Examination of Witnesses (Questions 140-159)
RT HON
JOHN DENHAM
MP AND IAN
WATMORE
29 OCTOBER 2008
Q140 Mr Wilson: So the answer to
that question is actually yes, you are?
Mr Denham: We are making changes,
and in my statement, which you have, it says very clearly that
we are amending the regulations to student financial support.
Q141 Chairman: Just to clarify, it
is coming down, Secretary of State, the financial income threshold
for partial grants, from £60,000 to £50,020.
Mr Denham: That is right, but
the key thing I would point out, Chairman, about this is that
we are not changing the lower threshold, which is the threshold
for the full grant, and that remains at £25,000. Secondly,
we are still hitting, in fact we are bringing in line, our original
intention that two-thirds of students should get a full or partial
grant, so the underlying commitments are ones that we set out
in July 2007.
Q142 Mr Wilson: Can you also just
be clear on one other thing. Is your Department thinking of freezing
English university places?
Mr Denham: No. The statement says
very clearly that HEFCE will allocate 10,000 and no more than
10,000, but 10,000 extra places, full-time equivalent, for entry
next September/October.
Q143 Chairman: Secretary of State,
there appears to be a £100 million projected overspend for
next year in terms of HE. How are you going to finance that? Is
that going to come out of Train to Gain as well?
Mr Denham: Chairman, we have to
look at the budgets available to us and we are looking, firstly,
at the departmental unallocated provision, and we obviously carry
some reserves and, therefore, one of my responsibilities with
the Accounting Officer is when does one plan to deploy those reserves,
and that is the first thing. Secondly, within the system we have
significant progress on our targets for cash-releasing efficiency
saving, so obviously we will look at places where genuine efficiency
savings can be made to produce cash, and then we will have to
look at other parts of the DIUS budget. Now, what I have tried
to do in the statement is set out some principles that should
guide us on that. We do not want to breach the science ring-fence,
we want to maintain the policy of the real value of the unit of
funding in higher education, we want to continue to be expanding
higher education opportunities and we want to continue to expand
opportunities in further education and Train to Gain, but we will
have to work through this and we will make the announcements about
any further changes in budgets in the appropriate time in the
normal way.
Q144 Dr Harris: In your statement,
where do you say that the upper limit on the threshold, the top
limit for the partial grant will be reduced from £60,000
down to £50,000? I do not see the top limit.
Mr Denham: What the statement
says, Chairman, is what the top limit will be, which is £50,020.
Q145 Dr Harris: So you have to read
in that that is a reduction?
Mr Denham: You are clearly, as
I would expect, Dr Harris, very informed about the details of
the system, so this is setting out what the system will look like,
which is what we set out in the statement.
Q146 Dr Harris: So, as long as everyone
is as informed as members of this Committee, they will work it
out?
Mr Denham: I think you will find,
Dr Harris, that, on the websites and the places where it matters,
this information is very clear.
Q147 Mr Boswell: I have a couple
of points, Secretary of State, and one is: have you now departed
from the principle of linking the top threshold to the child tax
credit threshold; and, secondly, what on your modelling is the
number of people or families who will lose out under these arrangements,
notwithstanding the fact that obviously there will be gainers
as well as people who lose out?
Mr Denham: The point that I would
stress is that the system remains substantially more generous
than the one that operated just two years ago in 2007/08, that
is the first point to make, because the maximum earnings is much
higher, the number of families covered by this has gone from 36,000
a year up to people on 50,000 a year and there is an eligibility
for higher loan levels, so, compared with just two years ago,
it is a much more substantial package, but the key question which
you obviously raise is: what are the group of people who would
have got between £50 and a few hundred pounds perhaps in
that period between 50,000 and 60,000? You will forgive me for
saying there is some imprecision in this, but we could be upwards
of 10% of the intake of that year.
Q148 Mr Boswell: So that is 100,000-plus?
Mr Denham: I think that would
take us to around 35 to 40,000, but it is not going to be clear,
Chairman, and I want to make that clear, until we have the data
coming through from the processing of this year's grant applications
on the current system to make that sort of application.
Q149 Dr Gibson: John, if we can change
tack a little, you made a speech in September in Cambridge on
seven lots of blood, seven new reviews, which is a heck of a lot.
How did you come to seven, how did you choose them and what was
the point of them?
Mr Denham: Well, the background,
Chairman, as you know, is that next year we will have to initiate
at least the look at the fees policy and the financing of higher
education. I have been very keen, as Secretary of State, to make
sure that that debate, when it takes place, takes place against
a clear background of understanding what we want from the higher
education system. We set out earlier this year the big question,
if you like, which is: how do we ensure that our university system
is world-class in 15 years' time? I believe it to be world-class
today and for the whole university provision we want to be that
good in 15 years' time. As part of that process, we looked at
areas first where policy had not been looked at recently and we
invited people from within the university sector, mainly vice
chancellors, to produce think pieces, provocative pieces about
international higher education, about the quality of the student
experience, the use of IPL and so on. Having done that work, which
I think is very good and is now becoming publicly available, we
then thought, "Well, we should probably get some people who
are outside the university system to tell us what their expectations
would be", so we went for somebody from the arts and cultural
world, like Nick Hytner, we went for John Chisholm, we went for
effectively the Permanent Secretary in the Indian Ministry of
Science and Technology because we thought it would be useful to
have an overseas view of what they were looking for from our system,
so, in a sense, it was not a set number, but we went through different
voices. We wanted SMEs, we wanted high-tech, we wanted the creative
industries, we wanted the cultural view and we wanted international
views.
Q150 Dr Gibson: It smells like the
question: what is higher education for? Is that what it is all
about? Are you suddenly asking that question after all these years
for the reasons that the students now have to pay money upfront
and it had better be value for money? Is that what your thinking
is deep down and this glosses it all over?
Mr Denham: No, it is the real
question of how do you maintain a world-class higher education
system in 15 years' time. In virtually every country that aspires
to be advanced and influential, higher education is going to be
more important, not less important, so those countries over the
next 15 years will be, and are, investing money and, therefore,
we have to ask the question: what would our system look like and,
therefore, how do we finance it?
Q151 Dr Gibson: So will you find
all this out before you decide to put the money in?
Mr Denham: The idea, and, in a
sense, it will be the big challenge for me, is to produce a document
some time in the first part of next year which sets out the Government's
view of what that vision looks like and what the challenge looks
like, and I suppose my test is to get the balance right between
being a document which has a consensual basis where there is real
support behind it, but which is also sufficiently radical and
challenging in the areas where the system may need to change.
Now, that is the challenge we have set ourselves in the Review.
Q152 Dr Gibson: So this is not going
to put off that decision about increasing the tuition fees or
whatever, so it will decide policy which will be reflected in
the tuition fees because that is the biggest event that is going
to happen next year in Britain?
Mr Denham: It is a very important
issue. I need to choose my words with care because I have to remember
that I was on the backbenches the last time we debated tuition
fees, but I do not want to be too critical of my colleagues—
Q153 Dr Gibson: I remember you well!
Dr Turner:—but, Dr Gibson, you
will recall that, in that fees debate, it was not always clear
what the question was that was being asked. Were we trying to
produce a market system because some people thought markets were
better, or was this about getting more money into the research-intensive
universities? Was it just a way, the only way, that people think
of for raising more cash for the universities, or was there a
principle about co-responsibility where the student puts some
money in and gets something back?
Q154 Dr Gibson: It kept changing
week by week.
Mr Denham: It did change quite
a lot, did it not, as the debate developed, and I was determined,
perhaps with the advantage of coming to this from the backbenches,
not to have a rerun of that next year. I thought that where we
should get to is that this is what the Government, hopefully with
widespread support, wants to achieve in higher education over
the next 10 or 15 years, so now let us have a proper debate about
how we pay for it.
Q155 Dr Gibson: HEFCE—changes
taking place? David Eastwood has moved. That is a coincidence,
is it not?
Mr Denham: Well, I have a huge
regard for David Eastwood. I do not blame him for going for a
top university vice chancellor post, but I am absolutely clear
that HEFCE's role—
Q156 Dr Gibson: Very soon.
Mr Denham: He will not go until
April which means, I think, in practice, that he will have a huge
influence over the document we have just been talking about, and
that is the first point. The second thing is that I am on the
record as saying that I and the sector will want somebody of his
stature and quality taking over. We have no significant, or even
minor actually, changes planned for HEFCE. Its role is crucial
between government and the autonomously led universities and,
without that, a huge range of decisions will come back to government
that we would not want to take and which we should not be taking,
so HEFCE has a hugely important role for the sector and for government,
and we will do nothing to upset that.
Q157 Dr Gibson: So there is no question
of eliminating HEFCE from the equation?
Mr Denham: Absolutely none, absolutely
none.
Q158 Dr Gibson: Let me turn to another
subject, one which I think you are interested in, and that is
degree classification. What responsibility do you have for that?
After all, you have said that universities are autonomous, so
leave them alone and they will turn out the number of firsts that
they think they should or which are worth it even.
Mr Denham: It is a very good question,
if I may say so, because it is primarily and fundamentally a question
for the universities themselves. I think that ministers have a
role sometimes in stimulating debates about issues and in challenging
the sector to confront an issue, and I cannot remember the exact
history, but I am fairly certain that there was some ministerial
encouragement for the formation of the Burgess Committee and its
report, but ultimately the ownership of it and what universities
decide to do has to be in the ownership of universities. If ministers
start trying to determine these things from the centre, we will
get into a much worse position than we are in at the moment. Now,
as you know, the outcome of that process is that, I think it is,
18 universities are trialling extra information to see how that
goes, and the unknown question in a sense is: for the employers
and other people who read those reports, will that turn out to
be useful, that the focus is less on the narrow classification
of the degree, or is the demand out there still going to be for
a simple classification of degree?
Q159 Dr Gibson: Peter Williams has
used the words "the rotten classification system". Let
me ask you, do you think a 2:1 at Southampton in his subject or
an equivalent subject in another university is more valuable than
a 2:1, say, at Dundee?
Mr Denham: I think the words "more
valuable" are what is so dangerous about this. I think it
is important—
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