Memorandum from Universities UK (SS 05)
The Education and Skills Select Committee will
take oral evidence on 12 December 2001 from Margaret Hodge MBE
MP, the Minister of State for Higher Education and Lifelong Learning,
on the DfES's higher education priorities for the next four to
five years. This note sets out what Universities UK, which speaks
on behalf of the country's university sector, believes should
be the priorities for the coming term and suggests some questions,
which the Committee might like to ask.
You will have seen Universities UK's
submission for the 2002 Spending Review. You obviously cannot
pre-empt any decisions of the spending review. But do you agree
that there is a real need for greater investment in our universities?
Does the minister agree that substantial
investment is needed from government if universities are to provide
a "high quality experience of higher education" for
50 per cent 18-30 year olds?
Retention of students is as important
as recruitment. Does the Minister agree that providing a high
quality experience of education is vital to retaining students
in higher education?
Recruiting and retaining students
from non traditional groups is expensive. Will universities receive
funding for these students which reflects the true costs of recruiting
and retaining them?
Universities UK believes that the
current review of student finance should lead to more support
which is targeted at those from lower socio-economic groups. Do
Do you agree that any additional
financial help for students should not be at the expense of higher
Universities receive an income of
around £350 million from tuition fees. Will the Government
commit itself to making good this income stream if the review
of student finance leads to their abolition?
Does HM Treasury share a desire to
increase investment in higher education to sustain a world-class
higher education sector? Have recent events changed the Government's
willingness and ability to meet the sector's funding needs?
With relation to the 50 per cent
participation rate, what definition can the Minister give of an
"experience" of higher education?
Does the Minister agree that the
current review of quality assurance should ensure that the burden
of audit and regulation on universities is reduced substantially?
Is the Minister aware that universities
experiencing difficulties in attracting PhD students in sufficient
numbers to replenish the academic profession, especially given
the proportion of current academic staff who are approaching retirement.
What plans does she have to address this?
Does the Minister accept that, despite
a genuine commitment within the sector, universities will struggle
to address the issues raised by the Bett report without additional
financial help from government in terms of an increase in core
UK spends no more than 1.1 per cent of GDP on
higher education institutions compared with an OECD average of
1.3 per cent. The United States spends more than double the UK
figure (2.3 per cent). After Japan, the UK has the lowest proportion
amongst OECD countries of Government funded R&D and, of the
G7 countries, spends the third lowest proportion on research as
a percentage of GDP.
Current public funding for the higher education
sector stands at £8 billion per annum. In our recent submission
to the Government's Spending Review, Universities UK has identified
the need for an extra £9.94 billion over the next three years.
£5.52 billion for recurrent
expenditure. That is £1.84 billion a year, or an increase
above current spending levels of 23 per cent by 2005-06; and
£4.42 billion is for one-off
capital investment to address the remedial needs in teaching and
research infrastructure to address the problems caused by a lack
of investment for many years.
The Government has, quite rightly, identified
the economic importance of a world-class higher education sector,
and has set universities tough targets. The higher education sector
has demonstrated its firm commitment to these public policy objectives.
But Universities UK believes that such targets must be matched
by an appropriate level of public investment.
In answer to a recent Parliamentary Question
tabled by Alistair Burt MP (Hansard, 26 November 2001:
Column 595) Margaret Hodge said "This is the first time any
Government have set a long-term participation target in Higher
Education, so we are currently examining the data to ensure we
provide a proper and appropriate base from which to consider progress.
We shall shortly announce the results". Our current understanding
is that the figure which will be used will be an average of the
number of individuals in each age group between 18 to 30 who have
been to university for at least one year.
The process of widening participation in higher
education is expensive. The costs of universities efforts to recruit
and retain students from non-traditional backgrounds are high
and has not been reflected in the funding made available by government.
Therefore, Universities UK supported the recommendation of the
Education and Employment Select Committee that the participation
premium should be increased to 20 per cent. We also believe that
this means that universities should receive a full unit of for
each new student rather than receiving it at the current marginal
It is important that universities are equipped
to offer a high level of education to students once they have
been attracted into higher education. In particular, Universities
UK believes that there is a need for investment in the teaching
infrastructure of our universities.
In our submission to the Spending Review, Universities
UK has set out the need for funds to allow universities to increase
capacity, repair, maintain and modernise buildings so that they
are fit for the purpose and capable of accommodating increased
As the student body becomes more diverse, so
the physical infrastructure, facilities and support services must
provide for the different study patterns and needs of more mature
students and increased numbers of part-time students, and to the
particular needs of post-graduate students.
Universities UK welcomes the Government's decision
to look at the problem of student finance. However, we are anxious
that any changes to student finance arrangements should not be
at the expense of institutions. Funding for students and funding
for institutions must be regarded as separate issues. It is also
important that additional help is focused on those who need it:
those form lower socio-economic groups who are currently being
put off entering higher education, possibly because of their perceptions
of the costs.
Options floated in the media have included the
abolition of the tuition fee. Universities UK is not convinced
that this would solve the problems it has highlighted. First,
tuition fees are means tested and 50 per cent of those currently
going to university do not contribute anything to the costs of
their education. Second, tuition fees have provided an indispensable
income stream to universities amounting to nearly £350 million
per annum. This additional income has played a crucial part on
securing a small real terms increase in funding per student. Any
changes to the system of student finance should take this into
account. Universities UK is concerned that universities should
be compensated fully if this income stream is withdrawn.
In answer to a recent question asked by Lord
Hannay (Hansard 29 November 2001: Column 448), Baroness
Ashton of Upholland said:
"Lord Hannay was searching for an assurance
that the Government are aware of the £343 million and its
relationship to the overall strategy that universities are pursuing
in terms of their funding. I believe that I have given that assurance."
Universities UK is seeking something more than
an assurance that the Government is "aware" of the importance
of this funding stream. Universities UK is seeking a guarantee
that universities will be compensated for its loss should that
The HEFCE-commissioned report Better Accountability
for Higher Education (August 2000) concluded that the accountability
cost burdens were £250 million per annum and that this represents
poor value for money. At HEFCE's initiative, there has been intense
work this year on ways of reducing the burden of accountability
for teaching in higher education. This has focused on the production
and assurance of information for external users and for institutions'
own internal purposes. It has also looked at a consistent and
economical means of assuring external stakeholders about quality
and standards in higher education. This work, which involves consultation,
is well advanced. But it is too early to estimate the extent of
savings which might result.
Work is also in progress to examine other areas
of the accountability arrangements including statistical returns,
biding exercises and the RAE.
Universities are experiencing difficulties attracting
PhD students in sufficient numbers to replenish the academic profession
and to provide an adequate supply of trained researchers for other
areas of the economy and society. Debt and perceptions of the
academic profession as unattractive have been identified as particular
problems. More PhD students might be attracted if there were better
incentives for the recruitment and retention of PhD students.
Improved financial stability for universities to enable them to
offer more attractive contracts to academic staff might also help.
The Minister said in response to a recent Parliamentary
Question that "the Government play no part in setting pay
levels for the higher education sector". However, an increase
in universities, core funding from government is vital. Otherwise,
universities will find it difficult to improve the pay and conditions
that the higher for their staff, both academic and non-academic.
One particular area where additional core funs
are needed is in addressing the issues highlighted by the Bett
Report. Without additional core funds, it will be extremely difficult
to address equal pay issues, provide more secure contracts of
employment for staff as well as recruiting and retaining the additional
staff who will be needed to teach increasing student numbers.
One of the major problems is that universities
depend on a wide variety of funding streams, many of them variable
and insecure. In particular, funding for research is generally
on a project-by-project basis and therefore time-limited. The
cumulative effect of declining core funding is that universities
lack the financial security to underwrite the risks of longer-term
employment contracts in project funded areas. This is one of the
reasons why, in Universities UK's spending review submission,
we make clear that extra resources are needed to invest in university
staff. And, just as importantly, any increases in funding needs
to be core funding, to allow universities the flexibility to offer
good terms to the staff they employ and value.