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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 881-vi House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE TRADE AND INDUSTRY COMMITTEE
Trade and Investment Opportunities with India
Tuesday 25 April 2006 LORD PATTEN OF BARNES and DR TIDU MAINI MS CATHERINE STEPHENS and MS VICTORIA GRANT Evidence heard in Public Questions 442-513
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Trade and Industry Committee on Tuesday 25 April 2006 Members present Peter Luff, in the Chair Roger Berry Mr Brian Binley Mr Peter Bone Mr Michael Clapham Mrs Claire Curtis-Thomas Mr Lindsay Hoyle Mr Anthony Wright ________________ Witnesses: Lord Patten of Barnes, a Member of the House of Lords, Chancellor: Newcastle University and Oxford University and Dr Tidu Maini, Pro Rector, Development and Corporate Affairs, Imperial College London, gave evidence. Q442 Chairman: Gentlemen, welcome to this last evidence session of our inquiry into trade and investment relations with India. While we were in India and during the evidence sessions we have had huge importance has been attached by all those to who we have spoken about the HE sector, both in that country and here. That is why we decided to extend our inquiry and have this additional session; we are really grateful to you both for coming. You are both well-known to us, but for the record would you like to introduce yourselves and your role at our inquiry today? Lord Patten of Barnes: First of all, thank you very much indeed for inviting me with someone who really knows what he is talking about. I guess I am here wearing three hats: first of all, I have recently become the British chairman of the UK India Roundtable which, under my distinguished predecessor, can take some credit for the initiative which the Prime Minister launched with his fellow Oxonian Prime Minister Manmahan Singh, a couple of years back, or which they announced they were going to work on and which was actually unveiled to a warm welcome this spring. Secondly, I am a serial chancellor. As you know, the chancellor of a university does not have any executive role; Harold Macmillan, when asked what a chancellor did, said "As you know, the vice-chancellor actually runs the university, but if you did not have a chancellor you could not have a vice-chancellor." I am chancellor of Newcastle University, which I have been since 1998, and I was elected as chancellor for Oxford - I note provocatively for life - in 2003, and both those universities are members of the Russell Group. They have different though similar, comparable, interests, and in both cases there is a strong interest of course in this particular issue. Q443 Chairman: Dr Maini? Dr Maini: Good morning, and thank you for asking me to come. I am the pro rector at Imperial College and have been for the last four years. I spent 30 years in industry after graduating from Imperial where I did my Bachelor's degree and PhD; I look after a variety of issues at Imperial, I am in charge of all our strategic relationships on research, both with industry and with major organisations, government organisations; I look after our tech transfer business, anything to do with fundraising, money, bringing revenues into the college, so it is a fairly wide role and an interesting one. Q444 Chairman: Thank you. One of the recurring themes of our investigation so far has been that given Britain's extraordinary history and close cultural links and ties, of language as well, with India it is surprising that we are not doing better in a whole range of areas of activity, but the HE sector has been particularly highlighted to us and, Chris, in your opening remarks you hinted at the strong links that exist between our countries in terms of the education of many of the Indian elite, so perhaps it is all the more surprising that we seem to be doing so badly. Do you think that perception is fair and, if so, why is it happening? Lord Patten of Barnes: I think it is fair; it is less fair than it was as, plainly, since about the late 1990s or 2000 we have done a lot better. When you look at the figures for visas for Indian students they were down at the 4,000/5,000 level at the turn of the century and they have increased substantially, 250 per cent or so, since then, so plainly things are moving in the right direction. There are a number of factors that come into play: first of all, there is our relative decline in comparison with the United States, both as an economic power and as a cultural power; 40 per cent of the world's students who follow degrees in other countries do so in the United States. One reason why they do that is because the United States spends so much higher a proportion of its GDP on higher education than we do. We spend 1.1 per cent, which is the European average, and the United States spends 2.6 per cent. The American public sector spends more as a proportion of GDP on higher education than we do, 1.2 per cent, with 1.4 per cent coming from the private sector. There are other factors as well: there has been a lack of enthusiasm and attention paid to India and one way in which that has been reflected has been the decline in the focus on Indian studies in this country, and I happen to think that one of the things we need to do in order to increase the enthusiasm with which Indians look at the British higher education scene is to make sure that we are doing more in Indian studies than is at present the case. The Indian Diaspora in America has been incredibly successful; it is suggested that a third of the NASA engineers are Indians and there are 5000 Indo-American professors at American colleges. Very often what happens in India is an existing academic who has been educated in America will recommend America to his or her students, and there are other factors which come into play which are more subjective than objective - visa regimes and the alleged cost of courses which we can perhaps come back to, because I do not think the situation is as disadvantageous to us as is sometimes argued . What I do think, and the pro rector will have views on this as well, is that there is far more money available to support Indian postgraduate students in American universities; about 40 per cent plus of Indians doing postgraduate degrees in the United States are doing so with the benefit of scholarships or bursaries provided in the United States. So there is a whole complex of factors, they are ones we can address and the image issues should be easier to address than the financial ones, but we need to get real about what is happening in the higher education world and, unless we are prepared to spend more on higher education we are going to find, before long, that we do not have the second best higher education system in the world but the third or fourth or fifth or whatever. Q445 Chairman: Dr Maini, do you want to add to that? Dr Maini: If I may. Please. I absolutely agree with Lord Patten. The first issue we ought to address is the branding issue; we do not project the right image in India in terms of what our universities are: there is a general dumbing-down or a blanket view of British universities, and there are two reasons for that. One is that within the UK we are more and more shy about expressing our appreciation of excellence and we also are very shy of segmenting universities carefully. There are universities that are good at research and they need to be in one category, there are universities that are extremely good at training and in practical aspects of what needs to be done and they need to be packaged differently. Unless we do that quite openly and clearly in this country we are unlikely to project the right brand for people to appreciate. There are plenty of instances where this can be done; there are institutions like Imperial, Cambridge and Oxford that are good at research, there are places like Cranfield and Aberdeen that have a very special talent in their own areas. We ought to project those separately. We have instances where we work very closely with the Indian government to train their oil and gas industry experts and there are certain things that we do very well and things that Aberdeen does very well. That can only be done if you are very clear about the differentiation, so that is one reason. The other issue is the issue of fees and living expenses in the UK; they are higher and the numbers are quite high. A typical good undergraduate engineering degree in the UK is around £15,000 to £17,000 a year and you then have to live on top of that, and there are hardly any scholarships available for Indian students to come here. That is a big issue, with the pound being very strong it is cheaper to go to the US and the US universities have huge numbers of endowments they can help you with. There is obviously the issue of the visas as well. Q446 Chairman: We want to save visas as a separate question, so we will come back to that. Dr Maini: That is the way you must pay back, so that is another issue. Finally, the Diaspora influence that Lord Patten has talked about is really key. The Indian Diaspora in the US is very different to that in the UK. It has changed in the UK but we are not using the new, young Indians who are educated in this country to champion our cause, we stick to the usual, rather rich businessmen who are projected as British Indians abroad. One needs to get into that and see how it can change. Q447 Chairman: I am not surprised that you talked about the competition from America for Indian students. What struck the Committee when we visited India was the very high level of interest from Australia, which is actually, proportionately, doing significantly better than the UK. We identified Australia as one of the major competitors; do you agree with that and are there any other major competitors you would highlight to us from around the world? Lord Patten of Barnes: The competition is increasing. We know, for example, that a number of countries which, despite or because of President Chirac, do not actually speak English as their mother tongue but are now running courses for Asian students in English - it is happening in France, it is happening in Germany, it is happening in Finland, so there is more competition. The Australian situation is interesting. The Australians, in the mid 1990s, were I think offering about 260 to 270 visas for Indian students, now - you will have the figures - the figures are hugely greater than that, it has been part of the Australian education initiative which means that if you look at enrolment figures as opposed to visas, and the Committee will know the difference between the two, there are well over 20,000 Indian students at Australian universities and that has been a deliberate Australian policy involving subsidy and involving, I would guess, an attempt to help place Australia in its Asian context. It is still, I have to say, the Americans who offer the biggest and most substantial competition. Somebody sent me, the week after the Committee and the pro rector and I were in India, a cutting on the visit to India of the now outgoing president of Harvard University who, during the course of his visit, offered a dozen chairs in Indian studies to eminent Indian personalities and announced that any Indian student qualified to come to Harvard, coming from a household where the family income is below $40,000 will be funded totally. With those sorts of resources available the £10 million with additional contribution which the Government has announced as part of the initiative, while hugely welcome, £10 million over five years, does rather fall into context. I am afraid that while it is vulgar to make the point, one thing we have to do when we look at the American and Australian competition is simply to offer even more support if we want to do something about this fall. If I can just add one point to what we were saying earlier, I think it is true that this country has, understandably, focused a great deal on what is happening in China. I would guess that the pro rector's figures at Imperial are similar to those at Newcastle and Oxford where we have far more Chinese students than Indians, which is counterintuitive. At both Oxford and Newcastle there are about 200 Indians, substantially more Chinese at Newcastle and at Oxford there are 540 Chinese. That is partly because there is obviously a different branding issue and the Chinese do not want to put all their eggs in the American basket (to mix my metaphors) but I think it also reflects the extent to which we have focused on China, which is very welcome, but have not looked sufficiently at India. Dr Maini: Certainly, if you look at the numbers of Chinese students at Imperial, we have 900 Chinese students who are funded by the Chinese Government or by their families. These are outstanding students and we could take double that number if we had the capacity to do so. Q448 Roger Berry: If I can follow that up, in terms of the issues about fees or the cost of living generally, and perhaps visas which we might come onto, the position for Chinese students is essentially the same, is it not? It is not as if the UK is offering potential Chinese students a better deal to come to the UK so, Lord Patten, as you say, it is counterintuitive; why is it that Chinese students are more likely to come to the UK than Indian students? Lord Patten of Barnes: It is counterintuitive for another reason as well, it is not just the cost and the scholarships. Very often Indian and Chinese students are competing for the same scholarships and at Oxford we have some scholarships which are particularly targeted on Indians: Rhodes scholarships, Felix scholarships for postgraduates, but a lot of the scholarships are available whether you are Indian or Chinese. The main counterintuitive factor is of course that if you are a Chinese student then in order to qualify to do a postgraduate degree you have to have pretty good English, to put it mildly, so there is another barrier that you have to get through. It is partly what I said earlier, that the Chinese themselves are more likely to speak English as a second language than any other language, therefore the choice for them is Australia, North America or the UK by and large if they are going abroad and they do see the UK and Australia as useful "political" alternatives to America. It also reflects the China enthusiasm in the UK over the last decade or so, which I do not disparage but we have obviously made much bigger efforts to put across what is happening in British universities in China than we have in India. I do not mean that as a criticism of Government or the British Council, they are now trying to catch up, but perhaps the figures today reflect what was happening in the Nineties to a considerable extent. Chairman: We are in danger of encroaching on some of the question areas that Lindsay Hoyle wants to pursue, so can I bring Lindsay in. Q449 Mr Hoyle: All the witnesses are quite clear when we have been going around, the Indian market is now open for competition, not only to companies but actually to institutions as well. Do you think that really is the case, or do you think there are still barriers that exist in India that prevent on education; if so, what are they? Dr Maini: I am not quite clear, come back again. Q450 Mr Hoyle: I will try again. In the case of the Indian market we keep being told by witnesses that the Indian market is now open to competition, not only from companies but from institutions as well. Are there any barriers on education that you feel are still there, or have all the barriers now gone? Dr Maini: I do not think there are any barriers. The only barrier one has in India is things take time to happen. It is a very bureaucratic slow process, they have learned it well from us and they really have perfected it, whereas in China there is a much more of a command economy. I was in China last week and the Chinese Government has very specific instructions to their institutions to send students to certain universities, and they get their scholarships and their funding if they apply to certain universities more easily than to others, whereas in India it is a very democratic, very open system, people choose where they want to go and they take their own time about it. In terms of competition there are, as far as I am aware, no barriers other than just the very slow bureaucratic process that you have to go through. Lord Patten of Barnes: Can I just add a couple of mild qualifications to that. There is a difference whether you are talking about recruiting Indian students for undergraduate or postgraduate degrees. If you are talking about recruiting Indian students for undergraduate degrees, clearly it is true that the Indian school certificate is not quite at the same level as the International Baccalaureate or the A level or SATs and you have to supplement the information you have about a student's capacity through SATs or through the IB; it is perfectly possible to do it but it does not make it quite as easy to recruit undergraduates. Secondly, there is one difference: the Chinese, like the Singaporeans and the Malaysians welcome the establishment in their countries of campuses run by British universities. I have to say - and this is a personal judgment, it does not reflect the views of Newcastle or Oxford, there are mixed views on this - I have a lot of reservations about that approach. While I think universities should be run in a business-like way I do not think universities are businesses and when it comes to establishing infrastructure as opposed to helping to run courses in other countries it raises a few questions in my own mind. What is a reflection of the extent to which India is an open, plural democracy is that I think there would be resistance to doing that in India from unions, from local politicians and so on which does not exist in China where it would be regarded, if it met central plans and central objectives, as a useful adjunct to local provision. I think it will be a long time before anybody is opening campuses of Australian, American or European universities in India. Q451 Mr Hoyle: Can I say that reflects where we are out of touch, we actually do not know the changes that are taking place in India. In fact, Dr Maini, you say it is a very slow process to change whereas China is much quicker; can I tell you that while we were there in Delhi Western Australia opened a brand new campus. Where are we going? We do not even know that the others are ahead of the game. Is that not the problem, that we do not know what is going on, that we are not in touch? Dr Maini: I do not think that is the problem, there is an issue, as Lord Patten said, of whether it is part of your mission to set up an overseas university. Some people do it and we have notable exception in the UK, Nottingham set up an establishment, the University in China, but I do not believe there are British universities that have the capacity or the manpower or the expertise to start a university in India. The sheer risk involved in creating the infrastructure, the time it takes to get anything done, is huge. If the Australians are doing it they are probably being funded by the government to help them, or they have private partners, and if a university wants to try that route I am sure they are free to do it, but it is not a question of being out of touch, it is a question of who takes the risk. Q452 Mr Hoyle: Did you know that Western Australia has a brand new tower there, a beautiful-looking university campus? Dr Maini: Yes, they are not the only ones. The University of Arts in London is doing a fabulous job in India. They have a campus there in partnership with a local businessman, and we have had plenty of local businessmen who have approached us to set up a university in India with them. We have declined, because it is part of our policy not to do undergraduate teaching in India. Q453 Mr Hoyle: What you are saying is we have got it right, the Australians and the Americans have got it wrong. Dr Maini: Time will tell, yes, you are right. Q454 Mr Hoyle: You will be judged on that, okay. Lord Patten of Barnes: I take that question absolutely head-on. I would say in response to that particular issue, yes, we have got it right because there is a great deal of experience that, first of all, opening campuses which were allegedly those of a western university in middle income or developing countries offers guarantees which are not kept. You do not provide the same teaching standards, you do not provide the same learning experience after a year or two as you are providing back home. There is a difference --- Q455 Mr Hoyle: What evidence have you got for that? You have not got any, you have just said that, because you do not know. You did not know there was a campus there, then you say the standards are not there. Come on. You have to back it up with some evidence, you cannot just say it off-the-cuff, but that is what seems to be happening. Lord Patten of Barnes: If you asked most people for their anecdotal evidence of the commitment that was shown by academics in this country on campuses abroad after a couple of years, you would find it was pretty limited. I find it surprising that we think that the best way of selling higher education in this country is by replicating what we do not do as well as we should in this country in other countries. Maybe it is what the University of Western Australia does, but I certainly would not strongly advocate it, not, as I say, that I have any executive role myself, and it is much more sensible, for example, to do what Newcastle University is trying to do which is to combine courses with good Indian institutions so that somebody doing a particular degree in the sciences can start the degree in India and can continue it in Newcastle; that is a much more sensible way. Coming back to your point about the University of Western Australia - and I think there has been some question of the University of New South Wales doing the same - it will be interesting to see the reaction both of the teaching professions in India and local politicians. Mr Hoyle: Thanks a lot. Chairman: Tony Wright wants to follow up on that. Q456 Mr Wright: Following up on that line that you take, Lord Patten, what we were told when we were over there is that although quite clearly the number of engineering and science graduates coming through is impressive, McKinsey's recent report found that many multinationals were not very impressed by the quality of the graduates coming through and we were told on a number of occasions that participation by the United Kingdom's higher education institutions could possibly improve the quality of those graduates. What are your views on that, do you think the Government is doing enough to try to exploit that particular market? I was quite interested in your comments about jointly doing some courses with universities and then continuing over here, so what would be your views on that? Lord Patten of Barnes: The main report you are referring to is a McKinsey's report and I guess you would find that McKinsey and others might make similar remarks about the quality of graduates coming through in this country as well as the quality coming through in India. I found - and I was talking to many of the same people going round India as the Committee - that a lot of the business leaders I talked to expressed concerns themselves about raising the quality of the graduates coming through in software engineering and in other sectors. I think we have a real contribution to make to Indian institutions in raising quality, but I happen to think that they have a contribution to make to us in raising quality as well. The Indian institutes of technology are outstandingly good; elsewhere at different levels of higher education maybe there is more we can do, but certainly collaborating in delivering taught Masters programmes and collaborating in PhD programmes is a way of raising quality on both sides. Dr Maini: I would add that I find the McKinsey comment rather difficult to believe given how many companies are setting up major R&D centres in India. If the quality of graduates is poor, why would Intel and Microsoft, some of the biggest companies in the world, set up their research and development centres in India? Shell has just opened a research centre in Bangalore and they have hired 1800 engineers. They are surely doing something right, so I find that comment rather bizarre from McKinsey. Q457 Mr Wright: You see it just as trying to exploit quite plainly what is an open and growing market? Dr Maini: It could be. It comes back to segmentation; there are certain areas where we could do a lot very quickly and efficiently. The sort of work that Cranfield do, for example, in training people to maintain engines, to maintain aircraft, we can do that extremely well and we should be pushing that very hard. The problem we have is we do not characterise our universities carefully enough and put them in pockets where their strengths show up, everything is bundled into one mass and we sell our universities as a homogenous unit and by the time you have done that and explained that to the British Council it gets really confusing by the time it gets to the end customer. We should be much more clear about where our strengths are and what different universities can contribute; we would do extremely well if we did that. Q458 Chairman: What are your universities doing to address the image issues you discussed earlier in this evidence session and to increase the number of students coming to your institutions from India? Lord Patten of Barnes: First of all, both the universities that I know best are trying to develop their collaborative ventures in R&D with Indian universities, with Indian business, with Indian institutes. Secondly, there is a longer haul in getting over a slightly different image of British higher education and that is affected by one issue which I am sure the Committee is aware of, and it touches on something which the pro rector was saying earlier. You do hear some Indians say you only want to attract more Indian students for the money; you do hear some Indian critics say you are regarding foreign students as simply a way of increasing your revenue streams because your budget is squeezed as hard as it is by Government and - let us be honest - that is often true. The reason why the number of foreign students is often given as a performance indicator is because it is seen as a way of increasing the revenue for our universities. It is extremely important to get across two rather different arguments. The first is that if we are not getting as many Indian students as America and Australia then we are losing out on attracting some of the best talent in the world into British higher education and in order to stay the second best system in the world we need to be clear that we are scouring the world for the best talent. The figures that we were both giving earlier about the disjuncture between the Chinese figures and the Indian figures I think underlines that point. Secondly, we have to get across that we are missing out on huge opportunities for research collaboration if we are not doing more to attract Indian students, particularly postgraduate students, so one should not lose sight of that aspect of the image issue. There are others which perhaps affect some universities here more than others. The extent to which some of our older universities are identified with older, more establishment India - a lot of the Indian audiences and a lot of the Indian businessmen I was talking to did not know that we have in Oxford an extremely good business school, thought that our courses were too inflexible when you can actually, at Oxford, do physics and philosophy and one of the most popular courses is economics, engineering and management. There are some specific issues to get across, therefore, but there is a general sense that perhaps we are regarding too much Indian and foreign students as a milk cow - sorry, that is perhaps not the right expression in the circumstances - and that needs to be thought about. Of course we need to attract more foreign students and of course it has financial consequences, but if we give the impression that that is the main reason why we want Indian students we do not do ourselves any favours. Chairman: Can we move on to Mick Clapham's question now because we have to get through the questions. Q459 Mr Clapham: Just before I come to my question, Lord Patten, could I just make a comment about the McKinsey report? As I read the McKinsey report they had looked at the views of multinationals who were actually employing Indian graduates, so it was not a piece of independent research done by them but the views of multinationals. Looking at what we might do to attract more Indian students, are your universities doing any work with the regional development agencies for one, the British Council for another, UKTI as another institution, because it seems to me that if we were working with these institutions there is that possibility of winning more Indian graduates over to study in UK universities. I would have thought, for example, that the regional development agency in the North East would have been a particularly important link, for example, for Newcastle University. Lord Patten of Barnes: Yes, and Newcastle is very conscious of the importance of that link, of its importance to the regional economy, and its ambition to be accepted as a city of science is part of that of course. We do have good and strong links with public agencies, particularly with the British Council whose work in this field is extremely good, and they have demonstrated how they are prepared to change. Their use of FM radio in India to get across their case is simply one example of that; I am a huge and unqualified admirer of the British Council in India and elsewhere. There are two areas where we need to do more and one of them at least represents a cultural difference between this country and the United States. Alumni in the United States behave and are encouraged to behave differently from alumni of British universities, even alumni who are not British. I was told about the arrival of some of the American universities in Mumbai for their annual exhibition and the extent to which every alumni of those universities regarded themselves as a John the Baptist for what was about to happen, and I am afraid we have a rather more discreet view of alumni associations. I know alumni associations that regard any suggestion that they should have something to do with money as a sin against the Holy Ghost so I think we do need to be a bit more extrovert in what we expect of alumni associations and the way we work with alumni associations. Secondly, we also need to work much more strongly with business. Both of the universities I know best do that pretty well; for example, one of the most important collaborative ventures of Newcastle is with Coal India and the hydro geochemical work that is being done by us with the support of HSBC has been terrifically important. Oxford has done a great deal of work in the area of cancer research with GlaxoSmithKline so there are business links that we need to develop as well as stronger alumni performance and as well as working with public agencies like the British Council. I do not want to sound too defensive, but however much more individual universities do, the disparity between the Harvard initiative which I mentioned earlier and what we believe at the present we can afford to do is pretty considerable. Q460 Mr Clapham: Nevertheless, these institutions could make up for that difference in resource. Dr Maini: They can, and there are also other things that we could do. I feel the key today to gaining ground in India is to collaborate more in the research and development area - we have a strength there, we are strong - and in the training area as well. Chairman: We want to ask some questions about collaboration actually, Claire Curtis-Thomas wants to come to that, so perhaps we could talk about that in a few minutes time. We have two issues that we want to raise with you in detail, visas and collaboration and possibly some wrapping-up questions as well. Can we move to visas and Roger Berry? Q461 Roger Berry: As we all know, one of the reasons that is frequently put forward for why the UK is less attractive to Indian students than some other countries is our visa arrangements and I would be interested to hear whether you feel that is an important factor for us to consider? How important do you think that is? Lord Patten of Barnes: I am not an expert on the arcana of visa regimes, but my impression is that any increase in fees has a particularly deleterious impact, not surprisingly, on enthusiasm for working or studying in the country which is responsible for those fees. The increase in visa fees for the UK was as unwelcome in India as, frankly, the increase in visa fees for Australia and the United States. It is an issue which is surrounded by quite a lot of mythology: I do not think it is fair to believe that it is much easier and cheaper to get a visa for studying in the United States than it is to study here, nor that you are more likely at the end of a visa to get a green card to work in the United States than you are likely to be able to work here. Maybe it is something that we have to address, as the Prime Minister did, by doing a direct satellite link and a press conference while the Committee was in India, with Indian students, as the sort of way you have to get across that some of the myths about our system are precisely that. It is an issue that we need to keep looking at and one particular aspect of it which was raised with us was the question of the cost of renewal of visas where a student has to stay on to complete a DPhil, where it lasts four years rather than three years. There are doubtless one or two issues which still deter students or potential students, but my overall impression was that the system was being pretty well managed by the High Commission and those who have had the job outsourced to them. Dr Maini: Certainly the impression I have is that the visa situation is improving enormously. There have been great strides in that area, but the issue still is one where the student when he finishes can work for a sufficient number of years to pay back his debts. That is the key situation and he cannot do that. If you are a student at Harvard or MIT or Berkeley you can work for three years and pay back all your loans; that just does not happen here and unless we recognise that and allow these students to work for three or four years to pay back their loans, we are not going to get around this problem. It is, quite frankly, very expensive to study here; for a typical engineering graduate it would cost the family £100,000 to study in England. Roger Berry: When you make that point to the Government or whoever, what kind of response do you get because that was precisely the issue that was raised with us on countless occasions in India, that if students can have a reasonable expectation that if they are good they can work for three years or whatever afterwards and repay some of the debt, it seems on the face of it an incredibly sensible thing to do, it happens in other countries, why is there that resistance in the UK? Q462 Chairman: Can I just add, of course, that the Prime Minister has announced a year but only for those who complete postgraduate degrees and undergraduates in sectors where we need specific skills, and of course it is two years in Scotland - which is bizarre, there are two immigration rules for the UK. Dr Maini: It is unnecessarily complicated, we need to have a simple system where you are allowed to work for four years or whatever it takes to pay back your loan. The interesting thing is that we now have European students who come from Poland and elsewhere to the UK to study, they get funded by the Government, they can get government loans, and when they go home they do not have to pay them back because their threshold of salary never reaches a level where they have to pay back a loan. This is ridiculous. Lord Patten of Barnes: The comparison between the costs of doing the degree course and visas makes it absolutely clear that the most important issue is the cost of the degree course. If you are doing an undergraduate or even a graduate degree course, maybe the figure for tuition fees is £15,000 or so but I guess you are actually talking about a cost per year of somewhere between £23,000 and £24,000. If, as I said earlier, you go and do an undergraduate course in the United States the costs at an Ivy League university will be higher than that, the costs at a state university are about the same, postgraduate costs are probably about the same. The difference is the figures I mentioned earlier, that 43 per cent of the Indians doing postgraduate degrees are getting funds, bursaries, in the United States and about nine per cent of those doing undergraduate degrees. The areas where we have to be looking hardest are scholarships, bursaries and support for postgraduate students from India, but then we also have to be looking at the support for postgraduate students from the United Kingdom, which is another issue perhaps for another committee. Roger Berry: Thank you. Mrs Curtis-Thomas: Lord Patten, some of your comments alarm me enormously. You said you were not sure whether or not a university was a business and yet you acknowledge that it needs to be a business in order to attract a market. When we went to India it was very obvious that the expansion of the private sector educational facilities were there to meet demand that the public sector could not meet, and in fact the government had indicated it would not meet because it thought that the private sector had a significant role to play. We visited a number of outstanding businesses, world leaders employing thousands of highly qualified individuals, paying them exceptionally well, but who are desperately interested in bringing UK academic provision into India, and there was not a question of whether Indian families would meet the fees because they were already meeting the fees, so the £30,000 a year that we charge here seems to be an outrageous sum of money, but not actually for a cadre of the Indian population. I am very much concerned that you seem to have adopted a unilateral position which says we will not take Oxford or Newcastle or Imperial to India because we do not think that is our role; actually, as a Member of Parliament and an engineer we are desperately short of highly-qualified individuals in this country in the short, medium and long term. I believe that if we could do something more to improve our links with India we might have within our grasp resources to address that acute shortage of time, so my questions really lie on is there a systemic position which says we will not take Oxford, Newcastle or any other good university into India because we think they ought to come with us, and is that not an incredibly selfish position to adopt? If that is the systemic position then what relationships do we have with other India universities at this time and what relationships do we have with significant Indian businesses who are very interested in developing research capacity, preferably there, but if not there then here? Q463 Chairman: That is quite a long question and we are technically over time already, so can I encourage you to be as succinct as you can be. Lord Patten of Barnes: I must have become seriously incoherent and inarticulate in my old age. I made two points: first of all I said that universities should be run in a business-like way but that universities are not businesses. Perhaps it is an old-fashioned view, but I do not think that knowledge is a commodity like Coca-Cola, its acquisition needs to be managed well but I do not think it makes very much sense to regard a university as like Wal-Mart. Q464 Mrs Curtis-Thomas: Is that your reason for not putting investment in or not looking at developing a branch of Oxford in India? Lord Patten of Barnes: My second point, which is more germane to what the honourable lady is saying, is that I do not think that demand in India is for British, American or Australian universities above all to invest in infrastructure and the development of their own campuses. I want to see us investing more, as we are, in collaborative R&D, in joint PhD programmes, in joint Masters programmes, in bringing more post-doctoral Fellows from India to Oxford, Newcastle and other universities, in sending more of our students to India - because there are perishing few of them travelling in that direction any more at the moment. I can think of ten or a dozen things that we are doing and which I believe we should do more in order to tap this extraordinary Indian appetite for education, but they do not happen to include establishing more UK university campuses in India because I do not think that is the principal Indian demand and I do not think that is the principal way in which we should use our resources. When you look at the degraded facilities, at the degraded laboratories and library facilities at UK universities it is strange to think that the best way in which we should go forward is trying to put the limited money we have got into new facilities in India, China, Singapore or Malaysia. Nobody is giving us that money or offering that money, so I am passionate about spending more effort in encouraging links with India, that is why I spent a week in India when the Committee was there, but I happen to disagree with two members of the Committee that the right way of doing that is by developing campuses. Maybe the members are right and I am wrong, but I would be surprised if they discovered that that was the Indian priority. Mrs Curtis-Thomas: What if you were approached by an Indian business that said "We are very interested in you establishing a facility here and we would want to support you financially to do so"? Q465 Chairman: Dr Maini has had that situation. Dr Maini: I have had that situation on three occasions and when you drill down into details they are not prepared to cover the risk, they are not prepared to give you enough money to establish a university and cover all the costs. I am on the board of a university in the Middle East, the University of Qatar, which is a huge foundation that has established four overseas campuses, and I can tell you that it is a very expensive business. The engineering school is in collaboration with the University of Texas and it costs the Ruler of Qatar $70 million a year, outside the cost of the building, to educate 50 engineers a year. That is the level of cost that is involved; I do not believe that there are Indian businesses, however much they may posture themselves, who will actually cover the entire risk. That is one issue; the second issue is that some universities do not see it as their core mission to go and establish universities overseas because they value the brand. That happens to be true for us, it happens to be true for MIT, for Harvard, they are not going to set up campuses where they will give Harvard degrees in India. They will collaborate on programmes and we have huge scope there. The last question is where would the money come from? Where would Imperial find the money to go and invest in India when we can hardly keep our own university going. Q466 Mrs Curtis-Thomas: Could you give me examples of where there is collaborative research between you and Indian companies and what are you actually doing to get more research funding from those companies? To address your point, Lord Patten, how are you going to increase the number of UK engineering students who are going to go from here to India? What are you doing about that? Dr Maini: We are setting up a foundation in India, with our alumni, and the idea is to create a foundation that will fund students to come and study in England. It has taken us a year to get in position and we are now at a stage where all the legal work has been done and some of the alumni have promised to put money in. We have pledges that have reached $1 million already and that will help us to bring students here. Q467 Mrs Curtis-Thomas: Are you working with the British Council on that or is that your own initiative? Dr Maini: We are working on our own with our alumni who happen to be some of the largest industrialists in India. We are working with major companies and we have a dozen companies in the UK who have ambitions to work and are currently working in India. We are working with Indian companies who have international operations who want to back this programme, so the idea is to create a foundation. Originally the idea was that we would collect enough money to get students to come and work here, but what we discovered in the process of our negotiations and discussions with the Indians was that they would rather put money in this foundation to encourage collaborative research, so the idea now is to find programmes where we can do collaborative research together and that way bring students to England and send some of our professors to India to work in the universities as well. We feel that that is a very strong programme which will take off. We already have a couple of projects that have started: one is in the aerospace area and the other one is about to start in the drug discovery field, so we have examples where these things can work but it needs a kick-start. We spend a billion pounds on research in this country through the Research Councils; I do not see why we cannot have a strategic decision to invest a portion of that money on international collaboration; 20 to 30 per cent of that money could be allocated for collaborative research. That does not mean the money has to go to India, all it signifies is that a British institution develops a programme and 20 per cent of the total funding will be allocated to international programmes. We have examples where we have put forward to the Government programmes where this particular model will work, and the Indians are prepared to match their side of the funding, yet we find it difficult to get the attraction of the Government. Q468 Chairman: We are out of time, gentlemen, but we are very grateful. I think you get a sense of our passion about the opportunities and we understand yours as well, and we are very grateful. If you think on reflection that there are things you would like to have said today in response to the line of questioning that some of my colleagues have pursued, please feel free to drop us a note, giving an indication of what you would like to have said, that would be very helpful. Lord Patten of Barnes: I would just like to thank the Committee for giving us this opportunity. Both of us are on the UK India Roundtable and we feel equally passionately that we want to develop and strengthen relations with higher education in India, as well as elsewhere, and both of us are aware of the financial restraints within which British higher education operates. Having said that, an extra £10 million over five years with additional support from some businesses is very welcome, but there are limits to how much you can do with that money in comparison with what some others are spending. Chairman: Particularly American others. Thank you very much indeed. Memorandum submitted by The British Council Examination of Witnesses
Witnesses: Ms Catherine Stephens, Geographical Director, Asia and Africa and Ms Victoria Grant, seconded to UK India Educational Research Initiative, British Council, gave evidence. Q469 Chairman: Ladies, can I begin by thanking you for coming. As we should acknowledge, in our private conversation, we met the British Council while we were in India and enjoyed the meeting. Can I ask you to begin, for the record, by introducing yourselves? Ms Stephens: My name is Catherine Stephens, I am the Geographical Director in the British Council for Asia and Africa. If that sounds an odd combination it is because we have two geographical directors and I have half of the world and my colleague has the other half; so obviously I cover India. I should perhaps say that I have spent almost a decade of my own working career in the British Council in India, leaving in 2000. So I have to be careful because sometimes my knowledge is out of date, but it is still quite profound. Ms Grant: I am Victoria Grant, I work for the British Council but I am currently effectively on secondment to UKIERI, the UK India Educational Research Initiative, as the Assistant Project Manager, as of last October and probably until about September this year, for the design and set up phase. Q470 Chairman: Thank you. There has been some speculation in the British media recently that the opportunities for the British HE sector in India could be about to expand dramatically because of the increase in reservation for the untouchable castes in Indian Higher Education Institutions, leading to a mass exodus of the Indian middle classes. But leaving that on one side - unless you would like to comment on it - could you give us some indication of what the British Council thinks the size of the market is, what the opportunity actually is? A lot of figures have been bandied around about the relative success of Australia and the US, but what really is the opportunity for the UK? Ms Stephens: I think there are two kinds of opportunities. One is actually investment in India and joint ventures and the possibilities for that. The other is, of course, the well-worn and well-known and still very interesting education promotion area, about which I think you have already had quite a lot of briefing, but I am very happy to go into that further. I would just like to say on the former that one of the questions that arises is how constrained are the possibilities for investment in education with Higher Education Institutions and indeed Further Education Institutions. I think on paper there is a very open stance. In practice what we have found when we have tried to progress quite interested parties to set up joint ventures with Indian education is that there has been quite a difficult track to follow. Part of this has been around the recent political situation in India where, under the BJP, there was quite a xenophobic attitude towards education and culture in particular, and there was a real sense, I think, that they were not open to sometimes pernicious outside influences. I think that was the stance. We found it very difficult in the Council in India to progress some of the initiatives, some of which looked very good, which had been discussed perhaps by individuals or institutions. When it came to it they could not get any further with the University Grants Commission or with the AICTE. I believe from what colleagues in India tell me that that has changed, that there is now an expansion of education opportunities in the Higher Education phase in India and there is a lot more private higher education investment from wealthy Indian and other corporate kinds of interests - Canadian International Schools and things of that nature - and as I understand it there is a possibility with the GATTs round coming up that there will be a further formal opening up of the sector to investment. We had something like 40 proposals in a sort of holding pattern at one time for various kinds of joint ventures. So I think we still feel that if things can open up further, and with the current profile of India in the West, that there is quite a lot we could do to help UK institutions invest in India and that kind of opportunity. Chairman: Your answer has strayed into some of the areas that Lindsay Hoyle was hoping to ask you about. You were talking about cultural barriers and Lindsay is interested in the barrier questions. Q471 Mr Hoyle: I am just interested that you lead us on to an area. Do you believe that there are barriers to education and, if so, what do you think they are at the moment? Ms Stephens: I think apart from a fairly sophisticated layer of the top universities, the IITs and the IIMs, the reality is that there is a deep cultural barrier. Even in a place like JNU, Jawaharlal Nehru University, I think there is a feeling that there is a strong Indian cultural ethos. They are quite open to having collaborations and indeed do have collaborations with all sorts of international partners, but there is quite a fierce defence of the sort of national cultural approach to education, which still grows out of an urban socialism, I think. Q472 Mr Hoyle: While we were there we were told by the UK Council that you cannot establish campus in India. Is this right or is this wrong? Ms Stephens: I think it depends what you mean. If you are talking about a wholly owned UK campus --- Q473 Mr Hoyle: University campus, yes. Ms Stephens: --- I think you cannot at the moment; it is not possible. Q474 Mr Hoyle: We then spoke to the Minister who said, "Of course you can, we are open for business, of course we have taken the competition away; it is there." And yet we see Western Australia with a brand new university campus, a brand new building - Western it says on top of it - and that is the Australians in there doing business. Do we really know what is going on in India? Have we really got our finger on the pulse or do you think we are missing something? Ms Stephens: It could be that we are missing something. Possibly there has been a regulatory change that we have missed, but I would doubt it. Q475 Mr Hoyle: So you think the Australians take it on speculation? Ms Stephens: I would be very interested to find out what is the real basis of that collaboration. Is it about joint recognition of each other's professional qualifications, for example, because this is often the area that holds up a genuine collaboration. Q476 Mr Hoyle: Why do we not know? Ms Stephens: I can try and find out for you. I personally do not know and I am not going to pretend that I do, but I am very willing to find out the answer to that question from my colleagues. Q477 Mr Hoyle: The worry seems to be that, yes, we are out there; yes, we think we have the right to business in India and education, whatever the area may be and whatever the segment of the economy, and that we have this right because we have historical links, but the truth of the matter is I do not believe we are as aggressive as the Americans and the Australians, who are actually in there wanting to do business, enticing people to go back to either Australia or America but establishing the campus to make sure they have a strong foothold. We do not seem to have that. Ms Stephens: I totally agree with you that we should not be complacent, and certainly to fall back on to the idea that historical links in some way give us an advantage would be a terrible mistake. We tend to take the view that if anything we have to understand and negotiate our colonial past, if you like, and at all times try to show that we are a modern country with modern ambitions. So please do not think that the British Council is sitting there saying that everything is fine and we do not need any effort, that really is not the case. However, I would like to point that, for example, Wigan and Leigh have ten campuses across India but the way in which they have set these up is through a joint venture, which entails a very detailed kind of come and go and give and take; it is not about Wigan and Leigh suddenly having a Wigan and Leigh owned campus, and I would be very interested to know - and I will try to find out from my colleagues - whether the example you have given is one where actually it is a joint venture in some way. Q478 Mr Hoyle: In fairness Wigan and Leigh is not a university - we are talking about universities from the UK - that is a college and the college is establishing links across India. What we are talking about is the university setting up a campus, and if you could drop us a note to say whether it is there and it can be done and how have the Australians done it if not. Ms Stephens: We will certainly find that out and I am extremely interested to find the answer. Mr Hoyle: So are we if we cannot get one! Chairman: One of the frustrations we find, quite often British people are told you cannot do something in India and they go away and a few months later you can do it and they have missed the opportunity, while our competitors seem to be a little bit sharper, not just in HE but across the spec. Brian Binley. Q479 Mr Binley: Thank you very much. I visited India a little earlier than the Committee, in January, and I was immensely impressed with how respected and how important the links with this country were considered to be in India, in Indian culture at all levels, and I therefore wanted to ask, because I look at the figures and I notice that the people who come to this country to study in our universities - and I am interested in that aspect - really fit into four areas, health and health sciences, into IT and electronics, business studies and engineering. They are crudely where the market place is for us, and that seems to me to be a rather limited market place, quite frankly. So can I ask you whether you think we receive the level of Indian students we should expect and whether our advantage in terms of the way we are seen by Indians generally is exploited to the full, quite frankly, or do you think it has it been eroded - not my view - and can you answer those two points first because I have another question I want to come to? Ms Stephens: I think there was an erosion and I think we have tried quite hard to reverse that erosion with some high degree of success. I am very interested in your point about the sectoral areas. Our stance in the British Council has been to very much work with our partners in the higher education club, if you like, that is interested in India and to work on the areas that they perceive there is most demand for in India. So there is a demand related aspect to those four areas. When we come to your point about are we being ambitious enough, I firmly believe we are not. I am absolutely sure that there is more market share to be gained for Britain, both in terms of people coming from India to Britain, but also in terms of relating to the dynamic local corporates in India, who are looking for inputs of certain kinds from the globe, and I do not see why it should not be the UK that supplies some of these. The area I am particularly thinking about is English services. I know this may be slightly off the higher education point that you are making but I think it is related that if we can be supplying consultants and English language services to help the growing ICT companies and all the rest of it, they certainly do not need our help with their own training. But in this area they are looking for assistance and we want to give it and I think that will help to pave the way for more people to look to the UK automatically. It will position the UK as being better perceived as the dynamic source of research and scientific innovation that it is. I do not think it has that profile enough in India, although we work terribly hard to try and get it there. But if we could have these links into the companies I think we could do more of that. The other bit I just want to get on the record is that we are doing a lot of work with schools. That sounds like a scattergun approach but if you get the right links into the schools that feed the good universities you build the community that looks to the UK in all sorts of areas. Q480 Mr Binley: I am delighted because that establishes what I hoped we would establish, which is there is opportunity. What I now want to talk about is how we exploit that opportunity. It seems to me, having listened for only part of the presentation we heard earlier, that there is an elitism and an arrogance about further education in this country, which seems to suggest that they are above and beyond competing and that they certainly above and beyond marketing. I, as a businessman all my life, was horrified, quite frankly, by some of the answers I heard in this respect. What can we do to kick academia up its backside, quite frankly, get it off it, get it out there and get it selling? Ms Stephens: I am not sure I am the person to ask. One of our major partnerships is with UK Higher Education. I was not here for a lot of the previous session, but I do have to say that I think it is a very diverse community and I hope it is not all arrogance. When you look at the intervention in China, which Nottingham has made, and so on, we can see lots of examples where there is dynamism, there is innovation, there are entrepreneurial approaches. I think that by and large we find that the universities that come regularly through our education fares twice a year to India do so in a very good spirit of openness, they are very keen to be culturally sensitive; they are ready to take up opportunities and discussions, and I would not want to characterise the whole sector in that way. Mr Binley: Just most of them? Chairman: Claire Curtis-Thomas. Q481 Mrs Curtis-Thomas: One of the great things about going to Bangalore is that they have 150 engineering students, which was marvellous for an engineer to find themselves amongst so many people of similar minds. We were told that there was more than enough engineering capacity both in the short term, medium term and the long term to fill the acute shortages gaps that we are going to experience in this country in the next ten to 20 years - music to my ears. But at the same time we are also told that the ICT sector was facing a shortage of suitable recruits. So we have two situations, two statements there - over abundance and under supply. So which of those is true? Do you know? Ms Stephens: I do not know. Is it that they see some difference between the two categories? That they do not see a link between the engineering group and the ICT group? Is it that they are seeing a different skills base there in some way? Q482 Mrs Curtis-Thomas: I do not know, that is why I am asking you the question. Ms Stephens: Sorry. I am not sure I do either. Q483 Chairman: Can I ask you to give an assessment, if you can, of what you think the quality of Indian engineering graduates actually is? The figure is that there are more engineering graduates every year, significantly more, leaving Indian institutions and work, on the whole, in the call centre sector in India. But if you press Indians they quite often say that the quality at the lower end is actually not that high. Ms Stephens: I would absolutely agree with that. I think there is a huge variation in quality in general, and I think in engineering in particular - actually even more so in the whole MBA area where commerce graduates are two a penny and really, I am afraid, not very bright and not very good, in my experience, in most of the universities. I think when you are coming to the top universities - and again obviously the IITs - then certainly with the IITs you are talking about world class as we can see from the brain drain from India that goes from those institutions. Q484 Mr Clapham: Can I explore why perhaps we are doing less well than we really ought to be? One of the views that have been put forward is that it is because British companies and institutions do not really obtain local knowledge, that they believe that because customs and practices are very similar to this country that they do not need to acquire local knowledge. Is that your view with regard to the education sector and, if it is, are you working to try and address that? Ms Stephens: Yes. Is there a false friend factor, I guess. I do not think there is any more. As I said before, I think any complacency that we might have had was thoroughly knocked out of us by the fact that everybody was turning towards the USA at a certain point and we were losing ground. We have managed to change that. There is a strong demand from excellent sectors of higher education in India to have more contact with the UK. So I believe that there is an issue of resource and capacity and I believe that there is an issue of the UK in some way marshalling it. It is probably what you are about really, it is about having some sort of strategy to say, "We really want to do this, and we really want to go there." I have been working now for about 12 months, I suppose, on the setting up of the UK Indian Education Research Initiative, from its very beginning with cross-Whitehall meetings. I do not always find cross-Whitehall meetings to be the most productive meetings that I go to but I was really thrilled at the passion and the speed with which this initiative came together because I think everybody recognised that we had to do something because we were falling behind. I think if Whitehall can do it I would imagine that industry can do it and higher education can do it. I think we need to in some way have a more coordinated and concerted approach to this so that right across the spectrum if you are talking about the visa regulations, you are talking about the schools' work, you are talking about the higher education, the work opportunities, the R & D and all the rest of it, there is some sort of a linkage. I think the Australians are better at that than we are, to be honest. Q485 Mr Clapham: Just developing that question, do you feel that there is a need for a much more, shall we say, coherent approach between the various agencies that are working, yourself for example, Regional Development Agencies, UKTI? Is there a way in which we could ensure that there is that coherence and that we are pulling together rather than each particular institution going its own way? Ms Stephens: I completely agree with that. I think that has been the strength of this initiative. It has all those bodies you have just mentioned and more within it and has worked out mechanisms for the parties to really come together and make decisions quite quickly and quite flexibly, while still remaining responsible for the resources they are putting in. So they have a lot of ownership of where it goes. So I agree actually, I think Lord Patten said that one initiative of £10 million is not really going to get us very far and I would agree with that, but I think the way in which this has happened and the fact that it demonstrates that you can have that coordination, and over a fairly short time span if there is the will and bit of money to kick it off, why can it not happen on a large scale? I believe it could. Q486 Mr Clapham: I think you were in when we were taking evidence about the actual setting up of British university campuses in India and you heard the views that were expressed. Would you agree with those, the view that if we were to see university campuses in India we are likely to see a fall in standards over a period. Is that your view? Ms Stephens: I do not really feel qualified to answer that. I do not know; I would not know how to answer that. I was not quite sure I heard that actually, to be honest. I think what I did hear was that there was a resource crunch and in those circumstances you have to be pretty careful about where you disperse your funding. I think actually it is much more about whether there is a viable demand and a real wish to do so, and then the mechanisms follow. Mr Clapham: Finally, I hear what you say but you said a little earlier that we are catching the Australians up a little but yet the Australians and the Americans are given to establishing university campuses, something that we are not doing. Q487 Chairman: Actually we did hear from Lord Patten that the good American universities were not doing that because of fear of risk of polluting the brand, but the factual situation needs to be clarified. Ms Stephens: I would just like to say that we have done this in the UK, very successfully. We were world leaders at establishing overseas campuses in Malaysia and in China - we are doing it - because in that environment it is the right thing to do, and I do have some sympathy with us not doing it in India in the recent past because I do know from having worked there up until 2000, which I know is a while ago now, that the situation under the previous government, before Congress came in, was that you could not even begin to think about that - it was just impossible. I think we are perhaps being a bit slow to understand that the situation has changed. I do not think that India is articulating very clearly that it wants foreign campuses; they are being very clear that they want some joint ventures. Actually if you look at some of the things we are doing in China they are in a sense that - they are joint ventures, they are partnerships. Coming from the British Council I would, would I not, but I do believe that partnership is the issue here - it is the way forward rather than trying to set up wholly owned campuses. Q488 Mr Binley: One of the reasons given to us that we are not as attractive to Indian students as we perhaps ought to be is the visa restriction question, which constrains the ability, you will appreciate, of Indian students to remain in this country. Can I ask you very quickly to tell us what the current rules are for Indian students wishing to stay to work once their studies are completed and what plans do you think the government has to introduce a new visa initiative for Indian students, such as the Fresh Talent Initiative in Scotland? Finally, can you tell me whether you think changing whole aspects of other work permit scenarios on to a wider basis would help in this respect? Ms Stephens: At the moment I think the situation is that apart from Fresh Talent there are few other schemes. There is the Science and Engineering Graduate Scheme - that is a year allowed to certain maths, science, engineering and technology graduate after they have finished to carry on working in this country. Q489 Chairman: That is an undergraduate becoming a graduate, for a first degree? Ms Stephens: Yes, I guess so. Mrs Curtis-Thomas: For post-degree completion. Q490 Chairman: On graduation. Ms Stephens: Yes, you know more about this than I do. Then there is obviously the highly skilled migrant programme, which does give a further route to students with exceptional ability or particular ability of the kind that we need in this country. There is also something I believe called the MBA Scheme - I do not know if you are familiar with that - it is the graduates of 50 listed management schools. So there are pockets, if you like, apart from the Fresh Talent Scheme, which is more general. I know that the Fresh Talent Scheme has been looked at very carefully as a model. My only knowledge of where things are going is actually the Chancellor's statement in December about all Masters Degree and PhD course students will be allowed to stay on for a further 12 months after 1 May of this year. I do not think that has actually come into effect yet and the starting date of that seems unclear from what I have read. But that is really the only other indication I have. Q491 Mr Binley: Can I push this a little because I think you are right? Do you think that we ought to be talking about a more general view of a more structured work permit scenario as a whole and, if we did that, would that help this as opposed to specifically attend to the student problem? Ms Stephens: I think the points system does look as if it is going to do that as far as I can understand it. It does seem much more structured and the whole sponsorship notion would seem to provide that. That is my perception. Q492 Chairman: I just want to push this a little because, as I recall, your colleagues in Delhi, when we were informally talking, attached great importance to this issue and you seem not to be giving it so much importance to your evidence now. You heard Dr Maini earlier saying that three or four years were needed; in Scotland they are offering two; the Prime Minister is offering one but that is a fraction of what the HE Institutions think they need to be able to make it affordable for Indians to be able to come to the UK. Ms Stephens: I would take my colleagues' view of this from an Indian perspective. I feel that there are a lot of other initiatives we could make, as perhaps I said earlier, in terms of preparing the groups of students that we most particularly want to see in this country. I am slightly averse to feeling that we need a very, very broad regime because, to be honest, there are just so many potential students in a place like India who we would not necessarily want to have come to the UK in enormous numbers. If we see it simply as a fee paying money earner then I suppose that is not the case, we would want anybody to come who could come, but I think there is an issue here about the capacity of our institutions and the areas in which we perhaps want to strengthen our ties with India. Q493 Chairman: Can I go back to my first question because I asked you a question about numbers, which you did not actually answer, and we are concerned as a Committee that Australia is getting more Indian students than we are and therefore building a strategic relationship with emerging elite in India which will be one of the world's super powers in the future. It is not about making money for HE Institutions, it is about the future of the United Kingdom in terms with its relationship with the country it ought to have a phenomenally close relationship with. So I repeat the question about numbers. You have suggested that there is a capacity in what we can absorb, which I entirely accept. I think we are below that capacity at present, that is my view. Where should we be aiming for? Ms Stephens: I apologise for not answering about the numbers earlier. I would like to make it quite clear that actually we are not below Australia, we are above Australia in the number of students coming to the UK. Q494 Chairman: Not proportionately. Ms Stephens: It depends whether you are looking at the number of students who are applying to come in a year or whether you are looking at the number in the country, and the difference is that we have one-year Masters programmes in this country and in Australia they tend to be longer, and even our undergraduate programmes tend to be shorter and look like they may be even shorter still. This is part of our competitive advantage because obviously it is cheaper to come for a shorter period, but what it means is if you look at any one period of time there will be more students in Australia because you have, in a sense, two intakes there at the same time. But if you look at the number of visas that are being applied for we have more visa applications from India for students than Australia. I can give you precise numbers. Q495 Chairman: The figures we have for 2004/05, 17,000 for the UK, 20,000 Australia and 80,000 in the USA. Therefore the 17,000 figure for the UK is actually better than it looks. Ms Stephens: That is right. Sorry, I have it here now. The UK recruited 16,277 new students in 2005/06 in comparison to 80,653 for the US and 10,000 for Australia. The difference is that students tend to follow two to four-year degrees in the USA and Australia, whereas the majority of the UK-bound students are on a one year's Masters course and so, as you have just said, the actual number of students present at any one time does not reflect, in a sense, the demand, the turnover. The percentage of undergraduates in the UK batch is increasing, so that might iron out some of this in the future - we will see more longer staying students here. Q496 Chairman: My view is that it is the undergraduates you need as well as the postgraduates. Ms Stephens: I agree. Q497 Chairman: Because the strong links that Britain enjoys with India are born, as Chris Patten said, of the ancient background of the Indian elite at present who have done the undergraduate courses at Oxford and Cambridge or the London School of Economics, or wherever it was, and that is numerically quite small at present. Ms Stephens: We are trying very hard to get that number up. We are focusing on it and one of our strategies is to work with leading schools, as I think I said earlier, because that is the feeder group that goes into the undergraduate group that can afford to study overseas. Q498 Chairman: That is precisely the group that will have three years of fees, three years of living expenses and therefore need to be able to work here afterwards to repay the costs of their course. Ms Stephens: Yes, I agree. Q499 Chairman: You did not agree earlier, you were saying it was not very important earlier. Ms Stephens: I think what I was trying to say earlier was at a more general level, looking into the future. I was asked whether I was in favour of the very wide work regime and I was taking that as something that was a general question, and I would say that if you make it too wide you do run the danger, possibly, as income levels grow, of finding that you might not have quite the catchment that would most grow the kinds of trade and industry links that perhaps we would want to see. If you are talking about at the moment do I think we should immediately be moving towards something like the Scottish Initiative, absolutely; I would completely agree with my colleagues. That would make a big difference. Q500 Mrs Curtis-Thomas: Could I say that it is particularly good to see Victoria Grant here because I think the UK Indian Education Research Initiative is fantastic news, and it was something we were made aware of when we went to visit the British Council office in Delhi and everyone was there was very excited. It struck me that it addressed a gap that had been there for quite some time, although the sum of £10m does not seem an awful lot of money and maybe out of it we might see another £10m if we can release it from business. My question is, within the British Council we have people who are very interested in the development of cultural links and the provision of education, but do not strike me as natural sales agents who can do a hard sell to Indian companies and get them to liberate funds from their pockets and support this particular initiative. It does not come easy asking for money from companies; you need to be a certain sort of person to do that. The UKTI seem to have a harder staff that might be very prepared to ask for money, so it seems to me that there has to be a significant relationship between the UKTI, who obviously have their fingers on companies coming into India, and the British Council that now wants to liberate some of their funds in order to do well by the British education establishment. So what about the relationship between the British Council and the UKTI? We went to visit the UKTI and they are not overly populated with staff themselves. So it seems to me a fantastic initiative but where is the personnel capacity to deliver that and release that extra £10m? Ms Grant: I think you have made a number of very good points. Firstly, I would just like to add that the British Council sponsorship manager has managed to secure almost £5m in sponsorship from the UK industry, of which 1.75 is in cash, the rest in kind from UK industry in terms of corporate partnerships from BP, BA, GSK and Shell, and the next stage, as you say, is to identify and work with Indian partnerships. The Tata Group has already said that they are interested in coming on board as a corporate partner and we are working with them at the moment. As you rightly say, the British Council works in the cultural as well as the educational arena. I would say that we do have a lot of the contacts with industry and corporate partners that would be relevant to this initiative, but also that we would in no way wish to exclude our other partners, our other government partners, FCO, OST, DTI, and I know that Rob Daniels in Delhi is working very closely with the Indian side team of UKIERI. The British Council has initially taken over the sponsorship role for the design and set up phase because we have the capacity; similarly, we put in a lot of the work for the strand development, the actual higher education design for the initiative, but we have not taken it on in perpetuity for the initiative. The details of who will be doing what will be finalised before September this year, so the roles in terms of identifying who will be the sponsorship managers in the UK and India is to be determined and the British Council will certainly be working with OST, DTI and other partners until then. Q501 Mrs Curtis-Thomas: Do you think your partners are adequately resourced to do the job that they are actually undertaking? Ms Grant: Which partners? Q502 Mrs Curtis-Thomas: If we could just concentrate on the UKTI, the announcement of doubling the capacity of UKTI, is that a long time coming and well overdue? Ms Grant: I have to say that I am not familiar enough with UKTI and their staffing structures to be able to comment on that, I am afraid. My colleague may wish to add to that. Ms Stephens: Could I just come in here because I think we would agree actually that if we have ambitions in this area - and we clearly do - I think we do actually have to look at the resource on the ground. We work very closely with UKTI; in fact as you may know we have UKTI staff in two of our centres in India. So we see very clearly the pressures that are on them. Also, talking to the UKTI person in Mumbai, who has just arrived, who is very experienced and very interested in doing more, I think we do get the impression from them that they do need more resource. We are working at the moment on a joint paper with them to sort out our roles and responsibilities where we are clearly on the education promotion side and wanting to very much focus on that and these kinds of opportunities we have talked about a bit, and they, we feel, should be working on other aspects of education, perhaps the kind you have talked about, with companies. But we do not think that they have the capacity to do that at the moment. Q503 Mrs Curtis-Thomas: Victoria, you have just said that you have liberated £1.3m, was it? Ms Grant: £1.75 in cash and £4.8m total cash in kind. Q504 Mrs Curtis-Thomas: From British companies? Ms Grant: Yes. Q505 Mrs Curtis-Thomas: And there is an appetite from Indian companies, and I presume that if there was more resource do you think there would be more money? Ms Grant: I think that is a general approach that you could apply to a lot of things - if there is more resource then there is going to be more outcome of whatever it is. So, in that respect, quite possibly. Q506 Mrs Curtis-Thomas: What I am trying to get at is that you have the capacity in this market place and there are funds there to support this initiative, if you have the bodies to go out and get them, and my question is: are you at a saturation point or is there a lot more money and if you had the resources you could get a lot more in? Ms Grant: I do not think we are at saturation point at all. I think we have identified initial corporate champions in this country and that was the priority. We now want to extend that to an extent in this country but also go and work with the Indian interested corporate partners, and yes there is definitely a capacity to do that. Q507 Mrs Curtis-Thomas: My next question is about your relationship with the Regional Development Agencies, the British Council's relationship with the Regional Development Agencies here in the UK and the devolved assemblies. What relationship do you have with them? Are they aware of what it is that you are trying to do? Are there comparable organisations with India? To me it seems such a massive exercise that it is not worth undertaking unless people come to you with an expression of interest. How do you send your message? Do they know who you are? If I walked into my RDA and said, "Steve, who is your contact?" would he be able to tell me if I said, "What about this UK Initiative for Research?" Would he know about that? Ms Grant: Certainly on UKIERI, yes, and I would expect the same would be true of major initiatives. I have a contact in the Northern Ireland Office, the Wales Office and in the Scottish Office. They are also in touch with our British Council's offices in those countries; so, yes. Q508 Chairman: Can we just turn to the squalid question of money, very briefly? In India we were told that your turnover in the year just finished was just under £11m, of which £4.5m was grant in aid and the rest you had to earn yourselves, through English language teaching and that kind of thing. Is that kind of rate of return, that contribution required for activities by British Council organisations elsewhere in the world or is that unique to India? Ms Stephens: No, that level is unique to India although there are other places in the world where we have a similar level near it. We are not actually required to reach a target, in a sense. What has happened is that there has been a demand for UK qualifications, in particular, which I think is a very important point in terms of signalling that there is a huge respect and appetite for UK education and what it stands for. So there is this growing examinations market which contributes to it quite a lot, and to resource that we have had to grow our infrastructure. If that market for some reason diminished or we took another view of it then obviously we would have to trim the size of the operation accordingly. Q509 Chairman: How is the process arrived at - and I should know this - how do you decide how much money you spend in India as opposed to China or a European country? Is that a decision that you take unilaterally or you discuss with the Treasury? How does it work? Ms Stephens: We discuss it through the Spending Review mechanism, of course; we have to put our further spending plans through the CSR, like other Whitehall bodies. Q510 Chairman: But in great detail? Ms Stephens: Yes, in quite a lot of detail, indeed. So it is discussed with the Treasury in that sense, but of course our sponsoring body is the Foreign Office and it is with the Foreign Office that we talk about most of the detail. Having said that, I would like to emphasise that we make our own strategic resource directions and we have to then supply the rationale for that and account for it, of course. For example, we have recently moved a million into the Indian recurrent budget, for very obvious reasons, and that was our decision to do that; we did not have to go to anyone else for that decision. Q511 Chairman: So do you think you have the balance right in terms of the money you spend on India? Obviously the British Council would like the money for all this work, that goes without saying. Are you convinced that you have your priorities right? Ms Stephens: We certainly think we have our priorities right in investing more in India and we will continue to do so and we will invest in education in India, that is what we have put that million into. Q512 Chairman: It is a huge country, one point whatever it is billion people. Ms Stephens: Yes, indeed. Q513 Chairman: Is £10m, £11m enough to reach out to that audience? Ms Stephens: It depends what level of impact we want. We segment the audience. We reckon that there are about 25 million of what we would call our focal audience in India. I still do not think that £11m is enough to reach the 25 million, although we have had things like these very successful road shows recently, where we have reached staggering numbers, actually. The problem is not so much reaching them of course, but engaging them in meaningful impact, sustained activity that leads somewhere in a relationship building sense so that there is an outcome for industry or for education or whatever. I would double the budget tomorrow if I could. Chairman: I am sure you would always like money and I am sure we would like to write you a cheque here and now for the important work you do, but I am afraid we cannot do that. We are very grateful to you for bringing to a conclusion our evidence sessions on our trade and investment relationship with India. Thank you very much indeed.
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