Select Committee on Education and Skills Minutes of Evidence

Examination of Witness(Questions 389-399)

MARGARET HODGE MBE, a Member of the House of Commons, Minister of State for Lifelong Learning and Higher Education, Department for Education and Skills, was examined.

Wednesday 12 December 2001


  389. Minister, welcome to the last of our ministerial meetings in the current round in relation to baseline assessment, which will enable us to carry out a performance review. However, your colleague, John Healey, is due to return in January. I am not sure whether we have interviewed you in this room before.
  (Margaret Hodge) I have been interviewed in this building, but the room was not like this one.


  390. The problem is that the acoustics are poor and people seated at the back can become restless because they cannot hear. Sîan Jones is our new clerk; she is certainly new since you were Chairman of the Committee. You have such an interesting range of responsibilities. Were you disappointed by the autumn statement? If there was a mention of education it went by me. It seemed to me that in the first four years the Government placed an emphasis on education and in the autumn statement there was an enormous amount of emphasis on health, but education appeared to be yesterday's fashion.
  (Margaret Hodge) I do not think that that is true. Thank you for having me back and it is good to see a couple of new Members on the Committee whom I have not seen before. Education is not on the back-burner. We received some money from the pre-Budget report specifically to try to tackle some of the work on development issues. It is very important to try to encourage more professional development in the work place. That is a £40 million to £50 million programme. I believe that that will lead to some decent pilots about how to incentivise individuals.

  391. Did you say £40 million to £50 million?
  (Margaret Hodge) Yes, £40 million to £50 million. We need to incentivise individuals and employers to release people into professional development training. We have a commitment, as you know, in this Parliament to increase the proportion of GDP that is to be spent on education and I look forward to that commitment being met over the period of this Government. We have the White Paper and a major education Bill that will set the framework for developing our policies around secondary education and improving standards. They will enable us to do something in which I am engaged, the 14 to 19 year-olds phase in education, and linking that into further and higher education. As we are building up to a comprehensive spending review, I am sure that there will be a pretty strong bid for resources from the Chancellor in that spending review. I look forward to that being smiled upon in the negotiations in which we engage in the spring and through to July.

  392. Is there anything else in general terms that you would like to say about your brief to the Committee before we get down to specific issues?
  (Margaret Hodge) It is an incredibly exciting and challenging brief. In the first term of the Labour Government we properly focussed on what was my previous brief, which was getting early years provision on to the agenda and establishing a framework for expanding nursery education and early years childcare. We also focussed on primary schools. All the indicators show that the work that we did then has paid dividends. There are real improvements in early years provision and in primary schools. Nowhere is the problem more evident than in my own constituency. Interestingly enough in relation to my current brief, it is a constituency that has the lowest percentage of adults with higher education degrees than any other constituency in the country. I come to the job with that constituency experience. The second term is about raising standards in secondary education, and tackling the staying-on rates, which I am sure Stephen Timms has talked to you about and which is one of the most difficult but crucial problems that we face as a government. We have to turn around the haemorrhaging of people who leave full-time training and education at the age of 16. Investing in further education for all sorts of purposes, not just to provide good 16 to 19 year-old education, but also there are the workforce development issues and the basic skills that we have never tackled before. Then we want to move on to meeting our ambitious target of ensuring that by 2010 50 per cent of young people under 30 will have the opportunity of a high quality higher education experience. It is very challenging; there are lots of complex and difficult problems, but the focus will be around that. If you reflect on the ministerial briefs, it is interesting that if we leave aside the Secretary of State who is responsible for everything, among the rest of us all bar one have joint responsibilities in various areas around the secondary school onwards into further and higher education phases of learning and teaching.

  393. That is very interesting. It leads me to my first specific question. Since you have been in your present post, two things have happened in terms of higher education. You have said there is a big emphasis on FE and keeping people in the system, so that enough qualified people go to university and higher education. There seems to be some confusion in the public's mind and in my mind about just what happened when the cross-department review into student finance was initiated. Almost rather quietly there was the outcome of the announcement of a fundamental review of higher education as well. It seemed that the department was bounced by No. 10, by the famous Labour Party Conference speech from the Prime Minister. The item went into the speech twice and was taken out twice and then it was put in a third time, and it was raising the expectations on something radical happening in relation to student finance. Then the Treasury was not happy. It was not happy about graduate taxes. What on earth was going on? Can you tell us what was going on?
  (Margaret Hodge) After all your years in politics, Chairman, you do not necessarily believe everything that you read in every single newspaper every day. We were not bounced. We have been engaged on this together with colleagues across government. I think that is quite right. I do not think that there is anything insidious in that. If you are carrying out a fundamental review of student finance, it is common sense that you work together with colleagues in the Treasury and in No. 10. The reason for doing that is two or three fold. Let me deal with the factors that influence us. We have this manifesto commitment that by 2010 50 per cent of young people will have the opportunity of participating in higher education. You and I know that up to now higher education has become a sort of right for the middle classes and is still a privilege for people in lower socio-economic groups. The challenge in meeting that target of 2010 is to open up opportunities, particularly for people from lower socio-economic groupings to go into higher education. There is growing evidence that debt and fear of debt is particularly inhibiting young people from low-income families which have no prior experience of higher education from entering higher education. That is one key reason.

  394. When we conducted our own investigation, we found it difficult to identify firm evidence that that was the case. We also note that most young people who have the relevant qualifications to get into university are coming in anyway.
  (Margaret Hodge) We know that most young people who have the qualifications get in. The socio-economic bias comes in at the age of 16. It affects those who leave school at 16. I agree with that. That is why every time I talk about it I say that prior attainment levels are as important as student funding. Indeed, aspiration is also important. There are three factors that affect this: aspiration, prior attainment, and fear of debt. There is growing evidence—it is not 100 per cent certain—coming from too many quarters that suggests that student debt is inhibiting young people from low-income families from participating in higher education. We have access to quite a lot of research. The sort of thing we find is that even where about a third say that debt puts them off, those from lower-income groups doing perhaps HNDs and HNCs will be more put off than others. We need to tackle this problem before it becomes a real issue inhibiting progress, rather than waiting for it to become so evident an issue that it is too late to do anything about it. Another point is that I have always felt that the reforms that were introduced by David Blunkett and Tessa Blackstone were extremely brave. As you know, I chaired a review into that when I sat in your seat, Chairman. I believe that it is right to say that those who benefit from the opportunities that they receive from the higher education experience should contribute towards it. No one denies that principle, which I believe is well established and which is now accepted by everybody right across the board. The NUS congress accept that there should be a contribution from students and their families towards the cost of higher education. That principle has been established. Whether we have the balance right and whether we have the timing of that contribution right are issues that we are now investigating. I believe that it is completely appropriate that a couple of years into the system, when the evidence is coming through, that we should reflect on whether we have that right, particularly as we want to get to the target.

  395. On getting the balance right, the fear in the university community that we are picking up as a Committee is that there are tremendous priorities in higher education. People are concerned about the levels of pay, of attracting good people to stay on to do research, and to stay in the teaching profession in higher education. Many people are concerned about the general level of pay. People are also concerned that money flowing into higher education and research must be maintained. We are not America and there will be more private sector finance coming in, we hope. We are not like America and the Government has to maintain the levels if we are to have world-class institutions. Your remit is interesting because you and I know that the regeneration capacity of universities is enormous. The fear is that if we lurch back to spending a greater percentage of our GDP on student support, as we did in the past—twice as much as our competitor countries—then you take money away from those other aspirational targets. That is the real concern that you lurch back on little evidence to start paying a great deal of money to people who should contribute to their own higher education.
  (Margaret Hodge) I notice that there are no Conservative Members present on the Committee this morning. The legacy that we inherited was severe under-funding of the higher education sector. A tribute to the higher education sector is that despite massive cuts in spending that it experienced over that generation—36 per cent cut in unit funding for students—it has survived with an incredibly strong and healthy position. Given the retention rates, graduation rates and how we are punching above our weight on research, even retention of academics and even the growth of postgraduates, the situation is not bad. There is a whole range of issues in which we need to invest over time, so that we can maintain our higher education sector as a key player in the global higher education world. I am absolutely clear on that. We are bearing that in mind as we put together a package of proposals that will form our part of the CSR bid. Having said that, it is equally important, if we are to develop the skills that we need in the economy and to provide the inclusive society which we want to build, that we ensure access to higher education for people from lower socio-economic groups. We have to get that right as well. They are complementary and not competing demands. I recognise that they are in an environment where we need a lot of money to go into the higher education sector in all sorts of ways: higher education, further education, working in the local community, teaching infrastructure, retaining the best of the academics in the UK and retaining the research capacity. There are many key issues that we have to consider. We are thinking imaginatively and laterally about how we can deal with some of those.

  Chairman: We shall come back to the profound review on higher education later, but now I shall bring in some of my colleagues.

Mr Pollard

  396. Referring to the 50 per cent by 2010, the manifesto says that standards will be improved whereas the department talks of maintaining standards. Is there a difference?
  (Margaret Hodge) No. I had not picked that up. In my view you continuously strive to improve standards. That has to be a basic tenet of our approach to every phase in education.

  397. Is that a washing down and not an acceptance of less funding in the future?
  (Margaret Hodge) One of the tributes to HE is that standards have not been watered-down, although funding has been cut by 36 per cent on the unit funding. We are determined to maintain and enhance standards.

  398. It was a slip then?
  (Margaret Hodge) I do not know where that came from. I do not think that that was deliberate in any way.

Mr Shaw

  399. I have a couple of questions on the review. The review followed quickly on the heels of the announcement regarding student finance. Was that the Treasury saying, "Right, we shall give you some extra money; universities need to sort themselves out; we are not happy with their productivity", and so on? That is often the way and the Treasury do not want to give you something for nothing. If we have to find the money now that the Prime Minister has made the statement , will you come back to show us what you are going to do to improve the productivity of universities. Is that the way it went? This came out of the blue.
  (Margaret Hodge) Which review are you talking about?

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