UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 75-i
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
EDUCATION AND SKILLS COMMITTEE
MINISTERIAL ANNUAL REVIEW
Wednesday 3 December 2003
MR IVAN LEWIS MP
ALAN JOHNSON MP
Evidence heard in Public Questions 1 - 100
USE OF THE TRANSCRIPT
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Oral Evidence
Taken before the Education and Skills Committee
on Wednesday 3 December 2003
Members present
Mr Barry Sheerman, in the Chair
Mr David Chaytor
Valerie Davey
Jeff Ennis
Paul Holmes
Helen Jones
Mr Kerry Pollard
________________
Witness: MR IVAN LEWIS, a Member of the House, Parliamentary Under Secretary of State for Skills and Vocational Education, DfES, examined.
Q1 Chairman: Minister, can I welcome you to this session of the Select Committee. We very much value our meetings with you and it is about a year since we had our formal meeting on what we like to call your performance review. We will be seeing a lot of you in the coming months because of course we are about to embark on an inquiry into skills and that means we are going to have to communicate on a very regular basis. We intend to look at three or four specific topics in the skills area and hope that will be helpful to you. Can I begin by asking, reflecting over your last year since you appeared before this Committee, what do you think have been the major concerns? We understand of course about the major White Paper that you have been involved in producing. Is there anything else that you would like to draw to the attention of the Committee?
Mr Lewis: I am delighted to have the opportunity of being here. I suspect, as you say, that we are going to have a big conversation during the course of the next 12 months and I would like to say that also we have spent the last year really trying to please you, Chairman. We delivered the Skills Strategy White Paper to time when you doubted that we could and we also announced the roll-out of the Sector Skills Council Network which I think is important. How I would define the central issues that have taken place during the last year is the production of that White Paper. I really think that it has been widely welcomed. There seems to be a tremendous amount of consensus out there for the content of the document. There is a closer working relationship now than there has ever been before, both between the organisations delivering the schools agenda but also between government employers and trade unions as, on the last occasion that I appeared before the Committee, you, Chairman, expressed that there ought to be. So, on the skills agenda, I really do believe that there is a new energy and a new focus. I also believe that we are really beginning to attack our culture in this country which is negative towards vocational education. I really do believe that we are beginning to make, as I hope I will be able to reveal during the course of my evidence, significant gains in terms of cultural change but also in terms of putting in place the policy blocks which will enable us to have high status/high quality vocational education in this country. The other issue that I would like to draw to your attention is a new focus in schools on the importance of attendance and behaviour as being central to raising school standards, not as some marginal issue. We know that, improving discipline, making sure that young people attend when they should, is vitally important in terms of their individual performance, in terms of our ability to create the world-class education system in primary and secondary that we seek, but also in terms of attacking some of the social exclusion-related issues in our society such as antisocial behaviour and crime. If you look at the figures, the direct relationship between those children who are excluded, those children who are truanting and those people who then end up in the criminal justice system and, even worse, end up in youth offenders and prisons is frightening. I believe that we have made tremendous progress, although I do not pretend that the creation of a strategy is the same as delivering change, on the skills agenda and I think that, for the first time in a generation, we are seriously attacking attendance and behaviour issues and, if you look at some the generational problems that we have in our society, some of the antisocial behaviour, some of the problems to do with teachers leaving the profession, some of the issues to do with relationships between the older people and the younger generation, I think that behaviour particularly is something which merits far greater focus and attention than it has been given in the past. That is how I would define the priorities. I have also personally been working very closely with David Miliband on the 14-19 agenda. We have put in place a serious of building blocks in advance of Tomlinson, the new GCSEs in vocational subjects, a more flexible curriculum at Key Stage 4, the flexible 14-16 partnerships where young people in many parts of the country now have a mixed programme of learning, a couple of days in college, a couple of days in school and maybe a day with a local employer. So, beginning this process of creating a 14-19 curriculum which is far more focused around the needs of individual young people than has been the case historically. Also, a greater emphasis on work-related learning - that will become statutory from next year - and, as the Committee will know, the commitment to introducing enterprise education fully into the curriculum over the next couple of years. So, that is the span of my major responsibilities and issues during the course of last year.
Q2 Chairman: Still in your list of responsibilities as supplied by the Department, you have individual learning accounts.
Mr Lewis: Yes.
Q3 Chairman: This Committee looked in some great depth at the way in which the individual learning accounts scheme, which we very much supported as a committee, went, as they say in the jargon, belly up losing significant amounts of money, millions of pounds of money. Every minister who came before us when we inquired into that assured us that you would get the money back and that you would bring the people who defrauded the system to justice. What evidence is there that you have done any of that?
Mr Lewis: Chairman, I do have figures but not on me in terms of the recovery rate and the resources that have been recovered and I can write to you about that. There have been some prosecutions. Of course, in terms of ultimately the total number of prosecutions, we are dependent on both the police and the Director of Public Prosecutions but, make no mistake about it, we have successfully chased many of the providers who we believe were overpaid and there is a thin dividing line between fraud and overpayment and that has also been an issue that we have had to resolve. We have been very, very assertive in chasing those people who we believe have had an excessive amount of public money and I believe that we have recovered quite a significant amount of that public money.
Q4 Chairman: What do you call a significant amount?
Mr Lewis: I do not have the figures on me; I can get the figures to you.
Q5 Chairman: Come on, Minister. You know and I know that if you had recovered a significant amount of money or there had been serious prosecutions, somebody on this Committee or one of our staff would have read it in the newspapers. Indeed, you would have made sure that it would get in the newspapers. There has been not one story about a successful prosecution that we have read about apart from one small prosecution. If you can draw our attention to successful prosecutions that brought back some significant amount - and we are talking millions here - we would very much like to hear it.
Mr Lewis: Well, I can get you the detailed figures. We have never ever pretended to this Committee or anywhere else that the individual learning account was anything but, in the end, a disaster. The principles that underpinned it, the objectives of the individual learning account, I believe, having gone through the process of developing a skills strategy and looking at how you do stimulate demand amongst individual learners, were absolutely right. Unfortunately, in the design and in the delivery, the whole principle, the whole vision if you like, was undermined and I do not deny that to this day and we hold our hands up and acknowledge that and we will have to learn from those mistakes. However, we have not stopped the process of chasing the public money that we believe has been inappropriately used and we continue to do that.
Q6 Chairman: If this Committee and you and the Government agreed that it was a great vision and a great way of getting through to those people who need that sort of skill and that range of skills, why have the Government not put it back in a similar form much more quickly than they have?
Mr Lewis: Because I think that we had to reflect on where the individual learning account went wrong, frankly. What we have created in the skills strategy is, for the first time in this country, a universal entitlement for those without a first Level 2 qualification to have that Level 2 qualification. The challenge now is to make sure that we market, promote and stimulate demand in a way which maximises the number of people who do not currently have that qualification to know how to access training in order that they can take advantage of that new entitlement. I would argue that, by focusing resources quite clearly on that category as well as redesignating ICT, for example, as a third basic skill, we achieve almost a better product potentially than the individual learning account where resources went to people who did not necessarily always need those resources. They were not focused always on giving people skills that they clearly lacked and were important in terms of both their personal development and our economic requirements. So, I believe that the new first Level 2 entitlement alongside the designation of ICT and alongside literacy and numeracy as a basic skill gives us a tremendous opportunity to stimulate demand in a targeted way amongst those individuals who we most want to bring back into learning.
Q7 Chairman: What is the time gap between what you have described, the end and the disaster of ILA as it was all thought through and organised, and its replacement?
Mr Lewis: What we are doing at the moment is piloting the introduction of the new universal entitlement because we want to get that right in terms of making sure that we do get the maximum number of people. We also know that there are implications for the rebalancing and redirection of resources in terms of the introduction of that entitlement. So, we are piloting that this year and it will become fully available from September 2004. So, you can work out for yourself, Chairman, the gap between the end of the individual learning account and the introduction of the new Level 2 entitlement.
Q8 Chairman: Three years?
Mr Lewis: Roughly.
Q9 Chairman: That is a long time, Minister. If it is an important gap to fill, it is one hell of a long time to wait to fill it.
Mr Lewis: In the meantime, there has been a lot of progress made in terms of, for example, getting people to develop basic skill qualifications who have never had them previously and other people have developed qualifications. It seems to me that you were quite clear in saying that we needed to replace a collection of initiatives in terms of skills with a coherent strategy and it was also important that because of what happened to individual learning accounts, we made sure that that strategy was developed sensibly and that it was developed in a way which had credibility and robustness and I would rather have spent a little bit more time, although we did deliver the skills strategy to time, getting it right and genuinely have the capacity to stimulate demand in a way that we have not been able to do before than we rushed it because superficially that would have looked better, but we would not have designed a system that really had the capacity to get to many more learners than has been the case traditionally.
Chairman: Minister, we do not want to dwell on this but we are just reminding you that sometimes you go across to Sanctuary House and it looks more like the Eden Project than a department! It is a very lovely place but when a project like this goes belly up, we expected - and we said this at the time - the lights to be burning all night while you put together a new programme and replaced it and met the need quickly. Quite honestly, I am sure this Committee will agree with me that that is a long time to have the gap. So, lights burning in Sanctuary House - environmentally a little bit dodgy but we would allow you to work through the night when you have to replace a programme. Anyway, I do not want to dwell on that. Thank you for that opening group of answers. Let us get on to school attendance.
Q10 Mr Pollard: Minister, reports suggest that the implementation of the behaviour and attendance strategy has tended to remain static and there have not been any great improvements. If you progress through some of the strategies, they have a negative emphasis such as fast-track prosecutions and attendance councillors. Do you have positive strategies where we can all enliven young students in order that they actually want to take part in education rather than not that part? I bring your attention to the Prince's Trust which has been doing the Excel Club Scheme which we had a demonstration of yesterday. One LEA, Durham, have an Excel Club in every school and it has brought attendance levels from the low teens up to the high nineties. So, positive strategies seem to work and negative strategies are not working quite so well.
Mr Lewis: I would agree with a lot of what you have said about the importance of having positive strategies. I do not accept though that we have an either/or scenario. What I would say is that, in the context of a government that are investing more resources than ever before in preventative work, in supporting families who genuinely have difficulties and in intervening earlier, it is also right that there be, as part of that package, an element of accountability and sanctions, particularly in relation to a basic responsibility for parents, with the exception of those who legally home educate, to get their children to school. In direct response to your question, let us look at some of the positive interventions that we are taking. The Key Stage 3 strategy which is about stopping this historic stagnation and backward performance of young people in those early years of secondary school, which has often been a major problem in terms of attendance and behaviour; the development and creation of the new connection service; as I have already said, the flexibility at Key Stage 4 to build a far more flexible curriculum around the needs of individual learners; the increased flexibility for 14-16 year old children to which I referred earlier; and the GCSEs in vocational subjects that we successfully introduced in September of last year. We also have now, as part of the behaviour and improvement programme, for the first time ever, the right of permanently-excluded pupils to have access to full-time education and, whilst there are issues to do with the quality of that, I think it is a major step forward that those who are permanently excluded have access to a full-time education. In the behaviour improvement programmes, we have small teams working close to primary and secondary schools. These are small multidisciplinary teams consisting of people from different professional backgrounds and different disciplines actually supporting the school in working with some of the most challenging young people and making the relationship between what is happening at school and what is happening at home. We have the incredibly successful learning mentors now in many of our schools who can offer individual intensive support to young people. I met some of them yesterday at the Pimlico School not far away from here. They are really able to offer that intensive support. We have learning support units as part of the programme where, instead of a head teacher only having the option of permanent exclusion or nothing, we give a serious option to withdraw the young people on a temporary basis with a clear objective to reintegrate those young people back into mainstream classes as quickly as possible.
Q11 Chairman: When are we going to see signs that it is working?
Mr Lewis: There are several things. First of all, if you look at teacher perspective on behaviour, on the most recent survey, 76 per cent of teachers and 87 per cent of heads considered pupil behaviour to be generally good and, in the context of a debate about that, we ought to be clear. Eighty-seven per cent think that standards are being maintained or getting better.
Q12 Helen Jones: Could you just clarify for us who did the survey because I do not think that teachers are likely to report to the DfES that behaviour in their own school is bad. Who did the survey?
Mr Lewis: It is a DfES commissioned survey. As far as I am aware, teachers in no way have to identify their individual institution in the course of giving their replies, but I can let you know about that.
Q13 Chairman: There is a shaking head on your right shoulder!
Mr Lewis: Coming back to the point about when it is going to work, I think there are several issues. First of all on attendance, I believe that the combination of the positive support that I have described - and we have not talked about truancy suite, fast-track prosecution, fixed-penalty notices, parenting contracts and parenting orders, all of the things Mr Pollard has some doubts about - will begin to demonstrate significant improvement in attendance school by school. We are already seeing in the behaviour improvement area specifically an improvement in attendance but I accept that nationally the unauthorised absence figures to date have remained stubbornly the same and our challenge is to get those down. We have the target of reducing unauthorised absence by ten per cent between 2002 and 2004. I am hopeful that we can get there; I cannot promise the Committee that we will. I also want to make the point that it is my intention once we have gone beyond 2004 to look at this issue again in terms of that our objective should be far more about maximising attendance in all of our schools rather than this artificial division that sometimes is there between unauthorised and authorised absence because head teachers have a tremendous amount of discretion when they make those kind of judgments. In terms of the long term, I want to make this very clear. The benefits of improving behaviour and discipline in schools and in relation to young people's performance, in relation to teachers' job satisfaction and in relation to antisocial behaviour and crime do not occur in one year. They do not occur in two years. This is a sustained generational challenge and, if we are going to take these issues far more seriously than we have done in the past, by expecting certain decent standards of behaviour and believing that that is right for young people in our society, that somehow this is not illiberal because, in the real world, by being relatively wishy-washy on these issues, I think we have allowed a small minority of young people first of all to be let down by the system and secondly to get themselves into all sorts of difficulties which frankly blight their life chances and life opportunities. So, I think that having a focus on expecting certain standards of behaviour is really important but equally important is recognising that families who are genuinely having difficulties and have many challenges need a lot of support and a lot of help. Alongside that, it is right for the State that is putting in unprecedented levels of help and support to demand basic standards of responsibility and accountability from individuals and, for me, asking a parent to do that, a parent who is refusing to cooperate not unable to cooperate but refusing to cooperate with the system in terms of getting their child to school, is not unreasonable in a civilised society.
Chairman: Minister, we are going to have to have slightly shorter answers to questions because we have a great deal of issues to cover.
Mr Pollard: I do not think that I made my question clear. It is easy to get a child to attend school: you just nail their foot to the floor and there they are! That is the negative side of it. What we have to do, following on from that, is to excite children into accepting learning and having some joy in development. There is no point in just having them sitting there, is there? That was the point I was trying to make and that is why I mentioned the Excel scheme. I talked to young people yesterday and they were saying that it was only when this scheme started that they actually took part in education and started developing the skills that we all know are necessary. You are absolutely right that these kids, if they are not excited into education, are going down that slippery slope and it is drugs, prison and all of those negative things that we all know.
Chairman: What is the question?
Q14 Mr Pollard: I am again focusing on the positive part and talking about the Excel scheme which is what I witnessed yesterday.
Mr Lewis: Very quickly, enrichment and enjoyment in primary; the Key Stage 3 strategy in order that children are not turned off education in the early years but are turned on; the flexible 14-19 curriculum which enables us to build it around the individual rather than say, "Here is a narrow box, fit into it"; the Tomlinson reforms that we are yet to hear the final recommendations from which are about creating pathways through the system which turn young people on to learning rather than turn them off. This Government have a very, very strong and good record on looking at the curriculum, looking at the assessment and looking at the teaching and learning to make sure that we do create a system which turns the maximum number of young people on to learning rather than turns them off. If you do not have the cooperation of parents however in trying to do that, it becomes very, very difficult for the Government and for the teachers.
Q15 Valerie Davey: I would endorse much of what you said, Minister, and particularly the mentoring scheme and indeed an organisation which again was represented in the House recently from Birmingham Black Boys Can. All of those things are good. The concern I have is for the group I would call 'out of school' children, so they are not on anybody's register. It alarms me that we do not have a clear idea of exactly how many they are. Do you know, at this point in time, how many children are not actually on the register aged between five and 16?
Mr Lewis: No, we do not know the answer to that properly. We reject the 100,000 figure that has been published recently; we do not believe that has any serious foundation.
Q16 Chairman: Are you referring to the Nacro work?
Mr Lewis: Yes.
Q17 Valerie Davey: The figure that I think more consistently has come out has been possibly 13,000/14,000/15,000. Do you think that is nearer the mark?
Mr Lewis: I think it probably is, yes.
Q18 Valerie Davey: But that is 15,000 and, even if I take ---
Mr Lewis: It is still far too many.
Q19 Valerie Davey: Exactly. Even if I take the 10,000 which I think is the bottom limit of that assessment - and there are other departments you are working with but matters such as, for example, bed and breakfast policies mean that they slip through the nets occasionally but, after some of the horrendous situations like the Ward murders in Gloucester, I think we did a lot more work to try and identify children between schools - what else are we actually doing?
Mr Lewis: We are working, as you know, in each local authority to create an identification, referral and tracking system which means that we minimise the possibility of young people disappearing literally from the system. A lot of the reforms identified in the Green Paper Every Child Matters really seeks to address this point in terms of the relationship between the education system, social services, housing, the local authorities, the criminal justice system, youth offending teams and the like. We need to have a far more joined-up system. What we have at the moment are a lot of organisations and a lot of professionals working with children and young people. We are not spending that money as effectively as we could. We do not have as much joined-upness on the ground as we desperately need and you will hear stories of some young people who have five, six or seven agencies in their lives without it being clear about which agency is responsible and without any of those agencies really making much of a difference in terms of impacting on that child's opportunities or that family's situation. So, I believe that the reforms that we have articulated as part of Every Child Matters, the decision to create a new Minister for Children and the bringing together of those functions is very important, but we must not also think that that in itself is the panacea. We still have to work, as you say, with ODPM on housing, with health on issues that they are responsible for and with local government and we have to make sure that we are providing a more integrated, cohesive system both in terms of its preventative capacity and also its protection, its basic requirement to protect children and young people and, equally, we have to ensure that this new approach minimises the number of children who are regarded as missing. There are a variety of reasons why children ---
Q20 Chairman: Minister, that is very interesting but you did pour cold water on an organisation's research that many of us who work with it have a very high opinion of - Nacro is not a fly-by-night organisation, it is one of the most impressive organisations working in penal reform and resettlement of offenders that I have ever known with high-quality staff and indeed, when this Committee was in Birmingham 15 months ago, Professor Chris Pascal spoke to some of us about how many children she thought were missing in hostels and refuges who never got on to the register and no one knew about them. That was another special adviser to our Early Years Inquiry. Quite honestly, Minister, I would not dismiss Nacro or Professor Chris Pascal. I actually think that some of the people in the Department should be undertaking a fair and objective assessment of how bad this problem is. The Members of constituencies who have a high level of residents who originally came from the Indian subcontinent have been concerned for a very long time that young people disappear off the school rolls never to come back at about 13 or 14 and, as far as the school is concerned, they have just disappeared. We do not know what happens to them.
Mr Lewis: Chairman, I did not pour water on the principles underlying what Nacro were saying. I acknowledged very clearly that what Nacro were saying was a matter of serious concern. What I poured water on was the 100,000 estimate which is based on grossing-up numbers on one local education authority's out-of-school register. I do not think any of us would accept that as a serious basis for an evaluation. All I am questioning is the numbers. I am not questioning the scale of the challenge. I do not want to repeat all the things I have said to Mr Pollard about the positive interventions in terms of trying to make school a positive experience for young people but something else I should have mentioned was our bearing down on bullying which turns a number of children and young people off school as well. Chairman, I personally am very, very exercised about the question of "missing children". There is the whole debate about children who are missing out and I have been through a list of things we are trying to do to make the education system more suitable/more fit for purpose for those children, but there are the children who are actually missing in terms of those travelling from area to area without us having any knowledge of them, those who are unofficially excluded - and there is no such legal term - by head teachers without the appropriate procedures ever being followed, there are traveller children and there are children who have serious health problems who do not go to school because of that, and I am currently, within the Department, undertaking a piece of work on how we can get a better grip on the scale of the problem and, as well as the identification, tracking and referral work that we are doing and as well as the work we are doing in the context of the Green Paper Every Child Matters, I am also looking at whether there is anything else we ought to be doing to really bear down on this serious problem because, clearly, those children are not only not being given the chance to be nurtured but some of them will be at risk if we do not know anything about them.
Chairman: We will be taking that up with the Children's Minister.
Q21 Mr Chaytor: Regardless of whether it is 10,000 or 100,000, do you think there is any link between the system of league tables and the high number of overt or covert exclusions? That is to say, given that schools are judged primarily by the number of five HSEs at GCSE, what is to encourage them to keep difficult children within school? Is it not just simpler to let them go to boost their position in the league tables?
Mr Lewis: The answer to that is that it is not acceptable to legitimise head teachers engaging in unofficial exclusions. It is not appropriate and it is not professional. I would like to address directly the point you make in relation to leagues. There are two significant reforms that we are making to league tables which I think are important. One is measuring value added and making sure that in the future performance tables take account of value-add performance from institutions. Secondly, the inclusion in league tables of appropriate and robust high-quality vocational qualifications. I think those two reforms will make league tables a far more appropriate and reasonable measurement of individual institution's performance. No, I do not accept the basic premise that league tables in themselves justify head teachers or local education authorities washing their hands of the most difficult and challenging children and young people. I also believe that is why it is very important that we have learning support units in schools to provide alternatives to exclusion. We also have now, as I say, for the first time in this country, access to full-time education for permanently-excluded pupils. There have to be tough decisions made. Some behaviour becomes so unreasonable and so unmanageable that one has to regrettably use the option of exclusion, but what is important is that that is not the end of that child's chances. We give that child many chances to come back into the mainstream and to fulfil their potential, which is why the direct relationship between exclusions and those in the criminal justice system is so stark and so challenging and which is why we have to look at this issue very carefully. I do not think we should legitimise not ensuring that we allow every individual child to achieve their potential because of the league table regime.
Q22 Helen Jones: Can I take you on to the anti-bullying strategy which you mentioned earlier. The Make a Difference campaign that the Department launched in November has a model charter for action which you encourage schools to adopt. How many schools do you expect will adopt that and how do you expect it to make a difference?
Mr Lewis: First of all, I would expect every school to seriously consider signing the charter or an adjusted version of that charter to suit their particular needs, so I would expect the vast majority of schools to sign it. It is designed to make a difference in two ways. First of all, up until now, we have required every school to have a bullying policy. As everybody on the Committee will appreciate, having a policy and acting on that policy are frequently two very, very different things. So, the charter is designed to get schools to move from just tipping the box saying "we have a policy" to taking decisive and sustainable action. The charter also includes some very, very practical advice, a checklist of things that school can do to tackle bulling. It does not proscribe what schools ought to do and I was very clear about this. It is not for me to dictate to every head teacher in the country precisely what they should do in terms of tackling bullying but it is for me to say, "This problem has not been taken seriously enough in the past and it still is not being taken seriously enough." Alongside the charter and alongside Ofsted's new focus as part of looking at behaviour on bullying, I am doing these regional tours in every part of the country to focus people's attention on bullying. The first conference in London was a sell out; it was over-subscribed; there were approximately 450 people there; we could have filled the place twice over. So, there is a general recognition that we need to change this. If anybody disbelieves me, I actually have hard evidence of this, not anecdotal evidence or small samples. If 20,000 kids are ringing Childline every year citing bullying as being the number one factor that concerns them, if editors of teenage magazines tell us that the major source of correspondence in their postbags is from children who are suffering, often in silence, as a result of bullying, then I do not apologise for making the case that this is one of the most serious challenge facing our children and young people.
Chairman: The Committee agrees with you on that.
Q23 Helen Jones: The point is that there is, as you have said already, a legal requirement for schools to have anti-bullying policies and yet the numbers of children who report being bullied are still quite astounding. Is there, in your view, a gap here between schools setting up anti-bullying policies or adopting the charter and actually implementing those on the ground and, if so, what do you put that down to? Is it lack of training for staff or is it something else?
Mr Lewis: I think that Helen Jones makes a very, very important point. There are several things. First of all, schools will say that, over the last two or three years, they have started to take this issue far more seriously than was ever the case historically and that they are doing a lot of work within those schools, both in terms of teacher training and teacher awareness, but not just teachers. I have always made the point that every adult and indeed every young person in a school environment has a responsibility to understand the full horrors of what bullying can do to somebody but also to have the skills to know how to open up, so that a young person who is going through that can feel able to reveal what is happening to them. I have been particularly impressed by the peer-mentoring schemes - I have seen a lot of these in recent months - where young people themselves are trained to be a listening ear, to be able to support their peers and then have systems, with permission, in the context of confidentiality policies, to talk to the staff about particular problems that individual students are having. So, I think there has been progress. I am very frustrated and impatient to see this become a mainstream part of having a strong and positive ethos in every school and an appropriate approach to behaviour. Bullying should not be seen as a stand-alone isolated issue. If children are being bullied, it is damaging their performance, it is affecting their relationship with others inside and outside of school and bullying can lead to antisocial and criminal behaviour and, if people get away with bullying during their early years in their childhood, they might grow up into adults and think that bullying is acceptable and legitimate and that is why we have some of the problems that we have been debating recently.
Q24 Helen Jones: I think we would agree with you about the peer mentoring, but my question really centred on the staff and I would like to ask if the Department has any idea of how many staff receive training in anti-bulling practices and also what you are doing to encourage those positive behavioural strategies that you mentioned because the most successful school that I know has a very clear-cut policy of rewarding positive behaviour as well as dealing with bad behaviour.
Mr Lewis: I agree entirely. First of all, every secondary school at the moment is having access to training specifically on behaviour issues and, in the context of that training, bullying is a central part. The idea is that senior staff from every secondary school will have access to that as well as as part of the primary strategy. Then, in every school, those senior staff will go back and begin a process of training and integrating that in terms of good practice within their individual institutions. So, we are very much positioning this in the context, as Helen Jones says, of having a positive approach in every school to attendance and behaviour issues.
Q25 Mr Pollard: Bullying does carry on outside school as well. There is gang culture, for example. Are you talking to Home Office colleagues about police working in conjunction with schools?
Mr Lewis: We are. One of the great successes of the behaviour improvement programme is the location, which people were cynical about at first, of police officers in school. Yes, they are based in schools, but they are not just working within the school, they are working within the local community, they are tackling antisocial behaviour and they are tackling problems where young people may be on the edges of crime and getting stuck in and involved early. We are also, as you know, for the first time as part of the Antisocial Behaviour Bill, looking at parenting contracts and parenting orders which are not wholly relevant to what is going on in terms of inside of schools but are also relevant in terms of what is happening on the streets and I would say to Mr Pollard that that is not just punitive. One of the main benefits of parenting orders, as many parents themselves have said, is getting to parents positive support to give them the skills and to empower them to feel able to provide appropriate parenting to their young people.
Q26 Jeff Ennis: In the Skills for Life programme, you indicate that 1.8 million adults have started basic skills training in the last two years. How many finished? What has been the dropout rate?
Mr Lewis: As I understand it, we are on course to have 750,000 people in total qualify by 2004 and we are actually on course to meet that target. One-and-a-half million is the objective by 2007. So, the answer is that there is clearly a significant number of people who begin adult basic skills courses who do not get the qualification at the end of it. That does not necessarily mean that they drop out and it does not necessarily mean that they do not progress into other forms of learning. These are some of the most hardest to reach people in our society and we need to remember that. I accept that we have a job to do to raise quality and standards in terms of basic skills education and to make sure that, if people are being brought back who are the most difficult to engage, we do not let them down because it would be extremely unfortunate if, having made that breakthrough, having brought people over the doorstep, we then fail them.
Q27 Jeff Ennis: I accept your point that some people will probably, to choose the parlance, drop out primarily because they feel they have gone as far as they can on that particular course and they feel that they have gained whatever they wanted to get out of that course when they started on it, but are we actually monitoring at what stage adult students are dropping out on that conveyor-belt system?
Mr Lewis: I think ILA and Ofsted did a recent report where they looked at this jointly and I think that they said there were a number of issues. First of all, they were not totally satisfied that the initial assessment of individuals coming into the system was as appropriate as it ought to be in terms of them looking at the support that individuals need with regard to an appropriate curriculum. They also raised the issue of variable quality in terms of teaching. We are embarking on a new national programme that, in a sense, has never been done before and we are trying to build the profession, both its status and its professionalism and its qualifications, from a very, very low basis. So, they raised the issue of the quality of the teaching. As well as qualifying the existing workforce and ensuring that they have access to high-quality training, we need to attract into basic skills teaching obviously people who are the brightest and the best. We have introduced, from September of this year, golden hellos which has been available to people in other parts of the post-16 sector but had not been previously available to those who were coming in to teach basic skills.
Q28 Chairman: How golden are they?
Mr Lewis: The figures?
Q29 Chairman: Yes.
Mr Lewis: I think they are several thousand pounds but I can get the precise figure to attract individuals in.
Q30 Chairman: Well, at least gold-plated!
Mr Lewis: Yes.
Q31 Jeff Ennis: Not just specifically referring to adult basic skills education but also the broader adult skills situation, I wonder if you could just say a few words about how effective you think the Learn Direct scheme is and what role that is now playing in terms of delivering the basic skills and the wider adult skills agenda.
Mr Lewis: First of all, I would say that it is one of the great successes of this Labour Government and I apologise, Chairman, for being political but I suspect that for many people who walk into Learn Direct centres up and down the country, it is irrelevant to them that it is as a consequence directly of having a Labour Government, but we have over 900,000 people who have benefited directly from Learn Direct, a variety of ICT courses focused around their needs at different levels depending on their individual circumstances from taster courses all the way up to higher-level qualifications. We know that a significant proportion of those using Learn Direct have never been anywhere near a learning course for many years and have never been anywhere near a computer certainly. We also know that Learn Direct is increasingly offering products which are tailored around the needs of individual employers, particularly small and medium-size enterprises that are attracted to having an opportunity to train in the workplace in a way which is focused on their need. So, my view is that Learn Direct has opened up a whole range of new opportunities. We know also that Learn Direct is based in many different environments. If people are reluctant to learn in a more formal environment because they have had a negative experience in compulsory education years, Learn Direct is available in a lot of different ways. I think it has been a great success. Again, we work all the time on raising quality and raising qualification levels. In its first year, Learn Direct got off to an extremely rocky start. If you remember, the early evaluation of Learn Direct was not wonderful. The latest evaluations are incredibly encouraging. I think we should pay tribute to Ann Lynn and Tony Greener who were the leadership team who I believe have turned that organisation around.
Q32 Jeff Ennis: I think I can endorse your remarks about Learn Direct. I have one final question changing the subject slightly and I do know that you do not have responsibility for the higher education sector but you certainly do have responsibility for the 14-19 agenda. How crucial is it that the universities should become involved in helping to deliver the wider 14-19 agenda within secondary schools?
Mr Lewis: I think it is extremely important that we break down the dividing lines between educational institutions of all types. I think that we want to create what I describe as learning communities where we have schools, colleges and universities working together to provide a comprehensive offer to people of all ages to make a reality of lifelong learning in every community. I also believe that it is essential because I believe that the more universities interact with young people, the more young people's aspirations will be raised, the more their ambitions will be raised and the more they will understand that university is for them, not for somebody else. Frankly, I think that in some of our most disadvantaged communities, I reject completely the notion that the reason that we do not have more working-class children going to university is to do with fear of debt. It is to do with the fact that we do not get the vast majority of them to want to stay on in learning beyond 16 in the first place and I believe that is about universities going into schools and meeting young people at an early age, I believe it is about a more exciting curriculum which allows young people to succeed not only via a traditional academic route but also via other routes too. I believe the education maintenance allowances, where they are up and running, are already demonstrating that we can keep young people in - and I do not mean keep them in to baby-sit or warehousing them - in a positive way because they see the benefits of progressing and achieving. We have to make this argument. The facts do not support the notion that the reason for barriers to working-class access is anything to do with the fear of debt. We do not keep anywhere near enough young people. It is a scandal and it has been a scandal of our system over many years, an educational apartheid where far too many young people have been denied opportunities. I believe that, with the strategies about which I have told you today and some of the others - Sure Start, Literacy and Numeracy, Key Stage 3, Connections, a new 14-19 curriculum, educational maintenance allowances, learning mentors, the reform of FE - we have never had a more cohesive, more radical reform at every stage of our education system that this Government have put in place over the last six or seven years. For those who ask, "What are the results?" the results are already coming through but we will see the results over the next few years and we will see many of those young people who have been traditionally denied opportunities in our society having those opportunities and, as a consequence, we will have a better and more cohesive society and we will achieve our economic potential too.
Chairman: Minister, what this Committee demands is that you actually benchmark it, that you actually judge and evaluate whether all this myriad of programmes that you have just run through actually work. Some of them historically since 1997 have worked better than others. What this Committee is conscious of is that it wants those to be benchmarked and evaluated. A problem that we consistently find in this Committee is that there are programmes and we have a number of reports from specialist schools throughout that really does question whether you do your homework and evaluation. We are not against initiatives. This Committee broadly welcomes initiatives to tackle the problems. What we demand is that they are properly evaluated and judged and that you drop the ones that do not work and that you build on the ones that do. That is our message to you and we will be again, if you are still in post next year, coming back to some of these that you have been advertising this morning.
Q33 Jeff Ennis: On the same issue, are we getting enough support from the whole university sector to move on with this vision of involvement in the 14-19 sector because I get the feeling that some universities play at it, shall we say, and are not serious?
Mr Lewis: Some universities have an excellent - that is part of the aim higher programme that the Minister for Higher Education, who I know you are waiting to see, will be able to tell you about - will be able to tell you about. Some universities have engaged very, very positively indeed in that but not all of them have and one of the ironies about the criticism of the package of measures that we propose in the Higher Education Bill that people are aware is that, for the first time, we will actually say, "Yes, you want to set variable fees and you want the flexibility to do that but, in return, you have to proactive in making sure that you are out there genuinely in an outreach way reaching out to young people, particularly in communities where they have been denied access to higher education in the past." So, it is not only about this higher education package. It is about creating enough resources to actually create world-class universities and it is also about, for the first time, giving us a serious opportunity to really do something about it rather than, in an aspirational way, middle-class people sitting around saying that they want to help working-class people get on, but actually, in a practical way, change the fact that largely higher education has been the preserve of an elite in this country for far too long.
Chairman: I hear what you say, Minister. Some of us agree with you, others do not. Micro-management of institutions is always something this Committee resists.
Q34 Paul Holmes: We have heard a lot over the last couple of years from Learning Skills Council and from ministers saying that the Learning Skills Council is much more streamlined and efficient than the various predecessor bodies and that they will therefore save money on running costs, bureaucracy and everything. It is difficult to actually assess this because we cannot get the figures for what the running costs of the predecessor organisations were. I asked you a parliamentary question earlier this autumn about the aggregated accounts for the text for 2001 and your answer on 27 October was that basically the information just was not available to publish those accounts. When will the information be available? When will you publish the accounts for April 2000 to March 2001 for the text?
Mr Lewis: I cannot specifically answer that question today but what I can say is that I will get back to you in the next few days with a direct answer to that question.
Q35 Paul Holmes: I will look forward to receiving that one! Moving on to the question of adult skills and the general funding of FE and indeed fees, not higher education ones but FE fees, there are some very welcome commitments now from the Government about increasing the number of adults who get up to basic skill levels and up to Level 2, but the Association of Colleges, in analysing that over the next three years, say that the money is simply not there in the system both to deliver these increases in adults getting basic skills on Level 2 and to carry on with the existing adult skills programmes at higher levels in IT and things like that. Either they are going to have to cut some of the existing adult programmes or they are going to have to charge or increase fees, which is something that the White Paper recommends that colleges do. If fees are increased for courses that are offered, for example, to employers, trainees or for IT courses, what will be the fall in demand and what sort of level of increase in fees have you estimated that the colleges might need to make?
Mr Lewis: First of all, the answer to the question about whether there is enough money in the system is, at this stage, a false analysis. We need to come out of the next spending review with clarity there about the level of resource we are going to have over the next few years and that depends on the Secretary of State's discussions with the Chancellor. Also, there is this redirection of resources. You are right that one of the implications of the White Paper is that we will be looking to raise fees where appropriate from employers and, in some cases, more than has been the case in the past from individuals. I do not apologise for that because we target resources on where they are most needed and we are honest about the requirement to have a contribution from the Government, from employers and from individuals and that honesty is there for the first time. I believe that, in terms of demand, there is always the view that if you charge people more or if you charge people for the first time, then they walk away. My view is that if you provide people with learning that they want that is focused on their needs and fit for purpose and that is flexible, particularly in relation to employers, they will be willing to pay for that, particularly if it is above Level 2. Many employers feel, quite rightly, that Level 2 failure is as a consequence of the failure of the compulsory education system and therefore it is appropriate that the State picks up 100 per cent of the bill, but employers accept that they will benefit in that the higher level the qualification becomes, there will be some benefit for them, particularly if it is focused in the workplace and it is about upping skills in individual workplaces. I think that employers are willing to make a contribution providing, as I say, that the education and training that is available for them is not a curriculum that is created over there with employers over there. There is actually a coming together, a cross-fertilisation, so that we ensure that the education and training content is genuinely responsive to the needs of employers. Learn Direct was referred to earlier and that is a good example. Employers are willing to pay for Learn Direct courses because they feel that they are focused on their needs and that they individually have commissioned those services. So, the outcome of the spending review will determine the level of resources that we have and also the rebalancing of resources and the ability to lever in additional income from employers and individuals where that is appropriate.
Q36 Paul Holmes: You seem very optimistic there that employers will invest more money and pay higher fees, but the White Paper itself indicates that employers have not actually been very good at doing that. The former Chairman of the Learning Skills Council has said that some companies only pay lip service to training. The Chief Executive of BAE Systems recently called for companies to be forced to provide compulsory time off for training and so forth. So, on the one hand you are being very optimistic and saying that employers will pay these increased charges but the White Paper and other people are saying that they have not done up to now and the White Paper says that it is the last chance for employers before compulsion might be considered.
Mr Lewis: I believe - and the Chairman has taken a very close personal interest in this - that the creation of the Sector Skills Council Network - 75/80 per cent of the UK workforce will be covered by sector skills councils by the middle of next year - will make a real difference and the development of what we are describing in the White Paper as sector agreements where, sector by sector, they will be able to determine clearly their skills needs, short, medium and long term, and our commitment is to configure the education and training system to respond directly to their analysis of what their skills gaps are. So, that is the first thing. It is the responsive demand-led approach and I think employers will respond positively to that via sector skills councils. The new regional skills partnerships where, instead of having this myriad of organisations which is a mystery for many employers to work their way through, we are going to have a streamlined approach and no wrong door approach, so it is focused on the needs of employers rather than again a mystery and a myriad of bureaucracies, which will make a real difference.
Q37 Chairman: There was a myriad of clichés there: streamlined, open door ... We have heard all that before, have we not?
Mr Lewis: Maybe but what we have heard before is many people attempting to create one door to go through and I just think that is out of the question.
Q38 Chairman: Historians sitting around this room, Minister, who have been around slightly longer than you, know that historically, on the one hand, Paul Holmes is absolutely right that employers in this country have been deeply reluctant to pay a fair contribution to the training for their workforce and indeed sometimes the Government have resisted. In our recommendations on the Higher Education White Paper, we clearly said that employers had a responsibility. We gave one suggestion that they might be able to have that full balance rooted in the Dearing recommendations and back came the Government, "We are fully in favour of Dearing but we do not agree with you about employers." If Dearing is right, it should not let employers off the hook surely, should it?
Mr Lewis: I think we have said, in terms of the education and training system, that we do not believe at the moment it is sufficiently demanding. We believe we have a primary responsibility to create a system which is truly demand-led. I have described some of the ways we seek to do that. I would also mention to you, Chairman, that for the first time we are reforming completely the adult vocational qualifications system to have a unitised system and a credit transfer system, something that employers have been demanding for many years. I would also say to you, Chairman, that the Government leading by example in this area is vitally important. One of the things I have been able to do in the course of the past year and as part of the skills strategy is to get the Government to commit in two ways to lead by example: one, in relation to its own employees, making it clear about how it intends to honour its commitment to investing in skills amongst millions of people who are either directly employed by government or indirectly via a range of public services, and, also, to consider the massive procurement power that we have in terms of goods and services as government to incentivise employers to invest in skills. Finally, the CBI, I am delighted to tell you, are leading a piece of work on the potential of the supply chain to influence employer investment in skills. Some of the larger companies really believe they could trail-blaze in terms of influencing small companies, first of all, to access training in a way which is focused on their needs, but also to make the case for the fact that investing in skills is not altruistic, it is not because the DFES or the Education and Skills Committee thinks it is a good idea, but it is absolutely central to business bottom line and profitability in a modern world. We have not always made that point very clearly to business; we have tried to present it as corporate social responsibility or altruism. This is about being at the cutting edge: in the 21st century, if you want to be profitable, if you want to have the best possible bottom line, you will invest in skills. It also applies to the kind of public services that we say we want to create in terms of responsive and reflexive public services. You have to have skilled people at every level.
Chairman: We would all agree with that. Paul, do you want to come in?
Q39 Paul Holmes: On one small point. We were talking about growth earlier, and you were saying that is all hypothetical. A principal of a London college last week argued, following a cut in his standstill budget, that the London colleges needed £5 million for growth in this financial year. The national Learning Skills Council only provided £1.5 million. After initial difficulties emerged, they increased it to £3 million, which is an increase, but it is still 40 per cent short of what is needed. Do you have any comments on figures like that?
Mr Lewis: I was at the AOC conference last week and my ministerial colleague, the Minister for Higher Education, and I were very, very positively received - which has not always been the case. Nobody disputes that fact, that there is both a record level of investment going into further education and an exciting reform agenda in terms of raising standards and improving quality. Of course, this year has been a tough year in terms of costs pressures, we do not deny that, but if you look at the sustainable commitment to year-on-year increases in funding directly related to performance - and we know we have the approach where institutions have to demonstrate that they are achieving particular standards to get a baseline level of funding and then an increase and then a further increase - I believe that further education has never been in better shape. The Learning and Skills Council has a new leadership, has a new chief executive. He is already, after a very short period of time, making some pretty significant changes to the structure of the organisation. We want to get the right dynamic between the centre and the 47 local Learning and Skills Councils. We want to create the right structure region by region. But I think it would be unfair not to recognise the unprecedented level of investment and commitment to further education that has been demonstrated in terms of the current spending review settlement and I am optimistic that that will be sustained on a longer term basis.
Q40 Chairman: But Paul Holmes is right, is he not? I do not think the Association of Colleges Conference actually was last week, if I may say so.
Mr Lewis: It was several weeks ago.
Q41 Chairman: But when I recently addressed the chairs of the Learning Skills Councils from up and down the country, all 47 of them, the one thing on which they were absolutely unanimous was the lack of flexibility in their funding to respond to local needs. So much of this budget is dominated by what you tell them to do and what you in the Treasury allow them to do. The flexibility which many of us thought Learning and Skills Councils would have to respond to local needs and local skills and employer demand is not there. What are you doing about that?
Mr Lewis: First of all, we are currently consulting on an appropriate funding regime for the future of post-16 education. Also, as I say, in terms of the new chief executive, he is making significant changes to the structure of the Learning and Skills Council.
Q42 Chairman: What are you saying to him? Are you recognising that need, that there is a lack of flexibility at local level?
Mr Lewis: We are saying, in the context of the skills strategy, that region by region we are getting the RDAs, the local LSCs, Jobcentre Plus, Business Link to get together and look at skills in its entirety, look at the spend, look at the policy, look at the regional and sub-regional community need, and making sure that we have best value for money and maximum flexibility. Also, Chairman, I do not apologise for saying that we believe there are certain national priorities, wherever you live, in any part of the country, to which you should have access as an entitlement, and I include in those categories basic skills, the level 2 commitment. I also believe - although this is for another time, no doubt, Chairman - that we have a very good-news story to tell, a growing good-news story - it has a long way to go on, for example, modern apprenticeships and giving far more young people the opportunity to access modern apprenticeships.
Chairman: We will be meeting you specifically on modern apprenticeships. David?
Q43 Mr Chaytor: Thank you, Chairman. Minister, returning to the level 2 entitlement, do we know how many adults currently do not have a level 2 qualification?
Mr Lewis: I think it is about 7 million adults.
Q44 Mr Chaytor: What will be the cost of implementing the level 2 entitlement?
Mr Lewis: I cannot give you a cost here and now.
Q45 Mr Chaytor: Is it assumed that this will be new money or will it be entirely redistributed from elsewhere in the current schools budget?
Mr Lewis: It will be a combination of the outcome of the spending review and also redistribution of existing resources. It will be a combination of those.
Q46 Mr Chaytor: Much of the work involved in fulfilling the level 2 entitlement will be delivered by private training providers. Do we have any idea how many private training providers we have currently in the UK?
Mr Lewis: I think we have about 1100, though I am not absolutely certain. I know the LSC has, through its contracting processes, removed a number of providers who have simply not been up to scratch and have not been providing the appropriate quality.
Q47 Mr Chaytor: This was my next point. Without rehearsing the ILA arguments, one of the difficulties in the ILA affair was the lack of rigour in monitoring quality of private training providers. In the year 1999/2000, just over three years ago, the Trading Standards Council's inspection of work-based learning providers suggested that 60 per cent were providing unsatisfactory service. Earlier this year, the Chief Inspector of Adult Learning's report suggested the figure is now 80 per cent providing unsatisfactory service. What is being done by the Department to ensure higher quality standards in the provision of work-based learning?
Mr Lewis: I think there are a number of things being done. First of all, as I say, with some providers the LSC is no longer contracting, because, despite attempts to help them improve, that has not proved to have made any difference at all. We are also obviously focusing on improving the quality of the staff who are working for those training providers by offering standards fund support, which had not been available previously, to training providers. We are also looking at reforming key skills, for example - which has proved to be an issue in terms of modern apprenticeship retention. So it is a combination of using the contracting process and also working with people who we believe have the potential to be much better, by offering them focused and targeted development funding support for their staff. Also, of course, they will be subject to the same kind of regime as colleges in terms of performance rewards: if their performance improves, then they will benefit financially as a consequence of that.
Q48 Mr Chaytor: We are in the process of setting up dozens of Sector Skills Councils; we have 47 Local Learning Skills Councils; we have a regional development agency; and 12 months from now, with a little luck, we will have regional assemblies, so directly elected regional government in three regions. Is that a sane, rational and streamlined system of delivery for adult skills?
Mr Lewis: We had a choice in the development of the Skills White Paper. One was to rip all these organisations up and start again and spend the next three years on radical organisational restructure and the other was to make far more coherent sense of how those organisations fit together.
Q49 Mr Chaytor: Is this the White Paper that argued for the creation of Sector Skills Councils?
Mr Lewis: No. With all due respect, the Sector Skills Councils were already policy. The debate was how quickly they were rolling out. They were replacing the National Trading Organisations, of which there used to be 75 or 80 and there are only going to be 23 Sector Skills Councils. At a national level, we have streamlined the NTOs in terms of the SSC replacement. We also believe they will be far more effective employer-led organisations. At a regional level we have brought together the RDAs, the LSCs, Jobcentre Plus and Business Link. Also, at a national level, for the first time we have all of the delivery partners who are responsible for making skills work in this country sitting round the same table on a regular basis and working to a common agenda, that common agenda being to maximise our capacity together to stimulate demand both in terms of learners and employers. I believe that the choice I had to make, we had to make, was radical organisational upheaval, or making the architecture and the wiring invisible, for the people who depend on this system for work; that is, the customer, the individual learning or the employer. I believe we put in place a framework which has the capacity to do that, as well as the bureaucracy busting that we have done in terms of Sweeney and now Andrew Foster. But the proof of the pudding will be in the eating, and it will have to be regarded by those who want to access training as a far more simple system than has been the case in the past, and a more effective system. I can give you one anecdote: the first delivery group meeting nationally finished at seven and people were still there at nearly 10 o'clock at night because they were so enthused about being in the same room talking about the same agenda for the first time. That is just one example of how we can achieve change.
Q50 Mr Chaytor: As we move forward in the future, do you think that the responsibility for skills training should lie with regional government?
Mr Lewis: I think the Government is currently debating the parameters of directly elected regional assemblies should individual regions go for a yes vote. That is one of the issues will inevitably have to be decided; that is, the accountability of the RDAs and local Learning and Skills Councils. I suspect that decision will be made at a higher level of government than mine, but I would be happy to engage in the debate as it evolves.
Q51 Chairman: Minister, that is a very good session. Thank you very much for that. We will be seeing you again soon. When you get that magic ingredient, getting all those people at that meeting from seven o'clock until ten o'clock, you can impart that into Century House.
Mr Lewis: Absolutely. Midnight in Century House!
Chairman: Thank you for your attendance.
Witness: ALAN JOHNSON, a Member of the House, Minister of State for Lifelong Learning, Further and Higher Education, examined.
Q52 Chairman: Minister, welcome to our deliberations. I think this is your first time before this Committee.
Alan Johnson: Indeed.
Q53 Chairman: You know we instituted, some three weeks ago, the system of meeting ministers annually for a sort of performance review. We thought that if it was good enough for teachers, it was good enough for ministers. As long as ministers stay long enough to have an annual review, it is very welcome! I have only been the Chairman of this Committee for three years and in that time everyone has changed, apart from one minister who has had three different jobs in the Department. So things do change in the Department. In June I think you were appointed to this job. I will ask you in a moment to reflect on how it is going so far. A bit of me wants to say that it reminds me of those old, old films of Stan Laurel and Oliver Hardy. I can see you as Oliver Hardy, who would always turn to Stan Laurel - but in this case you are turning to the Prime Minister - flap his tie and say, "This is another fine mess you've got me into." Is that the way you feel about the job?
Alan Johnson: No. Well, when the Prime Minister rang me up to appoint me to this job of Higher Education Minister, I said, "Well, you do realise I didn't go to university." He said, "Precisely" - which seemed rather cryptic. I am not sure which role I am due to be playing. I am very pleased to be in this job. Most politicians like to be involved in red meat political issues and this is certainly one of those.
Q54 Chairman: What are your major concerns in the Department? We are going to get on to flexible fees and all that in a minute, but you criticised, in a sense, the media and colleagues recently because so much of the questioning was really on only one part of your brief. I think you feel that quite strongly, do you not?
Alan Johnson: I feel further education is absolutely crucial to everything we are trying to do in terms of the desire to promote social justice, to attack social exclusion. If you look at the education world, further education is central to all of that. My comment was actually that in, I think, four education questions that I have done, I have not had a single question on FE. My point was that whilst higher education is in the media at the moment - it is top of the agenda in the sense there is a bill - that does not detract from my responsibility to look right across the range: lifelong learning, further education, higher education. They are all intertwined. Eleven per cent of higher education is carried out in further education, as you know. Forty per cent of people going into higher education come through further education. I just wanted to emphasise the importance that I place and the Department place on further education.
Q55 Chairman: The Government has such a good record in many senses of tackling those issues and of spending money to try to identify how you get "less well looked after" (in the material sense) children of people from poorer social backgrounds into education. This Committee sits here and takes evidence in terms of early years, Sure Start, nursery provision at four and now three, and right through the piece. Why do you think it is getting so much criticism at the moment of failing to get people from working class background through the whole system?
Alan Johnson: I do not know whether we are getting criticism so much on that basis. In the debate about higher education, for instance, I have heard many times people saying, "I was the first in my generation to go to university" and that our proposals are asking them to pull the ladder up after them. My point is that we are removing what was a ladder, a pretty insubstantial rope ladder that the occasional working class student scrambled up, to build a wide staircase - that is from the under fives, right through primary education, right through the education maintenance allowance - to ensure that youngsters from poorer backgrounds have the opportunity to stay on in education past 16. It is to get them to that two A-level stage, so they are near the top of the staircase, able to qualify to go to university. My point has been that it needs to be seen right across the range. The attempt to close the social class gap is not just at the university end - in fact, in many respects that is the minor part of the job. It is about raising aspirations, it is about attainment, it is about applications. The whole picture has to be seen in terms of what we are trying to do. We are not concentrating on one end to the exclusion of the other ends. I think the Sure Start process is an important start on that route.
Chairman: Thank you for that. We want to show that we appreciate the breadth of your brief and we are going to start off with some questions on further education. David.
Q56 Mr Chaytor: Thank you, Chairman. Minister, one of the implications of the long-term neglect of further education has been the lack of scrutiny of the quality of teachers in further education. You know the Ofsted reports that came out a month ago on initial teacher training and FE contained some damning criticisms. One of the points that came out was that one third of trainees for initial teacher training in FE did not have the equivalent to English or maths GCSE, so one-third of people training to be teachers in further education did not have the basic qualification we expect of school leavers. What do you intend to do about that?
Alan Johnson: On the same day that was published, on 11 November, I was able to launch at the AOC conference a consultation document about how we address those issues. Of course it was not new, it was part of Success for All. Part of the success of Success for All has been focusing attention on pedagogy, if you like, on the quality of teaching, placing learning and teaching at the heart of what we do in further education. The consultation paper was drawn up with AOC, with Learning and Skills Council, et cetera, to see how we address those problems. There were some positive things in the Ofsted report, but what encourages me is that people working in the sector have been saying for a long time, NAFE in particular, that we need to pay more attention to this, that people who are very good at the subjects in which they are training people, very good at their vocational speciality, we kind of imagined would, by some process of osmosis, turn into good teachers without any help and without any assistance. We are determined to address that. Yes, the Ofsted report gave some very hard messages to us, but I think our consultation document and the way we are seeking to address that does show we are serious about tackling this issue. It will not be tackled in a matter of months; it may not even be tackled in a matter of years, but we will ensure that people are helped to improve their teaching skills.
Q57 Mr Chaytor: In terms of the English and maths requirement for trainee teachers in FE, do you think it should be the same as for trainee teachers in primary and secondary, or do you believe we should have a two-tier system?
Alan Johnson: I think it is different in further education. Further education is training people from 14 years of age to 90 years of age. They have a huge range of skills to put forward. I think if we put an arbitrary barrier, for people who, as I say, are very good at the vocational skills in which are training people, we have to see that as a difference. Yes, there should be standard. Whether those standards should be the same as for teachers in primary education .... I think we need to be very careful about, in a sense, excluding people who have been very successfully training people for many years on the basis of introducing standards they are not able to meet, but that is not to say that they should not be able to meet NVQ level 2 standard, which is what the Ofsted report highlighted.
Q58 Mr Chaytor: But if you are saying that it is not necessary for them to have it at the start of the training ought it to be necessary for them to have completed it by the end of the training?
Alan Johnson: Yes.
Q59 Mr Chaytor: So every person teaching in FE by the end of their initial teacher training should have the equivalent of maths and English GCSE.
Alan Johnson: Yes.
Q60 Mr Chaytor: Thank you. The consultation period finishes in February next year but then there will be some further process of analysing the consultation, developing proposals, building it into some future spending programmes. It is going to be a long time before the shape of initial teacher training and FE is influenced. Do you intend to do anything in the short term, pending the outcome of the consultation?
Alan Johnson: We set up the Centre for Leadership Excellence - and I know it is a different issue, but it is one of the successes of the first year, the first anniversary, of Success for All, and that will help in some respects because leadership is very important in terms of inspiring and taking forward further education of teachers. I think the important thing here is not to look for the quick fix that might end up as something that just grabs a headline or two but does not address the underlying problem. I am quite happy to deal with this over a period of time - not an enormous period of time but certainly over the one or two years that we envisage to grapple with this problem - with everyone on board, with the partnerships that we have built up with the AOC Learning and Skills council, NAFE and others, to address the problem so that it is seriously addressed for the future.
Chairman: Paul Holmes.
Paul Holmes: Over the last year or two, talking to people who work in FE, they remind me of what it was like working in teaching, in the earlier days of Ofsted in particular: they feel that they are under the cosh from ministers and inspectors who play up the bad news all the time - as Chris Woodhead used to do with schools - but do not emphasise the good news. I have seen the press coverage and the press release on the teacher training in FE that David has just been asking about, but I seem to have missed the press release and the fanfare about another survey that was carried out for the Learning and Skills Council recently and was slipped out, a student satisfaction survey, which said that 94 per cent of students in FE were at the very least satisfied with what they had received and the number who were very satisfied had gone up from previous surveys to 25 per cent. So you have a brilliant-news story, people are very, very happy with what they are getting, and I have missed the press release on that one, but on the bad-news story we get lots and lots of coverage. Why is that?
Q61 Chairman: Minister, you are usually very good at good-news stories.
Alan Johnson: As you will appreciate, our putting out a press release does not mean it is going to be picked up by the media. That Ofsted report was bound to hit the headlines. On the same day, incidentally, we published a successful One Year On document which we presented to the AOC - indeed, we did a press briefing and I did a press conference - and, you are quite right, a year on, all the signs are pointing in the right direction, not least of all satisfaction of trainee students in further education. The drop-out rate of 16 is still too high, but it has come down. The re-inspection rate had reduced. We put all of this in a document. Indeed, I said to the press that we might be accused here of overplaying this, but I did not think we were for the very reason you just said. I think for this process to work people in FE have to see the encouraging signs that it is working and have to be applauded for that. If you like, I will drag out all the press releases we have done. We would be a strange government if we did not look for the good-news stories. I think we actually need more attention - and this is part of what I was saying to the Guardian - from the media on the success of what is happening in FE, not least of all, a statistic comes to mind, that 25 per cent of their students come from the 15 per cent most deprived walks of life in this country, so for them to succeed in that environment deserves at least two cheers if not three quite yet.
Q62 Paul Holmes: So you would like to put on the record that a 94 per cent satisfaction rate seems to indicate colleagues are doing a pretty good job.
Alan Johnson: Yes. I think FE has always done a tremendous job but the fact that it is now being recognised .... At first, when Success for All was launched and we said, "Look, this really matters. We are actually going to have a department in the DFES for the first time, a standards unit looking at FE," there was a healthy scepticism - not a cynicism but a healthy scepticism about whether we really meant it. Now, they know we mean it, and the question is: Are we going to continue this past this spending review? I think that is a measure of some success.
Chairman: Let's move on to university funding. Val Davey.
Q63 Valerie Davey: Thank you. The Government's consistent policy in each sector of education has been further funding plus modernisation. When it comes to HE, is the modernisation element, the market factor, the differential in student contribution? Opening up HE to market forces, is that the modernisation element?
Alan Johnson: First of all, that is not the only bit of the White Paper. It is certainly the central part of the Bill and lots of things that are in the White Paper are not in the Bill. Parts of modernisation, like, once again, putting teaching excellence at the heart of what we do in higher education is a very important aspect of the White paper. I would not recognise the description that this is going to be unleashing market forces in higher education. We are saying that we are moving from a system where the fee was regulated at £1,125 - you could not go up and you could not go down from that - to a system where we allow variability between nought and £3,000. If we lifted the cap of £3,000, then it was pure top-up; that is, there is a £1,000 standard fee but you can charge what you like with no limit, then I think that would be unbridled market forces. But I think the essential part of that modernisation is to concentrate on teaching. We have proposals out at the moment on university title, which is part of the modernisation; we have proposals on research, which no doubt you will touch upon; we have proposals, which in the main Lambert will be working on for the Treasury, about how we improve the links between business and the higher education sector; and that, all taken together, is the modernisation part of what we are doing.
Q64 Valerie Davey: So the recognition which we all have round this table, and those sitting in this room, I am sure, that HE needs more funding, is not dependent on the variable funding of student fee?
Alan Johnson: It is. It is not, in the sense that we are putting in extra taxpayers' money. By the year after next £10 billion will be going into higher education compared to £7 billion at the time Dearing reported in 1997, so that additional money from the taxpayer is a very important contribution. In terms of the additional money that universities are entitled to raise themselves, I think this is a huge part of modernisation, if you like, that there is a diversity of funding over which universities have control. The money that comes straight to them and over which they have control, in the sense that they can price their courses within a variable range rather than be instructed from the centre to have a fixed and rigid pricing system.
Q65 When the Government is looking at the price, the argument seems to vary as to whether it is important that the students pay variable fees because they are going to earn in a differential way or because the value and cost of a particular course is different. Which argument does the Government stand by?
Alan Johnson: I think both those arguments are valid. If it is a fixed rate .... The fixed rate now, I see, is £2,500. That seems to be the figure that is mooted. We just think that to say for every course at every university, regardless of the resources of that university, regardless of the facilities, regardless of the expectation in terms of what they will earn from that degree course, everyone must pay £2,500 is wrong. It would be asking students to pay more than they would under a variable system.
Q66 Valerie Davey: I think the difficulty of the whole debate, when we started way back in 1997, is not to look at the actual cost and diversity of cost of student courses. The £3,000 - and I would like to ask you specifically where that figure came from and did we consult with universities as to whether that should be the fee - no university course can be obtained for £3,000. Even an arts course. The arts courses range from something between £4,000 and £5,000 a year, up to a medical course of perhaps £15,000/£16,000 or more. Whatever the student is helping to contribute towards is nothing like the cost of a university course. That debate is quite important, that we understand the true value and the cost and we challenge universities to tell us why they charge .... We seem to be giving carte blanche to universities under the new scheme to charge what they like. What control is there? What understanding is there? And is there consultation with the universities about the £3,000?
Alan Johnson: Forgive me, I am not sure what consultations went on before I picked up this job. I think £3,000 was seen as the right balance. I know your Committee did not make a recommendation, but it made a suggestion that if we were really going to look at this market then £5,000 would be more reasonable than £3,000, or more effective than £3,000. Other people have chipped in with their higher rate where it should be. I think this is the right balance. To move very quickly from no fees at all, through Dearing, who said there should be a graduate contribution, and then on to a variable situation, I think £3,000 is the right balance. In terms of control over universities, 50 per cent of university students are subject to unregulated variable fees if they are post-graduates or overseas students or part-time students, and we let the universities decide that, and not within any range. I think we have to trust universities. We also, of course, have a very important element - and an important element of modernisation as well - the student survey which we are introducing, which is a far more comprehensive survey. It will survey every third year student, shortly before - we cannot do it immediately before - students are making their choices, but they will have very recent information, drawn up with the NUS, students themselves saying what kind of quality they got from the teaching, the facilities, the pastoral care, et cetera. A combination of that will, I think, empower students to be a lot more picky about which courses they choose and ensure that universities - and I think this is an absolutely beneficial part of the market, if you like, within that range - are offering value for money for their courses. I think, within that, universities should not be constrained. I think we should trust universities and we should trust students to make the right decisions within that framework.
Q67 Valerie Davey: The other element which the Government has been adamant about is student access, access for young people from families for which it has not been a tradition to go to further and higher education, where young people are looking for the first time at becoming part of that 50 per cent and more which I hope eventually will have the benefit of higher education. Their perception, I agree with you, will be astute. They will look carefully at the value and at the cost. What indication do we have that the higher cost of a university cost and the debt which they will incur will not be a barrier to those young people in their choice of a university course?
Alan Johnson: I will try to be brief on this, but this is at the core of everything we are trying to do. I do not say that widening access is a kind of peripheral issues in these proposals; it is central to these proposals. We had a situation where Robins said that free higher education for generous maintenance grants will close the social class gap. It did not; it widened. We had a situation where the move from grant to loan was going to have a devastating effect. It did not have any effect whatsoever: the social class gap remained just as wide, but it did not get any wider. We had the introduction of fees with the Dearing and then the £1,000 - which was not what Dearing recommended, but £1,000 up front - and that was going to seriously damage it. It did not. The evidence from other countries that have this kind of system shows that they have a better social class mix rather than a worse social class mix. But, I think, really, as politicians, it comes down for a general feel for this. Of course debt will be an issue. No one can pretend that students will not look at the likely debt which they will come out of university education with as a factor. Is it the most important factor? No. Is it a factor, given our total package, that we can meet their concerns? I agree with you that there is an issue of perception here. Lots of students felt they were going to pay £1,000 up front, when actually we had exempted 40 per cent from poorest families. I think a combination of what we are doing here .... No one pays anything until they have graduated. They repay it on an income contingent basis, through the pay roll, a tax deduction: their earnings go up, their payments go up; their earnings come down, their payments come down. The fact that, at the moment, as we speak, students will be paying back, on £15,000 a year, £10 a week, and when our proposals come in they will pay nothing at that level - it will be loan plus any fee - but in terms of what the onus is on them to repay, it drops from £10 to nothing at £15,000. The fact that we have carried into this fee remission. The fact that we have a maintenance grant being reintroduced at £1,000. And the fact that we have the regulator there, which is not remarked upon too often. I know this Committee has concerns about it; I actually think it is crucial to all of this. Taking all of that together, I think we have the best opportunity of actually closing that social class gap but not in isolation from the education maintenance allowance, from Sure Start, from getting youngsters from poorer backgrounds to the two good 'A' levels stage. With all of that together I think we really do have an opportunity to close the social class gap. If we felt like just abandoning all this and, in a sense, going back to Robins, there is no evidence to suggest that that would solve it. And the very fact that we are increasing the number of places is an important factor in this, because if we do not do this, we will get lots of good people from working class and middle class backgrounds to the 'A' level stage but no university place to go to if we do not expand and invest.
Valerie Davey: Chairman, I could go on, but I know other colleagues want to come in. I may come back.
Q68 Chairman: Is it not a problem, really, that the Government is facing the fact that it really got it wrong in 1997. They had an all-party consensus on Dearing and really the former Secretary of State David Blunkett did not take the spirit or the letter of Dearing. He got it wrong and really what the Government is trying to do now is put that right at this stage. Is that not where your problem lies?
Alan Johnson: You have to think back to those heady days of 1997, when all parties bought into Dearing. This was a national committee of inquiry, not some cobbled together joint working party, with a report that was absolutely comprehensive, that covered the waterfront. Graduate tax, Dearing looked at. Variability, Dearing looked at. Dearing looked at everything and there was a unanimous recommendation that graduates should make a contribution. But this was a brave new world. I absolutely sympathise with the decision to do this in the way that was introduced; that is, £1,000 and no payment for the poorer student as a kind of introduction to this brave new world. Maybe in hindsight things would have been done differently. It is certainly true to say that Dearing argued very strongly, in a sense, for what we are introducing now. In theory anyway, reception to that idea having gone through the initial step of £1,000 and getting people used to the idea that graduates should make a contribution, should bring us to a situation where the debate is actually about how that contribution is made, not whether they should make a contribution or not. Granted, that has not gone in the way that many would have predicted, but I can understand why the Secretary of State did what he did in 1997. I think it is absolutely right for us, having looked at the situation, having seen that we need to return to higher education free at the point of use and we need to introduce more money .... And the competitive threat that was not even around when Dearing did his report. When Dearing did his report, there were two million higher education students in China; there were five million as we were trooping around the doorsteps at the last general election and now there are 15 million. All of that together means we should change and we should not be afraid of saying that maybe Dearing was right in the first place in terms of graduate contributions.
Q69 Helen Jones: Would you accept, Minister, that the success of the Government's policy will be judged not simply on whether we narrow the class gap in universities overall but whether we also narrow it in the top universities? Is that correct?
Alan Johnson: Absolutely.
Q70 Helen Jones: The Government's argument seems to be that if variable fees are introduced young people will make the choice based on the outcomes for them, an economic argument. If that is the case, why should anyone choose to pay a higher fee to go to a top university and then go into public service, where the economic benefits to them may not be any greater than if they went to a university charging a far lower fee? - teaching being a prime example. How would you square that circle?
Alan Johnson: The first point is, that the reason why your question is very important is that nine out of ten 18 years olds, if they get to two 'A' levels, go on to higher education, irrespective of social background, but they do not go to the full range of universities. That is why your point is absolutely right. Secondly, the point you raise about why should they go into the public services. This is why Dearing made great play on the income contingent nature of a repayment scheme, so that if you do not go, if you choose to become a monk or go into a poorly paid profession like politics or if you go into public service where your earnings will not be as high as, for instance, in the City, your repayment will be in accordance with your earnings. Therefore, if you earn £18,000 a year, the average starting pay of a graduate - and I know I am saying this again but it is so important - now, as we speak, if this Bill disappeared, you would be paying back £13.85 a week. Eighty-three per cent of students take out a loan. That is their repayment at £18,000. We bring that down immediately to £5.20. So there is the ability to choose, unlike the old mortgage repayment scheme under the previous government, where, yes, you did not pay anything until you got to £20,000 but then you paid it back over five or seven years in equal instalments, irrespective of what you were earnings, irrespective of whether your earnings dipped, irrespective of whether you were out of work. It takes a lot to explain the income contingent system, but I do not think it would put off youngsters, first of all, from going into Oxbridge - which is the main point of your question - because there will be better facilities there in relation to the access regulator and the announcement from Cambridge -----
Chairman: I object to the tenor, in one sense, of this constant reference. We have done a lot of inquiries, as you know, Minister, and this is a criticism of all those who constantly talk about top universities and constantly then talk about a two-tier system of education. We have a very diverse higher education system in this country. Oxford and Cambridge are not the only fine universities; we have 120-plus fine universities with very good departments across them. I do urge colleagues not to talk about top universities. I certainly do not recognise, coming from the London School of Economics, those two that have mentioned as being in the lead, if there was a lead.
Q71 Helen Jones: Nor do I, coming from UCL, Minister. My question was why would anyone pay £3,000 fees instead of £1,000 fee if they could then go in, shall we say, teaching or social working and they would not earn a penny more as a result of obtaining the higher fee?
Alan Johnson: If you are talking about poorer students - and that is where your question started - fee remission, plus grant, plus bursaries should mean that the poorest students are not put off by the highest fees. That is the first point. The second point is that I think people will aspire to go to - and I agree with you, Chairman, I do not want to talk about top universities, I have difficulty finding the phraseology for all this ------
Q72 Chairman: Research rich universities.
Alan Johnson: Research rich universities, that is right. They will still aspire to go to .... Actually, not enough of them from working class backgrounds aspire to go to those universities. We can change that. I think they will go to those universities and then decide, having the ability to make the choice, as to whether they want to go into public services or go elsewhere. I do not think our debt repayment or our loan repayment system will force them to go into higher paid jobs. I do not think there is any evidence for that at all. What it will give them is the confidence to pursue the career they want to pursue. If we had other systems of repayment, like the mortgage repayment system, like some of the other payments, like the real rate of interest, which I know was a point raised by the select committee, then I think that would be a serious problem and I would agree with you. But I think the income contingent system would allow them to make the choice, depending on what they want to do, and I am confident that this package will address those concerns.
Q73 Mr Chaytor: If I could pick up on a point you made there, Minister. There is no necessary distinction between a policy which has a real rate of interest on the loan and income contingency, is there? That is to say, you could repay the loan at a higher rate of interest than inflation and still have it income contingent.
Alan Johnson: Yes. You would pay it for longer. I know that is what Nick Barr, for one, has suggested. But nevertheless you would be paying back. It does not address the concern of, for instance, a woman who wants to leave the workforce and start a family. You have the situation there where the New Zealand experience suggested that if you go down this road you very quickly have to find some ameliorating policies to stop some of the worst excesses. But you could add it on to the end, make it income contingent and pay for much longer.
Q74 Mr Chaytor: Or you could just pay a higher share of your income to start with, and pay for broadly the same period of time. Income contingency and the rate of interest are not incompatible, is the point I wanted to make.
Alan Johnson: No.
Q75 Mr Chaytor: Could I come on to my main point, that if one of the consequences of variable fees were to be that the strongest of the leading research universities - and that is the euphemism I will use to avoid this difficulty - and the weakest of the post-92 universities started to diverge (that is, the strongest were able to keep more of the fee income they got and the weakest were able to keep less because they were required to provide more in bursaries), would you let that happen or would you use your influence over the higher education Funding Council's allocation to redistribute from the strongest to the weakest?
Alan Johnson: In a sense, we do some of that at the moment, with the widening participation of money.
Q76 Mr Chaytor: To further redistribute from the strongest to the weakest.
Alan Johnson: I think we would have to consider that seriously, if that was the outcome. I mean, the point about the discussion we are having at the moment is that there is a misconception - not by this Committee certainly - that the people who want variable fees are by and large the research intensive universities and not the more modern universities. As the letter in the Guardian pointed out, signed by four of the modern universities, that is not the case. The modern universities are as keen on variability - with some exceptions, I grant, but a minority - as the more research intensive. I think they are worried about government dictating to them how that money should be used and them losing part of that additional income because they have a high number of students from non traditional backgrounds. That is a real concern that we have been discussing with them over the last few weeks.
Q77 Mr Chaytor: Do you anticipate that one of the effects of the variable fees policy will be that there will be a widening income gap between the strongest and the weakest?
Alan Johnson: No, I do not. In fact, I can see - and people from modern universities tell me this all the time - that this will give them an opportunity, as they do with overseas students, as they do with post-graduates and as they do with part-timers, to show that they can deliver just as good an education - and I agree with you, Chairman, that we have an excellent higher education right across the board. It will enable them actually to prove this in the sense of being able to price their courses and offer much more to students than some of the research intensive universities.
Q78 Mr Chaytor: In terms of the current levels of student support, the pre capita student support for an HE student is 15 times greater than the per capita student support for an FE student. Will you use the opportunity of the new HE policy to redistribute student support towards FE?
Alan Johnson: We will in the sense of foundation degrees, which will mainly be carried out in FE colleges. I think that is quite a separate debate. Part of our Success for All is how we can bring more money into colleges from employers in terms of charging for courses, but there is certainly no idea here that we are going to use some of this money to cross-subsidise, that a higher education institution is going to lose its further education, other than in the more harmonious working, in the partnerships between FE and HE, particularly to deliver not just foundation degrees but foundation degrees are going to be a large part of the expansion. That in itself will bring in fees to further education colleges that they do not currently have.
Q79 Mr Chaytor: Do you think it is acceptable that an HE student is worth 15 times more than an FE student in terms of the support that they receive for their studies?
Alan Johnson: I think there are anomalies in the system. I think the anomalies are part of what we are starting to address. I think it is all about considering FE perhaps in the past to be not as important as HE. We consider it to be as important as HE, and certainly I think we are going to have to address much more clearly how we deal with funding in FE. It is also an argument, incidentally, for meeting the costs of higher education entirely through the taxpayer. Because part of what we are doing in FE, whether it is the skills agenda which Ivan would have been talking about, whether it is ensuring that everyone has a right to a level 2 qualification, whether it is the education maintenance allowance, there are other calls for taxpayers' money, quite frankly, other than higher education.
Q80 Chairman: This Committee found, clearly, in its investigation into both access and retention, as well as our look at two other aspects of higher education, that higher education did desperately need greater investment. Also, the evidence given to this Committee was that if there was one thing that would probably predict the British economies success and wealth creation in future, it was going to be that successful investment in higher education. I personally believe that investment must come because one of those aspects that we found was the low pay of university teachers over a long period of time. Given that we have to have new resources flowing into higher education, and the Government has come up with one way of doing this, what is the answer to the opposition, at quite the way it has been done, when people say, "Well, a fixed fee for everyone. Perhaps £3,000 we can accept, but everybody should pay the same, every university, every course, every institution." What is your answer to that kind of view that has been expressed in early day motions and so on?
Alan Johnson: I think that brings me back to the point I made to Valerie. You can just about get away with what Nick Barr at LSC calls the "communism" of the fixed rate, £1,000. I do not think it works if you are going above £1,000. I think the ability to bring in this additional funding should be matched with a recognition that not every course at every university is the same. There is a huge divergence. When the Robins report was produced 40 years ago - and Robins did have a very careful look at whether graduates should make a contribution - there were, what, 40 universities. Now there are 122, with this huge range of different courses, and I think you have to recognise that in the funding structure. Granted, I do accept that there is a certain clarity to saying that if it is a fixed rate everyone knows what money is coming in, no one can be seen to be offering a second rate course, if the feeling is if you charge less than the maximum you are demeaning your own university. Those are the arguments but they collapse in the face of what happens to 50 per cent of the student population at the moment. If we are really that concerned, if this is such a central principle of a fixed system and no market of any sort, then we had better start looking at how we price part-time students and how we price post-graduate students, not to mention overseas students. So my argument there is that our proposals will bring in - and I suppose you can do different equations - we reckon about £1 billion, along with the extra investment from the taxpayer. But it is central to have variability. It is essential, we think, for universities to be able to charge less, to top down as well as top up to the limit of £3,000. That is such a central feature of this. If we wanted just to stick up the fee from £1,125, we could do it on a committee corridor without a bill. This is part of the change, it is part of the modernisation, and I just do not see it working on a rigid fixed fee system.
Q81 Chairman: Do you think there is enough discussion of how the flexibility will operate within institutions? For example, do you envisage chemistry departments, which are finding it quite tough to get students at the moment, that, although it is an expensive course, could charge a lesser fee, and people who are providing law courses to charge higher fees? Do you see a lot of variability within institutions?
Alan Johnson: I do. Granted, I cannot guarantee that. I suppose the difficulty of our position is when someone says for every university you might charge £3,000 for every course, as there is no prohibition in there and some of the modern universities were concerned that we were not going to allow them to have the full range, well, we are, so that could happen. Will it happen? I actually think - and this is a backhanded compliment - that this sector is incapable of forming a cartel - and the Office of Fair Trading would be certainly be interested if that happened. I think much more likely is the way you have described it there. I think it is the variability between courses rather than between universities which that will be remarkable feature of this. I think it is absolutely on the cards, a near racing certainty, that chemistry and physics, where they have high infrastructure costs but they need the volume, will charge nothing, or next to nothing, to attract students through, and cross-subsidise perhaps from law. That is what happens now for the unregulated part. I do not see anything wrong with that at all, preventing it from saying there has to be a rigid system. If you say, "You can have a rigid system, but you can still allow for that," then really you are saying variability but with a lower cap, £2,000 or £2,500. That is what is going to happen. That is why the Universities for Central England spokesman Peter Knight says to me, "why do you think I am in favour of a variability, not for a quiet life, we have to price every course, it is difficult for us. The easiest thing for us is to go for a fixed fee, we have less work to do". Peter and others are absolutely convinced they need variability for just the precise reasons that you mention.
Q82 Valerie Davey: The variability that you are talking about for a student is between £2,000 and £3,000. The chemistry course which the Chairman has just referred to in Bristol costs £10,000. By saying that you would allow the number of people doing an English degree to be paying for more people to go into chemistry you are saying that the institution and its courses are more important than the students coming in. You are actually focusing on the university. This is part of my earlier questioning, where is the balance of interest in the Government and its funding and its legislation in HE, is it to maintain, as you say, international quality universities, irrespective - and I am being provocative - of those people who get into them or is it saying there is a real issue of access? You said that all of the other systems have filled university places at the expense of those coming from low income. My understanding is that this will do exactly the same, we will have more young people going to university I have no doubt but we will not up the percentage of those going from low income families to, to use the euphemism, research-rich universities.
Alan Johnson: I cannot make the link. It is an important point to make that the student graduate contribution will not be the full price of the course. Dearing said that it should be 25% and because it is variable it could work out as different percentages, I accept that entirely. That does not lead to a situation where poorer students can be excluded, and I do not agree with you on the evidence. The evidence in Australia very early on - they introduced this in the 80s - was there were some problems with the social class gap but they did nothing in terms of Outreach, Aim Higher, they had none of these things in place. That social class gap in Australia has closed. In other countries where they had variables fees there is no evidence there to say that poorer students are worse off with the introduction of variables fees. I do not accept that equation. If £3,000 might put a poorer student off - and I know that is not strictly the point of your question - I cannot see why £2,500 would not put a poorer student off. Everything is okay about this, and I appreciate that, most of the people who are saying fixed fee agree with us on everything other than variability, they agree that graduates should make a contribution, they agree with expansion, they agree with extra investment, it is just this variability they have a problem with. I cannot see how you can say £2,500 will be fine, the poorer students might say they are put off by £3,000 but that £2,500 is fine. That does not equate to me. I also do not understand why the cross subsidisation, if you like, of people queuing up to come in for law - they do it at the moment with their HEFCE grant, it is a block grant and universities use it to cross-subsidise to a certain extent - is a problem, offering chemistry courses for nothing or next to nothing or physics courses and cross-subsidising that with popular courses where they have a lower cost and a greater intake. That does not seem to be a problem to me.
Q83 Valerie Davey: Essentially those of us who are arguing - and I am one of them, obviously - for a flat level are certainly looking for means testing in the same way as we have now. We have a flat rate, we are asking for an increased flat rate in order that those who are able to pay more will do so but we are certainly looking at the means testing to go with that, we are not just saying flat rate for everyone, that is out of the window. Can I come back with one more thing, the recognition we all have that we have a tiered system within the 122 brilliant universities - and they are different, we all accept that - what many of us are concerned about is the further polarisation in terms of resources and the irony that those universities which at the moment are taking in the highest percentage of low income students will in fact get the lowest income potentially to support and ensure that they get best value. Those extra things which they are going to need, which all of our Committee work has recognised, to maintain and retain those students is costly, the irony is that they will get the least income from the variable fee. That seems to be at complete cross purposes with what we as a Government have been saying all of the way through.
Alan Johnson: I do not accept that. I know you understand how the system works but we put that money into the universities upfront. We pay them the fee remission so the universities you are talking about will be charging £3,000 perhaps they will price it £2,300, and for anything up to £2,100 poorer students are making a gain under the current system.
Q84 Valerie Davey: With respect, the £1,000 we are offering is for maintenance, it is not to compensate their fee.
Alan Johnson: No, but it is additional to the loan. In Scotland the maintenance grant replaces the loan. The loan incidentally ought to be enough to cover the reasonable living expenses, Charles Clarke has said that and I have said that. The loan covers the reasonable expenses and then there is £1,000 on top for the poorer students which unlike Scotland does not replace the loan. It is fair for us to say that the student can spend it on their living costs, yes, but they can also spend it, if they want, to pay off some of their fee. I think it is reasonable for us to say that because it is in excess of the loan. The total package now compared to our proposals will enable them to meet the highest cost. The universities that you are talking about, modern universities, will charge £3,000 for some of their courses, we will pay the fee remission to those universities, they will get extra income from this, they are all telling us they will get extra income from this, their worry is whether Government insists that they put a larger element of that back into bursaries and because some of them have 75% non-traditional students that is a very reasonable concern that we are seeking to address. It is a concern about how much they are told to put into bursaries, not a concern about their ability to bring in extra income through this system.
Chairman: Paul Holmes is the only opposition member of the Committee here today and he has been very patient.
Q85 Paul Holmes: I have a couple of observations, first of all you said that graduates of York and Sheffield University - and can I add my agreement that excellent universities are found not just out outside Oxford and Cambridge but outside LSE and UCL and London in general.
Alan Johnson: In Hull for a start.
Q86 Paul Holmes: - you are not sure there is evidence to show a deterrent effect of fees or differential fees, and so forth, especially on students from poorer backgrounds. I do wonder, have you read in full all of the evidence that was submitted to this Committee over the two inquiries it did this year and last year? For example Claire Calendar's research for South Bank University earlier this year and the Reece Report for the Welsh Assembly and the Cubie Report for the Scottish Parliament do provide such evidence, which is why I dissented from the rest of the Committee on their findings. That is a rhetorical question really, what I would like to ask you is, when the previous Minister who held your post, Margaret Hodge, was here the Chairman was kind enough to allow me about ten minutes to press her on would she publicise the costings that had been done over the last few years by DfES and by the Treasury on the whole range of matters, if you are going to increase student participation to, if you are going to meet the requirements on pay in academic salaries; if you are going to undo 25 years of underinvestment in libraries and laboratories, and all of the rest of it. How do you meet that? Is it through fees? Is it through differential fees? Is it through income tax, which happens to be income contingent as well? Is it through student bonds? All of the different methods and all of the different costings, which you must have done a huge amount of work on. I asked Margaret Hodge for about ten minutes and she refused to produce that information. I note there is an Early Day Motion before Parliament signed by 147 Labour MPs, we are just saying the Government should suspend everything on differential fees at the moment and publish all of its costings so that people can have an informed debate on the issue. Would you take any more notice of the 147 MPs Labour in Parliament than the previous Minister did of this Committee and publish those figures?
Alan Johnson: In response to your rhetorical question I have read that information. I did see the submissions from the Cubie Commission. The interesting thing about Cubie and the Reece Commission in Wales post devolution is that Reece and Cubie looked at this whole issue and both were emphatic graduates should make a contribution, Cubie was more emphatic that Dearing. Cubie was absolutely remorseless in his rejection of all of the arguments put to him by the opposition parties, which then included the Liberal Democrats when they were in coalition Government, that graduates should make a contribution. That is first point on the rhetorical question. That is why I think this debate is about how graduates should make a contribution not whether they should or not. I am unaware of the ten minutes you spent with my predecessor on this, I am aware that one signatory to the EDM asked for this information back in July and the reply from the Secretary of State has been put in the House of Commons library. I did not see the word "suspend" in that EDM, that we should suspend what we are doing. What the EDM says is there are concerns about debt and concerns about variability and we should publish information on the various options that we have looked at before bringing forward legislation. We will go round the houses on this again but I think if you look at the Dearing report, 15 volumes of the Dearing Report (if you dropped it on your foot you would need an ambulance straight away) this is a really comprehensive report with unanimous recommendations, including a representative from the National Union of Students, it was highly respected. That goes through all of the options, that goes through an enormous amount of costings, and it is not ancient history, it was only in 1997. If you then look at Cubie, if you look at Reece, if you look at your own Select Committee reports and all of the evidence attached, and you look at our White Paper and the annexes and our widening participation document I do not think - unless it is costings about should we go to £3,500 or £3,000, unless those kind of costings are round, which are designed for anoraks, if not for cagoules - we could publish all of that stuff. I do not accept there are alternatives here to what we are doing that have not been fully explored either through Dearing or through the Select Committee or through other means, they are all there: Graduate tax, pay through taxation, pay up front, pay later, income contingent, I do not know what other options are there. I am sure my predecessor was, and I am really keen to give whatever information people want to see as long as it is not restricted or highly secret, and I have not seen anything on this that is. Our thought processes led us in Government to think that this is the best balanced package to address this problem, so we can take people through our thought processes. We have been trying to do that for a few months, admittedly we must have failed with so many signatories on that EDM, but we will go through that again because many of my colleagues are supportive of everything we are doing, they have these concerns that there might be some other system that would be better than this, we do not think there is, but it is our job to persuade them of that.
Q87 Paul Holmes: Picking up on Cubie, I took part a debate on the same side as him in the Cambridge Union on fees and he was absolutely opposed to differential fees in that debate a few months ago. Just one small example of costings, where it would be interesting to get some hard figures on what the Government is thinking of is not so much on how do students repay this, because a graduate repayment scheme through income tax would seem a pretty good one to me, but a more specific issue, ministers have sat here and told us there will be a market, if you charge £3,000 there will be a variation from £1,100 to £3,000. Initially the Government are picking up the cost of putting the money into universities, that will come from fees because it will be some years before students pay that money back. In the first few years the Government is picking up the cost. The Treasury, which keeps a tight hand on these things, must have done some pretty rigorous costings of how much it expects to have to pay out in 2006, 2007, 2008, 2009 and 2010, and so forth, until the money comes back. If the Treasury costing is based on 30% of universities charging £3,000 but in the end 90% charge it (and every vice chancellor who came in front of us in this Committee said we will charge £3,000, for various reasons) will the Treasury's costings, will the Treasury's budget limits be flexible enough to meet that huge extra demand for six, seven or eight years after 2003?
Alan Johnson: Yes. I think you will see from the Regulatory Impact Assessment when we publish it with the Bill that we have catered for the various eventualities. The answer to the question is yes.
Q88 Paul Holmes: One of the arguments in favour of differential fees is that universities need to be able to raise more money for various things, including paying higher academic salaries, does that not automatically mean that all of the universities, which is what the vice chancellors told us, are all going to want to charge £3,000 because the Government are not going to give it to them and the only way they can get the money is by charging £3,000. All of them will want to charge £3,000 if only to be able to meet those sort of requirements.
Alan Johnson: I do not think that is going to happen for the reasons I have explained before. If it does you then talk about a fixed fee of £3,000, so it should meliorate some of the concerns about fixed fees. I just do not think that is going to happen. I saw the BBC survey last week that said that 90% of universities are considering charging £3,000. I am surprised it is as low as 90% "considering charging £3,000". It does not say they are considering charging it right across the board for every course. I just cannot see that happening. It is a very important point. The taxpayer should meet the lion's share of higher education. There is 6% real increase over the three years of this Spending Review that we are putting in, the £10 billion, £400 for every taxpayer in England, will be going into higher education, and that is absolutely as it should be. They need more for salaries, they are scandalously poorly paid in terms of statistics, a 20% increase over the last 18 years compared to 60% in general, they need it for that, they need it for bursaries and access schemes and they need it for the estate. That is a very important part of the additional funding that is going in. That money is not going to go to a tax haven in the Cayman Islands, it is going to be reinvested back into universities and into the staff, which is why I find it strange, I have to say, as a former leader of a trade union that the trade union representing such poorly paid staff do not take the opportunity for extra funding coming in, indeed they say there should be no graduate contribution whatsoever. I would have thought post Dearing, post Cubie and post Reece and, yes, you can have your arguments about variability but your position and the position of AUT is that graduates should not make any contribution at all. I fail to see how we will solve these problems without an additional stream of funding. The other part of the Dearing recommendations about employers making contributions, and we have several initiatives underway at the moment, is I do not see how the taxpayer can be expected to meet all of these costs with 40% to 50% participation in the same way as we could when higher education was reserved for the tiny elite. I really think we should have moved on from that argument.
Q89 Chairman: At the beginning of these questions we started by asking, why did you not choose a graduate tax? Why not?
Alan Johnson: I keep coming back to Dearing - I did negotiate pay with him when he was Chairman of the Post Office, he is a hero of mine, and he also comes from Hull - Dearing looked at the graduate tax and he set out six reasons why a graduate tax was not the answer: First of all he said a graduate tax would not allow students to pay off big lumps in advance. Many students will say they will get a Christmas present and they will want to pay off the odd £1,000, you cannot do that with a graduate tax. There is no fully formed graduate tax in any OECD country, it has not been tried anywhere. A graduate tax says that you continue to pay for your university education, your contribution, plus the contribution of others and a graduate tax does not go direct to the universities, because of the tradition of not having hypothecated taxes, it goes to the Treasury, from which it may or may not find its way to universities. For all of these reasons and two or three other reasons Dearing said it is not the answer. An income contingent repayment system has lots of the benefits of a graduate tax, it is through the payroll, it is a payroll deduction but without the downside. I know lots of people who are keen on a graduate tax who have looked at Dearing and thought this is in a sense a graduate tax without the downside. I think Dearing made the most powerful argument, I suggest, as well as referring to the eminent documents this Select Committee has produced, because you have looked at most of these things as well, but Dearing was so good, so comprehensive, it was the Robins of its time and we should not refuse to go back to see what words of wisdom that national committee of inquiry came up with.
Q90 Paul Holmes: Just to clarify, I am not in favour of a graduate tax as such. Using your figures the average graduate earns £400,000 more than non-graduates so they also pay at least £100,000 more income tax than the average non-graduate so they are paying for their university education several times over anyway at a higher rate of income tax. The 82% of people who earn over £100,000 and are graduates would provide the immediate injection of funds you need for all of the things you need for universities. When tuition fees were first introduced in 1997 at £1,000 it was said that it would provide more money for universities and the extra money represents about a 7% increase in university funding. The Treasury grant went down by 7%, so students were paying more and the universities were not getting an extra penny of funding anyway. Can you guarantee - and Charles Clarke said that he cannot guarantee for future governments - in years to come if there is a £3,000 fee that all that extra money that is going into universities will not be clawed back by the Treasury grant being reduced?
Alan Johnson: Yes, but with the following clarification, it is wrong to say that the Government and the Exchequer immediately took that money back from universities. What happened, and once again reading Dearing is instructive, is there was a cap on student numbers and because we inherited the economic plans of the previous Government Dearing said that the reduction in funding should not be as steep as originally envisaged in those two years. In a sense it is an argument for another stream of funding, whether your party is running the Treasury or the Conservatives are there will always be pressure on public spending and the ability to have that other stream of income is very important. We have put in the current legislation and will carry it across to the legislation which we are going to bring forward soon the insistence that HEFCE cannot look at money from tuition fees in allocating its funding, they have to ignore it completely, that will be an important part of the legislation. We have said as much as any Government can say. We have this year's Spending Review, we will stand by the higher education sector in future Spending Reviews but there will not be, which is why I said yes to your question, any attempt by Government to say if universities are getting £1 billion through tuition fees we will take £1 billion off their funding. We are not doing this for a quiet life, this is not focus group politics. We would not be doing this if we were not absolutely sure that the university sector needs this money and more money in order to stay world class. It is inconceivable that we - I do not know about other governments - would just claw that money back.
Q91 Paul Holmes: Is that as firm a promise as the 2001 commitment not to introduce differential fees?
Alan Johnson: That is unworthy of this Committee. While you have mentioned it, we will not introduce these fees until after the next General Election. We had a choice, we could have just said, we are putting £10 billion in, we could have a quiet life, we could not take on this difficult issue, and it is a difficult issue, we could just turn the other cheek and wait until 2010 or 2011 before they get this money. All of indications of what is happening around the world and what is happening in this country for the future of our economy say that we have to tackle this head on. If that means we get the occasional snotty comment about manifestos so be it. It is the role of Government to say we are doing this, it might not be popular but here is the reason why we are doing it.
Q92 Chairman: You mentioned HEFCE, some of us are worried, many of us questioned the 50% target, not because it was an ambitious target, in this Committee in the evidence we took quite some time ago and believed that we would surge past the 50% quite comfortably. If you look at the Higher Education Policy Institute's work on the demographic trend we will deliver 150,000 students by the end of 2010 because - this is their view - more children are getting the entry requirements another and 100,000 plus will be coming in, that is a quarter of a million, which is a conservative estimate, one of the worries of that is that the word coming out of HEFCE and higher education institutions is that only bids to expand their numbers will be considered if they are on foundation courses, no other expansion is being planned. Is that right?
Alan Johnson: No. I was pointing at your last report, and I think it was a very reasonable point for you to make, let me mention Dearing again, Dearing said that we should have an expansion at some degree level, and foundation degrees are a very genuine attempt to meet this problem we have with vocational versus academic qualifications in this country. It will not be the total part of the expansion, least of all because we have to expand just to stay at 43.5 per cent. Demographic changes say there is this split coming through the system, we need another 120,000 odd places just to stay at 43.5 per cent participation. Also the success that colleagues in DfES have at getting more people to A-level stage to qualify for university will lead to an increase in the number of traditional degree places and honours degree places. I have the figures somewhere, and I think we gave it to you in our response, we are planning to expand the number of foundation degree places, we are also planning to expand by a higher number the number of traditional honours degree places, that is a central part of our quest for expansion.
Q93 Chairman: No letter has gone out from HEFCE suggesting that?
Alan Johnson: I am always concerned about letters flying about. I will look into that and write to you.
Chairman: Excellent.
Mr Pollard: Minister, you have a huge persuading job to do on Members of Parliament and the country at large to persuade them of where we are heading, you may remember that I and David Chaytor and two or three others met with you and the Prime Minister only two weeks ago and we were talking about this very issue of persuasion. I made the point at the time that there were two key markers that I thought would be helpful, one was before anybody paid back the levels of payback should be at average earnings, and that would be a marker that we could put down. Secondly, it was about bursaries, we have talked about the £1,000, and I use the example of my youngest daughter who is currently at Hertfordshire University doing a nursing diploma, she gets a bursary of £5,000 and presumably that is because we need them to do nursing diplomas, if it costs £5,000 for my daughter to be at university then we should be doing better than £1,000 to persuade the working classes. There are markers that are required to persuade people of the validity of the arguments that you are putting forward and the Prime Minister just sort of shrugged his shoulders when I mentioned these two points at the meeting recently. I just wonder whether you have thought about these markers because that would certainly be helpful to persuade me and my constituents of the value of what you are trying to do?
Alan Johnson: The Prime Minister probably shrugged his shoulders in a sense of the detail being my concern more than his concern in these issues. The Prime Minister, the Secretary of State and I are very keen to take on some of the ideas that have been put us to. In terms of the threshold I think it was a Select Committee recommendation that the threshold should be £24,000 average earnings. It is tremendously expensive, we have increased the threshold from £10,000 to £15,000 for repayment because it works on the basis of 9% of the difference between threshold and what you are earning, and that has had the dramatic effect that I mentioned earlier, it has reduced, halved the level of repayment of £20,000 a year, it has reduced it by two thirds, round £18,000, and from £10 to zero at £15,000. To carry that up to £24,000 would be extremely expensive. You have seen some stuff over the weekend and we have been looking at whether we can go to a threshold of £20,000. I personally think the second part of your point is more important than the threshold. In a sense the higher the threshold the longer, if you want to express this as debt, it is hanging over people's heads, the longer it is going to be there. Let me put it this way, there is a girl who works for me in my office who pays under the old system and wants to continue to pay under the old system but you cannot operate two different systems through the student loans company, she wants to pay it off because she will pay it off quicker if she continues to pay £13 a week at £18,000 a year. We have to either change it for everybody or change it for no one, we cannot have different systems because they are horrendously complicated. What I am saying is if you went to the threshold that you suggest everyone would be forced to go to that threshold and would not be able to pay off their debt quicker, which is the advantage of a lower threshold, providing it is income contingent.
Q94 Mr Pollard: Can I put one case to you, we are building key worker housing in my constituency for rent and the average salary to qualify for this was £18,000. It is recognised that is a low-ish salary in the South East, that person would be paying back the money that we are talk about, a young teacher. The idea of key worker housing is because they cannot afford to live in the South East yet at the same time we will be taking extra money. I am suggesting to you if that was put up to something a bit more reasonable rather than £15,000 it would help generally, particularly in the high living cost in South East.
Alan Johnson: I agree with you but we would have to put it up for everybody, including the person who is earning a small fortune, but I suppose they are through the threshold. I do not think £5.19 at £18,000 a year is an unreasonable weekly repayment, but that is not to say we have closed our minds to this, we are looking at these issues. The second part of your question was about bursaries, and that is the untold story. Universities are telling us and have told us continuously right across the board "we will we put one third into bursaries". The discussion is how would that materialise in terms of that gap, which in the total package there is a gap of about £825 for the poorest student on the most expensive course, and bursaries could be the answer to that. I think that is absolutely right and we ought to look at any ways we can to meet the concerns that have been expressed by you and others about what more we can do to help the poorer students.
Q95 Chairman: I am conscious that it would be wrong of this Committee not to push you a little on the view that the Government has another alternative, just to pay it out of tax and to pay it out of the higher income tax for those that earn more than £100,000, why do you think the Government rejected that way of funding higher education?
Alan Johnson: It was not on issue of whether there should be a 50% grade of tax, I think you could be fairly confident that the Government are not keen on that idea. Even supporters of a 50% grade of tax would say that if you had between £3 and £4 billion around to spend even in Sanctuary House other people would have greater call on that money than me as Minister for Higher Education, me as Minister for Further Education might have a better call on it. We spend £1,000 on the under five's, which is where the social class divisions really start, we have 400 Sure Start schemes, they are immensely successful but there are only 400, they are tremendously expensive. There would be other priorities within the Department. The thought of using a spare £2 billion or £3 billion to put into a sector of education where we spend £5,500 per student as compared to £3,000 per student in primary school is quite perverse to me. Yes, we ought to put the lion's share in through taxpayers' money but we could find better ways to spend that money in Sanctuary House and that is without other parts of Government, health, pensions, etc finding other things to do with that money, particularly as there is a system where we can introduce other funds by ensuring graduates make a contribution in the way that we have suggested here. We have had a National Committee of Inquiry backed by all parties and they say, "here is a route to go down where you can get the extra funding". To ignore that and say we are going to make higher education our priority for this extra money I do not think is sustainable.
Q96 Chairman: Coming back to my original question about "what a fine mess you have got me into", is it the case that sometimes the Government really does not trumpet enough the things which are the facts in this case. As I understand it from the evidence given to the Committee part of the resistance to loading on to taxpayers all of the burden for higher education is for example in the average constituency only 16 per cent of people have had any higher education. In Nottingham North it is 3%, in Huddersfield I am pleased to say it is 2% above the national average. The Government does seem to be very quiet on this. Are we right on those figures that on average 16% of people have had higher education in this country?
Alan Johnson: You are absolutely right on that statistic.
Q97 Chairman: That figure is right.
Alan Johnson: It is also true to say that 40 years of funding through the taxpayer was regressive, it meant money went from poorer families to better off families and it demonstrably failed on social inclusion. This is a better package for everyone. We are not saying this is entirely geared towards youngsters from poorer backgrounds, we think that is an essential to this, we also think for youngsters from middle-class backgrounds this is a better deal, no upfront payment, university places for them to go to, preserving our world quality status. I think probably if there has been a difficulty there in getting the message across Government always has to give a message right across to the whole of the population rather than having one argument for one group and another argument for another group and sometimes I think that has meant we have not got the strength of our argument across as forcefully as we could.
Q98 Chairman: Perhaps sometimes tucked away in Sanctuary House there should be some more reading of Select Committee Reports because we said very clearly in our very first Higher Education Report on Access that the clearest relationship between getting into higher education from a poorer background and not getting in was what happened really early on in education. We reiterated in all four reports, and in a sense you have allowed yourself as a Government to fight the turf on the one that is the most difficult. In fact we found as a Committee in all of our investigations if you are going to get people from poorer social backgrounds into higher education you have to keep them there throughout that education process. The Government has done a great deal about that but does not seem to have made that case strongly enough.
Alan Johnson: I would only say in our defence that you are absolutely right we did take these recommendations of the Select Committee and others very seriously. If you read the White Paper and the articles that the Secretary of State and others write when we are in control (an article I did for the New Statesman made exactly that point) what we cannot be accused of and what is beyond our control is what gets picked out of a long interview for the media. This is not sound bite politics and you cannot get that whole argument across other than in 1,000 word articles that we occasionally get the chance to put forward. If you look at all that whenever we make the argument we make it right across education. I think very few people know that the education maintenance allowance is going to roll out from next year everywhere, it has been a successful pilot, including in my own constituency. I think there are still some people who do not realise we are getting rid of upfront fees, that comes to me time and time again. I will accept if there is a problem getting the message across then we must be responsible for that, it is not always possible for us to get the whole of the argument across in the media.
Q99 Chairman: You have given us a lot of time, Minister, but we would be really remiss if we did not ask you one last question, and that is about research funding. One of the strongest resonances we picked up during our inquiry into the Higher Education White Paper was people were much more interested and much more concerned about research funding than they were about anything to do with flexible fees and the real feeling of injustice in the higher education community of this Government fashion for believing that further increase on the focus and concentration of research funding in fewer institutions was going to benefit universities and our research capacity as a nation. So much of the evidence came back time and time again that that was not the case. A recent survey conducted for the Universities UK seemed to back this up. Sometimes we would like to see some response to Select Committee inquiry reports and we are really disappointed that you do not seem to have moved at all in this area.
Alan Johnson: We debated this, as you remember, in July. We have not put the 21 million back from the five's to the four's, which I think you specifically asked for, we thought that was unrealistic. It was only 2% of the research budget. What we tried to do was separate myth from reality, the myth that we only wanted to focus on four universities round the South East. There were over 40 different higher education institutions that got more than £5 million in the latest round and there was one in every region. We want to concentrate on excellent research wherever it is. We do not intend to concentrate all research funding into a tiny group, 75% has always been allocated to 25 institutions, that is just the nature of how research operates. We want to reward emerging research and innovative research, the Higher Education Innovation Fund, which is £90 million against the £20 odd million we moved round - 2% of the budget that causes a great deal of consternation - is a third arm the funding. Since you have written your report you would have seen that HEFCE said they will retain four rated departments at their current rate of funding, round £138 million for the entire RA period, so over the next three years. That has settled down lots of concerns. Having said the movement of that 21 million was a shock, it was meant to be a shock to the system, it ended up as just a shock in terms of people misconstruing that. There was also legitimate criticism from you and others that if you read the OSTs consultation document on Research Council funding alongside Gareth Roberts report on the RAE you could have thought they came from different governments - I am going to say something controversial here - they did not seem entirely joined-up, and that has been recognised by myself, David Sainsbury and Charles
Clarke, et cetera. There was a real concern, the third bit of self-criticism of Government, because it was a shock to the system and universities were not expecting it, we had not consulted them enough on where we wanted to go with research. Our view was with Government putting an extra £1.25 billion into research we wanted to be absolutely sure it was not just going to be business as usual, because it is not business as usual in India, China or America and elsewhere, we have to keep up to scratch. Mea culpa in terms of some of those messages. What we have done since is to set up the Research Forum, which has a wide cross-section, the unions are represented, including the NUS, UUK are represented, modern universities, ancient universities, Scotland, they all have a place there and that will look at some of these thorny questions like, is there an integral link between research and teaching? It will also help us, it will act as a sounding board for how we go forward with those three pieces of consultation on research which will be taken through a Committee with me and David Sainsbury so we are linked up with the OST and we will use this group as a sounding board. I hope we can get some shared analysis. I have not heard anybody say it should be business as usual, they all accept the challenges we face. A bit more dialogue about how we address those challenges should lead to a far more productive atmosphere over this whole question of research.
Q100 Chairman: Minister, you have given us a lot of time, thank very much for the session. We look forward to seeing you again.
Alan Johnson: Thank you very much.
