Select Committee on Education and Employment Appendices to the Minutes of Evidence




  The Prime Minister announced a target of 50 per cent of those aged 18 to 30 participating in HE within the next century. The Office of Science and Technology Foresight Report "Britain towards 2010" predicts this will be achieved by as early as 2005. Current 18 to 21 APR rates are estimated to be:

    England—32 per cent;

    Wales—32 per cent;

    Scotland—46 per cent;

    NI—44 per cent;

    UK—34 per cent.

  Source: HESA 1999 Management Statistics.

4.1  Sub-degree and FE provision

  As the previously élite system is transformed, definitions of expansion become less clear. The traditional participation rate among 18 to 21 year olds is less than wholly relevant. Nonetheless it is clear that, whatever the yardstick, the system will have to continue expanding rapidly to achieve the Prime Minister's 50 per cent goal early in the next century. Expansion does not of course necessarily mean in the traditional three or four year degree. It may well be appropriate for a wide range of academic ability to expand sub-degree provision, for example the two year Associate Degree pioneered at Middlesex though demand for this route is only likely to be strong if progress to a degree is open, where academically justified. The Prime Minister said in his November Romanes lecture at Oxford that he wished to see the majority of the extra 100,000 HE places planned by 2002 to be at sub-degree level and provided through further education. But delivering HE in FE is most successful where groups are fairly small and teaching relatively intensive, ie at HE level but delivered in an FE classroom format. That is not a cheap option. Cut-price expansion of HE through FE would simply be a route to high drop-out rates, low quality and unacceptable loads placed on already grossly overburdened staff. Of course HE can be delivered very well in FE but only when fully funded at HE unit costs (as HEFCE direct funding now aims to ensure) and where academic links between relevant HE and FE institutions are well developed. NATFHE strongly supported greater integration of FE and HE, but only at HE funded levels.

4.2  Funding access and expansion

  Expansion has of course brought in more students from non-traditional backgrounds. The New HEIs have done better at recruiting these than the Old hence their rising share. For example Old HEIs take 19 per cent of students from the lower social classes (against a HEFCE benchmark expected figure of 21 per cent) while the New take 33 per cent (benchmark 30 per cent). Again, for low participation neighbourhoods, Old HEIs have 8.8 per cent (benchmark 105 per cent) against 14.3 per cent (benchmark 14.7 per cent) for the New. HEFCE has introduced a £30 million fund to encourage Access to HE for non-traditional students and those from low participation postcode areas attract a five per cent premium.

  But those monetary incentives are a very small proportion of the total £3 billion teaching grant.

  To achieve OST forecast of 50 per cent by 2005 would require an annual average increase in student intake for the UK as a whole of at least 7 per cent or 20,000 FTE students (depending on level, mode and duration of course etc) each year for the next five years. Much greater incentives to recognise the true costs of teaching disadvantaged students (described above) will be needed. The overall unit of funding per student must be maintained at the very least at current levels (ie the planned 1 per cent real terms cut in 2001-02 rescinded). This would require £88 million additional teaching funding grant each year (£4,400 times 20,000). Over the span of the 2002-03 to 2004-05 Comprehensive Spending Review that would mean an additional £528 million. In percentage terms, assuming inflation remains around 2.5 per cent (Treasury current estimates of medium term GDP deflator), this would mean increases of 9.5 per cent per year in HE teaching funding were required. Of course freezing the unit of resource at 2000 levels would do nothing to redress the years of cumulative cuts up to 2000 with all the damage and waste they have inflicted on the system.

4.3  Cutting drop-out rates

  One obvious form of waste is high drop-out rates. Of course, it must immediately be acknowledged that failure to achieve a desired qualification in the time planned is not a complete waste of whatever learning was achieved. Some students do go back years later to finish. Others will gain a few months participation even if they gain no qualification. For still others it will be valuable to learn that HE is not for them. But all of those caveats are qualified apologies for what students themselves, and the taxpayer, see as failure. Even accepting that the UK drop-out rate of 18 per cent is relatively low compared to most other countries, it means that £900 million of the £5 billion HE funding council grant is, in effect, wasted. Although 260,000 students gained a degree in 1997-98 (latest HESA figures available) a further 47,000 (18 per cent) did not do so. In today's terms they would each have wasted between £1,000 and over £3,000 in fees, not to mention the debts they are likely to have accumulated.

  So drop-out rates do matter enormously, not just to the Treasury and economy, but to individual students. And analysis of the figures shows that it is the financially poorest institutions which have the highest drop-out rate. See Table 5.

Table 5


University of Cambridge
University of Durham
University of Bristol
South Bank University
University of North London
University of East London
Bolton Institute

  Note: Drop-out rate is full-time first degree entrants 1996-97 leaving after one year ie by 1997-98; source HEFCE Performance Indicators November 1999. Teaching income per student is total income except income for research grants and contracts divided by all FTE students; source Table 6, Resources of HEIs 1997-98 and Table 1 HE statistics for the UK 1997-98; HESA.

  Of course, the teaching income comparisons are partly skewed by the subject-mix; science students attract more income than arts. But the LSE has little expensive science while South Bank, for example, does have substantial electrical and engineering departments. Furthermore, London is generally acknowledged to add around 15 per cent in costs eg London Weighting payments.

  It should also be acknowledged that the low and high drop-out rates for these eight HEIs were very close to the expected (HEFCE benchmark) drop-out rates ie adjusted for intake, the eight institutions were doing pretty much as expected.

  But the table vividly portrays the strong link between funding and failure rates. It is hard to imagine that increasing funding to those institutions with high expected and actual drop-out rates would not have a dramatic effect in lowering the wastage to the taxpayer and the student.

  Of course, a great number of factors affect drop-out rates, including family history, schooling, neighbourhood and income. But one major factor which helps retain students is the amount of face-to-face teaching they receive. Small group teaching is highly effective at meeting the needs of disadvantaged students. The more students need to be on campus, mixing with their peer group, the stronger their affinity to the institution is likely to be. But more face to face teaching in smaller groups, requires more staff per student. Table 6 compares the staff student ratios of the same four institions.

Table 6

South Bank University
University of North London
University of East London
Bolton Institute

Note: "Teaching and Research" staff only, research staff are excluded. Source HESA 1997-98. (Full-time staff only, no reliable figures for PT staff)

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