Examination of Witnesses (Questions 140
- 159)
MONDAY 7 FEBRUARY 2005
MR BAHRAM
BEKHRADNIA
Q140 Dr Iddon: Can I ask about what
your research has shown about the reduction of the factor 2 to
1.7 in the HEFCE funding formula? Do you think there is any rationale
to that reduction?
Mr Bekhradnia: You are going to
have the organ grinder right after me.
Q141 Dr Iddon: We shall be putting
it to the organ grinder.
Mr Bekhradnia: I would be extremely
surprised if there was not a rationale for that and I think I
know what it is. If the funding formula is calculated as it was
when I was at HEFCE, then that element of it is simply a reflection
of actual relative costs as reported by universities as to what
they are spending on different subjects. So that will be the reason
for that. I suspect that Sir Howard will tell you that, but he
must answer that question himself. But, yes, I am sure that there
was a good reason for it. But you may well ask the question, should
that be the only basis? Should what universities report as their
relative expenditure be the only basis for setting the funding
formula? That is a different question, whether you ought to use
a degree of judgment in deciding how much money should attributed.
Q142 Dr Turner: Whatever the factors
behind the problem that we have, I do not think anyone would disagree
that there is a great deal of concern around Britain's future
competitiveness if science faculties disappear and the supply
of scientists dries up. I cannot imagine this much angst if sociology
departments started to close, for instance, or law faculties.
Given that, do you think it right for the government to actively
intervene to try and maintain a sufficient core of university
departments in the important subjects?
Mr Bekhradnia: The answer to that
is I do not know and I do not think anybody else knows. The way
you put it of course required the answer, yes, if they are important
and they are at risk of drying up then necessarily some intervention
is needed. And may I say that my instinct tells me that there
is something important that is going on that needs intervention
of some sort. The problem is, who knows what is important, how
important it is, how much of it we need, where we need it? This
is all stuff that you could make policy based on hunch and belief
and it would probably be very bad policy, and I do hope that your
Committee does not make recommendations based on what it believes
to be true, and is able to underpin it recommendations with evidence
abotu what it is that is important for the country.
Q143 Chairman: But you are saying
that nobody knows, that nobody has done it.
Mr Bekhradnia: The trouble is
that we are not going to get a quick fix. We need to have some
good evidence. Remember that every pound we spend on supporting
departments that are in declining demand is a pound that could
have been spent somewhere else, and so there is a huge opportunity
cost here. The cost of getting it wrong is very great, so it is
important, clearly, that we have enough. What we do not know is
how much is enough and how much the country will suffer.
Q144 Dr Turner: Let us assume that
the Government should be doing something. What mechanisms of influencing
this do you think the Government has open to it? What do you think
would make the difference?
Mr Bekhradnia: As I said in my
memorandum, the Government can take—and you can recommend,
because it is the easiest thing to recommend, a supply-side action.
It would be perfectly possible for HEFCE to say to universities,
"you must keep open certain departments and perhaps "we
are going to give you some money to do so—although the normal
funding formula would not provide it." It does that already—or
did it already—through its minority subjects programme.
That mechanism already exists. There is a risk, and at the moment
more than a risk, that you would be keeping open departments and
providing places which would go empty. The key is to stimulate
demand. I have no doubt that if the demand were, there, universities
would react. They are very good at responding to student demand.
How are you going to get young people to want to study these subjects?
I do not know.
Q145 Dr Turner: I was about to ask
you if you had any ideas about that. What do you think the Government
can do to influence the demand?
Mr Bekhradnia: I think the one
thing that would probably not do is to provide bursaries and scholarships
at university level. It will be too late by then. The problem
is quite apparent before they get to the position where they can
even apply to university. Beyond that, notwithstanding the Chairman's
views, and perhaps yours, about university fees, there is now
conclusive evidence that at the levels at which we are talking
student demand is not at all price elastic; it is not particularly
sensitive to the cost of university education. For various reasons,
taking action at undergraduate level with bursaries and so on,
I suspect, would not be the right way to go about it.
Q146 Chairman: How can you say that,
Bahram? You have not done any studies. You are a man who is always
advocating studies.
Mr Bekhradnia: I have not done
a study, Chairman, no, but my former employers at HEFCE have done
a stunning piece of research that is about as good a piece of
educational research that I have seen—and I wish I could
take credit for it. One of the things it shows, amongst others,
is that student demand for higher education—whether by social
class, whether by subject, whether by region, ie, Scotland and
England, which did things differently—was entirely unaffected
by the changes that took place through the nineties in the cost
of higher education. The cost of higher education varied according
to social class because the poor lost their grants and had them
replaced by fees, and it made not the slightest difference. I
think we can be reasonably confident that at the levels we are
talking—this is a different debate—student demand
is not particularly price elastic. That is not to say that it
is totally price inelastic and that you can carry on ramping up
the cost, because you certainly cannot.
Q147 Dr Turner: Intervening in demand
at university level may not be effective. What do you think would
happen if you tried to intervene at the GCSE and A-Level point,
and perhaps introduce financial rewards for students getting good
GCSEs and so on in A-Levels, and help make it worthwhile—a
sixth-form bursary?
Mr Bekhradnia: That sounds to
me to be more promising, and there is some experience, is there
not, of this with the Educational Maintenance Allowance? It suggests
that financial intervention at that stage may have some effect.
I am sure there has been some research done about the effectiveness
of that, and I seem to remember seeing preliminary results of
such research. It will be expensive, I suspect, but it may be
more worthwhile intervening there than spending money on places
that are unfilled at university or providing bursaries at university.
I referred also in my memorandum to a government initiative in
the 1980s. Somebody in the Department of Education can probably
dig out the papers for you, but they called it the Science &
Engineering Initiative. It poured millions of pounds into universities
to provide additional science places, and of course it was completely
money down the drain. They would have been much better off spending
that on the sort of things you are talking about.
Q148 Dr Turner: I want to ask about
government intervention in universities' decisions. Should the
Government have intervened for instance in Exeter and said, "no,
you do not close that; do something else"? Do you think it
right that the Government should intervene in universities' affairs
either by withdrawing cash if they do not like their decisions,
or do you think it would be an undue interference in university
autonomy?
Mr Bekhradnia: I think it would
be a terribly slippery slope. I have no idea how you would decide
what interventions were justified, the extent of the interventions
and the subjects in which you have intervened. Should the Government
have intervened to stop Cambridge closing its architecture department—of
course it did not in the end, but would you do that? What would
be legitimate for intervention, and what would not? I think my
instinct is that rarely if ever is that kind of intervention justified.
On the other hand, that is not to say the Government is not entitled
to take a view and to find mechanisms of incentivising universities
to behave in ways that it thinks are justified. As I said in my
memorandum, I generally think it is unwise to try and substitute
bureaucratic or political decisions for decisions of universities
acting in the light of what they see locally . . .
Q149 Dr Turner: But you disapprove
less of carrots than of sticks.
Mr Bekhradnia: Yes, but carrots
can be enormously costly unless you really know that the intervention
that you are pursuing is justified, and that the resources you
are removing from other people in order to provide those carrots
matter less. It is a zero sum gain we are playing all the way
through. If you are going to provide incentives for some, you
will be taking away resources from others.
Q150 Dr Iddon: Does anybody know
what the demand is in the workforce for science graduates?
Mr Bekhradnia: No. I was hoping
that was something that you had done some work on. We are assuming
that there is demand that will not be met, and that the UK will
suffer as a result of that, but I am not aware of any work on
this. It is essential that it is done. We need to know the extent
to which we have a problem or do not have a problem.
Q151 Chairman: Do we know how many
graduates we need, not just science graduates? The Government
has a position. Has there been an estimate of where those graduates
will be employed?
Mr Bekhradnia: That sort of manpower
planning is not likely to be very fruitful. We produced a report
18 months ago now—
Q152 Chairman: It would be fruitful
for students who enter courses if they knew there was going to
be a job, would it not—plus or minus a few?
Mr Bekhradnia: I was very interested
by the answer to your question about whether students expected
to be working in the field that they were studying. That is relatively
rare, so that three out of four should have said "yes"
was a matter of interest. By and large, there is not such a one-to-one
relationship between the subjects.
Q153 Chairman: Expectation is different
from what happens in the end, but people can have expectations
of life and people can have dreams, can they not?
Mr Bekhradnia: Yes.
Q154 Dr Iddon: Does it matter if
a single country out of 25 in the European Union is producing
enough engineering and science graduates? Does it matter if those
departments close? Surely, the companies can go abroad, as they
are doing, and recruit within the other 25, or even outside the
European Union, in China and India, where the labour is much cheaper,
and people would rush to come over here!
Mr Bekhradnia: That question is
not being asked only in this country. The same issues that we
are facing in this country, with reductions in numbers of science
and engineering graduates, are being felt elsewhere. I do not
have figures for other countries in Europe, but I do have figures
for the States, and I can tell you that there were substantial
reductions in numbers of engineering graduates, physics graduates,
sciences graduates, maths and computing graduates, over two decades
to 2001. We are not alone in this situation. I have not looked
at this for this country—I could have done, and I apologise.
The Americans also have been suffering from reductions in American
students going on to do doctorates. They have made that good,
exactly as you suggested, by bringing in overseas students to
fill those places, and going on no doubt to become academics subsequently.
We have been doing the same. We did a study on postgraduates recently.
I do not have the figures, though, to give you the extent of that.
The trouble is that if other countries are all suffering the same
reductions, it will be a competition for a limited pool of people.
Q155 Dr Iddon: If university departments
in hard sciences and engineering close, what impact will that
have on the economy, either national or local?
Mr Bekhradnia: I do not know.
Q156 Chairman: Have you read the
paper by Libby Ashton and yourself: Demand for Graduates; a
Review of the Economic Evidence (September 2003)?
Mr Bekhradnia: Certainly! You
are teasing me, Chairman, are you not?
Q157 Chairman: I am not teasing you.
Mr Bekhradnia: You are teasing
me, I can tell.
Q158 Chairman: It is a serious question.
Mr Bekhradnia: Of course I have
read it, yes.
Q159 Chairman: You wrote it.
Mr Bekhradnia: Exactly—at
least my colleague Libby Ashton wrote it and I helped her.
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