Select Committee on Innovation, Universities, Science and Skills Minutes of Evidence

Examination of Witnesses (Questions 1-19)


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.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2008
Prepared 27 November 2008