Select Committee on Science and Technology Minutes of Evidence


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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