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Westminster Hall

Tuesday 21 October 2008

[Mr. Bill Olner in the Chair]

Higher Education

Motion made, and Question proposed, That the sitting be now adjourned.—[Steve McCabe.]

9.30 am

Derek Wyatt (Sittingbourne and Sheppey) (Lab): What a pleasure it is to see you in the Chair this week, Mr. Olner. While I am in such a good mood, may I thank the House of Commons Library staff for the enormous help that they have given me with this debate?

What are the critical questions that we should ask about higher education? Essentially, there are two. First, what are universities for? Secondly, how do we fund them? Let me try to answer the first question. When we had the debate about top-up fees, four years ago, we did not ask what we were funding. We went along the line of talking about providing more money for universities, instead of asking what we were providing the money for. I was interested in universities before then, because some history students in my constituency, at a respectable university, had not had a single essay marked in their third year. I began to ask what on earth we are paying for.

It is my contention that top-up fees have failed, because they have failed to make a market. We have approximately 165 university bodies in this country that can award degrees, of which all but a handful—three at the last count—charge £3,000 per student. So, in crude speak, a history undergraduate at Bournemouth is worth the same as a history undergraduate at Oxford, but that clearly is not the case.

Let me return to the original question: what are universities for? The Government have commissioned a plethora of reports and investigations on that question, in which they have been matched by the Russell group of universities. Will the Minister confirm in his summation that there will be a Green Paper on the future of universities and how they are funded before the House next agrees the parameters of top-up fees? That is critical, and they would be a beta-minus Government if that were not the case. I urge him to instigate a Robbins-esque review of the total university sector, and to have a mix including lifelong learning, the Open university, further education and the public library system. Our current HE model is seriously flawed, and it is time for us to have a grown-up debate about what we want for the university sector, after which we can decide how to fund it.

Let me try to help the Government to reach conclusions about what universities are for. In my book, they are for excellence not only in a UK context, but in the global environment. I recently went to China, and I have just finished my third visit to India. I am the lead IT person on the UK-India Education and Research Initiative team in India, and, last May, I took 14 academics to Bangalore and Hyderabad for a week. Interestingly, the
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universities that came were Imperial, York, Warwick, Kent and Greenwich, but not Oxford, Cambridge, Edinburgh or St. Andrews.

We need to get our major universities to think more globally about the space that they are in. Let me start with China, which has more than 1,000 colleges in its Academy of Sciences. There is an experiment involving three universities from this country—Liverpool, Nottingham and a cluster of north-eastern universities centred on Bradford—and a place 50 miles west of Shanghai. Extraordinarily, China will overtake the UK in the number of citations by its academics this year, which would have been unthinkable five years ago.

China and India’s research budgets in higher education are beginning to dwarf our own. We could argue that they should, given their size and potential economic strength, but Germany has already recognised the threat and has increased its research budgets for higher education, while we have not. Under the current financial arrangements, we cannot increase research budgets, but our universities will stand still if that remains the case. It is notable that many of our competitors, such as America, Australia, China, India and Germany, are increasingly targeting resources towards developing or sustaining leading universities, realising the benefits of co-locating education and research in universities and the important contribution that universities make to top-level research. Due to high levels of central Government investment since 2003, China’s 10 historic universities have been increasingly climbing the top-500 international league table rankings of universities, while our UK universities have remained steady. Data from the National Science Foundation in the United States show that 50 universities, comprising just under 8 per cent. of the 650 institutions there, have spent more than $150,000 on science and engineering research and development, accounting for 59 per cent. of federal research funding in 2006, with the top 20 universities accounting for about a third of funding.

The HE lobby has an emotional caché in Whitehall, but it is time for some detached thinking. Let us look at some tables. In the university of Shanghai’s top-500 world university rankings, Cambridge is fourth, Oxford is 10th, University college London is 22nd, Imperial is 27th, Manchester is 40th, Edinburgh is 55th, Bristol is 61st, Sheffield is 77th, Kings is 81st, Nottingham is 82nd and Birmingham is 91st. In that list, we have 11 universities in the top 100 in the world, but if one does not like Shanghai’s criteria, one can come closer to home and look at The Times Higher Educational Supplement list, which was published last week. It puts Cambridge third, Oxford fourth, Imperial sixth, UCL seventh, Kings 22nd, Edinburgh 23rd, Manchester 29th, Bristol 32nd, the London School of Economics 66th, Warwick 69th, Glasgow 73rd, Birmingham 75th, Sheffield 76th, York 81st, St. Andrews 83rd, Nottingham 86th and Southampton 99th. That list puts 17 of our universities in the top 100 in the world. If excellence is our watchword for the university sector, how can it be that we have only 11 universities in the top 100 of the Shanghai list and only 17 in the THES list? Are all our universities pursuing excellence as their watchword?

David Taylor (North-West Leicestershire) (Lab/Co-op): I do not want to generate complacency, but it is not a particularly bad record for a nation with fewer than
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1 per cent. of the world’s population and about 2 per cent. of its gross domestic product to have 17 per cent. of the places in a league table of excellence. That is not a bad track record, is it?

Derek Wyatt: It was not a bad track record, but it is static. Other universities in Europe, the far east and America are putting more into research and are going up the league tables faster.

Let me come back to my original question: what are universities for? Are they too introverted? Do they measure themselves only in relation to the UK? Should the Higher Education Funding Council change its perspective and adopt a global set of rules? I think that it should. In business, successful brands eat up other brands. Is there a role for a top-10 of global universities in the UK to be established, leading to a series of mergers and acquisitions? My sense is that Russell group membership needs to be halved. The fact that there is not a top-100 university in Wales or Northern Ireland should be of concern. Should we establish tougher criteria and double our research budgets for the top 10 universities in the UK? Is there a role for our top-10 universities to become chief executives of a cluster of other universities? How can we increase and improve the other universities? There seem to be no such plans afoot.

Dr. Ian Gibson (Norwich, North) (Lab): I have a passion for this subject, as my hon. Friend knows, and the scars to show it. The assimilation of such figures is difficult to assess, because we do not know what basic factors are relevant when the league tables are produced. Does he agree that one such factor, which he might mention, is the research assessment exercise in this country, which is linked to the amount of money that each university gets? That money is oriented around the golden triangle, whereas Leeds, Hull and others do not get it, which may act as a suppressant. It is possible that the issue is not the total sum of money, but its distribution by our RAE, which many academics do not like and think unfair. Although there have been changes, that still goes on.

Derek Wyatt: It is fair to say that despite the low level of research money we are putting in compared with Germany, India or China, we seem to box above our weight. That reflects what my hon. Friend the Member for North-West Leicestershire (David Taylor) has said.

Bob Spink (Castle Point) (UKIP): The hon. Gentleman is making some interesting points, but he is overstressing the negative side. We have only 1 per cent. of the world’s population, but we produce 13 per cent. of the highly cited scientific papers and attain 10 per cent. of world research prizes. We received 44 Nobel prizes in the last 50 years. We are therefore punching well above our weight, pound for pound. We ought to celebrate that. Instead, we must focus on whether the right number of people in this country are going to university, given that that has increased fourfold since I went to university.

Mr. Bill Olner (in the Chair): Order. The intervention is too long.

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Derek Wyatt: I hear the hon. Gentleman clearly.

I will take the London School of Economics as an example. It is one of our truly magnificent places of learning, but it has had greatly to increase the number of postgraduates it takes from overseas to balance its books. It cannot increase the number of undergraduates, because of the capping that the Higher Education Funding Council has placed on it. With respect, that is nuts. One of the great places of learning in the world is restricted in the number of undergraduates it can take by HEFC. The balance is wrong.

Let me come to a conclusion on excellence. Every university should have its own level of excellence, but not every university can have the same level when there are 165 universities. It is time to be brave and break the universities down into three strands. We should resolve to create 10 global universities. Under that, we should have 20 national universities of great significance. Under that, the rest should become regional centres of excellence, combining lifelong learning, the Open university, further education and our public library institutions.

Once we have defined what it is we agree to be excellence, we can move on to how we fund universities. Clearly, such a spread of universities could not be funded in the current way. Global universities would need to charge a market rate, with a maximum fee of £10,000. National universities should have a top-up fee of up to £6,000 and for regional universities it should be up to £3,000. In all cases, there would be a sliding scale of fees for students. There would not be a set fee for everyone, but fees would be based on ability to pay. That would be similar to the system for educational maintenance allowance for 16 and 17-year-olds in our secondary schools. Fees would therefore be redistributive, which is exactly what we want in this party.

I started by asking what universities are for, and I gave the answer of excellence in the global market space. I then asked how we should fund them. I have suggested that we break down the monolithic 165 universities into three groups, that we fund them differently and that we ask questions of them differently. I hope that I have started a debate and I look forward to the participation of other hon. Members.

9.43 am

Mr. Mark Lancaster (North-East Milton Keynes) (Con): It is a pleasure to contribute to this debate under your chairmanship, Mr. Olner. I begin, of course, by congratulating the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) on securing this debate. He has a reputation for showing a great deal of interest in higher education and that was demonstrated in his opening speech.

I am proud to be the MP who represents the Open university in Milton Keynes. It is the UK’s only university that is dedicated to distance learning. Approximately 180,000 students currently study with the OU, meaning that more people study with it than at any other university in the UK. It has students in every single UK parliamentary constituency. It truly is the United Kingdom’s own university.

I wish to ask the Minister a number of questions. I congratulate him on his new post. He may be aware that in January, before he took his post, I tabled early-day motion 317, which I think was signed by all hon.
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Members in this Chamber, with the exception of the Minister. It highlighted the impact of the Government’s decision on equivalent and lower qualifications. While I do not want to go back over old ground, it is worth highlighting some of those concerns and looking towards the future.

My comments will be brief because other hon. Members wish to contribute. I will focus on the part-time sector. The Open university has been badly affected by the ELQ decision, but is doing its best to adapt its business model to a post-ELQ environment. The Government are supposedly committed to lifelong learning, yet approximately 29,000 Open university students across the country have been affected by the withdrawal of funding for ELQs. It is clear that the ELQ policy has frustrated 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 society more generally.

Some 68 per cent. of Open university 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 for most graduate development. At the OU, most ELQ students are studying business studies, mathematics, computing, technology, science, education and languages—just the sort of skills the Government claim to encourage.

Higher fees for ELQ students will create a disincentive to carry out continuing professional development and the genuine risk that the main economic benefits of continuing professional development will be lost. It is perhaps worth reminding hon. Members that, contrary to popular belief, most ELQ students pay their own fees. Only 13 per cent. of ELQ students at the OU receive any fee contribution from their employer. Just 10 per cent. have all their fees paid by their employer.

Dr. Gibson: Will the hon. Gentleman continue and say that students have to pay their fees up front rather than after they graduate? Does he agree that the deal that was supposedly struck for part-time students at the Open university during the debate on this issue has evidently been reneged on? That is what I was told by his predecessor as MP for North-East Milton Keynes.

Mr. Lancaster: The hon. Gentleman is very well informed. Indeed, I recall that he contributed to that debate. I believe he is right. I will be asking the Minister a few questions about the future. Perhaps when the hon. Gentleman makes his contribution he will also press the Minister to address these points.

The idea that funding is readily available from employers, especially in the current challenging financial situation, has proved to be simply wrong. Why would an employer pay for an employee to train only for them to change careers and leave their employment?

David Taylor: I speak as an Open university graduate and former OU employee. When he responds, the Minister will no doubt argue that it is more important to bring new people into higher education than it is to reskill those who have already benefited. Does the hon. Gentleman agree that the Minister ought to be reminded that in a rapidly changing economy, that approach is rather damaging to the central strategy in education of lifelong learning?
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It is just as important to reskill people so that they can return to the workplace as it is to get other people into higher education for the first time.

Mr. Lancaster: The hon. Gentleman makes a powerful point and one that I was going to make. Especially in the current economic turmoil, we will see more and more people being forced to reskill. Only this month unemployment figures have risen. That is why this decision has been so short-sighted.

To be fair, Ministers have made some exemptions to the ELQ policy, but those do not go far enough. Only 4.6 per cent. of HEFCE-funded ELQ students at the Open university will be exempt under the proposals. It is equally difficult to see the logic behind why courses are or are not exempt. Why, for example, is teacher training included, while courses that lead to qualified teacher status are excluded? Perhaps the Minister could explain the logic behind the Government’s decision to exempt some groups but not others.

During the debate last year, the Secretary of State for Innovation, Universities and Skills made it clear that this policy was never intended to be a permanent policy and that it would be reviewed. So I simply seek clarification from the Minister today, now that the dust has settled and with the value of hindsight, as to whether we might see a review of the Government’s decision about the funding of ELQs. Perhaps the Minister could confirm that the current policy is indeed only in place for three years, after which we will see a return to the former position.

Briefly, I would like to ask the Minister some questions about three connected areas. I will start with the review of undergraduate fees that is due to take place in 2009. Although the Government’s proposed review is broadly welcomed by the higher education establishment, may I simply ask the Minister to give some clarity on the time scales for the review and perhaps he could also explain who exactly will be leading it? Given the importance of the review to the sector, surely the longer the higher education institutions have to prepare evidence, with at least a basic understanding of how the review will be run, the better.

The Minister will be aware that the Leitch review recommended that 40 per cent. of adults should become qualified to level 4 and above. However, it is clear that that target is not going to be met without significant input from the part-time higher education sector. As few if any details of the structure of the fees review have been published to date, can the Minister perhaps offer assurances that the Open university and part-time sector in general will receive appropriate attention in the forthcoming review?

I turn now to the proposals for a new credit transfer model in higher education funding. From an Open university perspective, it is clear that any new funding models should enable flexible learning pathways that encourage lifelong learning, providing a focus on the learner and encouraging learning progression between the further education and higher education systems. One way of helping to achieve that would be to allow credit accumulation and transfer from previous study. Therefore, could the Minister confirm that he recognises the value of such a flexible credit accumulation and transfer system and, perhaps more importantly, also confirm that that value will be reflected in the funding review next year?

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In the last 12 months alone, the Department for Innovation, Universities and Skills has launched a number of initiatives and consultations on higher education, including a consultation on proposals for new higher education centres, which closed on Friday; a consultation on its “Higher Education at Work — High Skills: High Value” report, which closed in July; a blog with nine issues for discussion on the future of higher education, and a student listening programme. However, what is not clear is exactly how this multitude of initiatives will be reconciled.

Finally, therefore, may I simply ask the Minister if these initiatives will be fed into the funding review, as would be logical, and what influence, if any, they will have on that review?

I conclude by making no apologies for standing up for the part-time education sector, which I believe has been neglected by this Government over the last year.

The Minister of State, Department for Innovation, Universities and Skills (Mr. David Lammy) indicated dissent.

Mr. Lancaster: The Minister may shake his head, but some 209 Members signed early-day motion 317 earlier this year, highlighting their concern about the Government’s decision to withdraw funding from the ELQ sector. I simply ask him to look again at this issue in his review next year, with the value of hindsight, to ensure that the part-time sector in the UK is fully funded in the future.

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