House of Commons - Government reform of Higher Education - Business, Innovation and Skills Committee

Government reform of Higher Education - Business, Innovation and Skills Committee Contents

2 Higher Education Reform

Background

4. The proportion of young people going on to higher education has increased dramatically over the last 50 years from around 6% in the early 1960s to closer to 45% today.[1] A review by Lord Robbins in 1963[2] recommended an expansion in university places: this expansion began with the transformation of Colleges of Advanced Technology into universities and continued until the conversion of the former polytechnics in the mid 1990s.

5. The expansion of higher education was accompanied by a drop in available funding per student, leading to the establishment of the National Committee of Inquiry into Higher Education in the late 1990s. This Committee, chaired by Lord Dearing, recommended the introduction of private contributions to the cost of higher education, in the form of tuition fees. Lord Dearing's recommendation that payment of the fees be deferred until after graduation was not taken on board, and up-front tuition fees of £1000 were introduced for the first time in 1998.

6. The Higher Education Act 2004 raised the cap on fees to £3,000 per year (enabling so-called 'variable' or 'top-up fees') and introduced deferred payments so that higher education once again became free at the point of entry. These provisions came into effect for students entering university in 2006. Recognising Members' concern about the potential impact of this increase in fees, during parliamentary debates on the Bill the then Secretary of State for Education, Rt Hon Charles Clarke MP gave a commitment to examine the variable fee regime after three years of operation.[3]

7. The system of a fee cap envisaged that different institutions would charge different amounts, from zero to the maximum.[4] Universities wanting to charge more than the previous £1,000 per year would need to divert some of that fee income into bursaries to support students from lower-income backgrounds and would need to develop an 'Access Agreement' with the Office for Fair Access (OFFA), setting out the other measures they would use to widen participation and the diversity of their student intake. In practice, the £3,000 maximum quickly became the standard fee, and no university now charges below this level.[5]

The Independent Review of Higher Education Funding and Student Finance

8. Lord Browne of Madingley was commissioned by the previous Government in November 2009 to conduct the promised review of tuition fees. The Review Panel issued an initial call for evidence at the beginning of December 2009, seeking responses from higher education, business, students, and all others with an interest in higher education, and exploring the impact of the introduction of variable tuition fees since 2006. A call for proposals was launched in March 2010 after an analysis of the initial submissions, exploring opportunities for policy development. Ninety submissions were received in response to the first call for evidence, and 65 in response to the call for proposals.

9. The Review Panel held two oral evidence sessions, hearing from invited expert witnesses on key themes emerging from the written responses. An Advisory Forum was also established to give 22 key representative interests opportunity for formal, structured engagement with the Review's work. The Forum met five times during the course of the review.

10. The Browne Report, Securing a Sustainable Future for Higher Education: An independent review of higher education funding and student finance was published on 12 October 2010 and recommended that students in England should pay more for their tuition, to reflect the personal benefit they receive from having a degree and to ease the strain on the public purse. It also recommended that the market in higher education be opened up by removing the cap on student numbers (the cap is only necessary if Government must protect its exposure to liability for providing financial support) and allowing student choice to shape higher education provision. The Review further recommended that student finance be simplified, support for living costs be improved (especially for those from low-income backgrounds) and that part-time students should be treated on a par with full-time students, including the removal of up-front tuition fees for part-time courses.

11. Following publication of the Browne Review, the Government announced that it 'broadly endorsed' Lord Browne's approach, and on 3 November 2010, David Willetts MP, Minister of State for Universities and Science, set out initial details of the Government's proposed approach.[6]

12. In order to bring certain elements of its proposals into effect for students entering university in 2012, the Government quickly embarked on a number of legislative changes:

Amendments to The Higher Education (Basic Amount) (England) Regulations 2010 and The Higher Education (Higher Amount) (England) Regulations 2010 were debated on 9 December 2010[7] and passed with a narrow majority. These changes will come into force on 1 September 2012, raising the range of tuition fees needing approval by the Office of Fair Access (OFFA) to a basic maximum level of £6,000 per year and an absolute maximum of £9,000.
Part Eight of the Education Bill, currently under consideration in the House of Lords, enables the charging of a 'real' rate of interest on student loans, and applies the tuition fees cap for full-time courses pro rata to part-time courses.
Clause 27 of the Education Bill places a new duty on schools to 'secure independent careers guidance' for pupils from the age of 14 onwards. As originally drafted the Bill would exclude the possibility for a school to fulfil its duty to provide careers advice by asking a single teacher or other employee to provide guidance to all pupils. At the time this Report was agreed, this aspect of the Bill was being debated in the House of Lords.

The Higher Education White Paper

13. In his Statement on 3 November 2010, Mr Willetts said that the Government would publish "later this winter, a Higher Education White Paper covering the wide range of long-term issues that arise from Lord Browne's report. We will hope to bring forward legislation in due course. Given the timescales, we would not expect to be implementing changes before the 2013-14 academic year".[8] In answer to oral questions on 13 January 2011, Mr Willetts revised the proposed publication date for the White Paper to "the early part of this year".[9]

14. On 24 February 2011, Mr Willets announced during a speech to Universities UK (the representative body for UK universities) that the promised White Paper would be delayed:

[W]e have decided to take more time on developing the White Paper—in part to test proposals more thoroughly among the sector, students and other experts; in part to learn from how price setting works this Spring".[10]

15. Just over two months later, on 27 April, the Secretary of State for Business, Innovation and Skills told us that the White Paper was "at a very advanced stage" and that publication was "very close", but would not commit to a revised publication date of June.

16. On 8 June, the Secretary of State for Business, Innovation and Skills told us that he thought the White Paper would be published "in July" this year, and undertook to write to the Committee with a "target date" within a few hours. His letter was received later that day, indicating that the White Paper would be published "shortly" and that he would write to us again as soon as a publication date was agreed.

17. The Government's White Paper, Higher Education: Students at the heart of the system, was eventually published on 28 June 2011, many months after originally promised.[11] It was accompanied by an Impact Assessment, an Equality Impact Assessment, a dossier of 'supporting analysis', an implementation plan and a separate consultation on possible early repayment mechanisms.[12]

18. The delay of six months between the Government's initial response to the Browne Review and the publication of its more detailed proposals has caused a great deal of uncertainty, and has eroded the essential preparation time available to higher education institutions, students and their families. The effect of this delay has been compounded by the fact that further policy announcements and proposals remain out for consultation or are still under consideration.

19. The White Paper is itself a consultation document, and is accompanied by a separate consultation on possible early repayment penalties. The Higher Education Funding Council for England (HEFCE) is also consulting separately on how the changes to funding and student number controls will work in practice for 2012-13. All these consultations will close in Autumn 2011, and the Government responses to them may be expected towards the end of the year. At the same time, a further consultation will begin on how student number controls should work from 2013-14 onwards, which we would expect to result in further Government proposals being announced during 2012.

20. In written evidence submitted after the publication of Students at the heart of the system, the University Alliance, which represents 23 'actively business focussed' universities expressed anxiety about the pace and progress of the Government's proposals:

[We ask for a] one year pause in implementing these proposals: we ask that no additional complexities (e.g. [changes to student number controls]) are introduced in year 1 whilst there is a tectonic shift in student finance system and market settles down.[13]

21. The Government's rapid implementation timetable has also created other inconsistencies. For example, the Government's Implementation Plan for the reforms says:

By September 2012: Make the most requested items of information—the 'Key Information Set'—available on a course by course basis in a comparable format on each higher education institution's website.

The student as an informed consumer is fundamental to the Government's proposed reforms, but the information on which consumers of higher education will need to base those decisions will not be in place until nearly eleven months after the first UCAS application deadline for courses under the new fee regime has passed. Examples include 15 October 2011 for dentistry, medicine, veterinary science and veterinary medicine and for all courses at the University of Oxford and the University of Cambridge. The final UCAS deadline for courses starting in September 2012 is 30 June 2012: applications received after that date go directly into the clearing process.

22. When we asked the Minister about the rapid implementation timetable, he said:

I recognise that in a perfect world we might have published the White Paper and then made the specific decision on fees. The reality, however, was that the priority for the incoming coalition was to sort out the public finances.[14]

23. He went on:

When we announced in the public expenditure settlement what we were doing on [teaching] grant, at the same time we made it clear what we were doing on fees and loans. […] [W]e then moved to replace the reduction in teaching grant with fees and loans as quickly as we could. That is actually one of the reasons why we have ended up with this timetable. We wanted the higher fees and loans to be available to universities as quickly as possible, and that drove the requirement for the early vote in order to give them time to plan through for the autumn 2012 new regime.[15]

[…]

In an ideal world, people always want more time at every stage, but the fact is that—provided we keep to the timetable, and I am optimistic that we can—what we will just be able to do is deliver the entire reform in the life of a Parliament, which I think was a reasonable objective to set. Remember, we needed the decisions before Christmas, because this would affect students going to university in 2012—it was already too late for 2011—and then, of course, it is three years for the new regime to feed through.[16]

24. The series of delays to the publication of the White Paper and the subsequent consultation exercises has seriously truncated the Government's timetable for implementing its reform of Higher Education. While the Committee understands the need for early implementation of the financial reforms, effective policy development can be undermined by the imposition of a rigid timetable. Many important pillars of the Government's Higher Education policy are currently out for consultation and the Department will need to take full account of the views expressed by consultees.

Government communication of higher tuition fees

25. The success of large scale reform is in no small part dependent on clear communication of the impact of that reform. The Government took the decision to introduce changes to tuition fees in advance of other parts of its reform package for Higher Education. This resulted in a sharp focus on tuition fees without the wider context of student support. Both the introduction of up-front tuition fees in 1998 and the move to higher 'top-up fees' in 2006 faced opposition in Parliament and prompted demonstrations by students.[17] The raising of tuition fees passed by Parliament in November 2010 gave rise to another series of student demonstrations.

26. Given the current economic circumstances, it is understandable that parents, students and graduates would be anxious about the affordability of higher education. Therefore, it was imperative that the reforms needed to be communicated both clearly and carefully. When we took evidence from Lord Browne in March, he said that his Report was "designed to be a very short summary of what we did",[18] but when pressed on how much advice he gave to the Government about implementation of his proposals, he said "all the advice that we gave was contained in the report. Remember, please, that we delivered this on 12 October and we were disbanded by that evening, so we do not exist, and we did not exist then".[19]

27. When we asked why the proposals had provoked such opposition, he said:

I think the communication of what is a very complicated situation needs to be expanded. I was quite struck that when the panel came together, with a pretty reasonable cross-section of people, none of us really understood how the system worked. We had to spend a lot of time educating ourselves on how the present system worked. We came with a lot of misunderstanding, and I really do think that people still have a large amount of misunderstanding.[20]

28. Professor Michael Arthur, of the Russell Group, commented that the proposed reforms to student finance were "not complicated, but it is not a very easy soundbite".[21] With this in mind, we asked some witnesses whether they could explain the proposals in a 20-second soundbite. They offered:

"When you are earning £25,000, it will cost you £30 a month, or the price of two pints of beer a week".[22] (Professor Michael Arthur, the Russell Group)
"A graduate contribution based on a percentage of your earnings afterwards".[23] (Aaron Porter, then President of the National Union of Students)
"Students get it free; it is graduates who repay" or "It is a payroll deduction, not credit card debt".[24] (Professor Nicholas Barr, London School of Economics)
"For over half of students it is a 9% increase in your tax rate for 30 years. If you come from a poor family, the upfront cost is effectively zero".[25] (Lorraine Dearden, Institute for Fiscal Studies).

29. A key aspect of the debate on the increase in tuition fees was disagreements over how much a student would expect to be charged for a university course. The Interim Impact Assessment published in November 2010 alongside the new fee regulations was based on average fees of between £6,900 and £7,200 per year, once fee waivers and other discounts have been taken into account.[26] This mean average figure fairly represents the initial expenditure by Government per student, across a whole cohort of students. However, only students from low-income backgrounds would benefit from fee waivers: students from better-off families would pay the full fee.

30. We asked the Minister for an estimate of the modal tuition fee (which would be paid by the majority of students), rather than the mean, but the Minister explained that it was not possible to calculate this without knowing "the headline fee and support figures for every individual".[27] However, it appears clear from the data published by the Office for Fair Access that the modal 'sticker price' (without waivers) will be £9,000.[28]

31. We acknowledge the Government's desire to enact the changes to tuition fees as a matter of priority. However, we urge the Minister to review the proposals for fee waivers, bursaries and scholarships to ensure that the strategy meets the needs of the intended recipients.

32. The repeated use of mean average figures did not help move the debate forward as it was less helpful and relevant to students than modal average fee. We recommend that the Government use the modal average fee in its communications material, alongside availability of waivers and support for students from poorer backgrounds.

COMMUNICATIONS STRATEGY

33. The Government acknowledged that a more comprehensive communications strategy was necessary and on 24 December 2010, the Prime Minister appointed Mr Simon Hughes MP as the Advocate for Access to Education. The appointment was for six months and amongst other responsibilities he was charged to:

Develop [...] a communications strategy to ensure that information on the new student finance arrangements reaches all secondary school students and particularly those from disadvantaged backgrounds to encourage them to access higher education.

[…]

The Advocate will focus on the effective communication and delivery of the Government's policy programme, within the current budgetary parameters.[29]

34. Mr Hughes' report was published on 21 July 2011, and made 33 recommendations for schools and colleges, Government, higher education institutions and regulators. Whilst preparing his report, he also submitted three interim reports to the Prime Minister and Deputy Prime Minister, covering access agreements, the replacement of the Education Maintenance Allowance (both February 2011), and communication of the student finance changes (May 2011). These interim reports were not made public.

35. A second strand of Government communication on student finance was the Future Students microsite. It was launched on 6 May 2011, alongside a campaign on the radio and television. The microsite, at http://studentfinance-yourfuture.direct.gov.uk/, consists of seven branded web pages. Six pages each cover one aspect of the proposed system (costs; other financial support; grants; repayment terms; information for part-time students, and a repayment-calculator) and contain links to more detail. A poster and two two-page flyers are available to download from the seventh page. Clicking on any of the links for more detail from the six main pages takes the user outside the Future Students-branded site, and back to www.direct.gov.uk, often with no obvious means of returning to the microsite.

36. The Future Students site was criticised by Simon Hughes MP in his Report, noting that it "only mentioned the fact that students will not have to pay any up-front fees to go to university in the fifth paragraph of a section of the website entitled 'can I afford to go to university?'"[30] In his evidence to us, Mr Hughes also criticised the press campaign. He said that the campaign "ran […] adverts at the end of May [entitled] "Future students—paying for university in 2012". Well, nobody will pay for university in 2012. That is the whole point of the argument. You don't pay up front. You don't pay until you come out".[31]

37. Mary Curnock Cook of UCAS also told us that she thought the Future Students site missed "a key message" in that "the affordability in terms of the amount of money that an individual would pay back out of their weekly or monthly pay packet is the same whether you have chosen a £6,000 or a £9,000 course".[32] We were also surprised to learn that the Government did not consult the Director of Fair Access himself when designing the campaign.[33]

38. Professor Nicholas Barr, of the London School of Economics, told us:

Since loans were introduced, you cannot overstate the awfulness with which the system has been explained to the public. You hear mothers ringing in to phone-in programmes saying, "I am a single parent mother. I have got three daughters. I cannot afford to pay £9,000 per year for each of my daughters." They do not have to. There is a huge gap there that needs to be filled. The website is a start, advertisements are very important, but a big publicity campaign is needed.[34]

39. In his report to the Prime Minister and Deputy Prime Minister, Simon Hughes MP says that "there is a collective national interest and responsibility in the six months from July to December this year [2011] in making sure that all school, college and sixth form students and all other adults thinking of becoming university students for the first time next year, and their families and teachers, must have accurate and accessible information and encouragement rather than discouragement now".[35]

40. The Government has now established the Independent Taskforce on Student Finance Information headed by Martin Lewis of MoneySavingExpert and supported by Wes Streeting (former President of the National Union of Students). The taskforce will work to combat the myths around the changes to English student finance in 2012 and will seek to reassure potential students about what they can expect when applying for university and beyond. The Government has stressed that it will be "independent of government" and that it will be free to "set its own agenda".[36]

41. We acknowledge the difficulties the Government faced with regard to the communications strategy and we believe that it should have been better handled. However, the establishment of the Independent Taskforce of Student Finance Information as an independent body should go some way to re-establishing trust. Given the independent status of the Taskforce, we will expect its work to be published separately from Government and without the need for Departmental approval before it is put in the public domain.

1 Jo Blanden and Stephen Machin, Department of Economics, University College London and Centre for Economic Performance, London School of Economics, Educational Inequality and the Expansion of UK Higher Education (July 2003; September 2003-revised) Back

2 Higher education: report of the Committee appointed by the Prime Minister under the Chairmanship of Lord Robbins 1961-63, Cmnd. 2154 Back

3 HC Deb, 8 January 2004, col 418 Back

4 HC Deb, 8 January 2004, col 418 Back

5 Lord Browne of Madingley, Independent Review of Higher Education Funding & Student Finance (2010), p.37 Back

6 HC Deb, 3 November 2010, col 924 Back

7 HC Deb, 9 December 2010, col 540 Back

8 HC Deb, 3 November 2010: col 924 Back

9 HC Deb, 13 January 2011, col 421 Back

10 David Willets' speech to Universities UK spring conference 2011, available from http://www.bis.gov.uk/news/speeches/david-willetts-uuk-spring-conference-2011 Back

11 Higher Education: Students at the heart of the system, Cm 8122, June 2011 Back

12 All documents are available from the BIS website: www.bis.gov.uk Back