§ 3.13 p.m.
§ The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Education and Skills. The Statement is as follows:
"Today the Government will introduce a Bill to reform higher education. Before we do so, I wish to make a Statement about the related matter of student support.
"Change in higher education is necessary because the barriers to access to university need to be lowered. The measures I am announcing today mean that disadvantaged students will get financial support to study what they want where they want.
"Universities need more investment. Vice-Chancellors will tell you that these proposals generate hundreds of millions of pounds of new money for them to spend on improving the quality of teaching and compete with the best universities in the world.
"We need to move towards treating students as financially independent from the age of 18.
"I believe that there is a broad consensus that universities need more resources and that it is reasonable for students to make some contribution, after they have graduated, to those resources. Where there has not been consensus is about the fairest way to raise this new funding, so that access from the poorest communities is promoted and not undermined. The Government have listened carefully to the concerns which have been raised and have discussed the matter widely. These concerns very much inform the proposals I make today.
"Our original proposals were set out in the White Paper I presented to the House on 22 January last year. We will remove up-front fees for full-time 318 undergraduates, so that higher education is free at the point of entry. We will provide loans with a zero real rate of interest, paid back through the tax system at a rate dependent upon earnings, beginning at a threshold of £15,000 per year rather than the current £10,000. We will introduce the new higher education grant from September this year.
"We will establish the new Office for Fair Access to ensure that universities support students from the poorest backgrounds. The focus of OFFA's work will be those universities with the poorest track record in widening participation. No university will be able to put up its fee without OFFA's agreement. OFFA will not concern itself with admissions.
"Universities will be able to set fees from zero to £3,000. We will maintain the £3,000 cap in real terms, through the next Parliament.
"Today I add the following commitments to meet concerns which have been expressed by some colleagues. First, on variable fees, I accept that some colleagues have genuine concerns about their impact upon our university system. Therefore, the Government will establish an independent review, working with OFFA, to report to this House, based upon the first three years of their operation.
"Moreover, our legislation will require that any proposal to raise the fee cap in real terms is subject to affirmative resolution. There will be the opportunity for a debate on the Floor of both Houses so that every Member can vote upon such a proposal, dependent on discussions through the usual channels. However, I have to make it clear that we do not agree that a substantially higher fixed fee would be the way to raise additional resources. It would be deeply damaging. We would be denying universities the freedom to incentivise industrial, vocational, scientific, technical, engineering and sandwich courses, or foundation degrees, which are vital for the economic future of this country.
"Secondly, I want to emphasise the Government's strong commitment to promoting access to higher education by part-time and mature students. We will provide, from September 2004, improved fee support and a grant for part-time students. I welcome the changes recently announced by HEFCE to support part-time and foundation degree courses. My honourable friend the Minister for Higher Education and the Funding Council will consult on how the funding system might further support the development of part-time study in higher education.
"Thirdly, for full-time undergraduates entering higher education from 2006, we will write off any student loan repayment which is still outstanding after 25 years. On average, we expect graduates to repay their loans in 13 years, but those who have taken on family responsibilities or are on low incomes could need more time. This gives rise to real concern, and I think that a 25-year limit is fair.
"Fourthly, from September 2006, maintenance loans will be raised to the median level of students' basic living costs, as reported by the student income 319 and expenditure survey. This increase will be modest for most students but it will be significant for those studying away from home in London. This principle will ensure that students have enough money to meet their basic living costs.
"I should emphasise that this student loan is free of real interest. Repayments will be based upon money earned, not money owed. It is much better for students to be able to borrow on these terms than at commercial rates.
"Over tune, although this cannot be afforded at this stage, the Government's aspiration is to move to a position where the loan is no longer means tested and is available in full to all full-time undergraduates, so that students will be treated as financially independent from the age of 18.
"My fifth and final intention is to ensure that every student from a poor economic background has enough resources to meet even the highest course fee without incurring additional debt. This £3,000 package is achieved by maintaining fee remission at around £1, 200; by raising the new higher education grant from the £1,000 which I originally proposed to £1, 500 a year for new students from 2006; and by, through OFFA, requiring universities to offer bursaries for students from the poorest backgrounds so that the full fee cost of the course will be covered, which means, for example, a minimum bursary of £300 for a course whose fee is £3,000.
"The effect of this commitment is that no student from a poor background will be worse off as a result of our proposals, whichever university they attend and whatever the fee charged for the course.
"Moreover, this commitment will align the level of the HE grant with that of the education maintenance allowance for 16 to 18 year-olds. Around 30 per cent of students will receive a full grant and a further 10 per cent a partial grant.
"A major advantage of this approach is that those modern universities which have strong records in recruiting students from poorer backgrounds will be able to use at least 90 per cent of any increased income from fees to improve course quality, rather than the about 70 per cent which was implied in some earlier discussions. These universities have made, and are making, a first-class contribution to this country's higher education and economy and I want to encourage, and not discourage, that commitment.
"On the bursaries, I have invited Universities UK to work with universities and ourselves to develop model bursary schemes to provide a clear offer to students.
"In addition I accept in principle the argument of some of my honourable friends that there is a very strong case for combining the HE grant and fee remission in order to give students greater choice up front about how they use the financial support they receive from Government. This would be a further move towards financial independence at 18.
320 "However, this approach raises real policy, financial and practical issues. We are examining them in detail and if they can be resolved we will adopt this approach.
"From the outset I have emphasised that our changes, which mainly come into effect from 2006, will not adversely affect the level of public funding for teaching and research.
"My proposals provide universities with resources they urgently need; they improve access by abolishing up-front fees and re-establishing student grants; and they raise the threshold from which repayment begins from £10,000 to £15,000. Moreover they move us towards the day when students become financially independent at 18.
"The abolition of up-front fees, the HE grants and bursaries, the raising of the interest-free loan, the higher repayment threshold, and the 25-year write-off of debt, mean that students will have the money that they need while they learn, and can afford to contribute when they earn.
"And universities get the sustainable funding stream they need to deliver world-class higher education. This is a coherent package to be taken as a whole or not at all. If not supported by this House, none of these benefits will arise. It is not a pick and mix menu.
"I commend these proposals to the House".
My Lords, that concludes the Statement.
§ 3.22 p.m.
§ Baroness Seccombe
My Lords, I thank the Minister for repeating the Statement made earlier in another place. However, it causes me great concern to see the haphazard way in which the Government are approaching the funding of our higher education institutions. The Statement that we have just heard is the culmination of days of arm-twisting and negotiations, which has resulted in a hotchpotch of concessions and damage limitation by the Government. That is not the way to make policy.
The measures introduced by this Government are nothing short of a disaster for our universities. They are having their independence stripped away with the introduction of the access tsar. That will dictate to universities that admissions should no longer be based on the ability to learn. It will hold back funding from those institutions that select applicants according to their potential as opposed to their postcode. It is a travesty that our universities are being blackmailed in such a way, and we on these Benches are wholly opposed.
Furthermore, the Bill introduced in another place today can provide no cast-iron guarantee that per-student government funding to universities will increase at all in real terms following the implementation of these measures. I am sure that the Minister will say that I am wrong on that issue, but there is a clear precedent that suggests otherwise. When this Government introduced tuition fees in 1998, a great deal of the income earned by the 321 universities was later clawed back by the Treasury. Perhaps the Minister can tell the House why it will be any different this time.
We are told that the top-up fees will be capped at £3,000, but I am afraid that, given the Government's decision to have 50 per cent of 18 year-olds attending university, the sums do not add up. Could the Minister say whether the two commitments are compatible? Can the Minister also confirm that variable fees are an unamendable principle in the package?
The Statement repeated by the Minister this afternoon concedes that universities need more resources. That is said to be a fundamental objective of the Higher Education Bill, but even while the Bill is in the process of being printed, any possibility of it being financially viable is undermined by the concessions announced in this Statement.
The Government need to take a fresh look at how to find a solution to the funding needs of higher education. Pushing on regardless down this road would be a grave error for all parties concerned. Students will have to pay a lot more to go to universities now. Much was said in the Statement about 18 year-olds becoming financially independent. The way I see it, precisely the opposite will happen if they are the verge of accumulating £30,000 worth of debt. Taxpayers' money will be wasted by creating this highly bureaucratic system. Perhaps most worrying of all is that the independence of universities is at risk.
In conclusion, is it not the truth of the matter that this will not provide extra resources to universities and will cost taxpayers more?
§ 3.26 p.m.
§ Baroness Sharp of Guildford
My Lords, I thank the Minister for repeating the Statement. It is not often that a Bill is published with a full Statement of this type. However, on this occasion, the White Paper that preceded it and which was published more than a year ago, has been changed very substantially through time. On top of that, the negotiations on the change have taken place in the past few days as much as in the past few months. Therefore, until today, we did not quite know what was going to come forward in the package, so it is interesting to see precisely what has come through.
It is somewhat sanctimonious for us to preach to the Benches opposite about broken promises. It is up to them to decide how economical with the truth their Government are being when, having promised not to introduce top-up fees in their manifesto, they then have a Bill that does precisely that.
There is also a certain irony in the current situation. We may cast our minds back to the general election campaign in 2001. One feature of that campaign was the desertion of the student body from its traditional support for a Labour government. When students were asked about it, the main issue was fees—in this case, the Dearing fee that had been introduced—and maintenance grants. In particular, the switchover from maintenance grants to loans was very unpopular.
322 Immediately after the general election, the Prime Minister set in train an inquiry to discover how best to cope with the problem of student dislike of the loans system. The Government wanted to come up with a better way and, in particular, some form of grant to help with the maintenance costs—the hotel costs—of students. This package has come out of that process but, ironically, far from relieving the problem of debts that the students disliked, the package increases the problem.
There are some genuine worries about the package that is being proposed. In spite of the comments by the Secretary of State yesterday on the absurdity of the idea that fees might be allowed to rise to the £10,000 or £15,000 mark in the Russell group universities, the fact remains that the expectation is that variable fees, when they are introduced, will be the thin edge of the wedge. The £3,000 fee, variable as it may be, far from providing a sustainable source of funding for universities, does anything but.
There is a wholesale expectation that we shall see much greater variability introduced later. Yes, the matter is going to come before a vote of both Houses—but, in spite of that, there will be pressure, just as there was with the Dearing fee. We were promised that the Dearing fee would be all we saw—but now what are we seeing? Now the fee is going to be £3,000. We are being promised that, before anything else is done, we shall consider the matter again. This issue will come back because, if the universities are to have the resources that they want to have, fees in Russell group universities will approach the £10,000 mark. If we see some of the universities with fees at that level—Oxbridge, the leading London colleges, Bristol and so forth—then there is a genuine fear that many students—not those from Guildford or Westminster, but those from Moss Side and those from St Paul's in Bristol—will perceive those universities as beyond their ken. They will not even bother to apply. This two-tier system is a very real problem.
I shall put forward some other worries that we have. First, how much new money is coming forward to the universities as a result of these fees? How much genuinely new money are the universities going to get from this? If all universities charged the £3,000 fee, it would raise about £1.5 billion. As we know, however, by no means will all universities charge that amount. How much new money do the Government reckon will come to the universities from this? They need £2 billion a year to be sustainable, but this is nowhere near that amount. If we are lucky, we shall see £500 million coming into universities from the present proposals. How much are the extra concessions costing? What will be the cost of the extra maintenance grant and the deferment of payment? The Institute for Fiscal Studies calculates that the deferment of payment over 25 years will cost £250 million. So how much new money is coming forward?
Secondly, what is the cost not just of these concessions but of the total package? We are looking at £500 million coming into the universities. Is the House aware that as we are moving from up-front payment to post-graduation payment, which we 323 welcome, the Treasury will have to pay the loans to universities if they are to receive any money at all? The Treasury sold on the first tranche of loans to the private sector at a 50 per cent discount. In other words, it is costing us, the taxpayers, £500 million in order to provide every £1 billion of loans. Those figures are provided by the Institute for Fiscal Studies. In its own calculations, the institute reckons that the cost of providing £1 billion-worth of loans is £400 million. So we are having to pay out almost £500 million to provide the same amount to universities. Is that really sensible economics? What are the precise costs?
Maintenance grants are the third issue. We were told in the White Paper that maintenance grants are for maintenance—for hotel costs. Now they are not for maintenance but to help pay tuition costs. That is a straight switch-over from what was proposed in the White Paper, a point to which the Statement alludes. We are continuing this concept of an educational maintenance grant for students from low-income families. The grant is now £30 per week for those who are post-16 and in a low-income family. The concept is now being carried forward to university level. Although I am delighted to see it, the grant is not for maintenance but to help pay the extra tuition costs. We are counting it as part of the package. Those students are being told, "You will not have to pay it because you come from a low-income family and we are knocking it off". But will they receive any help at all with maintenance?
Filially, I should like to ask about part-time students and those from the Open University. I believe I am right in saying that while concessions are being made in loans and grants for part-time students, no help is being provided to those who have to pay fees. Part-time university students, particularly students at the Open University, will have to pay fees. The Open University is not receiving help for part-time courses equivalent to the help being offered for full-time courses. If we want to open up participation in higher education. we have to realise that those who will participate are looking for the opportunity not only to study part-time, but to work, earn and learn all at the same time. That is the great opening and the area in which we are currently so lacking. We want to open up opportunities for such students, but these proposals are not the way to encourage them. I hope that the Government will look at this again.
§ 3.35 p.m.
§ Baroness Ashton of Upholland
My Lords, I am grateful to the noble Baronesses, Lady Seccombe and Lady Sharp, for some if not all of their comments. I say to the noble Baroness, Lady Sharp, that what she describes as a hotch-potch I describe as serious debate. This is a very difficult and I dare say controversial subject. It is very important that the Government continue the dialogue and discussion with all interested parties, not least universities themselves, to ensure that we get the proposals right. I believe that we have reached a conclusion that addresses the concerns that have been raised with us.
324 I say to the noble Baroness, Lady Seccombe, that this is about the independence of universities. As the Statement makes clear, and as I have often made clear in your Lordships' House, OFFA's role is not about admissions—a matter properly within the jurisdiction of universities. We are very clear that they must retain their independence. However, we are looking at ways of ensuring that our students who can apply to university do so. That means working closely with our school system and involving our universities in the type of outreach work that noble Lords have from time to time joined me in praising in your Lordships' House.
There is a very strong commitment across the Cabinet, not least by the Chancellor, to ensure that we fund and support universities. I think that noble Lords should be aware of that important point.
I believe that there is a real compatibility between wanting to provide the opportunity of a higher education to about 50 per cent of those aged 18 to 30 and wanting to ensure that our universities are viable. We want high-quality courses for all those attending university, and we want universities to be well funded. We need to move towards that as quickly as possible. This is about recognising our place in the global economy. It is about recognising our people's need to receive the high-quality education they deserve.
I think that in talking about "a bureaucratic system", the noble Baroness, Lady Seccombe, has underestimated the way in which we are introducing OFFA. It will not be bureaucratic. Further information will be published today as a result of publication of the regulatory impact assessment Bill. I shall also make available details on resources. It is important that we link this very closely with the work of HEFCE, while ensuring that we have a clear and definable objective in working with universities to help our students receive the high-quality education I described.
Both noble Baronesses asked about the sum we think will be raised. Our estimates are based on 75 per cent of courses being at the £3,000 level—a figure which I think fits perfectly with the £1 billion figure cited by the noble Baroness, Lady Sharp. That is important new money which will go to universities. It is not about having to compete against other priorities—another issue which we have discussed in your Lordships' House.
The noble Baroness, Lady Sharp, talks about our manifesto commitment. My right honourable friend has frequently addressed that issue. I would refer noble Lords who have not heard enough about that to the article written this weekend by my right honourable friend the Home Secretary in which he describes the circumstances in which that commitment was made. We have been very open and clear about what we are doing. I do not believe that anyone is under any illusion about why we have reached our conclusions or the rightness of those conclusions for the development of our universities.
The noble Baronesses talked about increasing debt. It is important that we are clear about what we are describing. The package we are putting forward will ensure that 30 per cent of students do not pay and that another 10 per cent do not pay all the fees. This is not 325 debt in the traditional sense as noble Lords and I understand the concept. It is about paying according to means and only when one is able to pay back. For those who choose to have a low income because of the work they do or who choose to have a different lifestyle, after 25 years the debt will not have to be repaid at all.
It is important, because the principle that we stand behind is that students should contribute to their university education. We are not in the position that we were in 30 years ago. This is about recognising those who benefit: the Government; the economy; our businesses; our industry and our individuals should make those contributions. We have done this in a way that ensures that we protect our poorest students and encourages them to go on to university.
Often, our debate is about those universities that are described as elite universities—I find that phrase difficult, but noble Lords will know which universities I am referring to—and their role in this. Some of them have exemplary records of working with students. We have noted before in your Lordships' House that Cambridge University is proposing a bursary scheme that, on top of this package, would give £4,000 to each student from a poor background. These are important moves forward, which I am grateful to universities for considering.
The noble Baroness, Lady Sharp of Guildford, talked about our move from maintenance grants to fees and loans. It is partly that we are trying to think about the totality of student debt. There has been some interesting work by Members of another place in looking at what we mean by the "totality". We have tried to think more about what we can offer students and enable them to think about the package that they will be receiving and the package that they will be repaying. I make no apologies for that, because it is important.
The noble Baroness, Lady Sharp of Guildford, asked about the increase to universities. Just to complete the answer to her question about how much would be coming in, it is about a 30 per cent increase, on average, per student for those universities that will charge that, which is an important part of that. I am not able to give her the definitive answer on our dialogue with the Open University about part-time students, which has been going on. I will write to her on that.
§ 3.41 p.m.
§ The Lord Bishop of Portsmouth
My Lords, we on these Benches broadly support this strategy, although we have questions. Whipping bishops is about as difficult as herding cats. We have questions, but we support the strategy broadly given the present situation, which is far from ideal. I speak from a perspective of having been a university chaplain in the early 1980s. The Government have listened to many of the concerns. Obviously there has been a great deal of bargaining, but that is part of the real world that we are all in because we are dealing with money. Higher 326 education needs resourcing, and this is perhaps, for some of us, the least worst option, next to reintroducing a further income tax.
Noble Lords will want to take part further in this question session, so I simply want to put four questions to the Minister. What about those who will just miss qualifying for extra help? That grey area has been addressed, but—though noble Lords who know me will realise that I am innumerate and cannot add up—I am concerned about those grey areas. I heard on the radio this morning a prominent person gently chiding the front page reportage of one of our prominent newspapers, which led me to believe that that newspaper clearly has as much difficulty handling higher education as it does with issues and appointments in the Church of England. I wonder whether this issue of communication is deep seated. I have raised this before. It can be described as "debt aversion". That does not appear in the Statement, but there is quite a mountain to climb on communication. I wonder whether the Government realise just how high that mountain is.
Will the Government really keep a watchful eye on the pressure to remove that £3,000 cap? I noticed in the Statement that there was a kind of hidden fear, which reminds me of what we call in the trade, "argument weak, thump pulpit". I would not for a moment suggest that the Minister thumps the pulpit, nor would I suggest that any of her arguments are weak, but I wonder whether there is an inner scepticism there that some of us have picked up. That will mean that fees might move beyond the ability of poorer people to pay.
My final question is not about the Statement, but I believe that it is important. The Statement is about financing and resourcing, but we want to say firmly that the Bill must say something about what education is for, not just what it does. There is an ideal in higher education, but, if we assume it, we will easily slip into taking it for granted. I ask the Minister to give that matter her active consideration. I know that she has done so already, because we have talked about it.
§ Baroness Ashton of Upholland
My Lords, I am grateful to the right reverend Prelate for his comments on the Bill. I am also grateful to him for the discussions that he has had with me and with my right honourable friend the Secretary of State and for his careful deliberation of the issues.
The right reverend Prelate is right to raise the issue of what happens at the margins. We know that, under our proposals, 30 per cent of students will be directly assisted with the total amount that we have proposed and that a further 10 per cent will be assisted partially. The right reverend Prelate could then ask me about the person at 41 per cent. That is part of the reason why we wish to review how the system works after three years. We will be mindful of that.
My right honourable friend is keen to consider the issue of how we recognise people as becoming independent at 18. In part, that is because of evidence, of which noble Lords will be aware—albeit that some of it is anecdotal—that some young people are unable 327 to persuade their family to support them with the upfront fees and with other things. They will need to be able to receive that income independently.
I agree that communication is critical. My right honourable friend plans, as soon as the Bill receives Royal Assent, to do a lot more work on communication that would not be appropriate until the Bill has passed into law. We recognise that there is a mountain to climb, not least because of some of the words that are bandied around about debt and so on. Young people must recognise what the system is. It is not the same as buying a car with a loan. If someone buys a car but does not have enough money to pay back the loan, the car will be taken away. Our system is not like that; people will pay as long as their income allows. It is a very different proposition, and we must communicate that. I hope that, during the passage of the Bill, we will do that. We must deal with misinformation.
I am not shaking about the pressure to remove the cap. my right honourable friend has said that the matter will be dealt with by affirmative resolution of both Houses. That is about as good a guarantee as possible, if the debates that we have had so far are anything to go by.
I am aware of the right reverend Prelate's desire that we should think about what education is for, as well as what it does. There is some overlap, but we should not lose our recognition of the intrinsic value of education.
My Lords, is it the Government's policy that the students who are shown by their examination results to be the best educated should be given priority of application to become undergraduates at universities? That is my first question, and I have a second. The noble Baroness will no doubt recollect that, early in the Statement, there was a reference to an independent body. What would that independent body consist of? What power would it have to recommend changes to what the Government have put forward?
§ Baroness Ashton of Upholland
My Lords, the categoric answer to the noble Lord's first question is "yes". We also know that when universities are oversubscribed with students who have very good qualifications, they look beyond that. That is for them to do.
Some of our students get the kind of qualifications that could lead to university but do not go. The challenge for all of us is to ensure that students who are capable of getting to university go to university and that they enjoy and relish the experience and gain from it. The universities must play their part in reaching out to them. Some universities have been felt to be out of the reach of people in some schools and in some parts of the country. They must recognise their role in helping to ensure that students realise that they are not out of reach. The biggest part of the job is getting the best school system for all children, so that we can ensure that they get the right results. That is the responsibility of government.
328 I am not sure that I quite understand what the noble Lord, Lord Renton, was looking for with his second question. We plan to review, and, as the details become clear, I will, of course, notify your Lordships. OFFA will be independent and will work closely with the Higher Education Funding Council. We work closely with independent bodies such as Universities UK. If I have not clarified that, I shall discuss it with the noble Lord and place a copy of my reply in the Library.
§ Baroness Blackstone
My Lords, I very much welcome the changes that the Government have made since the White Paper was published and believe that they will lead to an improved Higher Education Bill. However, does my noble friend agree that we need not only world-class universities but also a world-class system of higher education? That means that we need high-quality courses in all of our higher education institutions not just in some of them. If we are to achieve that, the gap between what universities are able to raise under this new package and what they have to pay out should not be too great.
If the Minister accepts that, will she give a commitment that between today and Second Reading of the Bill in another place further modelling will be done—perhaps it has already been done—to demonstrate the differential impact of this package on different kinds of universities? That would show us what its impact will be and how it will affect in particular the modern universities that will have the problem of a larger number of students needing bursary support and the likelihood that the amount that they can raise through variable fees will be considerably less than some of the research universities. If the Minister could reassure us on that point, and say that work could be done and published in the near future, that would be enormously helpful and would perhaps provide people who are particularly concerned about the effects of variable fees with the information that they might need.
§ Baroness Ashton of Upholland
My Lords. I could not agree more that this matter is about high-quality courses and a world-class system. Ensuring that universities have adequate funding to achieve that is absolutely critical and at the heart of the matter. It is all well and good for students to go to universities but the courses must be of the quality that we would expect.
I am not able at this moment to commit my right honourable friend to publish material on the matter we are discussing but we are considering the impact of the bursary schemes with Universities UK. We are undertaking modelling and discussing the matter with individual universities. I shall come back to the noble Baroness with the correct answer to that matter.
§ Lord Naseby
My Lords, is the noble Baroness aware that for those of us who went to university in the 1950s, basically free of charge apart from the county maintenance grant, the step that the Government propose today is essentially a retrograde one? Furthermore, it is for us as politicians very difficult to keep track of the latest bribe that is offered to the Labour 329 Back-Benchers in the other place. Given that scenario, the request of the noble Baroness, Lady Blackstone, for modelling to be undertaken of what is and is not on offer is of some substance. Therefore, I suggest to the Minister that it is not adequate to say that she is unable to fulfil that request. How can anyone outside evaluate what is being proposed unless we know the substance of what is actually being offered and, furthermore, are given a guarantee that there will not be further salami slicing of additional incentives to those in another place to support the package?
§ Baroness Ashton of Upholland
My Lords, in reminiscing about his time at university, the noble Lord will recognise that the number of students attending university in the 1950s and 1960s was considerably lower than now. I believe that the figure was of the order of about 7 per cent. The figure is now of the order of about 43 per cent with an aspiration of 50 per cent university attendance. I make no apology for wanting to see all those capable of obtaining a higher education, contributing to our economy and gaining from the inherent value of education being able to do so. One has to live in the world in which we live. That means that if we are to provide high quality university education to a high number of people, we have to fund it in a different way from that which pertained in the 1950s.
It is also very important to recognise that we seek to ensure that we have a fair and equal system that allows all those capable of obtaining a university education to do so. I shall not apologise for that. I do not consider that this is a matter of bribing Labour Back-Benchers. It is about ensuring that we have a package that works for our students. They are the focus of this department and of this Government. We seek to ensure that our students go to university, obtain a high-quality education and follow high-quality courses from high-quality institutions in a way that is fair and just. We seek to ensure that they also play their part in contributing to the quality of education that they receive.
As I said to my noble friend, I believe that we have done a huge amount of work on modelling. However, I am not at liberty to say what I can and cannot put in the public domain. Much of that modelling was carried out by the department or through Universities UK and so on. Much of it involved discussions with individual universities. Those discussions and that modelling continue. I have given a commitment regarding a review within three years to examine in detail the impact of all these policies.
§ Baroness Lockwood
My Lords, I very much welcome the Statement repeated by my noble friend today. I congratulate the Government on the general thrust of the Bill and in particular on the measures set out for student support and the emphasis on access. However, I still have one concern that is similar to the concern of my noble friend Lady Blackstone. As the Statement indicates, all universities need extra resources. I am afraid that the variable fee element 330 means that some universities will be able to benefit considerably from the variable fee while others will be less able to do so. Some modelling, as suggested by my noble friend Lady Blackstone, would be helpful.
When the Government look at the general disbursement of funding to the universities, will they look again at the element of funding that goes to teaching and to research to make sure that all universities are in a position to benefit from the premium to be paid on these two elements? I think that it is a fact—I am sure that my noble friend the Minister would agree—that if we are to maintain a world-class research system in our universities, we need to have a constant feed-in element to the so-called "top" universities. That very often comes from some of the universities that will not gain much benefit from the top-up fees but nevertheless do a lot in terms of training and preparing some of our best researchers and scientists.
§ Baroness Ashton of Upholland
My Lords, I believe that I have already paid tribute to the work of many of the new universities in terms of the high-quality, world-class education that they provide for young people not only from this country but also from overseas. Each university will make its own decisions about the opportunities to set fees between £0 and £3,000 that the Bill will give them. They will make those decisions based on a whole range of factors including how they consider that will benefit their university. A number of the new universities were concerned that the high numbers of students from lower socio-economic groupings would leave them with less income. That in part has influenced the package that noble Lords see today which will allow a minimum of 90 per cent of any new moneys to be fed into the new universities to ensure that they are able to develop as they wish. As we have said, we have ensured within the package that students from lower socioeconomic backgrounds will not have to find the relevant moneys. That should have, and will have, an impact on how universities think about the way in which they develop.
The noble Baroness made important points about research which I shall not attempt to deal with now. However, I take the point that it is important that we recognise in all we do that the funding of research and teaching is continued and is highly valued.
§ Baroness Howe of Idlicote
My Lords, I am one of those who welcome the Government's proposal as a step in the right direction towards greater independence for universities. That does not perhaps apply to the setting up of OFFA, but no doubt there will be plenty of opportunities to consider that in detail. Are the Government, through tax incentives, contemplating any way in which they could make it easier for companies to donate to universities regarding bursaries? There will clearly be a need for more money. One way in which the Government could facilitate greater funds into universities would be in that direction.
331 My other very quick point is on incentives for part-time education, a subject raised by the noble Baroness, Lady Sharp. Part-time education and e-learning will be very important. We need to encourage on an equal basis the same funds for universities for it. There are incentives for the students in the Statement, but I am talking about the universities.
§ Baroness Ashton of Upholland
My Lords, I am grateful for the noble Baroness's comments. She has raised the issue of companies in the House before. We are looking at it already; we have a task force to do so. During the passage of the Bill and our debates, I hope to provide more information on how that work is going. It is an important factor in our debate, in terms of the potential to recognise the benefits that industry receives from graduates and the opportunities that it has to work more closely with universities, which we would wish to see.
In the Statement, I reiterated that my right honourable friend the Minister for Higher Education was working with the funding council in consulting on how the funding system might further support the development of part-time study in higher education. I will, of course, pass on the noble Baroness's comments to him and ensure that they are part and parcel of the work done.
§ Baroness Warwick of Undercliffe
My Lords, in welcoming the Minister's Statement, I declare an interest as chief executive of Universities UK, which, as she said, has been closely involved in the development of the Higher Education Bill. I want to welcome very much the way in which the Minister and her colleagues have engaged with Members of this House and the other place, as well as representatives of the higher-education sector. From what she said, they have clearly listened to our concerns. The scheme proposed will, in my view, prove an important step towards addressing the financial crisis in all our universities.
The scheme will not resolve the universities' problems overnight, and nor will graduate contributions. Sustained and increased public funding will continue to be necessary. However, the package of measures that the Minister has set out will enable universities to improve the quality of what they are offering students, without leaving the poorest students any worse off than they are under the current system. It is progressive and fair.
I have a question about the Office for Fair Access, or OFFA. It is vital that universities retain responsibility for their own admission decisions. I believe that the House will share some of my concerns on the matter in relation to the position of OFFA. Will the Minister guarantee that the plans for OFFA will not in any way open the admissions process to political interference?
§ Baroness Ashton of Upholland
My Lords, I can say to the noble Baroness unequivocally that we would not 332 wish to see that happen under any circumstances. Universities remain responsible for their own admissions, and so they should be.
§ The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
My Lords, I am afraid that we have come to the end of the official time for questions. Perhaps we ought to remember that the briefer the questions, the more people are able to join in.