremely good at elementary teaching, but so far as I know they are never consulted about university teaching. I was rather surprised that apparently the university of which the noble Lord, Lord Beloff, used to be vice-chancellor was not visited by this committee. The independent university has certain lessons for the whole of higher education.

I come to the question of evaluation which is mentioned. I am profoundly sceptical. If evaluation had been in force, Porson would have been expelled from Cambridge—there is no question about it—and most of the eminent professors at the University of St. Andrews, where I was brought up, would also have been thrown out. Their habits would never have passed the scrutiny of inspectors. I think that evaluation may be necessary up to a point, but it is very dangerous and often results in the best being thrown out.

I am somewhat doubtful about the education commission. It is apparently going to advise upon what it thinks the country needs. I am all in favour of maximum divergence of view throughout the universities, and I do not want to see them all forced to follow what somebody thinks the country needs. What the country thinks it needs means what is fashionable, and what is fashionable is often very undesirable. One of the functions of the university should be to criticise modern fashions and not necessarily to follow them. I believe in devolution for Scotland and when that comes I shall wholly support devolution of university control to Scotland. But until it comes I agree that the first step might well be to accept this Scottish committee.

Let me finish by saying, as an outsider of universities, that the best service you can do them at the moment is to stop sending round questionnaires, committees, and investigations, threatening them with this, that and the other, saying how incompetent they are and treating them like children. Let these very eminent men run them. We are very lucky to get them. You get some very good, eminent lay people as well as academics. Let them get on with their proper work, which is teaching, research, pursuing their subjects and ensuring that these institutions, which are exceedingly good institutions, can flourish and be guaranteed adequate finance not for one year but for seven or eight years ahead.

5.7 p.m.

Lord Irving of Dartford

My Lords, before I come to the report I should like to raise a question on the membership of the committee. I wish to ask the noble Baroness when she comes to reply whether she will say why there was no representative on the committee of the University of Wales, or of Wales generally, the University of Wales having seven colleges and being the second largest university in the United Kingdom. I have been asked to say on behalf of my noble friend Lord Cledwyn of Penrhos and my noble and learned friend Lord Elwyn-Jones that the fact of this omission was deeply resented in Wales where it was clear that both England and Scotland were very well represented and Wales had special problems.

In looking at the recommendations of the Croham Report, it is necessary to understand how the need for this report came about. In my view, it stems essentially from the crisis in our universities, polytechnics and colleges created by the cuts in government funding of higher education—cuts made at a time when all our rivals are increasing support for education at every stage.

In the universities there has been a severe loss of income. Between 1981 and 1986–87, funding has been cut by 11 per cent.; the number of places has been cut from 250,000 in 1981 to 241,000 in 1984–85, when, during a peak demand from students, 12,000 to 15,000 qualified students a year were unable to get access to universities. There has been a serious decline in support for research which has reduced the ability of the research Councils to fund some top-rated projects, this again at a time when all our competitors were increasing the amount devoted to research.

The former chairman of one of our research Councils has said that Britain will have to pay dearly in future years for the failure of the Government to fund longer-term research. The Comptroller and Auditor-General has condemned the government policy for "the damage, disorder and dis-economy" inflicted on our universities. The cuts have fallen unevenly and unfairly on the technological universities. These cuts were imposed by the University Grants Committee, which has come under increasing criticism as becoming a mere tool of government and for the way it imposed these cuts.

I think that the kindest thing we can say about the University Grants Committee is that it was never set up to deal with this sort of situation. It was established in 1919. Although normally independent, it is staffed by DES staff and the chairman is technically a second permanent secretary of the department. It is against this background that we have to judge the report which we have before us today.

The first comment which I have to make on Croham is that unless the Government match the needs of the nation in their funding of higher education, no restructuring can repair the serious damage to the nation which this involves. Having said that, Croham seeks independence, competence and accountability for the new University Grants Council. I believe that that is something which we should all welcome. It also recommends that the new Council should be set up by Act of Parliament or by charter and that it be required to submit an annual report to Parliament. That is very important.

The present University Grants Committee has been described as: secretive. unaccountable and unrepresentative". The new Council should seek to be a strong and independent intermediary between the Government and the universities. We welcome the report's recognition of this need. We also support the committee's recommendation that government should play no part in the distribution of the grant to individual universities and its acknowledgement of the benefits of a university system organised on a United Kingdom basis. We welcome the strengthening of the secretariat and the relationship between the chairman representing industry and the director general who will be an academic. However, we feel that there is still scope for a wider range of experience on the committee.

It is less clear, however, how far Croham is just an attempt to increase the efficiency and relevance of the new University Grants Council, which would be welcomed, and how far it could become a step towards the centralised control of all education. We suspect this may be happening in other parts of the educational system. If we set the revamped and less academically-dominated University Grants Council alongside the rumour of a forthcoming White Paper which will divest local authorities of any involvement in polytechnics and colleges, this would be a highly retrograde step. We need more contact with the local community and not less.

One of the most valuable recommendations of the report is the proposal for three-year funding, as it has been quite impossible to carry on effective planning on this time-scale. However, I believe that it is necessary to go even further and to have a rolling programme stretching beyond three years, even if the amounts cannot be as precise as they are for the three-year period. Polytechnics, too, have suffered cuts over an even longer period. Recent cuts in local authority spending and sanctions such as penalties and rate-capping have further undermined standards.

We recognise the need for an over-arching body, as we believe that it is necessary to rid higher education of the inequality and duplication which at present exists and to maximise the use of our academic resources by joint planning and co-operation. As I have said, we have no wish to see polytechnics removed from the control of local authorities. Rather, there should be more contact at a regional level with local communities and a recognition of the importance of continuing education, which has been seriously neglected by the Government. There should be contact as well with local authorities and with the Manpower Services Commission.

The matters involved in the report are absolutely vital if we are to survive as a nation with the talents, the skills and the trained personnel to succeed in the challenges facing us. We are talking about not only prosperity but survival as well. I hope that the Government will be able to accept the restructuring and at the same time ensure that there is the funding to go with it.

5.15 p.m.

Baroness Hooper

My Lords, this has been a very timely and instructive debate. The large number of speakers, which has been matched only by their eminence and distinction, will ensure that it will be a most useful contribution to the present consultations of the Government about the future of the University Grants Committee. We are grateful to the noble Lord, Lord Swann, for bringing this important topic forward for discussion at this time.

When my right honourable friend the Secretary of State for Education and Science presented the Croham Report to Parliament last month, he invited interested bodies to let him have detailed comments on the report's recommendations by the end of June. He also said that the Government would announce their own broad conclusions on the main recommendations fairly quickly. That remains the Government's intention. I can only repeat—and perhaps I should address this comment particularly to the noble Lord, Lord Grimond—that the Government will take the report very seriously. Your Lordships can be assured that the views expressed this afternoon will be taken into account in the final decisions of the Government on the report.

The consultative arrangements are, however, only the icing on the cake. The main substance is already there in the report itself. Perhaps I may deal here with a preliminary issue raised by the noble Lord, Lord Irving of Dartford. on the availability of eminent persons from Wales. The Croham Committee, which was only a small body, visited Wales and took evidence from Welsh interests. It recognised in the report that there are distinctive features in Welsh university education which need to be given explicit recognition. No doubt that will be done in the formation of the new Council in due course and notice will be taken of the remarks made this afternoon.

I should like to place clearly on record the Government's considerable gratitude to the noble Lord, Lord Croham, and to the members of his committee for their work in reviewing the role and operations of the UGC and for the clarity of their report. We have also been privileged this afternoon to hear further from the noble Lord, Lord Croham, and from my noble friend Lord Butterworth, his deputy. In responding to the many comments on the report, they have certainly added to my understanding of the issues involved.

I should also like to join in what the noble Lord, Lord Croham, has said in paying tribute to the late Professor Paul Matthews. He made a very valuable contribution as a member of the Croham Committee and his contribution in all the other fields in which he was involved will be very much missed.

I have already commented on the timeliness of this debate in relation to the Government's consideration of the Croham Report. But it is timely in another way, too, for it was exactly 100 years ago this month that the university colleges of the day launched what would now be called a campaign for public funding. After two years they were successful, and in 1889 the Treasury made available a total grant of E15,000 and appointed an ad hoc committee to advise on its distribution. Well, times have changed. The Government will be spending some £1,700 million on the universities in 1987–88, which is 10 per cent. more than in 1986–87 and around 17 per cent. of current annual expenditures on schools. What has not changed, however, is that the universities still do not think it is enough.

Incidentally, I was interested to learn from the noble Earl, Lord Longford, that it is he we have to thank, in part at least, for the transfer of the University Grants Committee from the Treasury to the Department of Education and Science.

The Earl of Longford

I was the first person to suggest it.

Baroness Hooper

My Lords, the distribution of this large sum of money now being spent in the field is determined effectively by the UGC. Since the establishment of that body in 1919, Ministers have not intervened in decisions about allocations to individual universities. This arrangement has been regarded as an important safeguard for the autonomy of universities. It is a model which has been copied in several Commonwealth countries, and it is one which the Croham Committee recommends should be continued.

As your Lordships will be aware, the UGC introduced last year a completely new system for determining its allocations to universities. This includes a common unit of resource by subject in support of teaching and funding to support research which reflects the quality of research in each university department and the success of each department in attracting research grants and contracts from research Councils and from industry. The introduction of these new arrangements was a major task. That they were introduced successfully over little more than a year and without major dissent from those affected is a very considerable tribute to the present chairman and members of the UGC. My right honourable friend the Secretary of State for Education and Science has on several occasions expressed the Government's gratitude for the committee's efforts in introducing this new more rational and more open system of resource allocation, and for the tenacity with which it is carrying through these changes. I am pleased to be able to reiterate our thanks to Sir Peter Swynnerton-Dyer and his colleagues today.

Therefore it was by no means because of dissatisfaction with the recent work of the UGC that the Government decided to set up the review committee which was chaired by the noble Lord, Lord Croham. Rather. the main reasons were: because of uncertainty within the university system about the UGC's role; because of the need to bring the formal arrangements for accountability for public funds into line with Parliament's present-day requirements; and in order to ensure that we have the best possible arrangements for planning the university system into the next century. It was to this end that in May 1985 the Government announced the first-ever major review of the work of the UGC, which had been set up in 1919. So I regret that I cannot agree with the noble Lord, Lord Swann, in deprecating the need for the setting up of the Croham Committee or indeed for suggesting that the only reason—or perhaps he said the main reason—for it was the scarcity of resources.

Over the nearly 70 years of its existence the UGC and its mode of operation have of course changed a good deal in response to changes in the country's economic and social needs. That flexibility has been one of the UGC's strengths. It was largely made possible by the UGC's constitutional basis—one of those peculiarly British procedures, the Treasury minute. However, in recent years that flexibility and the lack of a clearer statutory basis have also become a disadvantage. Both in the universities and outside there has been increasing uncertainty about the role which the UGC should be fulfilling and about its precise relationship with government. This has not helped the transaction of necessary business. Nor does it sit easily with the increased emphasis which the Government and Parliament are rightly giving to the need for clear lines of accountability.

As noble Lords have commented, the Croham Committee's report helpfully cuts through this uncertainty. It states that the UGC should be clearly recognised as part of the machinery of government. It recognises that an intermediary body of this sort exists to perform in the public interest functions which would otherwise be undertaken by government and that such a body can do so only so long as it enjoys the confidence not only of the universities but also of the Government, Parliament and the public generally. The review's recommendation for a new-look University Grants Council with an explicit remit to look in both directions—to Government and to the universities—was clearly conceived to meet this need.

Other formulations, including some of the possibilities which have been mentioned during this afternoon's debate, would imply a different sort of intermediary body, with different functions and a different status. The early announcement of broad conclusions which my right honourable friend has promised will make clear the sort of intermediary body which the Government consider appropriate. It will also indicate whether the Government agree with the Croham Committee's recommendation that the new arrangements should be enshrined in statute; not least, in the committee's view because of the desirability of Parliament specifically approving the arrangements for administering such large sums of public money.

Let me turn now to the recommendations about the membership of the proposed new UGC. The idea of having a body not solely composed of academics was touched on by my noble friend Lord Quinton. The right reverend Prelate the Bishop of Birmingham, my noble friend Lord Butterworth and many others referred to the recommendation for a non-executive chairman with substantial experience outside the academic world and for a full-time director general with an academic background. As the debate has revealed, there are different views on this.

In spite of some comments to the contrary today, it seems generally accepted that non-academic interests should be given greater representation than previously; and that the UGC should be so constituted that it can take both a broad strategic view of how the university system should be best shaped to meet the country's needs and also be able to review in detail the academic dispositions which might sustain such an overview. Here I note in particular the suggestion about expertise in adult and continuing education put forward by the noble Viscount, Lord Combermere, and the importance of having women members, a point made by the noble Baroness, Lady Lockwood.

There seems to be less agreement, however, about the respective roles of the proposed chairman and director general. As with all new bodies, the precise working arrangements would need to be developed over the initial year or so and much would depend on the individuals first appointed. Quite obviously this is an important area on which it is difficult to be certain in advance about the right formula. As well as noting the many valid comments made today the Government will also listen particularly carefully to what is said on this subject by interested parties during the consultative process.

I turn now to the particular points raised in the debate. The noble Lord, Lord Swann, led the critics of the Government's present funding arrangements of universities. The noble Lord, Lord Irving of Dartford, wound up, as it were, on this side of the argument. I must make it clear that, including the additional provision related to the recent academic pay settlement, the Government have increased the total recurrent grant made available to the UGC for 1987–88 by 10 per cent. compared with the provision in 1986–87. Additionally, the provision for equipment grant has been increased by 6.5 per cent. for 1987–88. The levels of grants in later years will depend on the universities' progress in delivering promised improvements, better management, higher standards of teaching, greater selectivity in research funding and rationalisation of small departments. Subject to such progress the Government intend that university funding will increase in line with inflation.

The distribution of grants between universities was of course determined by the UGC, not government, and the committee's allocation strategy has two main elements—a common level of funding by subject for teaching purposes, and funds in support of research distributed selectively in relation to the quality of university departments' research and their success in attracting outside funding. Inevitably the welcome element of selectivity—and it has been welcomed this afternoon—in the allocation arrangements and the move away from an incremental funding process has meant that some universities have fared better than others but they are all being judged by the same criteria and the new arrangements are more open and rational than before.

The noble Lord, Lord Barnett, and the noble Viscount, Lord Combermere, raised the question of funding for part-time students. The present UGC method of allocation provides for students on part-time degree courses to be funded on a pro rata basis to full-time students but continuing education courses are assumed to be self-supporting through fees. However, the UGC allocates £82 per continuing education student as pump-priming finance for the development of new courses. Tax relief for certain costs of training was included in yesterday's Budget.

In conducting his current review of student support, my honourable friend the Under-Secretary of State is considering the question of support for tuition fees paid by part-time students and the formula for funding places for part-time students at university would of course be a matter for the new UGC to consider under the Croham proposals. The Government will be considering whether this is the right course when making decisions on the report. This would also affect Birkbeck College.

The noble Lord, Lord Tedder, spoke to us from the Scottish viewpoint, as did the noble Earl, Lord Perth, and others. The Croham Committee offered a useful commentary on the position of the Scottish universities and in particular on the arrangements by which they might have access to a UK system of peer review if they were moved outside the UGC umbrella.

The way is thus now clear for the Government to reach conclusions on the outstanding recommendation from STEAC for the establishment of a planning and funding body responsible for all higher education in Scotland. I know that my right honourable friends the Secretaries of State for Scotland and of Education and Science are considering this question. They hope to announce their decision shortly.

Your Lordships may be sure that they will be made aware of the points raised today. The noble Baroness, Lady Lockwood, my noble friend Lord Beloff, the noble Lord. Lord Dainton, and indeed a number of your Lordships also referred to the prospective advantages in the report for universities of the system of triennial funding. The Government recognise those but they are also aware of some of the pitfalls. In particular they are conscious that the term "triennial funding" is used as shorthand to embrace a number of separate but related questions. It covers both planning and funding., and it can refer either to the arrange-ments between government and the UGC and/or to those between the UGC and the universities. Each of these elements needs careful consideration. I assure the noble Lord, Lord Adrian, that the Government will consider seriously the question of student fees to which he drew our attention so interestingly.

The subject of medical education was referred to by the noble Lord, Lord Hunter of Newington, from his specialised background. As the Croham Report recognises, the planning and funding of medical education poses particular problems because it is relatively expensive and because of the clinical training which is necessarily interwoven with health service provision. It was interesting to hear what has been said about this. The Government accept that there is scope for improved co-ordination at the centre in this field but the need for co-ordination is equally strong at local level, in planning matters as well as in day-to-day working.

The suggestion of the noble Lord, Lord Hunter, that the DHSS should take over responsibility for clinical medical training was most interesting. The Croham Committee considered this possibility but did not investigate it in detail. It concluded that the prevailing opinion in government and in the universities was against this course. The Government will, however, take note of the noble Lord's views.

Finally, I turn to the committee's suggestion that a UK education committee be established to advise the Government and educational institutions on national needs in relation to the education system. The right reverend Prelate the Bishop of Birmingham in particular gave his support to this and the noble Lord, Lord Annan, allowed himself to give it at least fig-leaf support. There have been various proposals, including at least one in recent years from a Select Committee of your Lordships' House, for an advisory body which could bring together consideration of demogaphic, economic, employment and social changes and their implications for the educational system. The Government will take careful account of the views expressed today.

In conclusion, I reiterate the Government's welcome for the excellent report produced by the committee of the noble Lord, Lord Croham. The Government's eventual decisions will take full account of any comments and of the views which the noble Lords have expressed today. I should like to thank your Lordships for the many and varied contributions, which I think, taken together with last week's debate on the manufacturing industry, to which the noble Lord, Lord Greenhill of Harrow, referred, and the debate on the report of the research and development which took place the week before that, help to focus our thinking on what is a vital area of concern to the Government and a matter of considerable importance to the future of our country.

5.33 p.m.

Lord Swann

My Lords, I should like, first of all, to thank the noble Lord, Lord Croham, without whose report we should never have had this debate. I did not expect the noble Baroness to agree with what I said, but I thank her nonetheless for responding so deftly on behalf of the Government. Perhaps I may finally address a word or two to the 21 speakers—or 19 if I discount myself—those of your Lordships who have spoken and who have raised a remarkable number of extremely interesting and diverse points, some critical of the report and some supportive of it. Finally, if it is not presumptuous, I congratulate those 19 speakers, including myself twice over, for our skill in concluding this debate in almost precisely the allotted span of two and half hours. I ask leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.