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I make no apologies for the fact that I will be extolling the virtues of the Open university. It is a great honour to represent that university in this Parliament and I am sure that the Open university is held in great regard by hon. Members from all parties. I should first point out, however, that not only the OU will be affected by the
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Government’s decision, as 22 other institutions will be equally affected. The motion is very reasonable. Perhaps that is why 86 Government Members decided to sign it. I confess that I thought that we might make some progress tonight, but judging from the Secretary of State’s speech, I fear that I may well be disappointed—though we shall see.

The Open university is not only one of Milton Keynes’s biggest success stories, with more than 200,000 students studying every year; it is one of the UK’s best success stories, which is emulated worldwide. In 2003, for example, the OU helped in the middle east to set up and provide teaching materials for the Arab OU, which already has 30,000 students. Our Open university has paved the way and helped other countries to establish their own open universities to allow people all over the world to improve their academic records, which otherwise would have been too expensive or too time-restrictive to pursue. The OU has recently started talking to the Government of China to explore the benefits of collaboration on open and distance learning to meet the huge growth in demand for higher education, which its growing economy requires.

The OU has served as the leader in bringing education to those whose time and finances do not allow them to take three years out for full-time study. It has led the world in harnessing the widest possible range of assisted technologies to enable people with disabilities to study. For example, some 3,500 ELQ—equivalent or lower level qualifications—students have special needs and want to study on an equal platform with their peers. From the OU’s earliest experiment in using the latest technology to take education right into people’s lives via their TV sets, it has continued to pioneer ways of reaching ever more people in ever more places, using the almost limitless power of the digital age.

More than 125,000 teachers in Uganda, Sudan and Nigeria are now using the Open university’s learning materials. Moreover, since last year the OU’s audience has included new migrants in London developing language skills alongside OU qualifications in health and social care. I understand that, although those migrants may wish to study for United Kingdom-based degrees, the Government’s proposals will prevent them from doing so if they already have an equivalent qualification from overseas.

The IT skills gap is one of the crucial challenges facing the UK economy today, not just because the IT sector is booming but because all business areas are leveraging competitive advantage by adding value through IT. More than 70 per cent. of jobs advertised in the United Kingdom now have an IT component, and the only way in which the UK will be able to address the widening gap between supply and demand is by upskilling and reskilling people who are already working in the UK economy. The OU is a major contributor in this arena nationally, allowing people to update their IT and business skills in line with their job requirements without needing to enter a classroom. Every year more than 30,000 computing, IT and business course places are taken by part-time OU students.

Only today, the Prime Minister said that he wanted to help the Open university to achieve its aim of reskilling and upskilling the current British work force.
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How strange, then, that the OU should have been one of the principal victims of the decision to remove funding from those studying for courses that involve equivalent or lower qualifications. They are precisely the work force who are needed by the British economy, and the decision was made without consultation either in the sector or in business.

Men and women who are sacrificing their time to re-educate themselves in absolute conformity with the Prime Minister’s stated aims of lifelong learning, and who mostly remain in work paying taxes and supporting our economy, are to be treated less favourably than other students. In many cases, employers will not make up the lost funding. It is very rare for the employers of people who are trying to forge new career paths for themselves away from their current jobs to help fund their spirit and drive to better themselves. Under the proposed new funding system, people who went to university straight after school or college but left the workplace in later life to raise children or become carers of relatives will have their right to re-equip themselves for the rapidly evolving UK economy denied.

May I present the Minister with a brief case study showing the sort of person who will be affected by the changes that he proposes? Lydia Stanley writes:

Given the Government’s supposed commitment to lifelong learning, I am sure that Lydia and thousands like her will be deeply disappointed by the Minister’s explanation of why they are to be discriminated against by this ill-conceived Government initiative.

The fact remains that the ELQ policy will frustrate attempts to enable people of working age to update and broaden their knowledge and skills in line with the changing needs of the economy and of society more generally. Some 68 per cent. of OU ELQ students are over 35; most can therefore be assumed to have degrees that are at least 10 to 15 years old and in need of updating. Crucially, the policy will withdraw Government support from most graduate development. Most ELQ students at the OU are studying business studies, maths, computing, technology, science, education and languages—just the sorts of skills that the Government claim to be encouraging.

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Higher fees for ELQ students will create a disincentive to continuing professional development, and a genuine risk that the main economic benefits of CPD will be lost. Contrary to popular belief, most ELQ students pay their own fees. Only 13 per cent. of ELQ students at the OU receive any fee contributions from their employers and just 10 per cent. have all their fees paid by their employer. The idea that funding will be readily available from employers is simply plain wrong. Why would an employer pay for an employee to train to change career only to leave their employment? What about self-employed people? To quote one OU student:

Pricing research undertaken both by Universities UK and the OU shows that part-time students are extremely price-sensitive. There is a high risk that thousands of ELQ students studying for vocational reasons and paying their own way will be priced out of continuing professional development by the Government’s ELQ policy. It is equally true that certain groups of students will be particularly affected.

Research shows that employers have tended to offer support mainly to full-time workers from the wealthiest households. Part-time employees, the self-employed and those on low incomes will be disadvantaged, as will those such as carers who are temporarily out of employment. The Minister need not take my word for it; I have a few more quotes from current OU students:

Another student said:

Ministers have made some exemptions to the ELQ policy and HEFCE has proposed others, but they do not go far enough. The fact remains that only 4.6 per cent of HEFCE-funded ELQ students at the OU will be exempt under current proposals.

Finally, I would like to highlight the impact of the policy decision on OU funding. It will reduce resources available for core services at the OU and will jeopardise plans for growth and innovation. In financial terms the OU will lose funding for 25 per cent., or 29,000, of its 140,000 students in England from 2008, which combined with the HEFCE estimated loss of grant of £32 million is a total lost or at risk in 2010 of some £49 million.

The motion is reasonable, which is why some 86 Government Members have signed it. All I am asking is for the Government to stop, consult properly and think again about whether this is really what they want to do to fit in with their agenda for lifelong learning.


Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): I am sorry that the hon. Member for Havant (Mr. Willetts) is not here at the moment because I was going to congratulate him on the clever debating device of using the early-day motion as the Conservative motion. The problem is that once he started to speak to that motion, he added lots of things to it which those of us who signed the EDM would not necessarily agree with.

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I welcome this opportunity to rehearse again the virtues of the Open university. I do not intend to do so at great length because many others have already done it, but it is a fantastic institution. It has made degree level courses available to a wide range of individuals whom conventional universities would not allow to take degrees. It has contributed over the years precisely to upskilling and skilling many who would otherwise have been trapped in very low-skill, low-paid careers. I understand that the OU’s commitment is to make sure that it is able to continue in that role, and I simply intend to repeat the three major points that I have made directly to Ministers in meetings, most recently just before Christmas when my hon. Friend the Minister for Lifelong Learning, Further and Higher Education met me and two trade union representatives from the Open university. I understand that a final decision will be made on the detail of the proposals in mid-January.

The first point relates to the list of exemptions. There are strong arguments, made when the trade union representatives met the Minister, about adding IT to the list. It is clear that individuals who took their first degrees about two decades ago are unlikely to be quite up to the minute on IT skills—to put it mildly—and that therefore there are strong reasons why individuals who already have one degree might wish to get another at the same level but in IT. When we spoke with the Minister, he was sympathetic to the arguments we made although, obviously, he felt unable to commit himself at this stage when the final announcement has not been made. I certainly hope that IT will be included.

The second issue is employer co-funding. Employers, who gain enormous benefit when their employees are upskilled, should be expected to co-fund the training of their employees; that is highly desirable. There are lots of reasons why they should do so. If employers treat their employees well, on the whole their employees feel a sense of loyalty and tend to stay with them. Providing decent training helps not only to upskill their work force but to engender a feeling of loyalty among them towards their employer—and, of course, the employer cashes in on the employee’s experience of the firm or business and the way it works, instead of having to bring in somebody new who would not be familiar with that. Therefore, we should expect employers to co-fund more of the training of their employees.

However, a reasonable point was made by Open university people: although employers are often willing to co-fund the training of their senior staff, they can be a lot less keen to do so for middle-ranking staff. As what we are requiring is a comprehensive change in culture among businesses, Ministers ought to be a little more cautious about the speed at which they believe we might be able to persuade employers to change their culture. I therefore ask Ministers to consider phasing in these changes over a slightly longer period in order to see quite how successful they are at persuading employers to be more effective in funding training.

Mr. Willis: Can the hon. Lady give the House one reason why an employer would wish to support financially an employee to do an ELQ—an equivalent or lower qualification—when the outcome of that would be of no benefit to their business?

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Dr. Starkey: Obviously not, but that is a curious question to ask because I could throw it back by asking why an employer would not co-fund an employee’s training if that training was going to benefit the employer [Interruption.] I will get on to the point about people moving employer. In many cases, rather than looking to recruit more highly trained people from outside the business, an employer could be thinking of, so to speak, growing their own expertise by retraining individuals they already employ at a much lower level. That is perfectly reasonable.

Several hon. Members rose

Dr. Starkey: I will not give way because, unlike Front-Bench spokespeople, if I do I will lose time—I can give way once without losing time, I think.

Employers will obviously not fund everybody, and they certainly will not fund people who actually desire just to go off to another employer, but that does not cover all cases, or even the majority necessarily.

The third issue has been alluded to: women returners. They are probably the largest single group who are likely to have taken a degree a long time ago, and which they have not been using recently as they have not been at work because of family responsibilities. Because they have not been at work, they do not have an employer to co-fund their training. Therefore, Ministers should consider the group of women returners in more detail as they are a special case. For a huge range of reasons—not least those of equality, but also of making use of the skills and experience that such women can bring to the work force—we ought to make sure that any proposals we put forward do not inadvertently militate against that group.

Those are the three points that trade union representatives made directly to the Minister, and which I wanted to repeat in the debate. I am confident that the Government will have been listening to the points people have made and to the feedback that the Higher Education Funding Council for England—HEFCE—has received from universities during the consultation period, and that the final proposals will not be the same as the original ones. If they were, they would be likely to cause unacceptable damage to the Open university and, presumably, to Birkbeck, which is an institution that I know less well, so I strongly urge Ministers not to bring back the original proposals.

As the hon. Member for Havant has now returned to the Chamber, I want to make a final remark about some of his comments on the general system of university funding. As someone who had been on the receiving end of it before becoming an MP, it seemed to me that some misdirection was being given to hon. Members who might be slightly less familiar with how HEFCE has, for some time, taken decisions on the priorities to be given to different subjects. An individual with qualifications does not have a right to have a place on a degree course and subject of their choosing just because they fancy it. That has never been the case in the British system, unlike the French system, where someone can turn up at a university, sign up to something whether or not sufficient places are available and engage in a ridiculous Darwinian survival of the fittest that has a huge wastage rate.

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HEFCE has always taken decisions on university funding. It decides which subjects it regards as being more necessary—in the national interest—than others and uses the funding accordingly. To suggest that expressing priorities is an outrageous departure —[Interruption.] No, this is precisely the point that I made about the early-day motion, because if one reads it carefully one finds it does not say what Conservative Members are suggesting. I accept that individual Members who signed it may mean it to mean different things from what other Members mean it to mean, but it asks the Government to consider the representations that are being made to them by the Open university. That is what I am asking the Government to do now. There has been a consultation period and they have received representations, so I am asking them, as the EDM did, to consider the matter and to make changes. I believe that that is also what the Government’s amendment does, which is why this debate is somewhat curious. I would want to vote for both the motion and the amendment—the two are entirely consistent.

9.7 pm

Mr. Phil Willis (Harrogate and Knaresborough) (LD): It is a pleasure to follow the hon. Member for Milton Keynes, South-West (Dr. Starkey). I do not know whether she will vote for the motion or for the amendment. I do not think it is against the rules to vote for both, and she will doubtless do so.

I want to make a brief contribution. It has been mentioned on a number of occasions that the new Select Committee on Innovation, Universities and Skills is holding an inquiry into the issue of equivalent or lower qualifications, following an unprecedented barrage of correspondence and lobbying not only by the Open university and Birkbeck, but by universities ranging from those as far north as Sunderland and Middlesbrough to some of the London colleges. It is important for us to widen the debate. We must not consider only the Open university and Birkbeck.

Our inquiry will examine four key things. The first is the arguments presented by the Secretary of State and the Minister for Lifelong Learning, Further and Higher Education for phasing out support given to institutions for students studying ELQs. The second is the timing of the decision on the implementation of change, given the proposed review of higher education funding and fees for 2009-10. The third is the exemptions in respect of certain courses, as proposed by HEFCE. We will want to know, as doubtless will the Minister, why HEFCE has not exempted such courses as theology and pharmacy—the list could go on. The fourth is the impact on students, in particular women and older workers. The issue of immigrant workers has been mentioned. They often come to this country with a degree that is not accepted in the workplace, and thus there is a need for retraining. We hope to obtain information on those four criteria.

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