Examination of witnesses (Questions 40
- 54)
MONDAY 3 APRIL 2000
MR NICOL
STEPHEN, MR
GRAEME DICKSON
and MS GILLIAN
THOMPSON
Helen Jones
40. Can I ask you to clarify that for me. Thank
you for the explanation and that was very helpful, but you did
say that no one would be in greater debt than they were under
the current system. Can you explain to us in a little more detail
how that is achieved, bearing in mind that the Graduate Endowment
is not means-tested, whereas a lot of poor students currently
do not pay tuition fees?
(Mr Stephen) There are some tables that we have and
I hope that they have been circulated to the Committee. Would
it be possible to make reference to them to look them up as they
may help?
Chairman
41. Surely.
(Mr Stephen) We have got some figures that look at
the parental income of the individual student and under the current
system in Scotland, because it is a four-year degree in the normal
instance, you end up with a total debt at present of around about
£14,055 if your parental income is £10,000 or less,
which is the poorest students, the most disadvantaged students.
Under our new system, that total debt, even including the graduate
contribution, will be £10,055 and that is obviously because
those individual students are now getting access bursaries which
will reduce their debt, bursaries instead of loans. At a higher
level, in the next table where the figure here is £17,370
of parental income, the present total debt would be £14,055
and the new figure under the Scottish Executive's new scheme is
£13,255. Now, you can see what happens is that it starts
to narrow and around about £23,000 the gap between the current
system and the new system is pretty much closed, but at no point
does somebody have more debt than they do at present, and then
it starts to widen again because what we have done is increased
the level of parental contribution at the high end. Over a parental
income of £45,000, we have reduced the automatic loan entitlement,
or the proposal is to reduce the automatic loan entitlement down
to £750. We were astonished to see the cost of giving a minimum
loan entitlement to all students, no matter what their parental
income level was, of £2,700 per year. Basically all you have
to do is to tick a box, saying that you do not intend to disclose
your parental income and that gives you an entitlement to a loan
of £2,700 per year which is very expensive, as I was mentioning
earlier, very expensive in terms of public cost. It is complicated
and it is easier to explain it on a graph where you can see the
figures and the amounts closing, but poorer students, because
of the access bursaries, have less debt and once the access bursaries
start to run out, it becomes much more even and then at the top
end it starts to diverge again because we are asking for greater
parental contribution.
Mr Marsden: I understand the complexities that
you have outlined and I think I have just about followed it, looking
at the chart, but that in turn raises two issues in my mind. First
of all, is there an acute pressure point in these gradations,
say, for middle-ranking income parents which you are concerned
about? Secondly, and I think there is an analogy here with considerations
for the English system, despite that explanation and despite the
undertaking that particularly the poorer students will not be
worse off, are you facing, if you like, PR difficulties in terms
of getting this across to particularly students coming from working-class
backgrounds who may be concerned about these levels of debt even
though, as you have illustrated, those concerns are unfounded,
and, if you are having that problem, how are you addressing it?
Chairman
42. It must be unusual for a Liberal Democrat
to be asked if he has PR problems!
(Mr Stephen) In relation to the middle-income earners,
I have just turned a page and the table shows that the comparable
figures are income of £22,000 parental income where under
the current system the debt is £13,655 and under our new
system it will be £13,255, so it is starting to be a marginal
improvement, and then on £30,000 income, the total debt under
the current system is £12,075 and under the new system it
is £11,000, so there is still a gap there, but it is just
a lesser one
43. Could you repeat at what income level it
becomes only £750?
(Mr Stephen) Over £45,000 per year parental income.
The Cubie proposals were that with an income, I recall, of £47,000,
the entitlement would be to no loan whatsoever and we decided
that that, on balance, was too harsh and that the £750 per
year as a minimum was a reasonable balance. In terms of the message,
the PR, I think at the level of the poorest student, there has
been a widespread acceptance, a widespread delight that access
bursaries are to be reintroduced, but clearly people wonder how
much they will get and at what level of parental contribution,
but I think that that message is already out, that there will
be from 2001 new access bursaries available and I think that has
been well received. I think it is in this area of the Graduate
Endowment and the impact that will have on overall debt and how
that will be repaid and concern that some people will be making
extra payments once they are earning a relatively, or a very modest
income of £10,000 per year that they will be asked to pay
more than under the current system, that is the concern and that
is the issue we need to address and, if I was taking longer on
that issue than I might have, it is for that very reason because
it is very important that people realise that they will not have
to pay any more at all than under the current system. Indeed if
somebody is studying in England and Wales and they have their
tuition fees fully funded, there is no suggestion that an individual
would be paying more; quite the opposite, they should be paying
less in terms of the comparisons that I have been explaining to
you in these tables, but I think there is, at that middle income
that you are talking about, a concern that they might have to
pay more and that is a message that we have got to get across.
44. Are there any other anomalies between the
Scottish student who is studying in Scotland and the Scottish
student who is studying in England?
(Mr Stephen) Well, the Scottish student, because of
this problem that we had with the EU students and the equality
of treatment and any claim that they might make in England and
Wales, we have had to agree that the scheme would only apply to
Scottish domiciled students studying full-time higher education
in Scotland, so students from Scotland who go to study in England
and Wales will be on a par with every other student from England
and Wales studying there, so there will be no change to the current
system for Scottish students studying in England and Wales. I
have got some detailed explanation of that and it would probably
be best to hand it over to you.
Chairman: That will be very gratefully received.
Mr St Aubyn
45. On that very point, are you concerned that
the profile of English students coming up to Scotland and indeed
Scottish students now coming to England will be skewed by the
extra costs of their studies?
(Mr Stephen) Well, there should be no extra cost to
the English and Welsh students or there will be no extra cost
to English and Welsh students compared to the current system,
but clearly there will be a different system for Scottish domiciled
students and, we would argue, a more generous system. The fact
that the Quigley Report has just come out and that we have agreed
to fund fourth-year tuition fees for English and Welsh students
coming to study in Scotland I think will put them in a better
position than they are at the moment. There were people predicting
that there might be a decline in the number of English and Welsh
students coming to Scotland because of some of the changes in
the last two years, but we have not seen any sign of that trend
and in fact it seems that Scotland is becoming a more popular
destination than ever for students from England and Wales.
46. I think it was slightly wider than that
in the sense that, nevertheless, under the new arrangements their
maintenance costs would be much heavier than they were under the
pre-1997 arrangement.
(Mr Stephen) I am sorry, I misunderstood you.
47. Whilst obviously English students welcome
the waiver of the fourth-year fees, it is all four years at a
higher cost of living in Scotland, so are you tracking the profile
of the type of students who are coming to Scottish universities
to see if there is any change, and you say that the numbers are
the same, but to see if there is any change in the type of student?
(Mr Stephen) You are absolutely right because it is
an extra year of maintenance and even though, as we have done,
we have agreed to fund the fourth-year fees of English and Welsh
students, they will still have to pay their maintenance for that
fourth year and they will have a year of employment deferred effectively,
but there seems to be no trend to slow down the interest in English
and Welsh students coming to Scotland and indeed, if anything,
the reverse.
(Mr Dickson) I think the Quigley Committee Report
said last week that there was a little drop-off in one year, but,
nevertheless, I recall, there were more English, Welsh and Northern
Irish students in 1999 than there had been in 1997, so it is early
days.
Mr Harris
48. I asked this question to Andrew Cubie and
his colleagues and it is really to ask you, if you can, to give
a view as to whether you think there are peculiarly Scottish factors
that make the proposals that you make appropriate to Scotland
in a way which they may not be for England and Wales. My question
is really whether there were factors, whether they be cultural,
environmental or even genetic that make the sort of proposals
you have made, and indeed it was the same question to Andrew Cubie
about his proposals, appropriate to Scotland, or would it leave
someone in England coming to view this to view that it would not
be appropriate to introduce it as an improvement on the current
system in England and Wales?
(Mr Stephen) Andrew Cubie gave an interesting reply,
talking about the "canny Scots" and, as I come from
Aberdeen and Aberdonians within Scotland are regarded as even
cannier than the rest of Scotland, I thought that was an interesting
reply that he gave. Despite the fact that, through you, Chairman,
Mr Harris is one of my political colleagues, I think it is probably
one of those issues where it would be wrong for me as a Minister
in the Scottish Executive to pass comment.
Chairman
49. Quite right! There are some pretty canny
Yorkshiremen and Englishmen, I have to tell you, too!
(Mr Stephen) I would suspect that the reason for your
enquiry is to try to understand these issues and to try to understand
whether there are differences of the type that you are talking
about, but clearly because the two systems, until these proposals
were brought forward, were the same, we have still very much in
common.
50. From our point of view as a Committee, we
are very keen to look at diversity of choice in the whole of the
system that is offered to English or Welsh student going anywhere
in the United Kingdom, and of course we are interested in knowing
what the relative costs are of an English student studying in
England and an English student studying in Scotland because we
do very much care about diversity of choice. You talked earlier
about world-class universities and this Committee believes that
promulgating more world-class universities in the United Kingdom,
the better. Do you think this system is going to advance that
for English students? Are they going to get more of a chance with
your world-class institutions in Scotland or do you think there
is going to be a growing penalty for the English student studying
in Scotland?
(Mr Stephen) There is no penalty compared to the current
system. This does not change the system. Our proposal is for English
and Welsh students studying in Scotland, and we very much encourage
the diversity, the mix of students, both English and Welsh students,
Northern Irish students, students from other EU countries, studying
in Scotland, and we want to continue that. We do not want to create
any barrier. The fact that we do encourage that does have some
cost penalties for the Scottish Executive already and it is important
to underscore that; we have to pay quite significantly for an
element of funding of English and Welsh students coming to Scotland,
but we welcome that and we will continue to incur those costs.
The Quigley Report will make it easier for English and Welsh students
to make that decision to come to Scotland, so we foresee that
mix continuing, but it would be quite wrong, and I always used
to have a wry smile when people suggested that there must be a
maintenance of the same higher education system throughout the
UK that we have "at the moment" because there has never
been the same system of higher education throughout the UK, but
there have always been some unique differences in the Scottish
system, the four-year degree being only one of those, and if there
is a consequence of devolution, there is now some diversity in
terms of the student support system and our approach to tuition
fees, then that is one of the consequences of devolution that
we will have to grow used to because clearly devolution is going
to be all about different solutions and, in our case, Scottish
solutions for Scottish problems.
Chairman: We certainly welcome the diversity
of choice.
Mr Harris
51. I am sorry if my last question seemed to
be a curve ball; I think it is testimony to the fact that we do
not lob each other easy questions. I want to ask you about the
proposals that Cubie made through the Scottish Executive to effectively
the UK Parliament because it is a reserved power on benefits and
there are a number of recommendations, but specifically there
is one about summer access to benefits and summer vacation for
people unable to work, whether it be for rural reasons or other
reasons. One of the things we are concerned about in England and
Wales is student poverty and the drop-out rates because of that
and their lack of access to benefits has been postulated as one
reason. Can you say how you are taking forward that recommendation
and what you think the likely outcome will be?
(Mr Stephen) Clearly all the recommendations that
cover reserved matters, areas where the Westminster Parliament
has legislative authority, we will not be covering and they will
not be part of the Scottish Executive's response other than to
straightforwardly say that because, just as we would be surprised,
which is probably the best word, if you or another committee or
some other representative group of the Department itself responded
to the Cubie recommendations that affected our area of responsibility,
if the DfEE put out a response to Cubie, we would have been more
than somewhat surprised, I think equally you and the civil servants
in Whitehall would be surprised if we started to give our endorsement
or our authority to those particular recommendations of Andrew
Cubie's, so we will not be doing that. I can have particular views
as a politician, but I think I am here as a Minister to give evidence
on our response to the Cubie recommendations and our response
in this whole area as a Scottish Executive and that will be our
response.
Chairman
52. Is there any bit of, and I do not want to
push you in any sensitive area at all, Minister, but is there
any bit of the Cubie recommendations that if you had not been
resource-limited, you would have liked to have added to your own
package?
(Mr Stephen) I am trying to remember our discussions
and to give you a fair answer to that. Clearly costing was crucially
important in terms of our response, but I think it is fair to
say that given the other political pressures, given the concerns
that we had about the overall funding of higher education institutions
and FE colleges, given the central importance in this whole area
of lifelong learning and the knowledge economy and with an awareness
of the pressures on other budgets within the Scottish Executive,
particularly at the time we were discussing these matters, the
health issue, I think we came to a solution where everyone felt
that we were making the right judgment in terms of an additional
£50 million being injected into student support, one of the
most significant measures which actually increased the funds available
to students that had been brought forward for decades. The history
on this issue has been one of slowly whittling away at the total
funding of student support, whilst also, admittedly, expanding
the number of students going into higher education. We are pleased
at the expansion which has taken place, we are pleased at the
Scottish level of student involvement in higher education, the
figure of 47 per cent that Andrew Cubie quoted earlier compared
to a figure of maybe around about the mid-30s in other parts of
the UK, we knew that it was important to give a significant boost
to student support, and we knew that it was important to fund
the abolition of tuition fees, but I think any addition, any extra
funding would have been at the margin, what I or others might
like to have seen would have been at the margin rather than significantly
increasing that £50 million package. I think this whole area
of part-time students is one that in due course we would like
to address. I think the area of the means test, the parental means
test, the fact that it has not been reviewed for higher education
since the 1960s and that it is different for higher education
as compared to further education is one where we would like to
do further work. Andrew Cubie also mentioned the whole area of
individual learning accounts and I think there was an emerging
recognition that individual learning accounts could be the basis
of quite a fundamental restructuring of student support that would
start to treat all students after the age of 16 on an equal basis
no matter what choice they made in terms of what sort of institution
they went to, and that would be an exciting issue to address for
the future which no doubt would have resource consequences, so
if you are looking for areas to explore which would give you room
to really get your teeth into this issue, I think these are some
of the core areas.
Mr Marsden
53. I am very interested in what you have just
said there about the total impact of the package and indeed reminding
us of the higher level of participation. Do you think that the
package that you have put together will—"stabilise"
is perhaps a pejorative word—maintain the level of participation
in HE in Scotland or do you think it is going to actually increase
it? If it does increase it, will that cause pressures in terms
of funding this sort of package in the future?
(Mr Stephen) I think it probably will increase the
pressure. If it does not increase the pressure, then it will not
have succeeded because if we are to increase that very worrying
statistic of 9.6 per cent of those who participate in higher education
institutions come from social classes 4 and 5, if we are going
to expand it, we want to do that not at the cost of displacement
of students from the higher social classes, but of course by growing
the system and that is why there is funding in place for an additional
2,000 higher education students over the next few years, so we
anticipate some small further expansion. It may be that because
of the success, that demand will go beyond the 2,000 students
and clearly that would have quite significant resource implications
and we have got to tackle those as and when they arise, but it
is an injection of new funding which is genuinely new and additional
resources going into student support and if, as a result of that,
we did not see an increase in demand particularly for the students
from poorer families, I would be very surprised.
Chairman
54. Mr Stephen, that makes a very convenient
time to draw a line under the Committee's session. Can I thank
you again. It has been a historical first for all of us in this
room, so again thank you for coming and for being so forthcoming
in your answers. The Committee is grateful; we have learnt a lot
and it will certainly make a difference to the report that we
eventually write and Mr Cubie too and his team because we have
gained a great deal from that. Thank you for your attendance.
(Mr Stephen) Thank you very much, Chairman. I obviously
look forward to many more such occasions in the future.
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