Examination of Witnesses (Questions 1-19)
BILL RAMMELL
MP AND PROFESSOR
DAVID EASTWOOD
28 NOVEMBER 2007
Q1 Chairman: If I could say good morning
to the Minister for Higher Education, Bill Rammell, and the Chief
Executive for the Higher Education Funding Council for England,
Professor David Eastwood. Welcome to you both and thank you for
coming at relatively short notice. The Committee at this stage
is a newly formed Committee and we are trying to get to know the
major players within the new department of DIUS. I wonder if I
could start with you, Minister, and just ask you first of all
what difference will the creation of DIUS actually make to higher
education in England? What will be different?
Bill Rammell: I think importantly
for the first time we will have a powerful voice at the Cabinet
table. I have spent two years handling this job of further and
higher education in the former DfES. That was a very large department
and although higher education punched its weight, clearly we were
part of a much larger entity, particularly given the importance
of schools where schools in a sense were pre-eminent. Actually
having a department that brings together science, innovation,
technology and further and higher education gives us a very powerful
impetus. It is about recognising in terms of the future competitiveness
of this country that innovation is going to be key. We therefore
need a world-class research and science base and we need very,
very positively to be pursuing a skills strategy at all levels
and bringing those things together in one department, and I think
having a voice at the Cabinet table gives us the maximum opportunity.
Q2 Chairman: But crucial to a successful
higher education system is a sustainable higher education system
in the 21st century, given the demands that you have clearly outlined.
I am just trying to get a feel for what is your vision for that
sector? What is your vision for a sustainable higher education
sector in the 21st century?
Bill Rammell: I think we need
to continue with the significant progress that we have made in
improving the quality and the performance of our research activities
within the higher education sector. I think that has been backed
up very strongly by the very significant increase in funding that
has been given both through the research councils and through
my Department. I think we need to continue to widen and increase
participation in higher education. I have often argued that that
is not just a social imperative—and I do not apologise for
talking about it in social terms—but it is also fundamentally
an economic imperative. If we are to compete with the major economies
and the newly emerging developing economies, we have got to get
many more people educated to the highest levels. I think we need
a much stronger focus on the needs of business in terms of continuing
professional development, in terms of developing the kind of programmes
that will help businesses to take their employees to the highest
levels. If you look at Sandy Leitch's analysis, he was saying
of the working age population we need to move from some 29% today
to 40% and, arguably, we need to go beyond that if we are to be
competitive. I think it is about the research base, it is about
ensuring that we use that research and we actually apply it. If
you look at it historically, we have always been good at research
but we have not always applied it in the most effective way. We
need to increase and widen participation and we need that high-level
skills dimension.
Q3 Chairman: You have got an issue,
which we have come to before and I am pretty sure the former Education
Committee came to before, which is who drives that agenda? Is
it the Government that drives it—and remember these are
autonomous institutions—or is it HEFCE that drives it? Perhaps
each of you could respond to that. Who is going to drive this
agenda?
Bill Rammell: David will no doubt
want to comment. There is in a sense a separation of powers, and
that has got some advantages, between the Government and the Higher
Education Funding Council and the institutions, and when I look
at the model that exists for higher education elsewhere within
the European Union, I am much more attracted to our model. I think
actually having strong, independent institutions that can analyse
their strengths and weaknesses and develop their operations according
to that actually gives us some significant advantages. If you
micro manage from a government department I do not think you actually
get the best outcomes and all forms of international comparisons
demonstrate that that model does give us some real impetus. That
does not absolve Government from taking a very strong lead in
setting out the framework of the way that we want to go forward.
(i) that means we need to secure the funding base (and I would
say that, would I not) and I think what we have achieved over
the last 10 years has been very significant, but (ii) we need
to set out the policy framework and policy direction, and we do
that very strongly and we then ask HEFCE to implement that on
our behalf.
Q4 Chairman: Just before you respond,
David, we have come across this issue before, the Government has
got for instance a very, very strong innovation, science, technology
and STEM agenda, and yet HEFCE in the past has been pretty powerless
to actually influence that agenda. Do you feel there is a change
in implementing this new vision the Minister has outlined or are
you still a toothless tiger?
Professor Eastwood: We are certainly
not a toothless tiger. I think the vision that the Minister outlined
a moment ago for the sector of a very strong research base with
high-quality teaching with a commitment to widening participating
and a willingness to step up to the skills agenda is widely shared
within the sector. We have a diverse sector. We have institutions
which, as you say Chairman, are autonomous but which have distinct
and complementary strands. There is not a division between the
Government, the Funding Council and the sector around that wide
vision. At any point in the higher education agenda there will
always be challenges and I think you are right that two years
ago there was a challenge and that was around STEM. I think since
then, on a number of fronts, through the work we have done in
HEFCE, through the work done in schools, we have seen a transformation
of that position so that applications for all the STEM disciplines
are now up. I think there is a new excitement both in schools
and in universities around STEM disciplines and I think what that
demonstrates when we identify an important but complex issue is
the importance of partnership. Actually in this landscape no one
agency and no one government department of itself would have the
capacity to turn that around. Identifying the priority and putting
together, as it were, a package of interventions does I think
offer us a way forward.
Q5 Chairman: You said in your statement
that HEFCE has a role and I quote here "to develop and implement
higher education policy based on research and consultation".
Where does the division lie between HEFCE and the Government as
far as that agenda is concerned?
Professor Eastwood: I think we
are very clear that the Government establishes the broad policy
parameters and it does that in a variety of ways. It does it through
White Papers, it does it through legislative interventions, and
of course it does it annually in the grant letter that we receive
in January. That rarely comes as a surprise because we have good
working relationships both at ministerial level and with officials.
That establishes the broad framework. I think we understand that,
I think the sector understands that, but also I think the Government
understands the importance of both refining policy through consultation
and the importance of, wherever we can achieve it, achieving a
high degree of consensus, particularly where there are areas of
high challenge.
Q6 Chairman: Minister, DIUS now brings
together two major funding streams into higher education which
come under your direct remit—HEFCE within the dual support
system and then the research council funding as well. Why do we
need two organisations? Why not streamline that and use the resources
within the sector?
Bill Rammell: Because I think
it does bring a quality and a plurality of funding. I know international
rankings are not everything but I think that system has brought
us a very powerful research base. Through our Department, the
on-going capacity-building, looking at how you undertake blue-skies
thinking, doing that on a retrospective basis, up until now through
the Research Assessment Exercise, and getting that on-going mainstream
funding is important, but then I think having the project-based
funding for particular purposes through the research councils
does bring real benefits. One should not always just take what
universities say but if we through the creation of a new Department
had said that we are not going to have dual funding any more,
I think we would have had a real problem on our hands of taking
the sector with us, and I think on that account they would have
been right.
Q7 Chairman: So, David, you do not
see the prospect of a Higher Education Funding and Research Council?
Professor Eastwood: What is interesting
about the dual support debate is the system over the last generation
has been palpably successful. It does underwrite what on most
international comparators is the second strongest research base
in the world, and I think there is something curiously English
about agonising over something that is successful.
Q8 Chairman: So the dual funding
system is here to stay?
Bill Rammell: Yes.
Professor Eastwood: I think the
dual funding system as a system has demonstrated that it is fit
for purpose. If you talk to me about QR and Research Assessment
or if you were to talk to Sir Keith O'Nions about the way in which
the mission of the research councils is constantly being refined,
then within dual support there is constant improvement and some
element of repositioning but I think the broad architecture is
right, yes.
Bill Rammell: Can I add one thing
to that. For the first time having the two strands in global policy
terms together within one department so we can see clearly the
crossover and we can make sure that we are maximising the output
I think does give us a new strategic advantage.
Professor Eastwood: If I could
just gloss what the Minister has said. If you look in a couple
of areas, if you look at the Higher Education Innovation Fund,
which the research councils and HEFCE co-fund, and if you look
at the way in which we are now funding capital investment in the
research base (again a partnership between the research councils
and the funding councils) what we see is within this overarching
structure of the new Department those two sides of the dual support
system complementing one another very effectively.
Chairman: Okay, thank you very much indeed.
Ian Gibson?
Dr Gibson: I wanted to raise the issue
of equivalent or lower qualification (ELQ) students which has
the Vice Chancellor of Buckingham smiling all over the Guardian
yesterday welcoming this new initiative/innovation. I will read
very quickly from one of the many letters which I am sure you
have had too, where a university teaching school says that they
provide courses for transport and general workers, shop stewards,
safety reps, learner reps and others from within their constituency
and they go on at King's Lynn, Peterborough and other places too.
It goes on to say that the Government is speaking in a very strange
way because it talks about fairness, and this is their second
degree, their second chance in life and we encourage that, and
decisions are being made which are going to not help the widening
participation which we want from this lifelong learning, developing
new skills in a world where we agree that people can change jobs
and change their interests at different stages of life. It is
a remarkable decision to take people away from people and discourage
the whole process which we are about. Many people may give up
and may not go to university second time around. You would not
really want to discourage that.
Q9 Chairman: Would you?
Bill Rammell: You are talking
about people who have already got an under-graduate qualification
and want to take their second one?
Q10 Dr Gibson: Yes, like some of
us have. Some of us have two or three degrees.
Bill Rammell: Sure, absolutely.
Let me firstly make it clear that we are not cutting funding to
higher education. If you look at what has happened to funding
performance we have increased funding by 23% in real terms over
the last 10 years. We are shortly announcing the next CSR allocation
and that will be further improvement. That is a very significant
step forward. What we are saying is that over three years we want
to redistribute and redirect £100 million from people who
already have an under-graduate qualification to those who are
not even at the first base of getting their first degree. I have
to say that I believe strongly that is the right priority. I need
to be clear on this. This is not a change where John Denham and
I have been dragged kicking and screaming by officials (not that
we are ever dragged kicking and screaming by officials!); we believe
strongly that if you look at the higher skills needs analysis
within this country, the fact that if we are to be competitive
we need to get beyond 40% of the working age population to first
degree level, then this is the right priority. However, this is
not a sudden change that we are bringing in overnight. We are
currently consulting through HEFCE. There is going to be a three-year
phrased transition. In the first year this change will only amount
to 0.2% of the overall higher education budget. To look at some
of the letters that I am receiving and some of the articles that
were written, you would think that there is a massive change taking
place. It is 0.2% of the budget in the first year. Even at the
end of three years no higher education institution will lose in
cash terms.
Q11 Chairman: Including the Open
University?
Bill Rammell: Yes and we have
made that explicitly clear. There is a whole series of strategically
important subjects that will be exempted. Foundation degrees will
be exempted. This is by no means the whole of the amount of money
that we are spending on second degree provision. It is £100
million out of £350 million at the moment. All the anguish
I am hearing has failed to factor in that, okay, if you see a
reduction in your allocation for second degrees, what about the
increased opportunities, particularly working on a co-finance
basis with employers, to actually upskill people to their first
degree level qualification? If there is one thing that I do think
is important—and HEFCE are currently conducting the consultation
which will finish on 7 December—it is that we do need to
work with institutions to help them to get from A to B, from where
they are today where a number of them are catering for people
who are undertaking their second degree to where they can reoriente
the organisation to actually target those people who are not even
at first base. The final point I would make on this is that you
can argue that we are wrong but if you do that you actually have
to acknowledge the consequence, and that is that even with the
increased funding budget that we are going to be putting forward
there would after three years be 20,000 less people getting their
first degree than would otherwise be the case. Faced with that
choice and given the needs of those people, given their requirements
and given the requirements to upskill within our economy, I think
it is, rightly, the highest priority.
Q12 Dr Gibson: Thank you. We could
argue about how you get to the number 20,000 and all the evidence
you have got for all these other things happening, but what I
really want to ask is: why are you doing it now when there is
going to be a Research Assessment Exercise coming up, when there
is going to be a peer review, allegedly, in 2009 when we are going
to be looking at the whole system and how we might get money distributed
around it and the priorities and so on. Why pick on this group
of people to begin with? What is the gain?
Bill Rammell: If you look at our
need to up-skill I do not think you can afford to hang about.
If you look at the evidence—
Q13 Dr Gibson: --- One year?
Bill Rammell: Hold on. We are
actually behind the game in terms of our competitors in terms
of the proportion of both under 30-year-olds and also of working
age population who are educated to degree level. We collectively
will pay a price economically, quite apart from the social equation,
unless we address that issue. I do not think we can afford to
stand still. I certainly do not think we can afford to wait for
the 2009 Commission which may then lead to changes at a later
stage. I reiterate my point, if this was a dramatic, large-scale
change where overnight institutions were going to have significant
reductions to their budget, then I could understand the concern.
That is not what we are putting forward. It is a small but important
change and in part it is about culture change. It is saying to
university institutions look at the needs of those people within
the workforce because they are actually a real priority for us.
Q14 Dr Gibson: You can also argue
because it is a small change that it does not really matter in
the big game that is going to be played in the next year in terms
of university funding. Why make a big issue of it and annoy a
lot of people and demoralise them? Why not wait the year because
you are only going to start this in 2008 and 2009 is when the
big debate finally hits?
Bill Rammell: I will tell you
this: I have been doing this job for two and a half years and
I have the highest regard for our university institutions, but
I know that collectively and individually they are very assiduous
in asserting their self-interest and their self-interest is not
always synonymous with the collective national economic interest.
They do tremendous work but I think the Government does have a
right and responsibility to look at the funding levers and to
try and move over time the system in the right direction. This
is not a dramatic change. David will no doubt want to comment.
Through the discussions that take place, certainly the discussions
I am having with vice-chancellors, whilst I would not say that
everybody is delirious about this change, I think people recognise
and understand the underlying importance and actually are prepared
to work with us on this.
Chairman: Just before I bring you in,
David, I want to bring my two colleagues in here.
Q15 Mr Marsden: Bill, I hope no-one
here, and I certainly would not, doubts your commitment in the
Department to widening participation in any shape or form, and
that has been shown abundantly by the announcements that have
been made since the formation of the new Department. However,
at the risk of rattling off cliche«s there are maxims that
you should perhaps be aware of. One is the law of unintended consequences
and the other one is that "the devil in the detail"
so I want to pursue some detail with you. You talk, quite rightly,
about competitiveness and upskilling but there is surely also
the issue of reskilling and that is an issue which many organisations—NUS
and various others—have raised with considerable concern
in regard to the sort of time gap that might elapse between someone
who had done a first degree and wants to come back and do an ELQ
subsequently. If you take, for example, a woman who is perhaps
in her late 40s who did a university degree 20-odd years ago which
is now totally obsolete and not fit for purpose for her coming
back into the workforce, and you will have that woman coming back
into the workforce under your proposals as I understand them (and
I accept there are exemptions), that person would not be eligible
for funding. If you have a situation like that, not only are you
disadvantaging a particular potential part of the workforce but
you are also having a situation where adults are going to be locked
out of in many cases the potential to retrain because we are talking
about people who do not necessarily have current employment who
are coming back into a potential employment situation, perhaps
having reared children for 10 or 15 years or done other things,
not just children, they could have had carer responsibilities.
Could I ask you whether the Department and whether the HEFCE review
will look sympathetically at some form of end by/expiry date by
which time you will then consider people for refunding for ELQs?
Bill Rammell: I understand the
point that you are making but what I would say is in the midst
of consultation which I have asked the Higher Education Funding
Council to undertake, where there are detailed conversations taking
place between the sector and David, I am not going to pre-empt
the announcement of the outcome of that consultation. We did not
say this is going to happen overnight. We did not say this is
it; take it or leave it. We did say we want to talk to people
about phasing and about exemptions in detail. That is the process
that is taking place at the moment. That finishes on 7 December
and I think it is important that continues. I think David may
well want to comment on that. However, I do think there is a point
of principle. I understand the concerns but however much money
you put into the budget—and I bow to nobody in terms of
what this Government has done to increase the higher education
budget—there are choices that have to be made. I hear that
example but there are also examples—millions of them—of
people who are only educated to level three and they are a priority
as well.
Q16 Mr Marsden: I would not disagree
with that at all but I press you on the point that part of the
Government strategy and part of the strategy of Leitch, as you
well know, with the demographic gap, is to put an emphasis on
reskilling as well as upskilling. Do you see the argument being
advanced by many people that if you do not get this right, particularly
if you do not get the sequencing and time-frame of phasing out
right, you will inadvertently do very serious and severe damage
to the reskilling project as well as to the upskilling project?
Professor Eastwood: If you take
that particular learner there is a range of options. You are right
of course to say that there is an option which is closed. I do
not think anything the Minister has said or anything our consultation
has said would try to occlude that, but if that learner wanted
to come back and reskill through a foundation degree—and
by 2010 there will be 100,000 degree numbers out there—that
route is open, that route is funded. You are quite right to say
that the learner might not yet be in employment, but if an employer
was co-funding then there would be HEFCE funding flowing. If they
wanted to reskill in an area of a strategic and vulnerable subject,
public funding would flow and, quite importantly, we are through
the consultation proposing to increase the part-time premium because
a lot of those learners would seek a route back in through part-time
learning and we are seeking to enhance our support for that. Also
for learners who wish to return and to take a higher level qualification,
again that is unaffected by the proposal. So there is a range
of routes back in, there is a range of routes to reskilling, there
is a range of Leitch-compliant options which are all open and
which are all publicly funded. The Minister is quite right to
say that we are coming to the end of the consultation. We will
review the outcomes after the 7th and then some final decisions
will have to be determined.
Q17 Mr Marsden: Can I make a final
brief point then; so far, that message is not getting out very
well and you need to do a lot more to convince those people out
there who have written to us that there is not a real problem.
I also make the point that if you look at the figures that Universities
UK have supplied us with on the proportion of funding for students
that would be phased out, as understood at present under the implementation
programme you are looking at, it is 38% of the students at Birkbeck
and I think the figure that is quoted for the OU is nearly 23%.
If those figures are at all correct they do demand the most serious
sequencing programme because although Keynes said "in the
long term, we're all dead", we do not want to have a situation
where with too short a term implementation of those proposals
you end up with serious and possible terminal damage to institutions
like the OU and Birkbeck.
Professor Eastwood: I think that
point is well taken. Can I just make two comments. The first is
that when the DIUS grant letter is published, probably in early
January, it will be clear that there are additional student numbers
being released, as the Minister says, from the transfer from ELQ
funding to widening participation funding, and a number of the
institutions which at the moment have headline hits will be institutions
that benefit from the allocation of those additional student numbers,
so another part of the equation will become clear in January.
The second thing to say is that we have made it clear that we
will cash protect all institutions and that is precisely, as you
say, to ensure first that there is no significant damage to those
institutions and, secondly, to enable us to work with those institutions
to ensure that they can reposition themselves, and the institutions
which are most severely affected in headline terms will be the
institutions that we work most closely with.
Q18 Dr Gibson: How many people will
not come to do courses because of this initiative you are taking?
The institutes may be protected but what about the large number
of individuals who will not get that second training?
Professor Eastwood: It is very
hard to say because what we do not know what different choices
learners will make because there is a whole series of options
which will be available to them. We will clearly monitor that
as it goes forward.
Q19 Chairman: Can I ask you, David,
finally because I want to move off this question, when you will
publish your final proposals following the consultation? What
is the timescale for it?
Professor Eastwood: We will need
to take the outcomes of the consultation to our January board
because we will have to determine our funding allocations for
2008-09 in February.
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