Select Committee on Education and Employment Minutes of Evidence


Examination of Witnesses (Questions 120 - 139)

MONDAY 10 APRIL 2000

PROFESSOR RODERICK FLOUD, PROFESSOR JOAN STRINGER, MR DAVID CALDWELL AND MR TONY BRUCE

  120. Are you happy and are you persuading your teaching staff to work, say, five until nine rather than nine until five?
  (Professor Floud) We teach in my university from nine until nine and we are increasingly putting on courses at different times of the week and, indeed, at weekends both for the full-time and the part-time students in order to accommodate these changing patterns.

  121. Do you think that is becoming commoner? I would not expect you to say common, but commoner?
  (Professor Floud) Certainly more common, yes.

  Chairman: Could I ask for brevity because we have precious moments left.

Dr Harris

  122. It was proposed in an earlier round of questions that greater indebtedness could be compensated, as in America, by higher starting salaries for graduates. How do you think the public sector, for example universities, would be able to cope with the need to offer significantly higher starting salaries to attract the same level and quality of graduates as you do now?
  (Professor Floud) I think we would have very considerable difficulty. As is clear from the submission we have made to the Government through the Spending Review, and indeed the submission we have made to your Committee, we believe that there are significant difficulties in funding higher education generally. Sixty per cent of our costs arise from staff costs and we will find it very difficult to respond, for example, to the Betts Committee's recommendations without additional funding. I think pressure to put up starting salaries, although we might welcome it as far as the individuals are concerned, would cause difficulties.

  123. Finally, are you having difficulties in recruiting the people you would like to recruit because of the higher level of indebtedness that exists or is perceived compared to joining bonuses offered in the private sector to the sort of people you would like to keep on in research and academia?
  (Mr Bruce) We have just completed and published a study on recruitment and retention of academic and other university staff which we would be happy to let the Committee have a copy of. It does indicate that there are emerging recruitment problems particularly in a number of specific subject areas. One of the explanations for those recruitment difficulties is the under-payment that the Bett Committee identified.

  Dr Harris: My final point is drop-out rates of up to 30 per cent. Presumably you are concerned about that. If a political party lost 30 per cent or Marks & Spencer, they would be doing exit surveys like mad to try to identify factors. What research has this sector commissioned to really pin down whether it is more women than men, poorer students than others, people who are doing more work outside?

Chairman

  124. Could we have the 30 per cent validated before you answer that?
  (Mr Bruce) I think the actual figure is about 18 per cent.

Dr Harris

  125. I think it varies. It is up to 30 per cent in some institutions.
  (Mr Bruce) There are variations between institutions but the average national figure has not changed significantly throughout the period of expansion, for 30 years.
  (Mr Caldwell) I think we should emphasise the international comparison. The drop-out rate is one of the lowest anywhere in the world. We still want it to be lower still and institutions are working very hard and researching very carefully into the reasons why certain students do not complete to try to ensure that figure drops even further. I think it is very important to put it in the context that it is one of the very lowest drop-out rates in any higher education system anywhere in the world.
  (Mr Bruce) I believe that the Department for Education has recently commissioned a study on the causes and consequences of current drop-out rates with the intention of identifying what the causes are and what further action can be taken. I think that will be a useful study for the sector to consider later.

Chairman

  126. You are saying, Tony Bruce, that it is not getting very much worse even though we have changed the funding system for students?
  (Mr Bruce) Overall the position is remarkably constant although, as I said, there are variations between institutions. Any action that can be taken even to reduce that 18 per cent figure would obviously be of benefit because that represents waste and resources to some extent. Anything the sector can learn from research about how to reduce that figure would be welcomed.

  127. Are some of these figures of 30 per cent alarmist then, that there is a terrible crisis and drop-out? Are they alarmist calls?
  (Mr Bruce) I think they reflect variations across the sector. I think in part it is a consequence of the move to mass higher education where there are students from different backgrounds, where there are problems of finance and so on. The overall story is still a positive one.

Charlotte Atkins

  128. We heard from the students what their policy is on top-up fees, what is your policy?
  (Professor Floud) Our policy is unchanged. We support the current system. We have been engaging at the suggestion by the Secretary of State in his Greenwich speech in reconsideration of the whole issue of funding. We believe that top-up fees or a proposal for top-up fees have to be seen within the overall context of the proper funding for higher education and proper funding for students within higher education. We are about to establish a review group which will take up the Secretary of State's invitation to examine it.

  129. Even the elite would not support top-up fees for those particular colleges.
  (Professor Floud) We will be discussing this further at the end of this week at a meeting of the United Kingdom Board. We expect all universities will be in favour of having the kind of review we are talking about.

Mr St Aubyn

  130. Look at top-up fees in the context of widening access, do you think there is a case for top-up fees where the graduates do earn more in the market place in order to fund bursaries and other help to other students?
  (Professor Floud) That is the exactly the kind of issue we believe would benefit from rigorous examination and comparisons with the United States, which tend to be sometimes rather facile. One of the comparisons that is often made is that we could emulate and look at Yale or Harvard and have the systems you describe. I do not think we are persuaded those systems do give proper funding to students from disadvantaged backgrounds. There is some evidence that, for example, Harvard has a significantly lower proportion of students from working class backgrounds even than Oxford. As a social scientist I know that comparing the working class in America with the working class in this country has its problems. There is a real need for a rigorous examination. Dearing, to a certain extent, did that within a different political and economic context but we believe we should do it again.
  (Professor Stringer) I would just like to add, I do believe the debate about top-up funds is also a response to the sector feeling that gradually it has become under funded and it is in that context that the top-up fees issue is currently on the agenda. Whilst it may be an option in some circumstances if one believes, as I think the sector does, that there is a funding gap currently, then top-up fees would not resolve that particular problem for the sector as a whole.

Chairman

  131. Can I push you on that, it seemed to be common parlance in universities and discussions over the last five or ten years that there is a real problem of funding for higher education. We spend just as much as any other country per capita as our great competitors across the world, we spend about the same amount per capita but a very significant percentage, a much greater percentage, flowed to students support. I have heard that from vice-chancellor after vice-chancellor. In a sense what we are facing now is a changed system to confront that. What has gone wrong or has anything gone wrong? Are we on track to getting a better balance than the one people complained about recently?
  (Professor Floud) Certainly the reduction in the efficiency game cut—which was imposed for most of the 1990s—1 per cent per annum, which emerged from the Dearing Committee Report and was then accepted by Government, was a very welcome one.

   However, we actually believe that it itself is causing severe difficulties and will continue to cause greater difficulties for the university system in a variety of respects. In particular we believe that although the Government has done a great deal to support the research infrastructure through the joint infrastructure funding, and there has been a really significant input into the sector for research facilities, we face a significant problem of providing for the teaching infrastructure. If there is a continued cut in the unit of resource in the way that is currently envisaged then that will impact very severely on the teaching infrastructure of universities.

  132. Professor Floud, as you know we will be coming back to that in the major inquiry. What I am looking to you for a response on is you are not unhappy about the fact that students now are being called on to make a much bigger contribution than they were in the past, are you?
  (Professor Floud) I can only begin by speaking for myself. I came from a background where I was dealing with part-time students who were paying their own fees, therefore I do not see it as a principle that students should or should not pay fees. We believe that it is a necessity for the current higher education system that students should make a contribution in order to provide for the needs of the system. I see this as an unfortunate necessity. Of course it would be nice if students did not have to pay fees but we believe that is an important contribution to the welfare of the system.
  (Mr Caldwell) I would want to come back to Dearing and Garrick because it is terribly important that we do not forget this point. These committees identified very serious under-funding of higher education. They reached the conclusion that the only way this could be satisfactorily addressed, given that we now have a mass system which is therefore bound to be costly to the public purse already, is to ensure that a contribution is made towards the cost of the system by those that benefit from it. I think in that context we have to say yes, indeed, we do subscribe to that mechanism. It has to be seen in the context that the payments are being made by those who genuinely benefit but the argument runs as follows: graduates have higher lifetime earnings than non-graduates and, therefore, it is reasonable that they should make a contribution. It can then logically be argued that the time they make a contribution is the time at which they begin to enjoy the benefit of these higher earnings. There is a certain attraction to the contribution being made post graduation at the time when earnings reach a certain level.

  Chairman: I am conscious I have not brought Valerie in on this section yet.

Valerie Davey

  133. I want to ask very specifically, you have looked at all the options but you have not come forward today with any other option than those that have been discussed over many, many years. Are there any other areas that you would like to be exploring for funding to bridge this gap and to support students or not? Is there anything else that ought to be on the table?
  (Professor Floud) That is exactly what this review will look at. We intend to look at all of the potential options that are put forward and we will very much welcome the views of your Committee as to the things that you have been enquiring into.

Chairman

  134. The Cubie Report does exist, it did a lot of work and we do not want to keep on doing lots of work, do we? One of the reasons we have latched on to it is because it is extremely useful work and we value their evidence. Would you like a Cubie type solution or a Scottish Executive type solution? Would it solve your problems of student finance?
  (Professor Floud) My colleagues from Scotland should perhaps speak on that.
  (Professor Stringer) We already have a solution.
  (Professor Floud) I think we remain very concerned about two aspects. The first, as Dr Harris pointed out earlier, is the very substantial cost of applying the Cubie solution to the rest of the United Kingdom. The second is the necessity, we believe, for a guarantee that the funds raised by the Cubie type system do actually go into funding higher education. We remain concerned on behalf of the UK CVCP, if I can put it that way, at the fact that we do not have that assurance. We have good intentions from the Scottish Executive but we would regard it as absolutely essential that money should go into the core funding of higher education institutions.

  135. The one thing Cubie could not suggest, as we understood from Mr Cubie, was a graduate tax, so anything that came up had not to have the word "tax" in it. Would you prefer a graduate tax or are you in favour of a graduate tax? I think a graduate tax is one of the options which we will be examining. It has been examined by Dearing and it has been examined by different systems in Australia, and that is exactly what we would like to look at.

Mr Marsden

  136. I am really going to press you on this, it is an open secret that some members of CVCP are more enthusiastic about the concept of top-up funds than others. I accept you do not have this great review and everything. You told us that you do not think that there is a pot of gold from business necessarily out there. You have told us you are not happy with the present situation. Focusing on this issue of student finance and the gaps and disparities we heard about today, where on earth is the money going to come from to bridge that gap if you do not go down the top-up fees route?
  (Professor Floud) Clearly increasing the sum from students is one option, increasing the sum from the public purse is a second option and there may well be others.

  137. Do you think it is realistic to expect, given the targets for expansion into education will involve extra money coming from the public purse, a per capita increase from the public purse?
  (Professor Floud) I believe it is, for the very simple reason that all of the studies that have ever been undertaken on the economics of higher education suggest that there is a very high social as well as private return to investment in higher education and it is appropriate for the public purse to provide enough to ensure that that return is forthcoming.

Mr St Aubyn

  138. It is exactly a month from today until the launch of Year Out group—which is promoting the idea of a structured gap year for school leavers before they go to university—do you recognise the value of such a year out, particularly for those from less well-off backgrounds and do you see that as part of helping the widening access agenda?
  (Professor Floud) I am taken by surprise by that.

Chairman

  139. So am I. I think it is by way of advertisement.
  (Professor Floud) There is a lot of evidence that some students do benefit from that gap year. I think students probably benefit even more or at least as much from structured work experience during their courses. I hope that one of the ways business could indeed contribute in the way you are describing is by allowing us to get somewhere close to the Dearing aspiration, that every student should have a period of work experience during their courses. It is not universities who are preventing that happening, it is the lack of placement opportunities from business that is making that so difficult to achieve.



 
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