Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



  Q20  Mr Chaytor: Looking forward to the next 10 years, what do you think are the three or four highest priorities for HEFCE?

  Professor Eastwood: Probably the highest priority must be for us to play our part in maintaining the quality of English higher education and to do so in an environment where HE will be increasingly globally competitive. I think we must do that, and it seems to me the key to that, whether we are talking about UK students or international students, is quality. HE will be a business where quality is the key. Secondly, I think the challenge around participation and social inclusion remains and, if we look at the demography going forward through the next decade, that challenge may become a more acute one. The third area which I think is critical is that we retain the research edge that English HE gives to our economy both in terms of the quality of blue-sky research and in our ability to exploit that research, which I think we are continuing to enhance and that is probably an area of further improvement or enhancement. The fourth area will be to address those new agendas, the agendas outlined in Sandy Leitch's recent report around high-level skills in the economy, enriching skills, and I think one of the ways that that is going to be interpreted is in a new form of lifelong learning and a new form of continuous skilling and re-skilling. There is an area of very considerable challenge that we are only just beginning to work through.

  Q21  Mr Chaytor: In your earlier remarks you mentioned the trend towards greater differentiation. My question now is: where does that figure in your plans? Do the priorities you have outlined imply significantly greater differentiation and does your current funding system encourage or inhibit that differentiation?

  Professor Eastwood: I think what I have been saying does imply probably greater differentiation though I think we are seeing that trend already. I think that is a differentiation which should be driven, following the Chairman's earlier comments, by largely autonomous institutions considering the way in which the sector is developing, their own areas of comparative advantage and the areas where they have a quality product to offer. I think it is important that our funding gives them the confidence to do that and the confidence to plan, and there it does seem to me that the principle of funding that we adopt, which is a transparent system of funding but a system of funding around block grant, will give institutions the ability to plan, the confidence to plan and the confidence as appropriate to specialise.

  Q22  Mr Chaytor: You identified quality and competitiveness as your first priority for the next 10 years and the demand for graduates is continuing to grow but I understand a third of employers have recently said that graduates are still lacking key skills. Is that in line with your assessment and, if there is that criticism still, how can HEFCE channel funding to ensure that graduates are more employable?

  Professor Eastwood: As the market continues to develop, the market will do some of that itself, that is to say, institutions which have a strong record in terms of graduate employability will obviously be institutions which are attractive to applicants, so there may be an element of self-correction.

  Q23  Mr Chaytor: If I can interrupt there, should that be a criterion in your funding allocation?

  Professor Eastwood: Given that our funding allocation will follow recruitment, that is to say, an institution that struggles to recruit ultimately will lose not only fee income but HEFCE income, that linkage is already there. You raise a more profound question than my answer a moment ago would suggest and I do think—and I think this is consonant with what Sandy Leitch was saying in his report—that we need to continue to develop the kind of dialogues that we have with employers around the way in which employers specify their requirements and the way in which employers specify their disappointment when disappointment exists. I think institutions are now very responsive to those kinds of messages but I think quite often the difficulty is they are at articulating in very general terms: they would like more literate graduates, they would like more numerate graduates, and I think that needs some closer specification for institutions to be able to adjust or to flex their programmes to deliver better to those agendas.

  Q24  Mr Chaytor: Looking at it from the students' point of view, we now have the national student satisfaction survey, which I understand indicated that 80% of students were satisfied with their tuition, but presumably 20% are dissatisfied with their tuition. If this were a school or a college, this presumably would be front-page news, that 20% of university students are dissatisfied with the quality of teaching that they are receiving, but you have managed to escape that kind of headline. My question is: given that schools and colleges are subject to quite an intensive inspection regime, why are universities not subject to the same level of quality and inspection procedures?

  Professor Eastwood: The first thing I would say is that the levels of student satisfaction that come through the National Student Survey by international standards are very high indeed and therefore in those terms it is a good news story. That is not unimportant given the global environment in which we operate. In England we often have a genius for berating ourselves where we should actually be celebrating. I think it is as well that that story is appropriately represented.

  Q25  Chairman: You are not referring to cricket there, are you, Professor Eastwood?

  Professor Eastwood: Fortunately, Chairman, that does not fall within our remit, though the 2012 Olympics are starting to, so in due course I might be hauled back as a result of our failure to garner sufficient gold medals. The first point I would make is that, in terms of international comparisons, it is a strong showing. The second thing—the survey has been run twice now—is that institutions have responded remarkably swiftly to areas where the national student survey suggests that they could improve their performance. So we are getting that kind of feedback loop and, if you look across the sector, the area where virtually all institutions dip is in assessment and feedback, which is the area of greatest student dissatisfaction. Students are still predominantly satisfied but is it is the area where the highest proportion of students is less satisfied, and both the Higher Education Academy and individual institutions are working with their students to improve their performance in that area. So what we are seeing is a culture of self-improvement on the back of the national student survey. The third point I would make is that I do think through the Quality Assurance Agency we have a fit-for-purpose body in terms of ensuring quality, and a body with a very strong international as well as national reputation. So I do think that the sector is appropriately held to account in terms of quality and also, given that that is one of our statutory responsibilities, it is something that we take enormously seriously.

  Q26  Chairman: But some of the universities dodge out of that assessment, do they not?

  Professor Eastwood: A small number of universities have not had a sufficient number of returns to get above the threshold level, which is 50% at the moment, which is a very high level and was deliberately set high so that the robustness of the survey could not be questioned.

  Chairman: Andrew, your old university is one of the ones that is not literate or competent enough to fill in a form. Is that right?

  Mr Pelling: I am sure there are always far too many important things to do to fill in forms at a university like that.

  Q27  Chairman: How many universities fail to complete these? People out there seem to be saying it is a bit of a conspiracy, that certain universities are saying, "This is far too mundane for us to take part in. Don't not fill those forms in and then we will not appear in the tables." Is there a conspiracy of non-co-operation from some universities?

  Professor Eastwood: Given that all universities have to facilitate the exercise, it is difficult to run a conspiracy. I do not think such a conspiracy exists.

  Q28  Chairman: But Oxford and Cambridge do not fill in enough.

  Professor Eastwood: They do not meet the threshold. What we are doing at the moment is we are consulting on whether or not the 50% threshold is necessary or whether a downward revision of that threshold would be appropriate and still retain the robustness of the survey.

  Q29  Chairman: It is irritating that two of our leading universities do not get enough students to fill in these things so that we can assess them in the tables. Does it irritate you from HEFCE's point of view?

  Professor Eastwood: We are exploring with the sector whether or not there are ways in which we can revise the methodology, retain its robustness, but ensure still greater coverage in the national student survey.

  Q30  Chairman: You would agree then with the assessment that they have far more important things to do in the dreaming spires of Oxford and Cambridge to fill in these forms? What is your interpretation?

  Professor Eastwood: My interpretation is that there are particular difficulties in federal universities in facilitating these exercises.

  Q31  Chairman: Including in London? That is the federal university.

  Professor Eastwood: Effectively, it is reported by individual institutions so it is a unitary exercise.

  Q32  Helen Jones: Durham?

  Professor Eastwood: Again, there are two universities which are distinctive in terms of their organisation, and they are Oxford and Cambridge, but let me anticipate your next question: the University of Warwick has also not participated or not come above the threshold. I know that is a matter of concern for the current Vice-Chancellor.

  Q33  Chairman: What you are saying is that if there is going to be a survey of student satisfaction—how many universities or HEIs do you reckon there are?

  Professor Eastwood: It depends how you cut it and whether you include Scotland and Wales. Let us say 100.

  Q34  Chairman: Of that 100, a couple of the major institutions everyone knows for some reason do not have enough replies to the survey.

  Professor Eastwood: What I am saying, Chairman, is I do not think the situation will persist and I think it is desirable that it does not persist.

  Chairman: Good. Let us move on to university funding.

  Q35  Mr Marsden: I want to move on, if I may, to talk about university funding. I have obviously looked at what you have said about that and how you use formulae and how you try to simplify that. I thought it might be a bit like the Schleswig-Holstein question. You remember there were two people who knew about it, one was mad and the other one was dead. I am not going to ask you if you come into either category but what I am going to ask you is about the teaching because you say, "We are currently reviewing our funding method for teaching to ensure it remains fit for purpose." Does that imply you do not think it is fit for purpose?

  Professor Eastwood: No, it does not, and you were charitable enough not to put the third person into the Schleswig-Holstein question, who of course was the person who had forgotten it, and that was Palmerston; fortunately, I have not yet forgotten why we are consulting on our teaching funding methodology. The issue here was that from 2006, with the introduction of variable fees, teaching funding was changing in rather important ways and what we wanted to do was to ensure that our teaching funding was appropriate for what I call the known universe, that is to say, for the funding regime from 2006 to whenever it is revised, if it is revised. We wanted to achieve two things: we wanted to ensure that there was reasonable stability in an environment which might otherwise be volatile for institutions, but we also wanted to ensure, if there were some unintended consequences of the new funding regime—I am thinking in terms of some subjects in particular finding their position financially imperilled—that we had a mechanism for achieving that, and we were also concerned that the measures that we were taking to ensure that participation in HE was broadened would continue to have impact. Those were the principles which underpinned the review, and we have arrived at a point where the funding as it goes forward now will be fit for purpose in what we might describe as a £3,000 regime.

  Q36  Mr Marsden: If I can take you on from that, my understanding is that you are moving to a system which is much more output-based. It is going to be based on funding for credits and everything that goes with that, is it not?

  Professor Eastwood: We have not moved straightforwardly to a credit funding system yet.

  Q37  Mr Marsden: No, but you are on the way.

  Professor Eastwood: You are quite right. We are consulting again on how we fund outcomes which are short of the originally intended course outcome and under Bob Burgess, Vice-Chancellor of Leicester, there is a working party on credit moving forward but at the moment we are trying to have a funding regime which recognizes that different institutions are differently positioned in this market.

  Q38  Mr Marsden: Are you worried then—and I'm saying this in the light of your previous remarks—that by moving to that credit-based system, which might be seen as a more mechanistic system, one or two individual institutions that might have particular emphases or perhaps have larger numbers of part-time students than others might otherwise suffer? Are you trying to create some sort of safety net for them?

  Professor Eastwood: On the proposals that we are currently consulting on, which we have modelled, we do not think there would be any need to safety net an institution and we do not think there would be any need to cap an institution either. Of course, once you change the funding methodology you can always change behaviour and that is what it makes it difficult to model. No, we do not have particular anxieties at the moment.

  Q39  Mr Marsden: I was struck by what you said earlier in response to my colleague David Chaytor. You talked about the importance of the challenge of social inclusion, I think you said it was going to become sharper; you talked about re-skilling. These are things which historically universities have not really paid a great deal of attention to, have they? By historically I mean pre-1997.

  Professor Eastwood: I think there are some notable exceptions to that. The MBA would be a good example. The MBA was a qualification constructed precisely because the market wanted it and it has been a highly valued qualification as far as the market is concerned. I think I am saying that institutions have become more responsive, so I am agreeing with you, and I am saying that institutions will need to become more responsive in a number of ways and that responsiveness will be manifested differently in different institutions. The SME challenge is a very considerable one. We could point to a number of universities which have notably strong engagement with local SMEs and are beginning to crack what historically has been a very difficult challenge.

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