Select Committee on Education and Employment Fourth Report

Annex 1: the Scottish Debate

Cubie Report

1. The Independent Committee of Inquiry into Student Finance (the Cubie Committee) was established by the Scottish Executive following the first elections to the Scottish Parliament. Tuition fees had been a high profile issue during the election campaign and were a crucial element in the agreement between the Labour and Liberal Democrat parties to form a coalition Executive. The Committee of Inquiry was convened by Mr Andrew Cubie, an Edinburgh-based solicitor, and former head of the Confederation of British Industry (CBI) in Scotland. The Cubie Committee published its report on 21 December 1999.

2. The Cubie Committee concluded that a 'mixed economy' of tuition fee arrangements for further and higher education should be maintained. Their principal recommendations were:

  • tuition fees for further education courses should be paid for by the state,
  • tuition fees for full-time undergraduate courses should be abolished,
  • a flexible support package for part-time and postgraduate students should be available,
  • a Scottish Graduate Endowment should be established, with a total contribution of £3,075 where a loan could be taken out, payable once a graduate's income exceeded £25,000,
  • a charitable foundation should be established to receive voluntary contributions from prior beneficiaries of the Scottish higher education system,
  • a Wider Access Bursary Scheme should be developed to target non-repayable support to particularly disadvantaged students in higher education.

3. The abolition of up-front tuition fees should not lead to a reduction in funds available to universities, and therefore the Scottish Executive should make up the shortfall at a cost of £12 million in cash terms. The Committee also acknowledged that students from low income backgrounds had a particular aversion to debt. The Foundation would provide support to students or institutions consistent with the Committee's guiding principles for student finance. This would include non-repayable Bursaries to those particularly disadvantaged, such as young adults from low income families and mature students.[115]

Scottish Executive's proposals

Following the publication of the Cubie report, the Scottish Executive established a ministerial working group with representatives of each of the Executive Parties to set out the Scottish Executive's response to the Cubie recommendations. The Scottish Executive published its response to the Cubie report on 26 January 2000 as a Framework Document setting out its proposals for student finance arrangements for Scottish domiciled students studying at Scottish institutions.[116]

4. The Scottish Executive's proposals included:

  • tuition fees for further education courses should be paid by the state,
  • tuition fees for full-time undergraduate courses should be abolished,
  • access bursaries should be re-introduced for poorer students and students from more disadvantaged backgrounds, of up to £2,000 a year,
  • an extra £500 should be targeted to those students whose parental income in less than £15,000 a year,
  • mature students should have access bursaries on top of their existing loan entitlement,
  • the Graduate Endowment scheme should be established as part of the existing student loan scheme, with a total contribution of £2,000 payable once a graduate's income exceeds £10,000.

Mr Nicol Stephen MSP, Deputy Minister for Enterprise and Lifelong Learning in the Scottish Executive, clarified the situation for the Sub-committee by explaining that "the guarantee is that no student will have to pay more than they do under the current system, nor will they have to pay back for longer than under the current system because their level of debt will be the same or less than under the current system".[117]

5. The Scottish Executive concluded that it would not extend its arrangements for student finance to Scottish-domiciled students studying outside Scotland.[118] The NUS described the Scottish Executive's proposals as an "almost savage attack on Cubie's original plans for a graduate endowment scheme".[119] Nevertheless, the NUS told the Sub-committee that the proposals were a step forward from current arrangements for student finance in England and Wales.[120]

Quigley Report

6. Typically, honours degrees at Scottish universities require four years to complete compared to three years elsewhere in the UK. This difference led to a potential anomaly when tuition fees were introduced for students domiciled in England, Wales and Northern Ireland: students studying at Scottish universities would be charged an additional year of tuition fees compared to students following comparable courses elsewhere in the UK. The Teaching and Higher Education Act 1998 (which provides the legal basis for tuition fees) established an independent review of tuition fee arrangements for students studying at Scottish universities. The independent review was chaired by Sir George Quigley, Chairman of Ulster Bank, and reported on 29 March 2000.[121] The main recommendations of the review were:

  • a fee concession for the final honours year at Scottish institutions should be given to students domiciled in other parts of the UK
  • Scotland should meet the costs of providing the fee concession
  • each Scottish institution should make clear whether it favours direct entry into the second year of its degree programmes for suitably qualified applicants.

7. The Scottish Executive accepted the recommendations of the Quigley Committee, at an estimated cost of £2.5-£3.2 million a year.[122]

Cost of Scottish proposals for student finance

8. The Cubie Committee estimated that its total package of recommendations would cost £62 million in the first year of implementation and £71 million thereafter.[123] Cubie's recommendation that tuition fees should be abolished would lead to an immediate reduction of approximately £12 million in the funds available to Scottish universities.[124] The Scottish Executive's Framework Document stated that funds for the new student finance arrangements would need to be found from the budget of the Department for Enterprise and Lifelong Learning. This, the Executive acknowledged, would necessarily involve difficult choices at a time when investment is needed.[125] The Framework Document noted that the net cost of the Scottish Executive's proposals would be £33 million once the Graduate Endowments are in payment.[126] The Scottish Executive acknowledged that the parental contributions for some better off families might increase under their new arrangements for student finance.[127]

Repayment threshold for the Scottish Graduate Endowment

9. Mr Dugald Mackie, a member of the Cubie Committee, explained that the Committee's recommendation that contributions to the Graduate Endowment Fund should commence at £25,000 was based on the national average wage, of approximately £17,000, plus a figure for higher salary which graduates earn, research having shown that possession of a degree attracts a premium of about £8,000.[128] The proposals from the Scottish Executive set, at £10,000, the threshold at which payments to the Scottish Graduate Endowment would trigger. Mr Nicol Stephen MSP, Deputy Minister for Enterprise and Lifelong Learning in the Scottish Executive, told the Sub-committee that the Scottish Executive did not choose the £10,000 threshold at which payment to the Graduate Endowment would commence. He explained that the Graduate Endowment would be payable through the existing student loan system which already requires loan repayment at 9 per cent of your income over £10,000.[129]

Anomalies between the different UK systems for student finance

10. Mr Andrew Cubie referred to his Committee's consideration of the potential differences between the student finance systems in Scotland and in the rest of the UK (referred to as the Umbria/Cumbria problem). He urged the Sub-committee to give further consideration to this issue.[130] The NUS recommended that the Sub-committee should consider the anomalies which will be created between Scottish and other students if the Cubie/Scottish Executive proposals are adopted.[131]

11. Mr Cubie noted that there could be a difficulty under European law if the Scottish proposals for student support were extended to Scottish-domiciled students studying at universities elsewhere in the UK. EU students studying in, for example, London could claim that a Scottish-based student studying the same course would have more advantageous financial support.[132]

12. The Scottish Executive had therefore concluded that it would not extend its proposed arrangements to Scottish-domiciled students studying outside Scotland.[133] Mr Nicol Stephen MSP explained that to comply with EU regulations the Scottish Executive had to agree that its proposals for reforming student finance would only apply to Scottish domiciled students studying full-time higher education in Scotland. Students from Scotland who attended universities in England and Wales would have the same arrangements for student finance as all other students from England and Wales.[134] Mr Stephen noted the Scottish Executive had agreed to the recommendation of the Quigley Report that fourth-year tuition fees for English and Welsh students coming to study in Scotland would be paid for by Scottish Executive. Therefore there should be no extra cost to the English or Welsh students who choose to study at Scottish universities compared to the current system of student finance.[135] Mr Stephen reinforced the Scottish Executive's view that there should be no financial penalty to choosing to study in Scotland. He told the Sub-committee:

    "We do not want to create any barrier. The fact that we do encourage [study at Scottish universities] does have some cost penalties for the Scottish Executive already ... 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."[136]

13. The CVCP told the Sub-committee of two concerns if the Cubie proposals were to be implemented in the rest of the UK. The first was the very substantial cost of applying the Cubie recommendations to the rest of the UK. The second concern was the necessity for a guarantee that the funds raised by the Graduate Endowment system proposed by the Cubie Committee would be used in funding higher education. Professor Floud noted that the CVCP did not have that assurance[137]. Baroness Blackstone, Minister of State for Education and Employment, told the Sub-committee that she did not think the Cubie report and the subsequent proposals from the Scottish Executive on student finance had many implications for the rest of the UK.[138]

115  Independent Committee of Inquiry into Student Finance, Student finance: Fairness for the future, 1999. Back

116  Working Together for Wider Access to Further and Higher Education and a Fair Deal for Students, Scottish Executive, 2000 (the Framework Document). Back

117  Q. 38. Back

118  Framework Document, paras 10-11. Back

119  Q. 61. Back

120  Q. 62. Back

121  Report of the Scottish Fee Support Review, 2000. Back

122  Scottish Executive press notice, 29 March 2000. Back

123  Cubie summary report, page 23. Back

124  Cubie report, Recommendation 31. Back

125  Framework Document, para 14. Back

126  Framework Document, para 14. Back

127  Framework Document, para 5. Back

128  Q. 5. Back

129  Q. 38. Back

130  Q. 26. Back

131  Ev. p. 16, Introduction. Back

132  Q. 26. Back

133  Framework Document, paras 10-11. Back

134  Q. 44. Back

135  Q. 45. Back

136  Q. 50. Back

137  Q. 134. Back

138  Q. 263. Back

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Prepared 8 February 2001