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Margaret Hodge: I acknowledge that there was a rapid expansion of student numbers under the Conservative Government. My point is that that expansion was appallingly funded, which has created difficulties in regard to the quality of education. The last Government caused their own difficulties by capping student numbers.

I pay huge tribute to the higher education sector. Despite that enormous underfunding, it managed to expand numbers while maintaining quality. We are still punching well above our weight in terms of research, and the university sector is in good health.

Mr. Willis: Will the Minister also acknowledge that, if we subtract the Wellcome Foundation's investment in

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research, the unit of funding per higher education student during this Government's lifetime has continued to fall year on year, and is now less than it was in 1995?

Margaret Hodge: I do not accept that. I do accept that unit funding declined until, during the last comprehensive spending review, we injected a further £1.7 million of publicly planned resources into the higher education sector. That has enabled us to achieve a 1 per cent. increase this year, for the first time in more than a decade.

Mr. Chaytor: During the last Parliament, did not the amount given to primary and secondary education increase dramatically, thereby enabling far more young people to go to university after leaving school?

Margaret Hodge: Indeed—and what underlies that is the fact that, during our first term in government, we focused additional resources on schools in particular. It was important to get that right.

Our reforms of student funding enabled us to start tackling the unholy mess that we had inherited. We have lifted the cap on student numbers, and every individual capable of undertaking higher education now has the opportunity to do so. We are investing an extra £1.7 million of publicly planned expenditure—18 per cent. in real terms. For the first time in a decade, we have financed a 1 per cent. increase in the funding of each student, and, together with the Wellcome Foundation, we have invested £1 billion on the research infrastructure in our universities.

That investment is supporting our participation agenda. This year's figures continue to show a buoyant demand for places. The latest figures from the Universities and Colleges Admission Service show a 5.5 per cent. increase in the number of people allocated a university place this year, and a particularly pleasing increase of more than 10 per cent. in the number of mature students who have managed to enter higher education. Having achieved those considerable advances in the first term of a Labour Government, we are considering what further action we need to tackle all the existing barriers.

Joan Ryan (Enfield, North): I applaud the Government's focus on higher education and the increase in participation rates, but is it not important for the review to examine the possibility of more up-front support for students with less advantageous socio-economic backgrounds?

Margaret Hodge: Support for students throughout post-compulsory education is crucial. We have introduced an education maintenance allowance, albeit on a pilot basis applying to only 30 per cent. of the country. That is a very good way of increasing participation. I accept, however, that we must bear in mind the link between the perception of debt and lower-income families.

Let me now deal with what I consider to be equally important issues. Perhaps our most important and difficult task is to increase the number of young people who obtain level 3—A-level—qualifications. At present, nine out of 10 of those who obtain A-levels go on to university. Our challenge is to stop the haemorrhage of young people who leave school at 16 after their GCSEs, and to increase the number who remain in full-time education. That is what

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our secondary school reform proposals are about, and that is what will be addressed by the strategy on 14 to 19-year-olds that we will publish in the new year. That is why we have introduced the education maintenance allowances, which have achieved a dramatic increase, and that is why we are introducing the ConneXions service. That is our key task.

Equally challenging is the task of raising aspirations among young people.

Charlotte Atkins (Staffordshire, Moorlands): Does my hon. Friend agree that year 8 is a particularly important year? It is the year before students take their GCSE options, and a year in which universities and secondary schools could work much more closely together to ensure that students' aspirations are raised. I commend the work that Staffordshire university does in terms of widening access and working with local schools.

Margaret Hodge: I completely agree with my hon. Friend about ensuring that we raise students' aspirations at an early enough age. There has, possibly, been a tradition of thinking that if we can capture students at 15 or 16, before they take their GCSEs, we will achieve that increased participation. I agree with my hon. Friend that we need to reach them at a much younger age. Again, access to the 14 to 19-year-old agenda is all about ensuring those raised aspirations.

One of the most shocking statistics that I discovered when I first took over this portfolio was that 44 per cent. of children from the lower socio-economic groups—nearly half—never hear about the opportunities of higher education during their school years. Abandoning such a huge number of potentially talented young people cannot be right. That is why we are funding a range of programmes to widen participation among non-traditional groups of students. Our £190 million excellence challenge will work with children from the age of 13 in excellence in cities areas and education action zones to raise their aspirations.

Adam Price: The Minister has referred to arrangements in Scotland. Is she aware of the Rees report on student finance, which also examined the issue of support for further education students? It suggested introducing a maintenance grant in Wales for further education and higher education students. Will the Government allow diversity to flourish in FE and HE, as they claim to do in other areas?

Margaret Hodge: The hon. Gentleman will be happy to note that that is entirely a matter for the Assembly in Wales.

Let us look at what we are trying to do. We are introducing programmes to do more, with mentoring, out-of-school support and master classes. We are introducing programmes to get universities and further education colleges to do more, with access courses and summer schools. We are also encouraging them to look at how they recruit their students, because we want to tackle the disadvantage faced by children from schools in disadvantaged areas in gaining access to our best universities. We are introducing foundation degrees, which are both relevant to the labour market and attractive to the uncertain student, for whom we hope they will provide a passport to a job.

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We are introducing programmes to encourage universities to change the way in which they work, to form closer links between further and higher education, so that they can give support to students from schools in disadvantaged areas. We are introducing programmes to target support on those for whom the financial burden is the greatest, with our opportunity bursary scheme, our child care support programme, our support for students with dependants and our support for disabled students. All those crucial initiatives should support our objective of widening access.

Mr. Laws: In the light of the review, can the Minister think of a single problem with access to higher education created by the existing system of student finance?

Margaret Hodge: The Government are now reviewing the system of student finance. The hon. Gentleman presses me again on an issue on which I have given endless replies, and which his party is patently not addressing properly. If all his solutions are going to come out of the 1p that his party wants to put on income tax, that 1p will have to stretch a long, long way. I was trying to stress that the issue of widening participation is much more complicated than the hon. Gentleman suggests, and that if the Liberal Democrats will not address that wider agenda they will fail to achieve the basic purpose of a student funding system, or anything else.

Caroline Flint (Don Valley): One of the issues that I believe affects participation is the visual aspect of having a university within a community. Has any research been carried out into whether the location of a university in a deprived area has an impact on the community, not necessarily in terms of young people going to the university on their doorstep, but of their at least thinking about universities elsewhere? In South Yorkshire, I believe that there is a case for building on the great higher education developments that we have achieved and having a university in Doncaster.

Margaret Hodge: As we widen participation, no doubt we shall want to extend access for students right across the country.

I strongly believe that if we can get more young children to go into a university at a young age, just to get a feel of what life there would be like, it would be one way of raising their aspirations. We shall experiment with that through our excellence challenge programme.

I turn to the way in which we are monitoring and evaluating our student funding reforms. The principle that the beneficiaries should contribute to the cost of higher education was right when we introduced the reforms and it remains right now. Having said that, it is worth remembering that not all full-time undergraduates pay a contribution to their tuition fees. Fully half of those students have all their fees paid by the taxpayer, and only one third pay the full fee. We must also remember that the fee covers only about a quarter of the full cost of providing tuition.

I accept that some real issues have emerged from the reform. The system is extremely complex and difficult to understand. There are concerns about the up-front

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payment of a fee. There is some evidence, although it is not extensive, that debt and the perception of debt are deterring people from lower-income backgrounds from going to university and might be having an impact on students staying the course once they get to university. We have established the review of student funding to examine these issues.

We are, quite sensibly, working across government to look at whether we have got the balance right, and properly profiled, between contributions from the student, their family and the state. The review is now in place, but at this stage it would obviously be absurd to speculate on the outcome. Nothing has been ruled in or ruled out.

What is clear is our aim. For too long, access to higher education has been a privilege for the few. We are determined to make access an opportunity for the many, because it is socially just and economically sensible. At the same time, we want to nurture and enhance the excellence that exists in so many of our universities—an excellence that enhances our productivity agenda, enriches our lives and strengthens our communities. Our ambitions for higher education reflect our ambitions for Britain: delivering on those ambitions is the task that we face in our team. That is precisely what we are doing.

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