Letter from the President, Universities
UK to the Secretary of State for Education and Skills (SS 23)
UNIVERSITIES UK SUBMISSION
I am writing to you in your capacity as Chair
of the Government's review of student support to present a submission
from Universities UK as our contribution to this most important
and timely review.
Universities UK's position is clear. We unequivocally
welcome your in-depth review of student support. The present arrangements
are too complex for students and potential students to understand
and for institutions to operate. As you have yourself stated,
the new scheme must be easily understood, well publicised and
targeted at those most in need. Universities UK stands ready to
play our part in helping you achieve this aim.
The paper enclosed with this letter, which forms
the substantive part of our submission, was commissioned from
external consultants as part of our preparations for the 2002
Spending Review. It presents a number of costed options for improving
the current student support arrangements based upon Universities
UK's stated objectives for student funding. These are:
to ensure that student financial
arrangements do not represent a barrier to higher education;
to ensure that public funding for
additional student numbers is focused on the recruitment and retention
of non-traditional students, who are necessary to achieve the
Government's HE participation target;
that improvements in student support
should not be at the cost of institutional funding; and
that the principle of up-front tuition
fees should be maintained.
This paper offers a number of possible options
for change. It assesses the advantages and disadvantages of each,
and estimates the additional costs of each option. The calculations
underpinning these estimates are explained and the assumptions
behind them are clearly stated. The additional net costs and savings
to public funds for the various options we have presented are
clearly identified. Each option is consistent with our policy
that individuals who benefit from higher education should be expected
to make some contribution to the costs, based on the following
the maintenance of the current system
of means-tested contribution to fees for full-time undergraduates;
substantially increased grant support
for maintenance in place of loans for students from the poorest
simplification of the administration
of student support so that it is easier for individuals and their
families to understand and it reduces the current administrative
some increased contribution from
those from the most well off families.
The main options considered in our paper are
adjustments to the current system, although they would all guarantee
some grant support to students from the poorest families. However,
a more radical option is also considered, in line with some of
the Press briefing that has emerged from the Government's review.
This would replace the current living cost loans with grants for
all, not subject to means testing, but coupled with a graduate
contribution or graduate tax.
Much of our paper concentrates on the position
for full-time undergraduate students. Universities UK is also
concerned about arrangements for part-time and postgraduate students.
However, as the paper makes clear, there is little hard evidence
about the impact of current financial support arrangements on
these groups of students, particularly for part-time undergraduates,
for whom the present financial arrangements have been in place
for only one year.
The needs of students from poorer backgrounds
are especially important, as our research shows that they are
those most likely to face financial hardship. Debt aversion among
these students may well be impeding access to higher education
and so we trust that your review will consider how best to encourage
the recruitment of students from disadvantaged backgrounds as
well as helping them succeed in their studies.
We have already shared with your officials the
preliminary outcomes of our major study on student debt, whose
steering group is chaired by Professor Diana Green, Vice-Chancellor
of Sheffield Hallam University. This research is ongoing and so
unfortunately the full findings are unlikely to be available before
you complete the present review. We will, however, make these
available to you and your colleagues at the earliest possible
moment. This is likely to be towards the end of 2002.
Universities UK is convinced of the need for
further public investment in student support. However, additional
funding for students must not be allocated at the expense of core
funding for our HE institutions. We emphasised in our SR2002 submission
that additional support for both institutions and students is
needed and that the two are complementary. Students need adequate
support to succeed at university but universities also need additional
funding to ensure that students are offered a high quality education
and that their student experience is not devalued. Our priorities
for additional resources to support students and institutions
are explained and costed in the supporting evidence presented
with our SR2002 submission. This evidence comes from externally
commissioned research from independent experts. Much was undertaken
jointly with the funding councils.
Despite their successful, world class track
record over many years, in teaching and learning, in research
and in so-called "third leg" activities, UK universities
urgently require further public investment. HEFCE's latest financial
forecasts show the sector to be in deficit in 2000-01 and 2001-02.
The Council's recent consultation paper on developing a financial
strategy recognises that in the past institutions faced "less
acute financial risk" than they do now and acknowledges that
"income for publicly-funded teaching research [is] based
on regulated prices that are below the full economic cost of these
This is a period of significant financial constraint
and hardship across the higher education sector as a whole. Student
fee income makes an increasingly significant contribution to university
income. This is now in the order of some £400 million per
annum. It is important not only that additional funding to improve
support for students should not be at the expense of further investment
in the universities themselves, but also that if changes to the
overall package of student funding remove institutions' up-front
tuition fee income, equivalent funding is made available at once
and on a recurrent basis from the public purse.
I look forward to seeing your proposals for
reform of the student support arrangements in due course and to
discussing these in detail with your colleagues and officials.
In the meantime, I hope our contribution to your review is both
helpful and timely.
Professor Roderick Floud
President, Universities UK
25 February 2002