Select Committee on Education and Skills Appendices to the Minutes of Evidence


Letter from the President, Universities UK to the Secretary of State for Education and Skills (SS 23)


  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 principles:

    —  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 families;

    —  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 burden; and

    —  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 services".

  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

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