Examination of Witnesses (Questions 20-39)
SIR HOWARD
NEWBY
19 OCTOBER 2005
Q20 Tim Farron: With regard to the
adverse publicity of variable top-up fees and what impact that
may have not only on student recruitment as a whole but also in
terms of the balance of recruitment from different socio-economic
groups, I wonder whether you would comment on the evidence that
you may have come across so far as to the impact of what we are
calling euphemistically the "adverse publicity"—I
suppose I would say the "adverse reality", because even
though people do not have to pay up front, most of them still
have to pay—and what impact do you think that is having
(a) on the Government's target for 50% participation in HE and
(b) on the balance of recruitment with regard to groups from the
widening participation categories?
Sir Howard Newby: Of course by
definition the evidence is rather scanty. First of all, we had
the evidence, of course, of record applications and admissions
to the sector this year, so there has certainly been something
of a rush to enter higher education this year rather than next
year, and I anticipate that next year we will probably see a drop
in those applications and presumably admissions as a result. That
follows the pattern that we saw established—this is the
other piece of evidence—after the introduction of the up-front
fee that was £1,000 a few years ago when again there was
an initial rush to get in before the fee was introduced, a downturn
the following year but then demand came back and, indeed, carried
on going up, and I would expect to see something of the same pattern
this time as well. The evidence from other countries, which is
the other piece of evidence we have, is that not only does the
introduction of fees not deter students from entering higher education,
especially where they can be convinced of the returns, social
as well as economic, of graduating, but also, and this is the
rather counter-intuitive finding, that those countries which have
introduced fees have seen access to higher education widen, and
the reason for that is that it is only through the introduction
of fees that the resources have come into the sector to enable
universities to support students from poorer backgrounds through
bursaries and other measures. That, of course, is the thinking
which lies behind the establishment of OFFA (the Office of Fair
Access), and we know that universities have committed themselves
already to £300 million of support through bursaries for
students from poorer backgrounds. I think going forward, all of
us have a huge marketing job on our hands. There may well be a
blip next year, but thereafter I am confident that demand will
continue to rise and that students, including students from poor
backgrounds, who, of course, are exempt from any of the charges
we are talking about and will be subject to education maintenance
awards, will continue to come through provided that their performance
in schools continues to improve and provided that through the
measures we have taken through various outreaches, which all universities
and the sector as a whole is very committed to Aim Higher, and
all of that, and provided that we can demonstrate to the students
that going into higher education is still a good buy and that
they will not be suffering from the levels of debt and cost that
sometimes some of the scare stories in the press have set out.
Q21 Tim Farron: I am going to come
back to the issue of bursaries in a moment, but we are speculating
what might happen with regard to variable top-up fees and we have
been looking overseas to see what the evidence has been over there.
What we have got is the evidence of the upfront fee over the last
few years, and my evidence, working in different institutions
of HE, is that the opposite to the case you have made out has
happened and actually a decrease in groups from more marginal
backgrounds, particularly mature students, has occurred. That
is the hard evidence in this country, rather than trying to draw
conclusions from other countries, different cultures and different
backgrounds.
Sir Howard Newby: With respect,
the evidence in this country is that. . . . It is quite difficult
to explain. The evidence is that the absolute numbers of students
from socio-economic classes C2DE, which is a conventional measure
we use for this, has actually gone up.
Q22 Tim Farron: I know, yes. That
is right.
Sir Howard Newby: But actually
so has everyone else. It depends whether we are talking in terms
of absolute numbers or proportions. The absolute numbers have
gone up, I would not say substantially, but they have certainly
gone up significantly, and that is good news. That means that
in absolute terms there are students now going through higher
education who would not have gone through higher education even
ten years ago, let alone a generation ago, but (and we all know
this) on the other hand, because the system as a whole has expanded,
in proportional terms, the proportion portion has gone up very
slightly, but I would be the first to recognise it has been a
glacial movement, and I repeat what I said earlier: there is a
huge pool of talent out there that so far we have not tapped into,
but this is a long-term issue. This has really only been addressed
energetically and thoroughly in the last four years essentially,
just about when I came to the Funding Council, and we are really
talking about changing attitudes at the level of 13, 14, 15. Those
students that we have been working on will not come into the system
until the end of this decade, and that is when the real evidence
will be there to see whether this is working or not. All I can
say, and I do not want to make too much of this, is that at the
moment there is evidence that those schools that have been engaged
heavily in Aim Higher are showing better progression rates to
GCSE and to Key Stage 3 in mathematics than those schools which
have not been engaged in Aim Higher. I do not want to make too
much of that, but it is at least an encouraging first sign that
at that level universities and colleges are beginning to work
on raising the aspirations, and indeed performance, of some of
those children with a degree of success, but it is a long way
to go yet.
Q23 Tim Farron: There is more to
say on that, but my last bite of the cherry is on bursaries. Obviously
the issue with regard to the provision of bursaries is a key one.
Most higher education institutions are charging the full rate.
I would be interested to know what evidence you have, what your
impression is of the different types of universities that perhaps
are not charging the full rate—there are not many of them—but,
more importantly, in terms of the balance with regard to the different
types of university that are providing different levels of bursary
and what that says about the system and what that is likely to
do with regard to increasing recruitment particularly to the upper
level of the higher education system.
Sir Howard Newby: There is only
one university that I am aware of that is charging below the maximum
rate, and that is Leeds Metropolitan University. There are one
or two other institutions, including quite a number of FE colleges,
it has to be said, who are charging below the £3,000. One
of the issues, which has been often commented upon, of course,
is that those universities that have a very high proportion of
entrants from poorer backgrounds are those which are therefore
having to set aside a higher proportion of their fee income in
terms of bursary support, and they also tend to be the ones which
are not terribly well endowed financially in other respects, and
so there is, in my judgment, something of a regressive element
there. I have to say, Chairman, that the student support arrangements
are also continuing to be socially regressive in other respects
as well so that those students in greatest need are not necessarily
the ones who are going to get the greatest support. May be that
is something which when I have departed from this post the Government
may wish to come back and look at again. It remains to be seen,
I think, how this is going to shake down. There is what the Americans
would call a "sticker price", and even in most American
universities very few students pay the sticker price, and then
there is the actual yield from fees, which, of course, will be
lower by varying amounts from university to university compared
with the sticker price. That is partly determined by the level
of bursary support and, frankly, it is partly going to be determined
by the level of what deals students can do at the point of entry,
especially through clearing. None of us know yet how that is going
to pan out. I have warned the sector on many occasions that they
need to draw the distinction between the sticker price and yield,
and universities, like airlines, I suspect, are going to have
to engage in "yield management", I think is the phrase,
Chairman. Therefore, in terms of planning ahead, in terms of their
financial planning, universities and colleges need to take a very
realistic view about what the yield will be as opposed to what
the sticker price might suggest. We at the Funding Council stand
by to wait to see whether universities and colleges are going
to manage their affairs sufficiently prudently to not get into
trouble on this matter. At the moment, as you rightly say, we
are all speculating. We will have to wait and see.
Q24 Helen Jones: Can I return to
this question of part-time students, which is one that this Committee
has looked at on a number of occasions? The announcement by the
Government yesterday is clearly a major step in the right direction,
but there are still problems with that, because it is based on
the fact that 41% of students get supported in some way or other
by their employers, but that still leaves a majority who do not
get support, and on the figures that have previously been given
to us in the Committee even many of those who are in employment
are in very low paid employment. Is it, in your view, tenable
in that situation to still require part-time fees to be paid up
front? Is that not discriminating against the people we most want
to get into higher education?
Sir Howard Newby: With respect, I think
this is really a political matter. It is a matter for the Government
to decide over their spending priorities. What I would say is
this. I repeat what I said earlier, as we look forward higher
education is going to have to be delivered much more flexibly
through part-time as well as full time, in the workplace as well
as in an institution, on-line, through distance learning and so
on, and the student support arrangements eventually are going
to have to reflect that, but student support arrangements, which
is where I think everyone agrees where the problem really lies,
are really a matter for the Department rather than for the Funding
Council. Personally, I believe that the more we can blur the distinction
between a part-time and a full time student the more beneficial
that will be for our society as we go forward, because students
will want to, and need to, move in and out of higher education
a number of times across their life-time and we want to encourage
them to do so because we have a public interest, a national interest,
in making it easy for them to upgrade their skills, maintain their
knowledge—their professional knowledge, their vocational
knowledge—because we all know that the skills agenda, the
skills issue, is one of the biggest challenges this economy faces
if we are to maintain our global competitiveness.
Q25 Helen Jones: I agree with all
of that, although it does not answer my question, so can I put
it another way to you. How is the widening participation agenda
being forwarded by a system which says: if you are a student going
into full time education from a well-off family you can defer
your fees. If you are a single mother trying to get skills which
will enable you to compete better in the workplace, better look
after your family, you cannot defer your fees. How does that impact
on the way that students are coming into the system?
Sir Howard Newby: My understanding
of yesterday's announcement is that the additional support given
to the Access to Learning Fund will enable universities to provide
support to part-time students in respect of fees for those students
who need that support; so I think the Government is attempting,
within the financial constraints it is under, to do what it can
to remove any possible disincentives of the kind you describe,
and we will have to wait and see whether that is sufficient.
Q26 Helen Jones: The problem with
that, is it not, what you need, particularly if you have dependents,
is certainty, and therefore to say to people, "You may get
something from the Access to Learning Fund which assists you",
does not give them certainty. I know if I was giving up my job
I would want some certainty about how I would manage. Does this
not also play to what you were talking about earlier, that those
who understand and know the system best are best able to negotiate
their way through that? How do we ensure that the very people
who traditionally are not going into higher education and probably
know less about the system than people who come from families
who have traditionally gone into it understand what is available
and are able to ensure that their support package is put in place
before they go on their course?
Sir Howard Newby: I think there
are two parts to that question. The first is about certainty,
predictability, if you like. I would hope, and I would expect,
that universities administering the fund will give students that
degree of certainty, because at the moment a student applying
to a university to enter a part-time course needs certainty, frankly,
that they will be admitted. That is one of the key incentives.
They do not know at the time they are applying whether or not
they will be allowed onto the course. The universities operating
financial support through the Access to Learning Fund should,
therefore, be able to bring together the academic decision on
whether they are fit to entert the course with an assessment of
the financial needs of those students to support them to undertake
it; and that, I think, is one of the strengths of doing it through
the Access to Learning Fund. The second question you raise is
one, indeed, which lies behind proposals that we may wish to put
to our board about the widening participation premium; that is
to say, are there institutional costs which are going to be borne
through strengthening the information, advice and guidance function
for those students, both pre entry and post entry, that we need
to improve and invest in to ensure that institutions are properly
financed to give the kind of support and mentoring that those
students need: because, as I am sure you are aware, in proportionate
terms a part-time student probably needs as much early mentoring
and support, some people might say even more so, than a full time
student, and that is one of the arguments that we are looking
again at the widening participation premium for part-time students.
Q27 Helen Jones: Can I return you
to another issue which was raised earlier. You said there are
many students, even those going to full time courses, who still
do not understand that they are not going to have to pay the fees
up front. That is certainly my experience. Even students who I
know will not be paying at all think they are going to have to
find a cheque for £3,000. What is being done by the universities
to make sure that that message gets over. What can you do to encourage
it from HEFCE?
Sir Howard Newby: I understand
there is shortly to be a major marketing campaign which will be
led by the Department, which I understand Universities UK and
the Standing College of Principles—that is the two representative
bodies—are also going to join in. It is difficult, is it
not? I have noted in front of this Committee before that there
has been this focus in the press and public comment on the fee,
because I think fee is a small word which can fit into a headline,
whereas actually I have always maintained, going back to my days
before this job, that the key issue for many if not most students
from poorer backgrounds was the maintenance award, actually how
to cope with their living costs rather than how to pay the fee,
but because so much evident emphasis has been placed on the fee,
there is less information out there amongst those who need to
know it about the maintenance costs and how they are going to
be met, and I think that is a shame. I repeat, with all of us,
the Funding Council, the universities and colleges, the Department
for Education and Skills, everyone has to work hard to make sure
that the information is there in a readily and easily understandable
form, especially for those who need it most.
Q28 Helen Jones: Do you believe that
universities are doing enough to get this information out, not
just to their potential students, but to the sixth form teachers?
My experience is that many teachers make calculations based on
what their families earn and, therefore, are giving some of their
poorer students quite a misleading impression of the costs that
they are going to have to meet.
Sir Howard Newby: I can only really
join you in observing anecdotally from my own experience as a
parent, and I think I would support some of that view, but my
evidence is anecdotal rather than systematic.
Q29 Helen Jones: Should we not have
something built into the system to encourage universities to do
more in their links with sixth forms to ensure that that message
gets across clearly, because, once again, it appears to me that
the people who are most disadvantaged without the information
are precisely the people we want to encourage to apply to university,
those from traditionally under represented groups?
Sir Howard Newby: One of the purposes
of Aim Higher is, indeed, to offer that kind of information, advice
and guidance, not just to potential students, but to their parents
and, indeed, to school teachers, and, of course, there is always
more we can do. I think it is a generalised problem throughout
the education sector that getting across at whatever level the
kind of information, advice and guidance that students of all
ages need—and I include adults as well as young people—is
difficult, frankly, and I am sure there is a lot more that can
be done working with the media, not just with the print media
but with radio, with television and so on to get those messages
across.
Chairman: There is a fair amount of disinformation
on it as well.
Q30 Jeff Ennis: Continuing along
the theme of the widening participation agenda, Sir Howard, in
your progress report this year you said the allocation for widening
participation on the treatment of students who do not complete
their courses are widely thought to be inadequate or problematic
by higher education institutions. Does HEFCE accept that it has
failed to address these issues and that as a result most universities
which have been at the forefront of promoting widening access
have been penalised, creating further inequalities in between
institutions?
Sir Howard Newby: Since those
words were written, we have looked at this and we are bringing
forward proposals. This gets rather technical, but if the Committee
will bear with me. First of all, there is an issue about how we
treat non-completion. We traditionally funded universities on
the basis of students completing what is called a "prescribed
course of study". In simple terms, that means that you do
or do not complete the year, and if you drop out during the year,
we take the money away. We cannot, as you will appreciate, fund
empty places in universities. The difficulty arises, and there
is a difficulty, especially with part-time students or those who
are taking modular schemes, where they may sign up for a range
of modules at the beginning of the year, get into the work and
then discover that, because of their other commitments, their
caring commitments or maybe their employment if they are part-time
students, they cannot sustain those numbers of modules and they
want to drop some of them although continue with others. Then
we come along and say, "No, you have not completed the prescribed
course of study so you count as a non-completer", and we
take the money away. We are actively looking at ways in which
we can mitigate that, and this has been, I have to say, a particular
bone of contention with the Open University and Birkbeck College,
and we are working successfully and constructively with them now
to do what we can to remove that problem without, on the other
hand, opening the flood gates to funding what we might call genuine
drop-outs and genuine empty places, and we think we can find technical
ways around dealing with that problem.
Q31 Jeff Ennis: You mentioned in
your answer to Alan Reid fairly recently that you are reviewing
the widening participation premium. Do you think there is a need
to possibly lever out so it reflects the full economic cost to
institutions which have been in the forefront of promoting widening
participation?
Sir Howard Newby: That is what
we are examining, Chair. I cannot pre-empt the decision of my
board, but we know that the existing premium is below the cost.
It is based on cost. It is not, as is sometimes speculated about,
based on incentives. There is not an incentive here. If you want
to lose a lot of money you can take in large numbers of part-time
widening participation students, but we are looking at where we
can take it nearer to what was identified in a study undertaken
by outside consultants a couple of years ago on the cost of these
students. That is what my board will consider in November.
Q32 Jeff Ennis: You mentioned in
an earlier answer an organisation called the Office for Fair Access.
What is the relationship between HEFCE and OFFA, or is there not
one?
Sir Howard Newby: Yes, there is
one. OFFA, of course, has it own separate director, who is quite
separate from me, Sir Martin Harris, and he reports directly to
Parliament, not to HEFCE. He is supported by three colleagues,
one of whom is half-time, and they are HEFCE employees on secondment
to OFFA. They are line-managed by Sir Martin, not by me, and from
time to time Sir Martin may wish to draw to my attention issues
which have arisen either in terms of the staffing matters, because
obviously the infrastructural support comes from HEFCE, or in
terms of policy issues. I would submit, Chairman, if I may, that
those members of staff who have been responsible for OFFA have
done an absolutely superb job. They had to deal with an absolute
deluge of access agreements, each of which was virtually bespoke,
in a very short space of time, and I would fully expect that this
Committee has not heard of any complaints of how these have been
administered or dealt with, either from students or from institutions—I
think they have done an absolutely superb job—and this process
has gone far more smoothly and far more constructively than many
of us dared to hope given all the pitfalls that could have been
placed in the way.
Q33 Jeff Ennis: Forgive me if I am
wrong, but it is my understanding that OFFA are sharing your offices
in Bristol. Is that right?
Sir Howard Newby: That is correct,
yes.
Q34 Jeff Ennis: Do you think that
sends out any particular message? Given that we are dealing with
an institution which is trying to widen access specifically, would
it not have been better to have separate offices, say, in a former
coal mining area where the access rates are severely restricted?
Would that not send out a stronger message from the Government
that it is very keen on a widening participation agenda?
Sir Howard Newby: I have one comment,
Chairman, which is that we have one of our local MPs present here.
He will know that actually the office does sit on a former coal
mine! I am not joking. You would not believe it to see the site
now, but there was a small coalfield in North Somerset and South
Gloucestershire.
Q35 Chairman: An own goal from Barnsley!
Sir Howard Newby: The more serious
response is that OFFA is a very small organisation. I am sure
everyone wants to keep it that way. I personally, and my board
certainly, thought it was not necessary to create a separate organisation,
but there we are, it has been created. I think the rest is frankly
a matter of practicalities and cost. We are all under pressure,
quite rightly, to keep our running costs down. They have certainly
been kept down by locating it in the Bristol office. The only
thing I would remind the MP for Barnsley is that, notwithstanding
that, the points he makes in general are very valid ones, and
he will know the University of Huddersfield has recently opened
an HE centre in Barnsley with Funding Council support and we look
forward to that improving the participation rates of students
in the Barnsley and South Yorkshire area. I am confident it will.
Q36 Stephen Williams: Returning to
the question of part-time fees, you mentioned earlier that it
was only Leeds Metropolitan University which was not going to
charge the full £3,000 to full time students. Do you think
that will also be the case for part-time fees as well? At the
moment you might have to pay £600 if you are studying 50%
part-time, whereas under the new arrangement it will be £1,500
upfront for part-time students which is quite a lot, quite a big
jump for a part-time student when 60% of them are not being supported
by an employer to meet that. Do you think some institutions will
actually not charge the full pro-rata top-up fee?
Sir Howard Newby: Well, the evidence
this year is that the vast majority of universities are not charging
the pro-rata fee and that universities and colleges indeed in
general have shown a great deal of restraint over raising their
part-time fees. Now, the issue, I think, is how far that position
is sustainable going forward, but I think they all recognise that
the part-time undergraduate fee is a rather fragile market at
the moment, so they have not, I think virtually all universities
have not, gone forward to charge the increases that you refer
to. It is perhaps worth reminding the Committee that there are
many part-time students who are charged very high fees, especially
at postgraduate level, and there I think probably universities
will continue to increase fees. That always has been an unregulated
market, and I am thinking of the PhD students, MBA students and
other postgraduate qualifications.
Q37 Stephen Williams: I have one
more question about the detail which was announced yesterday.
I understand that the support for part-time students is done on
a banding basis, so if you are between 50 and 60%, you get up
£750, up to 75% £900 and for 75% plus it could be £1,125.
What about students who might not have a 50% study ratio? Are
there many students who actually study for less than 50% full
time equivalent?
Sir Howard Newby: Yes, there are.
Q38 Stephen Williams: Are you in
support of them?
Sir Howard Newby: I think I would
need notice of that question, Chairman. I, like you, have only
seen the statement that was released yesterday. It is a student
financing issue, not a Funding Council issue, but I would imagine,
from my reading of the statement at least, it would be that, given
those bandings, a student taking a course that is less than 50%
of the full time equivalent would still be subject to that lower
banding that you describe, but that is really a matter for the
Department.
Stephen Williams: But it is not clear.
Q39 Chairman: When you have been
able to digest that change, could you give us a note please?
Sir Howard Newby: Yes, I will.[2]
Chairman: Now we are going to move on
to strategic subjects.
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