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

Examination of Witnesses (Questions 20-39)


28 NOVEMBER 2007

  Q20  Chairman: When will they come into the public domain?

  Professor Eastwood: All our board papers are published so it will be clear in January where we are on the outcome of the consultation.

  Q21  Chairman: So in January you will know?

  Bill Rammell: Chairman, can I very briefly respond to Gordon: (i) the process of engagement is on-going. Obviously there is a consultation through HEFCE. I am meeting personally, virtually on a weekly basis, with providers; (ii) I have the absolute highest regard for the work that people like the Open University and Birkbeck have done. I regard the Open University as the finest creation of a previous Labour Government. However, some of the claims that have been put forward are simply wrong. At the start of this debate I was told that the Open University was going to lose £30 million. It is simply not true. I would urge people to focus on the detail of the proposal and engage in the conversation. I make the point again, what we have to do through HEFCE is demonstrate that this policy is correct but then help institutions to move from where they are today to actually meeting that need of people who are not yet at the first base of getting a degree.

  Chairman: I am going to leave that there because we have a lot of business to get through and if I could ask us all to try and be as brief as we can with our questions and perhaps encourage our guests to be as brief in their answers. Over to you, Des.

  Q22  Dr Turner: I cannot resist one very quick one before I ask a series of questions. Very rightly and very gratifyingly, you put a great deal of emphasis in your opening remarks, Bill, on science and research, but it does not figure in the Department's title; can you tell us why? Is there any truth in the apocryphal story about the focus group?

  Bill Rammell: I have never heard the story about the focus group. There is all sorts of debate and I have to say that I do not think the agonising debates that go on in Whitehall about titles for departments is the most productive use of time. I think that Innovation, Universities and Skills encapsulates the whole of the science area, the need for research, the need for innovation and further and higher education, and I think we get that message across. At the end of the day it is not going to be a title that changes practices and culture, it is going to be what we actually do.

  Q23  Dr Turner: I know but people do look at titles. Anyway we have been discussing, in terms of getting views, Government policy as enacted through funding, but of course, in practice, teaching for funding is allocated by block grant and institutions have a great deal of autonomy in how they actually use their block grant, so there is going to be a conflict there. How can you be sure that institutions are actually going to do exactly what you want and indeed should they have to given that the Government pays at least lip service to academic autonomy?

  Bill Rammell: I would say we do a bit more than pay lip service. In fact, for the Fabian Society last night I was giving a major lecture on the importance of the concept of academic freedom which I think helps our institutions to develop. There is a balance to be struck. We spend £10 or £11 billion a year on higher education directly through the Department. That is a substantial sum of money and I think taxpayers would not thank us if we did not set out the broad framework and the steers of the things that we value that money being spent on. There is all the difference in the world between having that view and then actually intervening to micro manage institutions. We do not do that and I think we would be wrong to do that because we would not actually get the best outcome. It is also the case—and David will correct me—that in global terms only 40% of funding to the universities actually comes from the Government on average, so there are other funding avenues that they can pursue. It is about getting that balance right between the national imperative but actually wanting strong autonomous institutions to deliver on the ground.

  Q24  Dr Turner: Does it follow then that when you change the funding system as you are advertising, you will not be doing it through targeted grants or ring-fenced monies?

  Bill Rammell: There are some targeted grants. Funding for foundation degrees, funding for strategic development funds for hot-spots in the country where there is no higher education institution and we think, for educational reasons and the regeneration of that area, that there is a need for funding, then of course you specifically earmark funding for that purpose, but there is still a very, very strong degree of autonomy of institutions analysing what they are good at, what they are less good at, and playing to their strengths.

  Professor Eastwood: Can I add two things. Firstly, I do think that the block grant principle for teaching enables institutions to operate a high-quality teaching environment and to invest flexibly and appropriately. Having said that, we do a number of things which are strictly targeted. For example last year when we decided to invest a further £70 million in the high-cost science subjects, we did that for a three-year period because that is the funding time horizon we can work with, but if any institution were to discontinue provision in those areas then they would return the funding. I think that is a significant incentive. Secondly, with the additional student numbers that we invest in the system, again we invest those strategically as Bill says. Some of those are in areas such as foundation degrees to engender new kinds of provision. Some of those are in universities which can demonstrate that they can recruit in some of the strategic and vulnerable subject areas and we invest additional student numbers there so within the block grant envelope there are a number of things that are quite strategic and a number of steers which are quite powerful.

  Q25  Dr Turner: Since 2005 the Government has carried out two reviews of teaching funding "to ensure that it remains fit for purpose in a changing higher education environment". Are you satisfied that you have got the answers now? Can you tell us in outline how these reviews have informed your decisions, and are you satisfied or will there be yet another review?

  Bill Rammell: I think the process of looking at the system, reviewing it periodically and making sure that it is where you want it to be in terms of meeting the needs of society is an on-going process. I am not going to say to you that there will not be further reviews. There is for example next year a review of the teaching weightings between different subjects.

  Q26  Dr Turner: Can I just ask why that was not incorporated in the present review because it is a subject which has been raised by our predecessor Committee on a number of occasions?

  Professor Eastwood: The answer to that is that through the transparent approach to costing we will have new and, we believe, robust data on costs and relative costs and we will have that in 2008, so it was an evidence-based timing.

  Bill Rammell: I think the other thing on the subject of weightings however is that given that there is going to be a certain sum of money in the pot, however much you are increasing that by, if you are saying one set of subjects needs a higher weighting then ipso facto you are saying another set of subjects needs less funding. We always hear the arguments about those subjects that need more spent and we need people to say credibly where the reductions in funding should come from.

  Q27  Chairman: Medieval history?

  Bill Rammell: That is your view is it, Chairman?

  Dr Turner: Our favourite is media studies. That is just an aside.

  Q28  Chairman: That is not a view of the Committee.

  Bill Rammell: Media studies actually have very good outcomes in term of employability and if we are going to enter into a debate about which subjects—

  Q29  Chairman: Minister, do not go down that route!

  Bill Rammell: All right.

  Q30  Dr Turner: You have already referred to TRAC(T) with the object of arriving at some sort of evidence base for a sustainable system. Can you tell us what you think a sustainable teaching system will look like?

  Professor Eastwood: I think a sustainable teaching system will be premised on universities themselves having a clear understanding of where their costs lie. That will then translate back into the way in which we structure our teaching funding algorithm. It will then also feed back into the advice that we give to ministers and the advice ministers take into subsequent spending reviews, so that is how I envisage it working. We have on a number of fronts been working to ensure that what we achieve is a sustainable sector. We are making real progress there in terms of the capital base of the sector and by about 2012 on current projections we will arrive in capital terms at a sector that looks broadly sustainable. And as far as teaching is concerned, we have not yet seen the full financial benefit of the change towards the new fee regime. We will get that in 2009 and I think at that point, which is why it is wise to have a review in 2009, we will have an evidence base to judge both the way in which the funding regime has impacted and secondly whether or not there remains a significant deficit.

  Q31  Dr Turner: In 2008 hopefully you will know the full economic costs of teaching and of teaching in different subjects. You have already referred to that and this is clearly going to have a major impact on total funding and on the distribution of funding. Have you started to measure that impact? Can you be sure that there will be not be any kind of feedback between having looked at the impact and felt, "That is going to be tough, perhaps we should alter the figures"?

  Professor Eastwood: I think there is a difference in understanding costing for research and costing for teaching. With full economic cost for research—

  Q32  Dr Turner: I am talking about teaching.

  Professor Eastwood: I realise that. For full economic cost of research what we had was the costing of a research project, the direct and the on-costs of that. When we look at the costs of teaching, there are a number of assumptions that you have to build into the model. They have to do with the number of contact hours, the size of teaching groups, the frequency of lab sessions and so forth. What TRAC(T) will give us is a better way of understanding current costs and a better way of costing enhancement of the teaching provision, for example more contact time. It would be wrong for me to suggest that TRAC(T) of itself will give us straightforward the answer "what should the cost of teaching be?" but what I think it does do is it gives us a sensible evidence base to have that debate quite widely about what constitutes appropriate funding, what subjects we should go for.

  Chairman: We will come on to funding of research and I will bring in Gordon Marsden.

  Q33  Mr Marsden: David, we are aware obviously that the process of determining what I think is called the single overarching framework as the replacement to traditional RAE is still continuing, but can I ask you initially, are you happy that we have got the split right between the STEM subjects which are going to be dealt with on the basis of quantitative indications of research quality and outputs and the light-touch peer-review based assessment for everybody else? Are there any subject areas which are in a grey area between the two?

  Professor Eastwood: I think broadly we have got it right but you are quite right, there are some subject areas.

  Q34  Mr Marsden: Would you like to identify them?

  Professor Eastwood: The non-medical health related disciplines is one quite important area and I think we will get greater clarity on that as a result of this consultation.

  Q35  Mr Marsden: When do you expect the consultation to finish?

  Professor Eastwood: The consultation finishes in the middle of February. We launched it last week.

  Q36  Mr Marsden: Will you then be in a position to announce the funding formula?

  Professor Eastwood: After the consultation we will take stock of the outcomes of the consultation. Then what we have said we need to do is to run a pilot of the new methodology because it does involve gathering data in different ways. When we have done that—which will take us into the autumn of 2008—that is the point where we will be able to come to some final decisions about the evaluation structure and begin to look at the funding implications.

  Q37  Mr Marsden: That may be all well and good and well understood but there is going to be a significant period of uncertainty for universities and institutions as to how the new funding formula is going to be based then, is there not?

  Professor Eastwood: We will conclude the Research Assessment Exercise of 2008 in the December of 2008 so the funding allocations of that will be announced in February 2009. The agreement with Government is that the new regime, what we are currently calling the REF—the Reference Excellence Framework, so we will be able to blame the REF in future!—will start to inform funding from 2010. I think the sector does understand that and in terms of the funding changes that the new system might drive, until we know what the outcomes of our RAE 2008 will be, we do not know how significant the changes will be that the REF might drive.

  Q38  Mr Marsden: Can I bring you back briefly to what might be seen outside as the continuation of RAE by other means, the non-metric element, because one of the things that is curious about the controversy that followed the announcement of going down the matrix route and the subsequent response of Government and indeed of HEFCE is that in that process some of the fundamental criticisms that were voiced previously of the RAE seem to have got lost. I refer specifically to the arguments that it ossifies research funding in a small number of institutions—to those that have more will be given—but more particularly that some of the issues previously about people buying in research on the basis of their books to boost their university do not seem to be being addressed in any shape or form in the light-touch peer review that you are now taking forward.

  Professor Eastwood: What we have said about the light-touch peer review is that we will be doing the work first for the science-based evaluation. When we have completed that we will then move to reworking the light-touch RAE and we will consult on that, so it would be wrong at this stage to anticipate what the outcomes might be. We are expecting to learn some relevant things for light-touch RAE from the bibliometrics-based approach that we are applying to the science-based subjects.

  Q39  Mr Marsden: Do you then accept that some of the criticisms that were made of the old RAE along the lines that I describe remain valid criticisms to be answered?

  Professor Eastwood: We will seek to answer them when we devise the non-STEM light-touch RAE.

  Mr Marsden: We will await that with interest.

  Chairman: You sounded like a politician there.

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