HL Deb 06 November 2001 vol 628 cc123-5

Lord Hannay of Chiswick asked Her Majesty's Government

What plans they have to consult universities in the course of the review of student finance which has been announced; and whether it is an agreed basis of the review that universities should in any circumstances receive an increase in the resources available and not a reduction in them.

The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)

My Lords, the Government have announced a review of student funding in England and Wales. It will consider the balance between state funding and contributions made by students and families. We will consult and the higher education sector will be involved in the consultation. Resources for HE institutions will be dealt with separately and as part of the forthcoming spending review, against the background of a Government who have invested substantially in HE already.

Lord Hannay of Chiswick

My Lords, I thank the noble Baroness for that Answer and declare an interest as Pro-Chancellor of the University of Birmingham. Will she confirm that she and her department are aware that the cash flow provided by the present system of student funding is roughly£350 million a year? The withdrawal of that amount would be very serious. Recent studies conducted by the universities have shown a funding gap in excess of£900 million if they are to work with the Government, as they wish to do, on the attainment of government objectives, including the objective of having 50 per cent of young people in higher education by 2010. If the Minister confirms those figures, will she say how the Government intend to do something about those gaps?

Baroness Ashton of Upholland

My Lords, let me talk about the investment that the Government have made in higher education. We plan to increase that investment by£412 million this year and by£268 million in 2002–03. I am well aware of the needs of universities, not least the University of Birmingham, where the noble Lord is Pro-Chancellor. I am well aware of the research allocation that that university has been able to obtain—currently£29 million, I believe. It is rated as the fifth richest university in the country. That is no doubt a tribute to the work of many people at the university, including the noble Lord. As he has said, our ambition is to increase the number of young people—and older people—who are able to come into universities to 50 per cent. We will do that by working closely with the universities and the review will form part of that process.

Baroness Blatch

My Lords, what do those percentages mean in real terms for the universities? Will the Minister also tell the universities the Government's response to the Bett report?

Baroness Ashton of Upholland

My Lords, the Government have talked to the Bett committee and our spending plans in response to it include£50 million in 2001–02, rising to£110 million in 2002–03 and£170 million in 2003–04 to assist with the recruitment and retention of key personnel. That is a major part of what the Bett committee has been interested in. Noble Lords will know of our manifesto commitment to introduce golden hellos for new lecturers in shortage subjects. Those are significant contributions to the debate.

Baroness Lockwood

My Lords, is my noble friend in a position to confirm the report in the Times Higher Education Supplement this weekend that any funding to assist students will not be at the expense of university funding generally? If so, that is welcome. Does she agree that if we are to solve the problems of student funding, there must be some new money up front, even if it is to be paid back at a later date through some form of taxation?

Baroness Ashton of Upholland

My Lords, the question of funding for institutions is a matter for the Chancellor of the Exchequer and the spending review. The review of student finance will report in the new year. I do not wish to say anything to pre-empt that. However, noble Lords will be aware that the Government are taking the issues seriously. The problems of debt and perception of debt can be a barrier to the take-up of higher education, particularly among lower socio-economic groups. Addressing that is one purpose of the review. We want to get more children from less privileged backgrounds into higher education. We will start from the principle established in 1998 that those who benefit financially from HE should contribute to the cost.

Baroness Sharp of Guildford

My Lords, as the noble Lord, Lord Hannay, said, the deficit facing the universities is in the region of£900 million. The Government's present proposals do not come near to meeting those problems. Does the Minister have any real proposals to cope with the problems of recruitment and retention in the universities, which are becoming extremely difficult?

Baroness Ashton of Upholland

My Lords, I am well aware of the problems facing universities.I have already referred to our manifesto commitment for a golden hello scheme, which we believe will make a contribution to solving that question. I have read the noble Baroness's speech from the debate last week and recognise her contribution. We will address the issues of funding and of how universities will help us to develop towards our 50 per cent target in the work that we are doing as regards the Chancellor's next spending review.

The Lord Bishop of Wakefield

My Lords, I am grateful for the Minister's comments about the lower socio-economic groups. Will she underline her awareness of the fact that in universities such as Huddersfield, where I am a member of the council, the complexity of the present student finance situation puts people off applying? As she has said, they come from groups where no previous member of the family has been at university. In universities such as Huddersfield or Portsmouth, that starts to undermine the financial viability of the whole university. Will she give an assurance that universities such as these will be consulted by the Government?

Baroness Ashton of Upholland

My Lords, I believe that the system to which the right reverend Prelate referred has, indeed, been described as a "nightmare". Simplification is absolutely paramount to this review.

Lord Dearing

My Lords, the Minister indicated that a contribution from the students is still on the cards. Do the Government see an advantage in looking at the experiences of, say, New Zealand and Australia, where a higher education contribution system has been run for a number of years?

Baroness Ashton of Upholland

My Lords, I am personally aware of some of the ways in which Australia has developed its education system. I am hoping that someone will send me there on a fact-finding mission, but I fear that that will perhaps not happen yet. At this stage, I am not able to comment on what the review will do. Suffice it to say that nothing is ruled out. I am sure that consideration of experiences elsewhere will form part of the review.

Lord Naseby

My Lords, the noble Baroness stated correctly that it is the Chancellor who determines the overall figure for higher education. However, can she confirm that there will be no further reduction in the funds available in proportion for Oxford and Cambridge, which remain two of our three leading universities?

Baroness Ashton of Upholland

My Lords, I am not able to confirm that at present. I simply do not have that information. However, I shall happily ask my honourable friend Margaret Hodge to write to the noble Lord in that context.

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