Examination of Witnesses (Questions 80
- 102)
MONDAY 10 APRIL 2000
MR ANDREW
PAKES, MR
SCOTT RICE
AND MS
LINDSEY FIDLER
80. What you have said in your evidence to us
in talking about a greater contribution to education by business
is you welcome the concept of the Individual Learning Account
as a way of building on this principle. Even if you have not done
any policy or any research in that area I wonder if you or your
colleagues have any thoughts as to how the ILA concept might be
strengthened and developed in respect of businesses?
(Mr Pakes) Looking at people returning from work into
education I think the ILA can provide a good model for businesses
to contribute into those accounts for students themselves. If
you look at not wanting to penalise small and medium sized enterprises,
but looking at what companies themselves are providing, if companies
are providing that training themselves to their own workforce
the NUS would not want to see those companies doubly burdened
by having to contribute to the state whilst also undertaking that
training and support for their own employees. We think that the
ILA could possibly straddle both of those in that it could recognise
the work that individual companies are doing in terms of training
but those companies that are not doing that could make a contribution
into that for those people to then choose themselves what form
of education or training or support they want to go into.
81. On the back of that can I ask a final couple
of questions. Do you think that the current level which the Chancellor
is talking about as contribution to the ILA is too modest to make
a significant impact on student funding in this way? If you do
think that is the case, will it be necessary for Government and
for the Treasury substantially to change the way in which the
tax regime operates which would then allow businesses to contribute
more into this sort of set-up in the way that American businesses
do?
(Mr Pakes) I think the answer to your questions are
yes and yes in that at the moment I do not think what the Government
are putting into will have a significant impact on the choices
people make whether to go on to study. My problem in answering
that is I do not think money alone is the problem, I think it
is how confusing the system is and that knocks on previous questions
about mature students, that you now have this whole range of forms
and different channels to piece together your money. Where the
ILA could be good is if you end up with this almost one-stop shop
approach to going back into learning. If the Government needs
to look at changing the tax regime to free up some of that money
to be placed together under the umbrella of the ILA, if that makes
it more simple for people in terms of choosing how to train or
re-skill then that is going to be welcomed.
Mr St Aubyn
82. We were in the States, as Gordon mentioned,
and we saw that students have to contribute a great deal more
to their higher education. This has not deterred a much larger
proportion of those from less well off backgrounds going into
higher education because when they then go into work companies
recognise they have to pay them much higher salaries than they
would do in our system. Has the NUS considered mounting a campaign
with companies to raise the amount of money they are paying to
graduates in order to, as it were, complete this circle over here?
(Mr Pakes) No, but I am sure we would welcome it if
they want to pay people more.
83. Thank you. Following on another tack, you
also mentioned the problems of student indebtedness and I notice
in your submission to the Committee you are very critical of the
Student Loans Company. How much of the problems that students
have coping with the concept of debt is due to weaknesses in the
actual system and their interface with the Student Loans Company?
(Ms Fidler) I think this year, in particular, the
problems with the whole administrative system have had an impact
on student hardship. There was quite a significant number of students
that did not receive their support on time. Even after Christmas
we were still dealing with students who had not received their
support. That in itself has had an impact on student hardship
this academic year. Hopefully that will lessen next year as the
system has a chance to bed down. From NUS's perspective it is
absolutely crucial that the administration of that support is
sorted out and works smoothly if the system is going to be effective.
That is really our focus this year.
Mr St Aubyn
84. We were told by Ministers at the start of
the year that universities would be given time to account for
the funding loss from the fact that their students are not getting
their tuition fees funded by the student loan company until later
in the year, did you find that university authorities were sympathetic
to the plight of students who were having problems with student
loan funding and was this a hassle factor or was it a real financial
problem?
(Ms Fidler) That is difficult to answer in general.
It completely depends on the institution. Some institutions were
extremely sympathetic from a maintenance perspective, providing
loans and grants through the access fund for students. Other institutions
simply were not able to meet the demand and others just were not
prepared to provide it. It is very, very general. In terms of
the contribution to tuition fees, that really was outside the
hands of the students, that was the student loan company problem
with the LEAs and the transfer of data. The impact of that on
individuals' contributions to their tuition fees was very, very
varied. Some institutions were extremely sympathetic to the payment
of tuition fees, others were simply demanding the whole fees on
the date required and that was it.
(Mr Rice) If I can make a point, being on the cutting
edge, at my own university, Kings College, they have quite a flexible
and sympathetic method with tuition fees, however it does not
undermine the fact that you are unable to get access funds until
you have paid your tuition fees because access funds cannot be
used to pay the tuition fees. Students who are waiting for a student
loan who have not paid their tuition fees are in this catch-22
situation where they cannot apply to the access fund for extra
money nor can they pay the fees. I see that quite often at Kings.
No matter how many instalments you have until you get the loan
cheque in order to pay the fees you are still barred from applying
to the access fund.
85. Does the NUS have cases of students who
had to drop out, at least for a year, because of problems encountered
over their student loan?
(Mr Pakes) We have case studies of students who were
put into severe financial hardship around that beginning of term
period from September/October until Christmas. I do not think
we have asked them if they are still on their studies. We have
case studies of students receiving cheques valuing zero pence,
students who have received cheques paid them into their bank account,
paid for their rent and bought food and then the loan company
discovered that the first instalment was slightly out of what
it should have been and then cancelled the cheque, so the student
had an even larger overdraft without the loan company telling
the student. Even though they had given them the money they had
cancelled it. We have numerous cases around that from that autumn
period where there was that massive backlog from the student loan
company.
(Ms Fidler) We are doing a casework statistical project
at the moment where we are collecting cases from institutions
and welfare services which might flag-up that sort of issue. We
might be able to have data on that later in the year.
Mr Foster
86. If I can take you back to what Gordon Marsden
was talking about, ways of levering in extra money, have you discussed
these thoughts with the CBI and Chambers of Commerce and business
representatives at all?
(Mr Pakes) No.
Dr Harris
87. You gave a figure of £558 million for
the extension of the Cubie proposal to the rest of the United
Kingdom, and agreed a little less for the Scottish Executive's
proposal, not a huge amount less. Given—and I will do the
maths for you—that it cost the Chancellor about five times
that much, £2.6 billion, for England alone to cut income
tax by a penny, do you think it is politically acceptable to raise
that sort of fund from those sort of resources? You would call
it Government funding, I would call it taxpayers' funding.
(Mr Pakes) If we are to have a United Kingdom-wide
system of mass education based on social justice and based on
values around lifelong learning, then I would say it is politically
necessary for the Government to find those resources.
88. How would you feel if those resources were
not taken from the way I suggested but were taken from FE and
other sectors or, alternatively, the expansion, that you say you
support to 50 per cent, came at a significantly reduced proper
unit of funding per student?
(Mr Pakes) I do think that would measure-up to the
values of social justice or lifelong learning. Within those values
you do have concepts of quality and of standards, which are also
matched by the fact that it does not matter how much money students
have in their pockets to live on if when they go to college the
lecturers are overburdened and the resources are not there. The
alternative is true, it does not matter how well resourced teaching
staff are if there students cannot afford to turn up to classes
and take part in those studies appropriately. I do not see it
as my role to sit here and advocate that students need that money
in their pocket more than teaching staff do. What I am here to
say is that there are Government aspirations behind the system
of higher education they want. That has a cost tag attached to
it.
89. In your report you said that you support
the aim of getting 50 per cent into higher education that the
Prime Minister has talked about, "NUS supports fully the
Government's proposal of further expansion leading to 50 per cent
participation." If that happened with a prediction of graduate
unemployment or some of the problems you identify of under resourcing,
would you qualify that support by saying, "We think that
should not be aimed for", or would you say, "Come what
may that is really such a high priority"?
(Mr Pakes) I do not think we are arguing that you
enter into this cattle drive to get more people into university
if the quality is declining and declining. However, we believe
that at least half, probably more, of the people in this country
could benefit from learning and education via higher education,
whether that is delivered in the university or through franchising
and other support mechanisms of delivering higher education in
FE colleges. They can benefit from that and we believe that we
do need to look at new technologies and different ways of learning
to make that more effective. At the end of the day that does need
money to go with it.
Chairman: We are coming to the end of session,
I want your answers to focus on the key things you want to get
over to us. Let us get the right questions.
Valerie Davey
90. I want to expand back to FE and HE, because
the figures that we have been talking about are HE figures, do
you have any further additional amounts you would add into that
total if you were to expand the quality of FE for student support—for
encouraging FE? Secondly, we have concentrated on the level of
application but we recognise that whatever the level of application
all of the courses are full and what we really need to consider
very carefully is the drop-out rate. That is where the real effect
is being noticed and not so much on application, courses will
always be full or always has been full. First the question of
FE and the funding that would be needed, and second the concern
about the drop-outs and whether, if not now, you will give us
further information about that, if you have it?
(Mr Pakes) If you will forgive me, the answers we
have prepared for today and the figures have been relating to
higher education rather than the costing of further education
which is massively greater in terms of higher education. I think
one of the most interesting figures is that in recent years we
have now got to a position where about 12 per cent of people in
FE are still in HE, which I think has proved that with franchising
out and different options there is actually a merger between the
two sectors and that is likely to continue. We are also likely
to see a massive shift in the whole mechanism of study. For example,
you will have things such as the University of Highlands and Islands
which by its very nature will focus on distance learning packages
and new technology which is radically different from King's College
or my old university, the University of Hull. The whole of learning
is changing. The differentiation between what has been traditional
FE and traditional HE is changing and I think that is quite welcome
because it is about learning in different ways and people facing
up to that. In terms of drop-outs, I think again the trend is
continuing where we now see a one in five drop-out rate or non-completion
rate. Our evidence would suggest one of the major reasons for
that is student financial hardship. I am sure there are a number
of other reasons why people do not complete their courses as well.
On balance, the abolition of the grant and the introduction of
tuition fees, not just the cost of tuition fees but as much the
confusion of the new financial system where to piece together
the entitlement you have to financial support, there are now access
funds, there are new bursaries, there are now child care allowances
you can get, all coming from different sources does act as a deterrent
in the way it has all been pieced together.
Chairman
91. I think you have put that very clearly.
The confusion is a very large part of this problem. Something
that has not been addressed by the Committee in terms of its questions
is do you have a view on the introduction of top-up fees? I know
you might very well have an opinion but perhaps you would care
to give it to the Committee.
(Mr Rice) Certainly from my point of view as someone
from King's College and one of the elusive members of the Russell
Group who seem to be really pushing the debate on top-up fees,
I am certainly very much against the notion of top-up fees, it
will be a huge barrier to the access of study if it is a sliding
scale down. If the Government is true to what it was talking about
in having a national framework for people to gain credits it will
be very difficult and that will be a huge barrier to move from
one institution to another if the Russell Group are dictating
the level at which they set fees and the level of education which
they have there. I think if we talk about quality and benchmarking
then Dearing suggested that benchmarking is an idea where you
get the same quality of degree at each individual university and
top-up fees fly in the face of that.
92. Does anybody else want to come in?
(Mr Pakes) I think our point is at the moment we have
a national system, a national framework for higher education which
is something quite precious and students understand and see. By
deregulating that by allowing universities to charge top-up fees
you undermine that national framework. One of the questions earlier
was about America, I do not want to see our university system
become like America where it is on different tiers and there are
assumptions about the kinds of students who go there. One of the
models that has been suggested by the University of Nottingham,
one of the leading advocates, is for there to be a scholarship
or bursary system there. However, I think the assumption is to
go to a place like Nottingham under that scheme you would be wealthy
enough to go there but if you were unfortunate enough to be poor
there would be a certain number of scholarships available. I think
that is the wrong basis on which to approach higher education.
93. It has been put to our Committee that the
United States is the most successful centre for higher education
globally, so in a sense we should not dismiss their experiments,
although they may not be entirely applicable here. Of course,
diversity has already appeared. One of the reasons we are having
these inquiries is because we have diversity in the sense that
Scotland is doing something rather different from what we are
doing. If you really had an option tomorrow would you go for Cubie,
would you go for the Scottish Executive compromise, or would you
want something totally different?
(Mr Pakes) We would go for Cubie as the full recommendations
came out with.
Dr Harris
94. What would be your second preference, the
current system or the Executive? It is not in your evidence you
see.
(Mr Pakes) That is right. Funding by single transferable
vote.
Chairman
95. I think you get a star for that.
(Mr Pakes) We would definitely go for what the Scottish
Executive has brought in as a second preference because it does
reintroduce that statutory entitlement to a bursary or grant for
poorer students.
Dr Harris
96. One final question from me on benefits.
There was a proposal in Cubie, although it cannot be dealt with
by the Executive because it is a reserve matter, to restore benefits
at least during the summer vacation to those students who simply
cannot find work. Is that something you are campaigning for?
(Mr Pakes) Yes.
97. Would that have an impact on drop-out rates
or is it just making people more likely to afford it?
(Mr Rice) I think you also need to take into account
accommodation, housing benefit. The updated accommodation survey
has just come out and that shows that students outside London
are spending 83.6 per cent of their weekly loan on rent. Any other
sector of the community which is spending such a proportion on
housing income would be entitled to housing benefit and we are
totally missing that and students are having less than £20
a week left out of their student loan in order to live, eat and
travel. That account goes up in London. We do need to address
that.
Helen Jones
98. Does that not come back to what we were
discussing earlier, that currently a large amount of student support
is going on funding such a system? I speak as someone who benefitted
as a student moving around the country to go to university, but
if you had to make a choice between the expansion of higher education
in the way you described earlier with the full franchising, with
the use of new technology and so on, and a large amount of our
money which is going on student support and housing students a
long way from home, where would your choice lie?
(Mr Pakes) To be honest, I do not believe there is
an ever growing number of youngsters who wish to be fully funded
to study on the other side of the country from their parents.
There are a large number who do, a large number who benefit from
it, but if we are talking about getting one in two into education
then that is looking at people studying at home, it is looking
at people studying part-time, different ways of learning, and
a natural add-on to that is that many of those people will be
combining studying and working and they will be doing that where
they live. We are quite happy and comfortable with that. I am
uncomfortable if students are being forced to study at home because
they cannot afford to study anywhere else and that is the motivation
for their mode of study. I think that the large number of students
who are studying in universities away from home is not quite at
saturation point but it is ever increasing.
99. What you are saying is we may well have
to have a radical look at how we direct our student support?
(Mr Pakes) Yes.
100. I asked you earlier about mature students.
Is it not time for us to look at exactly where our funding goes
and what and who it supports?
(Mr Pakes) Yes.
(Ms Fidler) Also perhaps the interaction of current
Government policies, for example the DfEE policies on student
support with the DSS policies on benefits. At the moment there
are a few funding gaps, anomalies in the system, which allow students
to fall through the net as it were, who drop-out, particularly
if you suspend your studies for example, to be forced between
abandoning studies in order to survive on benefits or having no
income. If you are not lucky enough to have parents who can support
you you are not left with an option. There is also a need to look
across departmental policies at creating a system that enables
study rather than prevents it or creates barriers.
Dr Harris: The Chairman asked a very important
question about top-up fees. Do you think there is support in Government
for top-up fees and, if so, do you not think it is inevitable
that they will come in and the sooner you recognise that the better?
Chairman: You do not have to answer that, it
is very hypothetical, but you can if you want.
Dr Harris
101. Let us expand it to Whitehall.
(Mr Pakes) I would like to think that what the Government
is arguing for in its intention to expand education is joined-up
funding. I do not think that top-up fees are part of that joined-up
funding.
102. So it is not inevitable?
(Mr Pakes) No.
Chairman: Can I thank you for coming and giving
your evidence. We have learned a lot from you about your opinions
and about your views and have had some very good insights into
how the system is working and how it could work better. Very often
people say to us after the meeting that they thought of what they
really wanted to say as they were going home on the tube or the
train, so if you have further reflections, the Committee wants
this to be a communication, do come back to us with any further
evidence. Thank you very much for your attendance.
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