Examination of Witness (Questions 719-739)
WEDNESDAY 19 MARCH 2003
RT HON
MR CHARLES
CLARKE
Chairman
719. Secretary of State, can I welcome you to
this session of the Select Committee. You will know that the purpose
is not your annual review, as we like to call it, but it is really
to wind up the oral evidence that we have been taking in terms
of our evaluation of the higher education White Paper. We have
had a whole range of very interesting evidence from vice-chancellors,
from students and from trade unions, so I think we have done quite
a thorough review, certainly in terms of the oral evidence, and
we now have a large amount of written evidence coming in. We have
written to every vice-chancellor and every college principal,
so I think the quality of the material we are getting as well
as the quantity is going to be sufficient for the Committee to
start writing up our evaluation of the White Paper, and really
that is what we want to home in on today. I want to start off
by asking you if you want to have a couple of minutes of introductory
remarks.
(Mr Clarke) Very generally, Chairman,
to say that I appreciate the way the Committee has conducted this
approach; I think it has helped the debate generally and I think
you have, if I may say so, had a very good range of people giving
evidence. I am delighted that Margaret Hodge has given evidence
and I am delighted to do so today. I think that we still need
more debate and more discussion on these things and I think that
the framework of doing it by virtue of your Committee and its
hearings is extremely positive. We will continue to respond as
positively as we can to what you say, including your report when
you make it, and we will respond constructively and rapidly at
that time. I have no particular point other than to appreciate
the role of the Committee so far.
720. There have certainly been some emerging
themes and one that I would like to open with is really to say
that many bodies are called before this Select Committee and,
in a sense, over the past two or three years, there has been a
sharpening of the relationship or an understanding of the clear
relationship between Ofsted and this Committee and you will know
that most people would argue that Ofsted reports to Parliament
through this Committee. We have different experience with, for
example, QCA, which was much debated last summer and is still
being, I hope, discussed. When we talked to HEFCE, we learned
with some interest that HEFCE were asking you to write a letter
to the Chairman of HEFCE pointing out the changes that you want
in funding, that the funding for institutions who are rated 4
for their research should flow in another direction, in other
words to the five star departments. In other words, you are taking
£30 million away and distributing it to the five star. I
would like to ask you not only why you thought it was important
to do that at this stage with such short notice but also, what
is your relationship with HEFCE and would it not be better if
HEFCE were rather more independent of the Secretary of State?
(Mr Clarke) I think there is a very good case for
that. Chairman, you introduced your question by referring to the
relationship the department has with other bodies such as Ofsted,
QCA and others, and it was not a question that I was intending
to raise here but I will say to you that I think that we as a
department need to look closely—in fact, we are looking
closely—at the way in which we do relate to the range of
other bodies which are around because there is always a danger
in appointing other bodies for the reasons for independence—and
that is the reason for HEFCE's existence going back to the University
Grants Committee years ago—that you have an independent
body upon which we are checking up all the time which works against
the purpose of the whole process. The same applies to QCA and
to other bodies. So we are looking at that in general. In the
specific case of HEFCE, it is very important that HEFCE remains
independent but it is also very important that the Government
are as clear as they can be about the public money which is raised
by the Government through taxation and what we intend it should
be spent on. There are some people who say that is not the appropriate
thing, that universities should simply exist and that is all.
I do not think that is right and we set out in the White Paper
in the research chapter the approach we had and of course HEFCE
was very well aware of that both directly and in every other way,
as it should be. The question then arose, what is the speed at
which this is done and what is the process by which we go down
this course? I felt and feel it is important that HEFCE get moving
in the direction of this document as quickly as it could and I
think in fact they did that extremely well. I think there are
some misconceptions and I do not know if you are going to pursue
me on these further, about what the Government are saying about
4s and 3as and where we go.
721. Can you hold that for a little.
(Mr Clarke) I will not go into the detail of it but,
in principle, I think it is a matter for HEFCE to decide and allocate
the money as between universities but that it is a matter for
the Government to make clear what the overall thrust of the reason
for funding higher education is.
722. We will come back to that, Secretary of
State, in a moment. I am pleased to hear that, on the general
principle, sitting here as the Select Committee, it does seem
exactly as you have commented, that to have bodies that are supposed
to be at arm's length from the department, it is better for them
to know that and for everyone to be crystal clear about the relationship.
That was part of the problem with some of the QCA and in the past
has been the problem with Ofsted until that was clarified and
certainly members of this Committee think that a clearer understanding
of what the relationship is and how independent these bodies are
would be helpful all round.
(Mr Clarke) I can say to you on behalf of the Government
that I would be happy if that was a consideration that you reflected
in your report and I think it is true. That said, I do think that
the HEFCE letter which was published on the same day as the higher
education White Paper is a very important and clear statement
to HEFCE of the way in which the Government thinks higher education
resources should be spent and sets it out very clearly and directly
and I think that relationship is entirely proper and correct but,
as I say, I understand the point you are making, Chairman, and
respect it entirely. The only other thing I would say in relation
to this is that there is a difficulty, if one is about a process
of change at all, about the extent to which any body, whether
HEFCE or anybody else, is reflecting a particular interest about
the way things have always been done vis-a-vis reflecting the
need for change in the way that things happen and I think that
is quite a tension for any government, certainly for a Labour
Government, to deal with and finding a way through that is not
always a straightforward issue.
Mr Jackson
723. On this particular point, I very much welcome
that reaffirmation of the arm's length principle and am interested
that there is this review of the constitutional relations, but
I would suggest that, if you look at it from the formal point
of view, the idea that you have independently appointed bodies
where the Secretary of State has a power to issue that as a direction,
you probably will not want to refine that or change it. That seems
to me to be a reasonable principle for reconciling accountability.
The real issue, it seems to me, is what you might call the informal
constitution, the "nods and winks", and I have absolutely
no doubt that. I saw it in my own time at the department. The
tendency to issue nods and winks and for these to be taken with
increasing seriousness has grown in modern government and I think
it is almost impossible to see how you could constitutionally
deal with that point but, in the end, it has to be dealt with
by self-restraint and it seems to me that that is an issue that
does need serious thought.
(Mr Clarke) I think this is a very interesting discussion
and I appreciate the way Mr Jackson has put it. I think the reason
why it has grown at all—and I accept that it has—is
because of the increased accountability and scrutiny of modern
government in all of these areas to a level of substantial detail,
both by the media but also by Parliament through committees such
as this. Select Committees have only existed for about 20 years
in this form in terms of their ability to really scrutinise everything
that is happening and I think there is therefore a much greater
knowledge about what is happening and therefore leads to more
of those kinds of relationships. There are also different classes
of nods and winks. I think HEFCE's is an Athenaeum-type nods and
winks operation or with other bodies it is different. I should
also make it clear that I am not talking about a formal review
of these relationships—we are not conducting a formal review—I
am saying that we are reflecting on it, not least stimulated by
the report of this Committee on the QCA issues about how we deal
with that question but it also arises with the Learning and Skills
Council, for example, where I have the power to direct in certain
areas even though it is an independent body. The question of how
I should use that power and how it should operate arises in a
wide variety of areas. University has always had a particular
place in our national life where independence is important for
reasons of academic freedom, but again I just say that this issue
of the relationship between representing a body of opinion and
structure as it is and the need to get change is quite a difficult
issue when you have arm's length organisations and how they operate.
Chairman
724. The fact of the matter is that there are
some very strong themes emerging from the evidence we are taking,
some of them quite surprising. In one sense, we would have expected
a different reaction to some of the principles in the White Paper
that we actually found. One that we did was when we interviewed
Margaret Hodge, your colleague, and she said that one of the principles
of the higher education White Paper, certainly in terms of the
fees, the £3,000 cap on fees, was to create a market. Yet,
when HEFCE came to see us, there was a very strong view there
that £3,000 was not high enough to create a market and that,
in their view, £5,000 would have been a more reasonable target
and that, by 2006, there is a clear indication, both from vice-chancellors
and from HEFCE, that everyone is going to choose to go for £3,000—it
is only £1,800 now; it is likely to be £3,000 in 2006.
How do you react to the argument from HEFCE and others that the
cap is too low to create what you really want, and that is a market?
(Mr Clarke) I read Sir Howard Newby's evidence to
you with interest on this particular question and it is certainly
true that a group of universities, the famous Russell group of
universities, said that we should go for £4,000 in the evidence
that we received before we published the White Paper and I understand
the point that is being made, but my observation is as follows.
Firstly, I think we are making quite a major departure in allowing
universities to vary fees at all and a number of people—and
you have received evidence to this effect—are worried about
the permission to do that which we incorporate in the Bill, and
I thought and think that it is important to indicate that, though
the change is being made, there are limitations to it. You saw
Sir Richard Sykes the other day and he publically argued earlier
in the year for a £15,000 a year level of fee and it was
important in pitching it between £15,000—
725. He denies that, by the way. There is a
very detailed explanation in his evidence of what he really said
or says he said.
(Mr Clarke) You are a politician, Chairman, and we
can understand those who feel they are being traduced by the media
and for the vice-chancellor to be traduced by the media must be
a difficult experience! Anyway, there was a real debate and we
had to decide, if we are making this major reform, whether we
put some limits on it and what the nature of those limits should
be and the view we came to was that £3,000 was an appropriate
figure. Do I believe that all universities will simply whack up
their fees to £3,000? Actually, I do not and I have spoken
to a large number of vice-chancellors about this and I know that
there a bit of what I would call sabre rattling in this area.
726. On your side or theirs?
(Mr Clarke) On their side. I will tell you my sabre
in a second if you are interested.
727. I think we know it. Some people would call
it bluster rather than sabre.
(Mr Clarke) Well, I am not a very sophisticated man,
Chairman, as the people on this Committee in terms of dealing
with it, but the fact is that there are people who suggest that
the universities are going to operate as a cartel and simply put
all the fees up to £3,000 a year for all courses. I think
that is extremely unlikely and I think that when universities
do their market assessments, you will find a much more sharper
process of differentiation taking place and my sabre says, or
my bluster or whatever you like to describe it as, that I do not
think a cartel is acceptable in this area and, if there were evidence
of such a cartel emerging, I would want to look at it and see
what steps we could or could not take to deal with it. I am aware
of what is being said, but I do not think it will happen. I do
not think you will find a blanket increase to £3,000 across
all the universities. If we went to the £5,000, then you
would certainly get, as I think Sir Howard said to you, more variation
in fees than would be the case for £3,000, but I do not think
it would necessarily be the case that that would be more acceptable
to the people who are concerned about variable fees over this
time and people would see that as a more dangerous route to go
down. So, that is why we set the figure at £3,000. Of course,
there is an element of arbitrariness in whatever figure is set
in this process and I am sure the subject you have just raised
will be debated in Parliament and indeed it will be interesting
if this Committee goes for a £5,000 fee or something of that
kind. I think it will be interesting in the debate and I genuinely
mean that. I think it is an interesting aspect of what is going
forward, but I think I would want to pour some degree of cold
water on the idea that everybody is going to simply put up their
fees to £3,000 which they would not do if it were £5,000.
The final point I would make on this is that a number of people
have made an argument to me that the fee charge will be a kind
of symbol of the seriousness of the university, if I can put it
like that, and that some universities will feel that, if they
do not put up their fees, they are not serious universities, or
some form of discussion around that. I think that is ridiculous.
They have variable fees on everything else they do except undergraduate
fees—they have variable fees on postgraduate courses, variable
fees on part-time courses and so on—and I think to suggest
that it becomes a kind of mark of honour to have the highest fee
possible is something that will not stand up when the market situation
is really examined.
Mr Jackson
728. I understand the Government's political
problem and I very strongly support their policy here, but I am
concerned that there may be too much inflexibility built into
this. We are talking about the fee starting in 2006 and then being
fixed for potentially another five years at that rate of £3,000,
so down to 2011, and that is a very, very long time horizon. Let
us assume we have a government which perhaps loses control of
inflation—that just conceivably might happen. I wonder whether
the Secretary of State might like to reflect a little on whether
the arrangements for altering the cap should not be reasonable
flexible.
(Mr Clarke) I think that is the key question, Mr Jackson,
for legislation. We obviously will need to consider to what extent
all aspects of our proposals are in primary legislation and to
what extent things are in secondary legislation and obviously
a key question is whether the level of fee is a matter of primary
or secondary legislation. The implication of your argument, to
which I am very sympathetic, is that it should be in secondary
legislation rather than in primary legislation and that it would
then be a matter of political pledge—and the Labour party
has made its pledge on this matter clear—rather than a matter
that is enshrined in primary legislation. That is an issue that
would need to be considered as we come to proposed legislation
and I think it is a matter on which the view of this Committee
would be of interest and weight.
Paul Holmes
729. To carry on with the same theme, it is
interesting that when Margaret Hodge was giving evidence to the
Committee, I asked how many universities will charge top-up fees
and whether it would be 5% or 95% and she said that she had no
idea. You are saying that you think it could be a lower figure,
but a succession of people from the universities who we have had
giving evidence have all said that they think it will be nearly
every university. There seems to be a great deal of uncertainty
about what is one of the major planks of the White Paper.
(Mr Clarke) The major plank is the right to vary fees
and there is no uncertainty about that. Where there is uncertainty
is as to how universities will respond to that right once they
have it. You are right to say that there is uncertainty about
it and you can do modelling as much as you like, but the truth
is that people do not know. Vice-chancellors have said to me much
the same as they have said to this Committee and to everybody
else and that is why I described it as sabre rattling because
there is an element to that, I think. My response to it is that
I think many vice-chancellors have not yet conducted a serious
market assessment over where all this stands and what they will
do. They will conduct such a market assessment because they are
very intelligent people and they will decide what to do and I
am saying to you that my prediction is that less people will go
to the £3,000 mark at the beginning than is currently being
described. Of course, I can be wrong and Margaret Hodge can be
wrong, you can be wrong or whatever. One can model it as much
as we like, it is only when we actually get the legislation in
place and universities have to take their decisions that we will
see where it all stands. Let me make a slightly negative remark.
I do think that universities have to face up to this world in
which we are going to go. If universities simply see this as another
income stream which they have to deal with without looking at
the conditions and quality of the work they do, I think that will
be a mistake. If you take the example of comparing a law degree
from a particular university with another, does one university
do a better or worse law degree? What is the level of fee? That
is the debate that has to take place. To the extent that vested
interests within the university sector say, "We do not want
this debate, we are just going to put the fee up, come what may",
I think that is a bad thing.
730. In terms of the whole funding principles
behind the White Paper, it has been very difficult to get from
the Government estimates of what they think the funding gap is.
The universities have given estimates of what they think it is
over and above the money the Government are going to provide and
what a number of the universities are saying is that simply to
meet the shortfall in terms of expansion to 50% intake, the academic
pay gap etc, etc, they are going to have to charge the higher
fees because, as far as they can see, it is the only way of meeting
the funding gap which they have identified but which the Government
are not prepared to put a figure on.
(Mr Clarke) I think that is a very important point
and there are two responses to it. Firstly, the reason why I am
pretty loath to say that there is a funding gap is because I do
not think there is such a thing. The funding gap depends on what
your assumptions are. You mentioned academic pay. What are your
assumptions about academic pay and what is the timescale? If one
took a view that we ought to have academic pay at levels that
were comparable relative to Members of Parliament, for the sake
of argument, as they were 20 years ago or whatever, that generates
one funding gap as an argument in that area, or you look at the
question of consequences of increased student numbers, that is
another funding gap. There is a whole set of assumptions that
one can make and they are all relatively easy to cost but getting
to a global figure which you say is right or wrong and is the
funding gap I think is foolish. So, I do not have a view of the
funding gap. The second point I make cuts to the chase of what
you say which is that if there is a funding gap of whatever level,
whether it is £1 or whether it is £30 billion, whatever
the scale of the funding gap may be, the question arises of how
to fill it. Some will say to simply fill it through getting more
money from taxation and go down that course, to which I say that,
as far as this CSR review is concerned, we have not done badly
on a 6% real increase right through this process. Secondly, in
general terms, Government are not simply a Milch cow for every
interest that comes along. Choices have to be made in this job.
I have to make choices between the relative significance of primary
education and secondary, universities or whatever and the universities
have to take that place in that exchange. I think universities
have done pretty well in this CSR but I could point to other areas
where they have not done so well. Scotland, for example, has a
much worse funding settlement this time out of exactly the same
process. That is the discussion which has to take place. If universities
say, "Here is this funding gap, oh, State, you now meet it",
I think that is not an intelligent way to go about it, which is
precisely why we come to the fee issue as a means of potentially
generating more resource and again that is where universities
have to make their own judgment and their own calls in those circumstances.
There is no other area of life where you would say there is a
funding gap somehow defined. The State just has to sort it out
because that is not how life works. There is a whole level of
different levels of funding gap according to what types of assumptions
you make about what needs to be funded.
731. Again, the succession of witnesses we have
had from different aspects of universities have all agreed on
another point which is that they have no confidence whatsoever
and in fact they assume that once differential fees are introduced,
Government will cut the amount of money Government are providing
to offset that and they have pointed out that that is exactly
what happened with the introduction of fees in 1997-98, the 7%
increase in funding was offset by an equivalent fall in government
funding. So, the students get into debt and nobody actually benefits
except of course for Gordon Brown.
(Mr Clarke) I have made a series of commitments which
the Chancellor has also made about this very point and you are
certainly correctly describing the situation that some people
have those fears you describe, and I have distinguished between
the situation now and 1998 when, in 1998, the incoming Government
was faced with an acute shortage of resource as a result of lack
of investment over decades that we felt we needed to address and
the then Secretary of State felt that we needed to address that,
principally in the primacy school area but also the secondary
school area, and therefore we needed to find another stream of
income to deal with higher education, hence the changes of 1998,
and that is actually what happened. We are specifically saying
in contrast to that that we are not doing that at this point.
We are saying that because of the figures you mentioned earlier
and the issue of funding, we have to both increase the amount
of resource in real terms that we give to higher education and
we give a testament to that with the 6% year on year real increase
that we are giving, and allow the possibility of other income
streams being generated through the ability to charge fees. We
are saying that both are necessary because the scale of the problem
is as it is. I know that, in a sense, nobody will accept that
until the proof of the pudding is in the eating, but I am saying
that I have given commitments both in the House and elsewhere
that the effect you have described will in fact not take place
certainly under this Government. Of course, nothing is forever
and another government might come in and say, "No, we are
cutting 20% off all public spending and therefore we are going
to wipe it out in universities" or whatever. I cannot predict
that circumstance and there will be a political argument that
takes place, but the virtue of the fee approach, rather than other
approaches to raising money, is that it does allow the universities
to have the money themselves that they raise in fees. You may
say that the countervailing grant may come back the other way,
but actually I think that the fees gives more of a guarantee to
universities of their future funding than any other alternative
of money going to universities.
732. You appear to have said at the start of
your answer something I have not heard anybody from Government
say before, that the introduction of student tuition fees by this
Government was not to benefit the universities but was to pay
for education expenditure elsewhere such as infant school class
sizes or that sort of area.
(Mr Clarke) I was in fact repeating what I had said
earlier, that any government, whatever the situation and whatever
the economic state of affairs, faces choices between where they
put the money and how they operate. That is a fact of political
life; that is reality; that is where we are. I then said that,
in the particular circumstances of 1997-98 when this Government
were elected after a period, we would argue, of very substantial
under investment in our education system, we then had to look
at what the priorities were. We decided quite explicitly that
the priority we were going to go for was primary education because
we thought that was the area where we were weak as a country and,
to an extent, pre-school education, and all the evidence is that
those are the areas where we have not had the investment that
we need, so we decided to do that. A consequence of that, in the
real world rather than any kind of utopia, is that money was not
available for other parts of the system to the same extent as
might be needed—in particular in this case we are talking
about universities. It was that condition which led to the decision
to go down the course of trying to raise resource by the tuition
fee reforms of 1998.
Valerie Davey
733. There seems to be a tension in the White
Paper between the market which you are introducing by the diversity
of fee and trying to eliminate diversity in terms of the access
which students have. So, we are now enabling students to enter
university whereby the school they want to, the accent they have
or whatever becomes less relevant. However, we are now adding
into it the wallet and we are saying that that will be a factor
in their choice of university. Do those two factors not sit rather
uncomfortably?
(Mr Clarke) I do not think so. This is an important
debate and it is one that we have had in a number of different
areas, but I think there are two quite different meanings of the
word "diversity" here. The first meaning is to have
a diverse university sector in which the various missions, research,
teaching and knowledge transfer I take in the structure of the
White Paper, exist in varying degrees and each university in the
country. So, you have a range of different institutions with different
degrees of focus on research or different kinds of research, on
teaching and on knowledge transfer. I think that is a situation
of what exists at the moment as you look at the university sector
and it is why I reject the idea that we have some kind of two-tier
system because actually I think we have a vast range of different
types of institution. I think that getting universities to focus
much more sharply on what their mission is in that context is
a good thing and the White Paper is designed to encourage that
and the effect of it will be to create, in my view, a more diverse
university system than we have at the moment. The second meaning
of the word "diversity" in this context is the opportunity
for people to go to university at all and the question of how
we change the situation where there are significant differentials
between your chance of going to university if you come from a
certain kind of background to others is one that we think we need
to address, hence the access regulator points and so on that are
there. I think that they are both perfectly respectable and reasonable
goals of policy, ie to increase the diversity of the sector as
a whole in what it offers but, in a sense, to reduce the diversity
on access in terms of saying that the differentials are sharper
than they should be about people's chances of going to university.
The question then arises, if you are doing the second, does the
fee regime and the right to vary fees that we have talked about
significantly challenge that second aspect? That is a very major
debate which many of our political colleagues and others and many
giving evidence to this Committee have raised regarding whether
there is a trade-off. I am happy to have that conversation because
I believe that our proposals, taken in the round, do not have
the negative effects on access that some people have been concerned
that they might, but I do acknowledge, as I have acknowledged
in the House, that that is a genuine debate for us to have and
it has many implications.
734. There were two little words that you used
there, opportunity to go to university "at all" which
indicate to me that we are allowing more youngsters from first
time university entrants to get on the first step of university
but not have that opportunity for the huge diversity which we
are now creating on an equal footing. In other words, the implication,
I think from what you said, is that there will be an opportunity
but that it will not be the broad breadth because, in my book
certainly, if you put the wallet alongside and you diversify not
just the type of university but the fee they can charge, then
inevitably the market factor detracts from some people getting
into the whole of that choice.
(Mr Clarke) I think this is a very important and difficult
point. The question of whether we are talking about access to
particular groups of universities, in which case which, as opposed
to the university sector as a whole is a very important discussion
to have. I do not accept the proposition that the proposal that
we have made—and, by the way, going back to an earlier question,
Chairman, that was raised, it is one of the reasons we have gone
for the £3,000 figure rather than the higher figure is because
of the kinds of worries that Ms Davey has just expressed I think
are less true at a level of a £3,000 fee than they are at
a level of a £5,000 fee—is because we think there is
a series of measures that can be taken to address precisely the
concerns that you have to ensure that everybody from all backgrounds,
whatever their level of ability, can go to any university and
my concern is that there are significant numbers of talented young
children and young people with merit and potential who, for a
variety of reasons, do not feel now today, irrespective of a few
regimes, able to go to the universities that they might be able
to benefit from and that has been the case, whatever the funding
regime, over the last 30 or 40 years. Do I think that the proposals
in our White Paper will make it better for those young people
in terms of giving them more chance to go to the universities
from which they can benefit? Yes, I do but, as I have acknowledged
all the way through, quite apart from the general issues in the
financial arena, there are certain pluses to what we propose and
certain potential—and I emphasise potential—negatives
of what we propose in terms of debt, which could be disincentives
which we need to address and which I think we are addressing.
I do not in any sense dismiss the legitimacy of the point, I think
the point you are making is a fair one, but I do not think that
the charge that what we are doing in the round will damage access
to even our elite universities is true.
Chairman
735. Before we move off this topic—and
we may come back to it in a different guise—when you talk
about diversity of institution, we have cross-examined a number
of people, including the NUS, AUT, NATFE and so on, about this
diversity and there does seem to be a strange voice coming from
some sectors in HE where, on the one hand they would quite like
diversity and less dependence on government but, when you push
them, they really only want money from the taxpayer and indeed
from income tax to fund the operations of higher education.
(Mr Clarke) I think there is a serious issue, Chairman,
for the people who are the current vested interests in the university
sector. They can argue that a utopian Secretary of State for Education
and Skills should simply deliver the resource they need to do
whatever happens and they can argue that as much as they like—and
there may one day be a utopian Secretary of State for Education
and Skills but I am not he, despite all my aspirations—but
that actually will not happen. If you are concerned about academic
pay, for example, or you are concerned about resources for students
who are learning in universities for example, you need to make
a decision as to where the cash is going to come from. If your
answer all the time is "the taxpayer", I only advise,
as I advised Mr Holmes in the answer earlier, that any chancellor,
whether Labour, Lib Dem, Lloyd George, Conservative or whatever,
will be faced with precisely these same choices. I will tell you
the way I put it to William Straw, the President of Oxford University,
in a debate that we had. He said in this debate, shortly after
we launched the White Paper, "If you were a true socialist
and you were bold and radical, what you would do would be to raise
income tax on the highest taxpayers to give the money to universities."
I responded to applause in this meeting, "If I were a true
socialist", a difficult assumption to put forward "and
bold and radical, I would not put any money into universities
and I would put all the money into nurseries and primary education
because if I would want to change educational disadvantage in
this country, that is where I would put the resources in."
I agree that that was a rhetorical device to deal with the situation
but the truth is that that is the dilemma which is really faced,
in the real world, by any Secretary of State for Education and
Skills, and I think that, if I were an academic, I would prefer
to feel that the university I was at had other income streams
which it could address to try and deal with the situation we are
about. On the central point that you made, Chairman, there is
a real issue here about diversity. People pretend that all universities
are the same. Actually, they are not by any stretch of the imagination.
I think I said to you privately before that because I am the kind
of guy I am, I spent my Christmas reading The Times Guide to
Modern Universities and The Virgin Guide to Modern Universities
and, if you read those books which summarise all the courses
that are going on at all the different universities, you could
only be impressed by the massive diversity which exists in British
higher education. If you take a trip to universities in Britain,
you will see that there are quite different types of institutions
and that they work in different types of ways. That is the story
today. That is the case of affairs. If we try and say that it
is all the same, it is simply not true. Maybe we ought to say
that it all ought to be the same. Actually, I do not agree but
you could make the argument that it all ought to be the same.
If we say that we want multipurpose universities which can be
put down in any part of the country and be all broadly the same,
then it leads you to a completely different set of policies certainly
to what is in this White Paper but to any policy that has previously
been pursued. So I would say that diversity is good.
736. I think most of the members of this Committee
would agree with you, but what we would say is, is it strongly
enough argued and is there enough argument in the White Paper
that would deliver that diversity to institutions because, as
Paul Holmes said, one of the worries is that if universities raise
more money out of fee income, if they choose to go for the £3,000
per student when they are allowed to or by building up their overseas
student income or by endowment, there is a view, such as with
the Australian example, that, with more private funding, that
is very useful and, with more independent funding, you will get
less taxpayers' money. There is no guarantee. However brilliant
a university is at diversifying income stream, at the end of the
day, they could lose out.
(Mr Clarke) "Could" is the operative word,
Chairman. There are no guarantees in life ever. We have a three
year comprehensive spending review settlement. We could have a
government elected in the future which cuts public spending by
20%—fine, if that is what the people want—and that
would have a massive impact on what goes on.
737. Conservative opposition, running up to
the last election, actually had a scheme for floating off universities
as independent foundations or trusts.
(Mr Clarke) I never make party political points, as
you know, Chairman, but I have observed in the House of Commons
that there is a tendency in some parts of the Conservative party,
present company excepted, to want to go back to the very elite
model of universities of 40 or 50 years ago with 7 or 8% of the
population going to university and that is what it is. I do not
think that is a very coherent policy. I do not think that it addresses
the needs of the country and I do not think that we ought to just
freeze where we are, but I do think that we have to go down the
course of diversity, that we cannot give guarantees for 30 years
in advance as to whatever will happen, but anybody who places
their faith in the British state and the British taxpayer to be
the central source of money for universities when compared with
everything else that happens will be disappointed if, by central
source of support, you mean it provides all of it. At the moment,
of the approximate £7.5 billion that is provided by universities,
£400 million is fee and the rest is State; it is a 1:14 ratio
and I do not think that is particularly unreasonable.[1]
We will slightly change that ratio by the proposals we are talking
about. If people think that it should be 100% provided by the
State, then I think it is a wrong perception of what is actually
going to happen.
Mr Jackson
738. What is involved here is actually a very,
very interesting new development in government thinking which
potentially has wider applications. Moving towards a mixed funding
system, a private/public mixture of funding of a function which
has become, quite recently actually, a wholly publically-funded
matter is, for the British system, a bit of an innovation and
it does present all these problems which have been highlighted
of how, if it were managed, the two funding streams could run
side by side. The only point I would make is that of course there
can be no guarantees about the public funding, but this is a problem
which most other systems around the world, particularly in higher
education but also, for example, in healthcare, have to manage
and manage successfully and I do not see any reason to believe
that we will find it impossible to manage in this country.
(Mr Clarke) Firstly, Mr Jackson, I agree with that.
Secondly, I think it is pretty important to remember why it is
that the State does put money in. It is not doing it just as a
gesture of goodwill, it is because the State believes that having
a highly-educated/highly-able population is critically important
to our both economic and social success in the future. I think
that is a true statement and it is one of the reasons why I oppose
those who say that we should shrink the number of people who go
to university, but the fact is that the State will continue to
believe that, in my opinion—other States you describe will
believe that. The challenge that arises from that, however, is
how effectively and how well do universities meet that challenge
of equipping society for the challenges of the future and that
is a big issue for universities and there are people who argue—and
I have seen articles on it quite recently—that the medieval
model of university is fine, that we have a large group of scholars,
43% of the population, sitting around thinking about things and
that is fine and that is what we should do, but I do not think
that is the basis, at the end of the day, on which we will really
get major State funding for this. I think the State funding will
come because the objective reason for doing it will continue,
if I can put it like that, and, for the reason that you describe,
I think we will be able to manage those processes in a perfectly
feasible way.
Valerie Davey
739. Have we costed, looking just at the student
fee again, the potential of putting it up? Suppose you put it
up to £2,000 and that was the level fee as opposed to the
variables. You would then have a specific figure instead of the
uncertainty which your present scheme presents.
(Mr Clarke) We did cost it; I do not have the figures
in front of me but I can write to the Committee, if you would
like me to do so, indicating what the costs were.[2]
The view that I took certainly was that, though there were some
attractions in that, it did not address the points which the Chairman
made earlier about the diverse nature of the system and there
is, not a dishonesty, that is wrong, a misleading nature of the
system here, the point about universality. I think it is untrue
to believe that a degree from every university in Britain leads
you to the same relative earning potential later in life. I think
if you get degrees from certain universities on certain courses,
you are in a stronger position to earn in life than on other degrees
on other courses. People may not like that; I think I am simply
describing reality in this state of affairs. If you accept at
all that the student should pay more and if you accept at all
that the student should do it through their post-university and
through their graduate income, then I think that is a factor which
one should take consideration of. As I say, it depends very much
on one's view of the university system.
Valerie Davey: I would welcome the information,
thank you.
1 See Ev. p278. Back
2
See Ev. p278. Back
|
