Examination of Witnesses (Questions 60-79)
SIR HOWARD
NEWBY
19 OCTOBER 2005
Q60 Chairman: While you have been
touching on the financial management of universities, actually
is there training for someone who is going to become a vice-chancellor
in the financial management of an institution that big?
Sir Howard Newby: That is one
of the legacies that I hope I will have left behind when I depart
from this post, Chairman. The answer now is yes. The answer when
I joined was only just, I think. When I was President of Universities
UK, I was responsible for instituting a so-called top management
course at that time and that has now been embodied in the Leadership
Foundation which is an organisation that we acted as midwife to,
so it is now the case that not just vice-chancellors, but all
senior managers and middle managers in universities have the opportunity
to undertake serious and consistent management training over a
lengthy period and this is for heads of department upwards. That,
I think, will serve the sector well in the years ahead.
Q61 Chairman: So anyone who became
a vice-chancellor today would have to have this training?
Sir Howard Newby: It is not compulsory.
Universities, as you know, are independent and autonomous bodies,
but in terms of code of practice, we would wish to see all senior
managers undertake this and the reality is that all of them are,
and not just before they come into post, but while they are in
post and that, I think, is very valuable. In rather the same way
as we have tried to professionalise teaching in universities,
it is now compulsory that all entrants to university teaching
posts must undertake teacher training, which is accredited by
the Higher Education Academy. I think this notion of professionalising
universities has moved forward quite a lot in the last five to
ten years.
Q62 Chairman: But where there is
a worry in the university administration, it is very often where
the top management does not seem to be able to cope with the financial
management side of the operation, is it not?
Sir Howard Newby: Well, that is
a matter for the governing body. It is not always the case that
it is the financial mismanagement that gets the universities into
difficulty. I think Members may recall the case of Thames Valley
University a number of years ago where the issue actually was
one of academic quality rather than financial mismanagement and
there are from time to time universities which are very satisfactorily
managed financially which get themselves into difficulties of
all sorts of different kinds, not only academic issues, but governance
issues as well.
Q63 Chairman: But for those universities,
who are all dependent on donations, there is a bit of a worry,
is there not, that there is no sort of vetting of the quality
of people coming in as vice-chancellors?
Sir Howard Newby: That is a matter
for governing bodies, Chairman. They make the appointments, not
the Funding Council.
Chairman: That is right.
Q64 Stephen Williams: This is actually
quite a broad strategic question and an institutional one as well
because it looks forward to your future job as well as your current
one. This Committee is going to look at the funding balance of
post-16 between traditional sixth-forms and new kids on the block,
FE colleges. Do you think there will be profit also in looking
at the funding differences between traditional universities and
post-1992 universities, like the University of the West of England,
for example?
Sir Howard Newby: Well, the funding
for the teaching from the Funding Council is the same for all
universities in respect of particular subjects, so despite what
one may hear, there is no difference in the funding we provide
to a post-1992 university and a pre-1992 university in respect
of teaching the same student in the same subject. However, looking
ahead, of course that will change because, as we move into a variable
fees era, and we know it is not so variable, but it is actually
discounted in varying amounts by bursary support, we will find
that a student going to university X will attract more resource
through the fee element than a student studying the same subject
at university Y who may attract a different sum of money through
the fee because that university is offering different amounts
of bursary support. By law, the Funding Council cannot take that
into account in the funding that we give to individual institutions,
so I do not know whether that is at the back of the Committee's
mind in looking at that issue, but that is where the differentials
might arise. At the moment in terms of teaching it does not. Of
course on the research side there are huge differentials between
some universities and others in terms of the amount of research
income they receive both off the market and from us, but on the
teaching side there is a level playing field at the moment. That
is going to change as fees come in and, I repeat, by law we cannot
do anything about that.
Q65 Chairman: Could you repeat that
point, Sir Howard, because there was a booming voice in the corridor
and some of us did not hear that answer.
Sir Howard Newby: As we go forward
into the variable fees era, then it will be the case that there
will be differential levels of teaching funding between different
universities who are nevertheless teaching the same subjects,
but, by law, the 1992 Act states that the Funding Council cannot
take into account universities' other sources of income when it
comes to determining the level of the HEFCE grant, so there is
an issue there. If the Committee is intending to look at this,
one of the things is that it is not just at the individual institutional
level, but there are of course subject areas which are disproportionately
clustered in some kinds of universities rather than others. An
obvious case in point, let us say, is nursing which is disproportionately,
although not exclusively, taught in post-1992 university institutions,
so there might be an issue and it is not just nursing, but one
can think of others, a lot of vocational subjects, also art and
design. One might, if one is not careful, sleepwalk our way into
a situation in which those subjects have been inadvertently disadvantaged
because they happen to be in certain types of institutions. We
cannot do anything about that at the institutional level, but
the question is: should we do something about it at the, if you
like, subject-based level? That perhaps is something that the
Funding Council might wish to return to in the future and I honestly
cannot tie the hands of my successor.
Q66 Tim Farron: Science departments
have recognised that low learner demand is a key factor in the
difficulties being faced there, low learner demand for those particular
subjects, but I am sure you recognise that there are geographical
pockets around the country where there is low learner demand for
HE, full stop, and Cumbria is one of them. I just wonder what
HEFCE's position is and what you are doing.
Sir Howard Newby: Well, as you
will know, and for the record, we have announced our intention
to establish a University of Cumbria. There are some proposals
out for consultation at the present time. I am confident that
we will see a University of Cumbria established in the very near
future. I think it will be a very innovative kind of university.
It will be based in all likelihood with its main centre in Carlisle,
but it will be highly networked into other parts of Cumbria on
the west coast where there is, I am sure you will agree, a particular
need as well as into centres in Penrith, Kendal and Ambleside.
The difficulty we face in Cumbria is that no one institution in
Cumbria can supply the provision which is necessary to meet the
needs of the Cumbrian student population, so we have had to work
together through a coalition of institutions and try, if I can
put it this way, to shape them into what will be a putative University
of Cumbria. As we are short of time, Chairman, that is the short
version and I can give you a much longer one if you wish, but
I think we are confident that there will be a University of Cumbria.
There are these pockets of under-provision around the country.
We have put heavy investment into Cornwall, we have put heavy
investment into Suffolk and we wish to do everything we can to
support the provision of high-quality higher education.
Q67 Chairman: The North West is not
particularly concerned, is it, with under-provision and under-achievement?
It is not the worst in the country.
Sir Howard Newby: Well, Chairman,
the north-west region covers an area from Crewe on the south border
to Carlisle at the north which is actually longer in distance
than London to Crewe.
Chairman: Hardly anyone lives in some
parts of it!
Q68 Tim Farron: I do!
Sir Howard Newby: We are confident,
Chairman, that were we to create a University of Cumbria, it would
be a viable institution, provided the quality was there of course.
I think it is also fair to say, and it goes back to a point Mr
Ennis made earlier, the kinds of students we all of us wish to
attract into higher education disproportionately wish to go to
a local institution and they have very, very good reasons for
that. Really what to us might seem rather short distances represent
major barriers to those students, and this is not because of some
innate parochialism, but it is because they have very good economic
and family and social reasons for that. It is no use saying to
a student in Doncaster, "Well, you have got two universities
in Sheffield up the road. Why don't you go there?", and I
am sure the same is true of Barnsley. It is no use saying to students
in Burnley, "Well, you have got the University of Central
Lancashire in Preston and it is only about 13 miles away, so why
don't you go there?" They have got very good reasons for
saying that it is just not a practical proposition and, increasingly,
we have to deliver HE to where the students are rather than deliver
students to where HE happens to be. Now, this is the Cumbrian
problem.
Q69 Chairman: But there are many
ways of doing that, as you know. Huddersfield University are providing
a partnership campus in both Barnsley and in Oldham, so you do
not always have to set up another new university to do it.
Sir Howard Newby: The university
in Cumbria will be bringing together existing institutions, so
although it will be, one would hope, designated as the University
of Cumbria, its constituent parts will be existing institutions,
the Cumbrian Institute of Arts, St Martin's College—
Chairman: I am not criticising the pet
project of any Member of this Committee, but the evidence to this
Committee has always been that the eastern reach of the country
is the most under-performing in education across the piece and
entry into higher education. Is it still the case?
Tim Farron: Not as a region as a whole,
but as a sub-region.
Q70 Chairman: I was not asking a
Member of the Committee!
Sir Howard Newby: I do not think
the eastern region is itself under-provided for. What I was saying
is that we have 70 universities which are south of the line from
Norwich to Birmingham. Now, that has never been planned that way,
that is just a historical accident, so we do have large parts
of the country which are under-provided for and, I repeat, that
has implications for participation because students from non-traditional
backgrounds in particular, and one thinks also of students from
ethnic minorities and female students, do not wish to, and actually
cannot, travel far from home. This is why, going back to Mr Marsden's
earlier question, delivering HE through FE colleges is a very
serious matter because further education colleges are much more
ubiquitous than universities and we can take higher education
to the students in the areas I have described by working in conjunction
with the FE sector and delivering it through FE college provision
and that is important.
Q71 Chairman: What is your organisation,
HEFCE, doing to drive that process, and this is something this
Committee has been interested in for a very long time? There are
too many universities in London and the South East, it seems to
us, and we would like to see more provision north of that line.
Sir Howard Newby: You used the
word "drive", Chairman, and I often describe my role
as back-seat driving. We do not have planning powers, we cannot
force mergers or a reduction in numbers. London has a very high
concentration of higher education institutions, but then it also
has a high concentration of excellence in research, it has a very
high concentration of overseas students who wish to come to London
more than any other city in the UK, and London also has the highest
rates of participation, including widening access, of any region
in the country, so I would like to think this is not London versus
other parts of the country; it is actually improving opportunity
for everybody, including the very deprived areas of London of
which there are still of course many.
Q72 Dr Blackman-Woods: Is the answer
then as to the proliferation of universities, which you are not
sure is going to happen, to ensure that HE is delivered either
in FE or in local centres or in work-based learning situations
or whatever rather than just saying, "We must build new universities"?
Sir Howard Newby: Yes, it is and
we have introduced the notion of lifelong learning networks to
do precisely that so the provision is that a student can start
a part-time course at an FE college and out of that course there
is a clear pathway, a progression pathway through to doing a university
degree and postgraduate work. We have got 18 of these now up and
running and we will have about 40 or so in the pipeline and this
is really working very well, especially, I might say, in the North
West where the region is almost entirely covered now by them and
other regions of the country are fast catching up.
Q73 Chairman: Can we have a list
of the 18 and the ones in process?
Sir Howard Newby: By all means.[4]
Chairman: We now move to international
students and Bologna.
Q74 Mr Wilson: The economics of international
students—now, there are some projections saying that there
is going to be strong growth over the next 15 or so years from
the British Council in international students studying here, and
some estimates are saying up to 900,000. Now, that is substantial
growth, as you will appreciate, and it suggests to me that there
could be some capacity issues, particularly with a target of reaching
50% of home students. Do you envisage any tensions developing
in allocating places between home and overseas students because
of those and, if there are, who would get first preference?
Sir Howard Newby: At the macro
level if we are looking at the sector as a whole, there ought
not to be any tensions because, since you are all well aware,
overseas students pay the full economic cost and, therefore, universities
can expand the number of places available for overseas students
without creaming off resources from the provision for home students.
Now, I repeat, that is at the macro level. At the micro level
of particular institutions, then of course those institutions
which are in heavy demand per place, that is, those institutions
which are very selective over their admissions, one could see
that there might be some tensions where very highly qualified
overseas students are taking places because there is not the same
level of quality of students presenting themselves at home and
in the EU.
Q75 Mr Wilson: How easy is it for
an institution to expand if they are getting lots of overseas
students?
Sir Howard Newby: Well, there
is always a kind of granularity problem here. You can expand to
a certain extent at sort of marginal cost, but sooner or later
you need to build more lecture theatres, more laboratories or
more halls of residence, although these days halls of residence
tend to be off the balance sheet, so they are often quite stepwise
changes. Then of course there are a number of institutions which
are rather constrained in terms of their physical size where they
have no more room to expand or they cannot get planning permission
to expand, so there are issues of this kind.
Q76 Mr Wilson: So it is not easy
to expand then really, is it?
Sir Howard Newby: Well, I would
not go that far. We have to balance this with where the student
demand is going. As I repeated earlier, a disproportionate number
of overseas students wish to study in London and it happens to
be in London that the constraints we are referring to are probably
greatest because there is no land or, if there is, it is very
expensive, new build is very expensive and so on and so forth,
so I would not rule out that there might be some capacity constraints
in London and the South East in particular, but across the rest
of the country I do not think they are quite as severe at all
as your question implies.
Q77 Mr Wilson: Can I move you on
to an associated subject. I am concerned that higher education
institutions are beginning to regard, as they have for some time,
overseas students as cash cows and they are using them to fill
funding gaps and supplementing the cost of domestic students.
Do you think that is the case?
Sir Howard Newby: I think there
are two ways of looking at this. First of all, I started off,
Chairman, by celebrating the fact that, notwithstanding all the
vicissitudes of the last few years, British higher education remains
in very good shape, widely respected around the world. We have
managed to sustain quality and certainly within Europe we are
widely recognised as being highly competitive. If we want to sustain
that position, it is natural, it is inevitable and, I would say,
desirable that we are going to attract more overseas students
and more students from the rest of the EU to this country. Now,
as far as EU students are concerned, they of course are considered
by law as home students and, as I have said before to this Committee,
Chairman, HEFCE is currently funding the equivalent of around
about two average-sized universities that we would not otherwise
be funding were there no EU students in this country at all and,
because of the disparity between inflows and outflows, where not
as many British students study in the rest of the EU partly for
language reasons and partly because of the high quality of what
we offer here, then, if you like, there is a cost there, but it
is one which I think reflects the high reputation and the high
value of British higher education. Since the same is true of postgraduate
students where these constraints do not apply, then I think that
is a good news story and we should be celebrating the fact that
we are attracting to this country so many high-quality overseas
students, many of whom, it has to be said, stick around afterwards
and even those who go back, go back with an affection for this
country which in the long term often is of great benefit to this
country. Now, you asked the question, are they being used as cash
cows, and I think the evidence from the National Students Survey
would suggest that they are not actually, that the vast majority
of students, including overseas students that come here, leave
highly satisfied with the experience that they have had. Now,
there is of course a financial incentive and we are back to Mr
Chaytor's question, that we want institutions to be entrepreneurial
and market-oriented and one way in which they are being entrepreneurial
and market-oriented is in recruiting more overseas students and
charging a fee which matches the full economic cost. Therefore,
what I am pointing to is that there is just a little bit of, if
I may say so, confusion in the public debate about this and I
think the fact that we are getting more overseas students is something
we should be celebrating, provided, you are quite right, that
they are not displacing opportunities for home students, but I
do not see, frankly, any evidence of that at the macro level at
all.
Q78 Mr Wilson: Do you see any dangers
in becoming over-reliant on overseas students filling these funding
gaps because, as you said yourself, we do live in a very fierce,
competitive world?
Sir Howard Newby: Yes, I do and
we do monitor that very closely. From memory, but I can send you
a note on the detail, there are 15 universities in England, 14
of which are in London or the Greater London area which have,
and I will correct this through a note, if I may, more than 15%
of their income coming from overseas student fees and we do look
at, if you like, the vulnerability, the risk that institutions
are facing.[5]
Now, let me say that some of those institutions or many of those
institutions are very, very strong financially and although taking
a hit on a decline in demand for overseas students would no doubt
inconvenience them, it certainly would not threaten them, but
there are a few institutions which could be threatened by a major
sustained downturn in overseas student demand.
Q79 Mr Wilson: Obviously there are significant
risks involved in cross-border movements of people and students
as much as anybody else. You may have heard recently of a student
from my constituency at Reading University who was implicated
in one of the bombings in Bali. What do you think are the funding
implications with regards to security for higher education in
the light of this, or are you going to leave that very much to
the Government, police and security services to sort out?
Sir Howard Newby: Well, you would
be surprised to learn that this has been a matter of discussion
very recently actually between myself and ministers and of course
the Secretary of State referred in her speech to Universities
UK in a conference this year to the security issue and the responsibilities
of the universities. I think I would say that all of this is an
extremely tricky and sensitive issue which is indeed best managed
locally where people have local knowledge and where sometimes
not even vice-chancellors, I have to say, are always in possession
of all the facts. Universities these days are very large and complex
organisations. Some of these issues have been around for some
time and they have been heightened of course by the bombings in
London in July. There are other issues which perhaps have not
quite surfaced for that reason and they are issues about industrial
security, not just defence security. It is a dilemma which I know
faces you all, as parliamentarians, and how we draw a line between
defending freedom of speech and liberty, freedom of speech within
the law and liberty which universities are, and have to be, bastions
of whilst at the same time recognising that in today's world universities
cannot somehow absent themselves from the wider civic responsibility
for the security of the nation, and I know that all vice-chancellors
are taking this very seriously. I do not think it is something
the sector should rush into. The sector will need help and support
on this, and it is not just financial support, but I think it
needs guidance and other kinds of support as well as to how to
deal with situations before they arise, let alone when they arise.
As I go back into the sector as a vice-chancellor, it is something
I am very aware of.
4 Ev 23-25 Back
5
Ev 21 Back
|
