Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  1. Good afternoon, it is very nice to see you both, old friends, both of you, as far as the Committee can be friendly. It does not seem too long ago we met you Professor Newby and Mr Bekhradnia in our endeavours to come up with a reasonable report on access and retention, we are grateful for your help on those inquiries. As you know, it is our intention to dust off our HE interest in our report and really to have some contribution to the on-going discussions and cross-departmental discussions on student finance which was, I suppose, if we look back it was a long time ago, I think it was the Prime Minister's speech at the Labour Party conference.

  (Sir Howard Newby) The last time I gave evidence to you on this was certainly before the election, round about March.

  2. In a rather different room with rather better acoustics in the old Palace, we will bear with it. We are going to concentrate on the student finance side, although, as I said before, we might bounce a couple of other things to keep you in trim. The key thing is, Professor Newby, you have, yet again, changed your role from being at that time the President of Universities UK, and before that CVCP, you were responsible for the changeover and, of course, as Vice-Chancellor of Southampton. Welcome to your new post. I want to ask you, really, what do you think has happened since the Prime Minister made his speech? There is a gut feeling abroad if you talk to journalists and if you read what has been happening over this last two and a half months, that there has been a significant shift, at one stage to something must be done about student finance in higher education, to a kind of change that people are looking much more down the line at the ability to retain students in education until 18. Do you sense there has been a sea-change since the Prime Minister's speech?
  (Sir Howard Newby) I would not call it a sea-change, clearly what has happened with the election is there was an election manifesto commitment by the Labour Party to widen participation in higher education and the Prime Minister has set a target of 50 per cent of 18 to 30 year old's being involved in higher education by 2010, that is actually a very challenging target. I think all of the other activities that are relevant to that, including student finance, have been brigaded behind this over-arching priority.

  3. What percentage on your figures in HEFCE, what is your percentage now?
  (Sir Howard Newby) In England we put the current participation at 34 per cent.

  4. 34 per cent?
  (Sir Howard Newby) Yes.

  5. What is your view in terms of what is going on at the moment? Do you think it was too early for a review or would you like to have seen the arrangements that had been introduced post 1997 bedded down for a longer time, or do you think it is an appropriate time to have a review?
  (Sir Howard Newby) I think it was an appropriate time to have another look. I think one of the difficulties we faced was the perception amongst those students who were contemplating entering higher education about financing arrangements were somewhat distant from the reality. Many, many more students believed they were going to have to pay fees than was actually the case. The issue of the maintenance award and the loans regime was not terribly well understood amongst students. Since the initial announcement in 1997 the government have introduced quite a large number of schemes to support particular categories of students with their maintenance grants or maintenance awards through various bursary schemes. I do not think these have been brigaded into schemes that one would regard as very coherent nor were the students, for the most part, aware of the opportunities that were available to them. I know this always sounds a rather feeble reason for anything but I think communications with students, especially 17 or 18 year old students, were not as good as they might have been, they were not simply aware of what was available to them.

  6. Is that the main thrust of your criticism of the system we have? What is the central remiss of the system, in your view?
  (Sir Howard Newby) I have always taken the view that the key problem in not deterring students from entering higher education was the issue of the maintenance award rather than the fee. Far too much debate centred around the fee issue after 1997, rather than the maintenance award. Members will recall that Dearing Committee actually recommended the retention of the maintenance award alongside the introduction of a fee. My view still is that the key to encouraging more young people into higher education, not deterring them on financial grounds, relates far more to the issue of their living expenses than it does to the payment of the fee, after all half of them will not have to pay a fee in any case, although not many of them, in my experience, are aware of that.

  7. What are the cost implications of going back to the maintenance review?
  (Sir Howard Newby) You referred just now to my new role and I have to say as the Chief Executive of the Funding Council my main concern is that whatever solution emerges you should not take money away from the sector, from the institutions, because we can scarcely do everything that is asked of us at the present time on the resources available, resources are very tight. Of course they will become more so if the predicted expansion of those going into higher education is not carried out. If I was to wear my hat as Chief Executive of HEFCE that is something that I could attempt to insist on. Beyond that, of course, the particularities of how this is organised is not the Funding Council's concern, so I revert to a personal opinion rather than my view as the Chief Executive of HEFCE. I still believe that getting the maintenance regime right is the bigger priority of the two.

  8. Were you very disappointed with the Chancellor's autumn statement?
  (Sir Howard Newby) Yes, I was. I did feel that more might have been said about education generally, actually, further and higher education, in particular, given this manifesto commitment. It is a very stiff challenge and it is stiff challenge not just to higher education but to all the partners involved in education, school, colleges and universities. Ensuring the progression of well-qualified youngsters through from the age of 14 onwards is going to be the key to achieving this target. We know that by international comparisons our major weakness in this country, larger than our competitors, is the dropout rate between 16 and 18. At the moment the sector is admitting virtually all those students who are qualified on conventional criteria to benefit from higher education. What we really need to do is improve the number of students and increase the number of students who are qualified.

Mr Shaw

  9. If you were advising the Prime Minister prior to putting this in the manifesto, as you just said, if you had the benefit, the foresight, that there could be an economic downturn to the review stream to Treasury and it was not going to be as great as it had been or was at the time and the Prime Minister said to you, "I want 50 per cent of 18 to 30 year old's going into higher education and there is not going to be a whole heap of cash round, where should I spend the money? What is the priority? Where can I make savings? Is this achievable?" What would your answer be to those points?
  (Sir Howard Newby) On the first point I think, as the Dearing Committee recognised and as the government has recognised subsequently, there is a balance to be struck in meeting the cost of higher education between taxpayer, the students and/or their parents and employers who benefit from having a more highly qualified work force. Where one strikes that balance is really what we have been debating now for the last five years. There is no doubt that students benefit across their lifetime from being graduates. One of the surprising aspects of the previous round of expansion we had in the sector has been that although the number of people participating in higher education has gone up very quickly and steeply the premium on lifetime earnings has not gone down. That suggests that not only are we supplying students into the economy whose skills are needed and have a market value but also the students, even in the present day and age, are benefiting from their participation in higher education in direct economic terms, that is leaving aside anything else. As far as the economic downturn is concerned the historical evidence is this may not be such a bad thing for recruitment into the sector, although that comment probably applies more to more mature students who wish to come back into higher education to improve their professional development and do part-time courses at masters level or whatever. The third part of my answer to the Prime Minister through you would be, whatever the short-term downturns in the economic cycle you have to regard expenditure on higher education as an investment, it is an investment that maintains not only our economic competitiveness but also has other wider social benefits to society as a whole in terms of social inclusion and in terms of all sorts of other outcomes for which higher education does benefit the population as a whole. I do not think one should stop investing in higher education because of the temporary downturn in the economy.

  10. What about the poorer students, do you think the current system is putting them off or not having much effect?
  (Sir Howard Newby) I think you will be talking to other colleagues who have conducted some research on this and there is evidence from research that the perceptions which such students have had may have deterred them in terms of their being averse to debt. The full answer to your question is actually quite difficult because we do not have the counterfactual, we do not know how much more the demand for higher education would have been had this system not been introduced. I think that is about all I can say at this stage.

  11. Do you think that student hardship is affecting the institutions that you fund, ie because of increased debt that we heard about universities are not getting money back from the tuition fees?
  (Sir Howard Newby) It undoubtedly has some effect, although it is very patchy between different institutions, depending upon the composition of the student intake. We have at the Funding Council recently been endeavouring to discover what are the additional costs of drawing an increasing number of students from poorer backgrounds, not only attracting them into higher education in the first place but also retaining them once they are in, that is also very, very important. We believe that there are some additional costs involved in both of those things and they will fall disproportionately on different institutions, depending on the character of their intake. I think students in their first year in particular do need more care and attention in terms of improving their learning skills, they need more mentoring, more counselling and more personal support, they need more generally. That is something that we are looking at to see whether or not we can take some measures to meet more of the costs of supporting such students through the funding regime we operate.


  12. Dr Bekhradnia, you are nodding, did you wish to come in?
  (Mr Bekhradnia) I only want to reinforce the point. I refer you to the supplementary memorandum we put to your Committee in respect of your previous investigation. We do provide additional funds in respect of students from disadvantaged backgrounds because we believe that it takes additional support to help them. We know the relationship between dropout and the student background. Actually, as we pointed out to you before, when we dig down deeper into it it is the relationship between a student's previous educational achievement and the support they need in higher education. The relationship between social background and achievement falls away when you look at their achievement. A student from a privileged background is as likely to dropout as a student from a poor background given the level of educational achievement. It is a little bit subtle when we look at that question.

Mr Baron

  13. I take that point. Is it true to say, is it not, that students from lower income backgrounds probably have a greater fear of debt than others? Do you not think that fear of debt is putting students off going on to university and even may account for an element of dropout rate once they get there?
  (Mr Bekhradnia) One would expect that but we do not have the evidence of that. We certainly do know from some research that there is a greater fear of debt among such students but whether it is actually leading students to decide not to go to university or not is another issue. We do not know. Perhaps you will uncover research in the course of your study that will shed some light on that. If I might add one more thing to that. We have published a report on supply and demand in higher education and it is quite clear from this that it is the decision to stay on at the age of 16 that is the key one. That has been falling away and that is followed by a falling away of students coming into higher education. The issue is to create a link between student debt and that. You have to believe that students at the age of 16 are deciding because of future funding arrangements not to stay on to the sixth form. That is quite a leap, and it is not one that we have any good evidence for. It is quite clear from the work that we have done that it is the staying on at 16 that is the critical decision and so we have to look for what it is that drives that decision and whether it is the prospect of future debt.

  14. At 16 you are old enough to realise the negative impact of debt.
  (Mr Bekhradnia) I am not making a judgment either way, that is the link.

  15. You are saying that the cause has to be established.
  (Mr Bekhradnia) You have to see what it is that is driving those 16 year olds not to go to higher education, indeed not to take A-level, for which the regime has not changed.


  16. That is a different question. We have a group that come through to 16 and then give up. Do we have a substantial group coming through at 18 and giving up with good qualifications?
  (Mr Bekhradnia) Not with A-level but with other qualifications, yes. All most all those who get to 18 with A-level go into higher education.

  17. I know that HEFCE have come up with a broadly similar conclusion. The recent report certainly believes that debt is a major disincentive for going on to further education. We have not improved in recent years our participation with students from lower or disadvantaged families.
  (Mr Bekhradnia) Yes, we have, but we have not improved it relative to those better off.

Mr Baron

  18. Overall there has been, but relative to those better off there has not been an improvement. That must be an aim?
  (Mr Bekhradnia) Yes, of course.
  (Sir Howard Newby) If I may come in here, I think to achieve the 50 per cent objective we must, this is not an ideological statement, it is purely factual, improve the proportion coming in from poorer backgrounds, because the sector is virtually saturated in terms of those coming in from higher income levels. We are really talking about same issue. I think it may or may not be that fear of debt is a disincentive to those going through from 16 to 18. Alongside that one would also have to put a number of cultural factors about attitudes to learning, which we believe are formed at 13 to 14, that is why I quite deliberately earlier said we have a 14 to 19 progression problem, it is not just a 16 to 18 or even 18 to 21. That implies that to address this issue we in higher education have to work very much in partnership with colleges and schools to, if I can put this way, manage the supply chain of young people coming through into higher education.

  19. Can I just tease you out further on that, what would you like to see being done more by government to address this issue, because we are not going to reach that target, as you say, unless we involve more and get greater levels of participation for students from disadvantaged backgrounds. What would you do?
  (Sir Howard Newby) First of all we have to remove the perception, I emphasise perception rather than reality, because the perception has been different to the reality, from youngsters that they cannot afford to go into higher education, whether that is a fear of debt or for other reasons.

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