Examination of Witnesses (Questions 64-79)
BILL RAMMELL
MP AND PROFESSOR
DAVID EASTWOOD
17 JANUARY 2008
Q64 Chairman: We now welcome our second
panel this morning to our short inquiry on equivalent or lower
qualifications, and we welcome and apologise to you, Minister,
Bill Rammell, Minister for Lifelong Learning, Further and Higher
education at the Department for Innovation, University and Skills,
but you will appreciate there was quite a heated discussion earlier,
and welcome also and apologise to you, Professor David Eastwood,
Chief Executive of the Higher Education Funding Council for England.
Minister, we asked for a memorandum on ELQs from DIUS. What we
got was a short letter dated 14 January enclosing John Denham's
letter of the 17 September, which was the letter to HEFCE, and
HEFCE's consultation document of September 2007, both of which
have been publicly available for four months, plus a two-page
internal analysis of the responses to consultation. Can I say
that that was neither helpful to the Committee nor to the Government's
case, bearing in mind that, of the 478 consultations that we have
got here, less than eight, roughly seven, were supportive of Government
policies. Why did you feel it was not worthwhile to send us, given
the sensitivity of this issue, a full memorandum in order to support
the Government's policy?
Bill Rammell: I apologise if that
is the way that it has been received. HEFCE was in the midst of
the consultation that it was conducting. Both I and Professor
Eastwood had had an opportunity to discuss it with you at our
recent appearance at the Select Committee. We knew as well that
Professor Eastwood and I were coming along this morning to discuss
it in detail with you, and we took the view that that would be
the best way for you to be able to question us, to challenge us,
to scrutinise us, on the proposals that were being put forward.
I would wish to make clear that throughout this process, if we
separate it out because Professor Eastwood quite naturally and
responsibly has gone to great lengths during the consultation
period to talk to a whole range of concerned individuals and institutions,
but similarly, even though the consultation is with HEFCE, I and
the Secretary of State have met a whole range of individuals and
concerned institutions to discuss the detail of this—indeed
we have done that now on numerous occasions across the floor of
the House. So if what we presented with you was unhelpful, I apologise.
There was certainly no intention not to give as full an explanation
as possible.
Q65 Chairman: Well, can I ask you
then a very straightforward question? Who took the decision to
withdraw the £100 million of support for ELQ student fees?
Was it HEFCE? Was it your Department? Or was it the Treasury?
Bill Rammell: It was Ministers,
and that was clear in John Denham's letter to Professor Eastwood
last September and it may help if I go through for you some of
the deliberation that took place before we took that decision
to re-direct the funding, and it was within a context where we
are most certainly not cutting funding to higher education—I
have said this previously at this Committee, and all the facts
bear that out. By the end of this CSR period funding will have
increased to higher education in real terms by 30% since 1997.
Q66 Chairman: I do not think we are
debating that; we are debating prioritisation, and where did this
come about?
Bill Rammell: It followed on from
the Leitch analysis of where we need to be, as a country and an
economy, with our workforce by the end of the next decade. Sandy
Leitch put forward this analysis and nobody within this House
has challenged that analysis, but, in order to be internationally
competitive, we need to move from today with 29% of adults educated
to Level 4 to at least 40% by 2020 and, arguably, we need to go
significantly beyond; 40% will allow us just to creep into the
upper quartile of OECD countries. The whole thrust of Sandy's
analysis was the higher you regard the qualification chain, the
more you have to pursue an approach of co-financing where, yes,
the State makes a contribution, but the individual and the employer
make a contribution. We looked at the evidence and the fact is
that there are 20 million adults within the workforce who are
not yet at first degree level. Six million of those actually have
A Level-equivalent qualifications and yet have not gone on to
degree level, so we took the view that we wanted some further
levers within the system to enable, and to ensure, that universities
prioritised the recruitment of those students within the workforce
who are not yet at first-degree level. In addition to that, within
the CSR process, we had set ourselves a number of objectives.
We wanted to maintain the unit of resource, we wanted to maintain,
and improve, the student financial support package, we wanted
to increase growth in student numbers and we wanted to improve
the research base further. Given that policy impetus, but alongside
it, the need to maximise our opportunities for growth, we took
the decision that the best way to achieve that was to redirect
that £100 million.
Q67 Chairman: I have spoken to a
significant number of people from a variety of universities, and
I am up to Middlesbrough next week to the North East to meet people
there. What you are saying is that the Open University, Birkbeck
and a variety of universities offering ELQs have not been simultaneously
going out to seek to recruit the very people that Leitch identified
in his report. What evidence is there that they are not doing
that and what evidence is there that they can do it in the future?
Bill Rammell: The evidence that
is there is that there are 20 million people—
Q68 Chairman: No, I accept that,
but what is the evidence that the universities are not doing it
because it is a dereliction of their duty?
Bill Rammell: Well, I think they
are doing it, but universities, in my experience, always respond
to the financial levers within the system and universities have
been very proficient and successful at doing that. Within what
is a modest stimulation within the overall higher-education budget,
and we were not going to bring it in overnight, there was a three-year
transition phase, there was cash protection for institutions,
it was on the back of an expansion of the higher-education budget,
we certainly felt that this additional lever would lead over a
period of time to a greater focus on that.
Q69 Chairman: Would you accept that
a very significant number of the people in employment that Sandy
Leitch identified, quite rightly, in his report are in jobs where
the employer has no incentive whatsoever to actually fund an equivalent
or lower qualification for those people because it is of no use
to their business and that they are the very people who in fact
will be affected by this decision? Do you accept that as a premise?
Bill Rammell: Well, in some cases
with some employers that is the reality today, but, if we, however,
accept that that is the status quo for ever, we are simply not
going to achieve our higher-level skills ambitions. Therefore,
we do need a cultural shift and that means we need financial levers
in the system. It also means that we, as a government with employers,
need to actually change that culture so that people will actually
invest, but, even for those people who are with an employer who
will not invest in them, there are other routes to reskilling
that we are protecting within this process, such as vocational
foundation degrees and such as a whole range of strategically
important exempted subjects.
Q70 Mr Boswell: Do you accept that,
if you are to increase participation in the way that we all have
as a common objective and you wish to drill down into the existing
labour force, quite a high proportion of those students will be
likely to be part-time students rather than full-time students
and, if they are, in what way do you think your proposals at the
moment are going to be able to facilitate their learning as against
some of those who may be the casualties of the proposals you have?
Bill Rammell: I think one of the
features of this debate, and at one level I understand this, all
the focus has been on the £100 million that is being redirected.
The focus has not been on where that £100 million will be
redirected to, and I think part-timers and more mature students
are likely to be significant gainers through that process, but
it is also the fact that we are increasing higher-education funding
by 2.5% above inflation during the course of this CSR, so there
will be further opportunities to make good on the part-time front.
We also announced, HEFCE announced, in the original set of proposals
that, bearing in mind that this does have an impact on part-time
provision, they were going to put forward an additional £20
million in terms of the part-time premium, and that is on the
back of a significant boost to the part-time premium in previous
years. One of the things that I would like to do this morning
is set out for you that this has been a genuine consultation on
the implementation and I am minded, as a result of that, to write
to HEFCE to suggest, and it is their decision, some changes to
the original proposals. One of those is to increase that additional
part-time premium from £20 million to £30 million.
Q71 Dr Gibson: You have declared
a truly magnificent response that you are getting from a lot of
people in the higher-education sector. Usually, they are a boring,
dull lot, I find—
Bill Rammell: That is just you,
Ian!
Q72 Dr Gibson: Actually they have
really got active on this issue, so there is something stirring
there and it is good that they are getting involved in that and
you have picked an area for them, but I am interested in why you
picked that one to increase what is right, and we all agree with
employers having more input into the system and more money getting
working-class kids into the system and all that, but why do you
not really go for the employers in some way? I have always felt
that they get a damned good deal from our higher-education system.
Football clubs get Beckhams and all that for a lot of money. We
send a lot of young people and old people out into that market,
and it is a market, as you put it, and we do not get much back
from it. Now, I know there are schemes, they are here, there and
everywhere, but you could be much uglier with the employers and
make them pay for what they are getting.
Bill Rammell: Well, if we are
going to have a debate about whether you have statutory force
on employers to actually commit to education and training of their
workforce, I have to say that I am not persuaded by the international
evidence that that actually works effectively because employers
can always find ways around the system, but do we need a change?
Yes, we most certainly do. That is why we already have 15 projects
that HEFCE are funding across the country on co-financing initiatives
and just before Christmas I announced a further at least £100
million during the course of the next CSR period for co-financing
initiatives with employers, and we will be shortly publishing
a high-level skills strategy which gives added impetus and force
to the need to change that culture and to recognise that, if we
are to get to where we need to be in terms of economic competitiveness
by the end of the next decade, then there needs to be a cultural
change and it needs to be based on co-financing.
Q73 Dr Gibson: But why did you pick
on this mechanism or did you consider others as well and down
the line they might yet happen? It is strange that you picked
on this one which a lot of people did not see coming, as it were,
arguably, from the consultation, but there is argument about that.
Did you pick on anything else?
Professor Eastwood: By "mechanism",
do you mean the ELQ?
Q74 Dr Gibson: To put the money into
getting first-timers into the system.
Professor Eastwood: As the Minister
has said, the in principle decision was taken by ministers. We
and our Board worked through the way in which that would be implemented
and what we were seeking to do, which reflects the point the Minister
was making earlier, was we were seeking to ensure in the implementation
of the policy that the kind of priorities which the Government
had already established, which Sandy Leitch had already pointed
towards, would be protected and, as far as possible, be enhanced
as we implemented the policy, hence the protection for employer
co-funded, hence the protection for foundation degrees, hence
of course the protection for strategic and vulnerable subjects
which, in significant measure of course, are subjects that employers
have indicated that they value highly and are in short supply.
Q75 Mr Marsden: Minister, can you
tell the Committee how the £100 million, which is currently
to be recirculated as a result of the changes on ELQ, will be
divided between three particular initiatives, the co-funding with
employers, support for full-time students and support for part-time
students? What I am getting at there is, assuming we accept your
premise about the recirculation of the money, who is going to
benefit most from this process? Have you actually done a specific
breakdown of that £100 million between those three groups?
Bill Rammell: The way the process
works is that we do not micro-manage the numbers centrally in
that way. What we do is give strong steers within the HEFCE grant
letter that we will be publishing very shortly about where that
money is to go and we do highlight that we expect the co-financing
route to be a recipient. Our expectation is that, given the market
that exists of adults within the workforce who are not yet educated
to Level 4, a significant number will be part-time and in institutional
terms.
Q76 Mr Marsden: I have to say, that
sounds at the moment pretty woolly. I am not being a pedant over
this because it seems to be absolutely crucial, but, if, for the
sake of argument, you were to say that the vast majority of the
money that you wanted to produce as a result of this £100
million change was going to go to an ambitious programme of co-funding
with employers, that would have two implications. Firstly, it
would take a considerable period of time to set up, but, secondly,
you might even defuse some of the very sharp criticisms which
have been made of this policy by Richard Lambert and by others
at the CBI on the basis that there is nothing in this that would
automatically encourage employers to take up the sort of numbers
that you want.
Bill Rammell: On the issue of
timing, it is very clear that this is a phased implementation.
In the first year, this only affects 0.2% of the overall higher-education
budget, so there will be time to adjust. In terms of what Richard
Lambert said, he actually welcomed the proposals on co-financing
and we will, within the grant letter, be making it very clear
that the priorities for the £100 million are co-financing,
and our own expectation is that part-timers will be major recipients.
Another priority, and a very strong steer within the grant letter,
is to widen participation, so we expect that to be the route as
well.
Q77 Mr Marsden: Just for absolute
clarification, is it your intention at the moment that that letter
to HEFCE will include a specific breakdown of how that £100
million is to be recirculated?
Bill Rammell: Not in X amount
of the £100 million for particular purposes because that
has never been the way that the HEFCE grant letter operates. We
give high-level steers at the priorities and that then needs to
be undertaken in the proposals that institutions put forward for
additional student numbers.
Q78 Mr Marsden: That most usefully
brings me to you, Professor Eastwood, because you have had four
months to think about this and you have been dealing with this
in the consultation process. I am not asking you for figures on
the £100 million, but have you had any thoughts as to where
the majority of this £100 million being recirculated is likely
to most benefit the sector?
Professor Eastwood: The £100
million, when recirculated, in round numbers, will put another
20,000 student numbers into the system by the end of the Spending
Review period. That will constitute a significant proportion,
but a minority, of the total growth that will be specified in
the grant letter that the Minister has just referred to. Ministers
have also announced that by the end of this Spending Review period
they would expect to see some 20,000 learners on employer co-funded
programmes, so that commitment—
Q79 Mr Marsden: If I can just interrupt
you there, in the previous session it was very clear that one
of the crucial distinctions we had to make, not least because
it affects the figures by a factor of two or three or possibly
more, was between full-time and part-time students, so, when you
are talking about that 20,000, are you talking about full-time
or part-time?
Professor Eastwood: When I am
talking about what that £100 million will buy us, I am talking
about FTEs. Obviously with employer co-funded programmes, in the
main they are part-time programmes.
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