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Lord Bach: My Lords, I am sorry to interrupt the noble Baroness, but we have kept closely to the time constraint and to extend it is not fair on the other noble Baronesses who are to speak.

Baroness Sharp of Guildford: My Lords, I am sorry. I have reached my final point. I believe that the Government are trying to reconcile the irreconcilable. They have four different objectives: to expand access; at the same time, to maintain the traditional high standards in teaching and scholarship; to play a prominent role in leading edge research and technology; and to put no more money into the system.

I believe that those four objectives are irreconcilable--with difficulty, three could be reconcilable--but if the Government will the ends they must will the means to those ends.

7.31 p.m.

Baroness Blatch: My Lords, I, too, am grateful to the noble Lord, Lord Jenkins of Hillhead, for introducing the debate. It has been an interesting and, it goes without saying, important debate. As the noble Baroness, Lady O'Neill, said, it has also been a timely debate.

I, too, welcome the two excellent maiden speeches; the first from the bee-keeping Bishop, the right reverend Prelate the Bishop of Derby, and the second from the noble Baroness, Lady Prashar. She touched a chord with me when she regretted that her parents were not present during her maiden speech. Had they been, they would have been immensely proud of their daughter in this place. But perhaps I speak for many people who arrive here not expecting to do so by saying that we regret that our parents are not here to witness our introduction and our maiden speeches.

A country is judged by the quality of its education and particular focus rests on the quality of its higher education. The Government, when they came to office, declared that education was their first, second and third priority. Some of us have considerable reservations about such proclamations when witnessing the way in which core funding for our schools has been reduced as a direct result of the unprecedented and costly expansion of the Department for Education and Employment. I refer to the rise in the number of political advisers on the payroll, the massive increase in

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non-accountable quangos and the volume of moneys held back--or, in the departmental jargon--top-sliced by government to fund endless centrally-controlled projects.

However, before I am intervened upon for straying from the subject, I declare that I wish to confine the rest of my remarks to higher education and in particular to the state of our universities. Universities can be forgiven for believing that they have been omitted from that list of priorities.

Higher education students were deceived by the Government--indeed, by Mr Blair personally--when pre-election and post-election pledges were made that a Labour Government had no intention whatever of introducing tuition fees.

Sir Ron--now Lord--Dearing made recommend- ations following considerable consultations and deliberations by his committee. They included the recommendation that students, particularly poorer students, should retain up to 50 per cent grants towards their maintenance at university. This was ignored by the Government and we are beginning to see the signs of debt accumulating for the students from low income backgrounds.

Since the changes in student funding, the fall in applications has been most marked among mature students. Sadly, one problem is highlighted. It is that those students who drop out of universities, sometimes because they are ill-suited for a higher education course, have for a year or more accumulated debt and then have to make a fresh educational start somewhere else.

It will continue to baffle political scientists that it was a socialist Labour government which introduced a system of student finance which resulted in the poorer student carrying the greater burden of debt on leaving university. A great deal of emphasis has been placed by many, including the National Union of Students, on the introduction of tuition fees. However, for the brightest young people from poorer homes the greatest adverse financial impact has been due to the wholesale removal of maintenance grants. Recently on BBC's Radio 4 I heard an NUS representative admit--with hindsight, of course--that he regretted not putting up a greater fight for the retention of maintenance grants for students from low income families.

Before leaving the issue of fees, perhaps I may ask the Minister what progress is being made with the investigation into the absurd anomaly of Scottish and European students receiving preferential treatment over English and Welsh students and those from Northern Ireland by having their fees for the fourth year of their university course waived. Also, what is the latest situation and what are the projections for the Government's support for the collegiate tutorial system at Oxford and Cambridge Universities?

Despite the priority claimed by the Government for higher education, the so-called additional funding has not taken account of student numbers. It is also now clear that the funding per student has fallen. The Minister, when responding, will no doubt repeat her assertion that the "unit of resource", as it is known, fell

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under the previous government. It may come as a relief to the noble Baroness to hear that I shall not argue with her about that. However, I shall say that there was recognition that a review of higher education funding was an issue and the Dearing Committee, with all-party support, was set up to consider it and to report back to government. That point was made by the noble Baroness, Lady Lockwood.

The Government claim to have addressed the issue, but I believe that there is considerable evidence to the contrary. The additional income from tuition fees has turned out, predictably, not to be truly additional funding. It has done no more than mitigate--and only in part--a reduction in funding per student. In each year to 2002, funding per student, even including a proportion of tuition fee income, will fall.

As the Association of University Teachers claimed, student income has supplanted planned central government expenditure. And expenditure as a proportion of GDP fell from 0.7 to 0.6 between 1997 and 1999. What comfort can the Minister have for that third of our universities which, in their returns to the Higher Education Funding Council, are predicting a deficit budget for next year and beyond? The increases for the next three years, announced in another place by the Minister, Mr Wicks, of £318 million, £253 million and £295 million do not begin to address the recommendations in the Dearing Report, especially if participation levels continue to increase. The Dearing Report advised that there would be a shortfall of £350 million in 1989-90 and of £565 in 1999-2000.

The Bett Report on academic salaries has been received by the Government, who so far have washed their hands of it. One argument used by Ministers--indeed, the only argument to date--is that the report was commissioned by higher education employers and that therefore any response is a matter for them. Well, that is in part true, but given the centralising nature of the Government, the lack of flexibility for universities on top-up fees and the dependence upon central government for funding, how can Ministers take the view that there is no link between grant in aid and the cost to universities of paying their staff? If the Government really are saying that any increase in salaries must come from within present resources, and that universities must continue to strive to achieve the Prime Minister's target of additional students--up to 50 per cent of young adults--then the funding per student is heading for serious decline and with it a fall in standards, a rise in wastage rates and the risk of a lemming-like exodus of the best academic staff.

Ministers have sent out confusing signals on participation rates. Will the Minister please clarify the position? In July, the Minister said in this House that no decisions had been made on participation rates. Mr Blunkett continues to talk about expansion. The Prime Minister said in his conference speech:

    "today I set a target of 50% of young adults going to university in the next century",

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and the Chancellor is said to have claimed that almost all young adults will go through higher education by 2020. I asked for clarification on that issue when responding to the gracious Speech, but so far I have received no reply.

If the participation levels are to rise, what is the timescale and what is the source of funding? Expansion must not lead to a compromising of standards. The key to sustaining standards lies in the schools--as the noble Lord, Lord Wallace of Saltaire, mentioned. I can add to the examples of interesting summer schools designed to encourage children to think and to work harder in order to benefit from higher education. At Teesside University there is an effective programme of summer schools and the signs are extremely promising.

I turn to the issue of standards. Are the Government concerned about the standard of entry qualifications to higher education courses? Are the Government concerned about the proliferation, quality and academic content of courses? Do the Government accept that the rise in drop-out rates from university courses may have some link with poor entry qualifications; an inappropriate match between the skills and talents of a student and the courses offered? The acceptance of students through the clearing system often has more to do with filling places than with educational considerations.

I should like to know the Minister's reaction to the following. One university--I shall refrain from using its name unless I am pressed by the Minister--looking to fill vacancies on 184 courses through the clearing system offered civil engineering to students with a mere 12 points; that is, the equivalent of three Ds, geography to students with eight points; chemical sciences to students with a mere six points; and mathematical sciences to students with only four points. At another well-known university, 12 points were enough to study physics with nuclear physics, while a student who preferred his astrophysics straight could be accepted with only 10 points.

Does the Minister agree with last year's report from the Higher Education Funding Council which presented widespread evidence of the dumbing-down of degree standards? What response is there from Ministers about degree courses in rock music and kite-flying, which I believe do little to enhance the academic reputation of higher education?

The publication of tables providing information about higher education intakes, social backgrounds, completed degree courses and drop-out rates is to be welcomed. In all those areas perspective is important and therefore I understand why we should note that the situation for the proportion of students completing courses and the drop-out rates in the United Kingdom show a much better picture than in most other countries. It should not, however, give rise to indifference. The overall figure of 18 per cent of students not completing courses may look reasonable in comparison with other countries, but the drop-out rate at some institutions gives rise to serious concern and does at least beg the question that it could be

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linked with pressure to increase participation levels, student funding, academic salaries or even misdirected young people who might be more effectively provided for by sub-degree courses, highly vocational and educational training.

One has to speculate as to whether the Government really are working towards a redefinition of the role of universities as the equivalent of comprehensive schools providing for all abilities in one institution. Perhaps the Minister will confirm or disabuse the House of that assumption.

I have not touched on research because of time constraints. I ask only one question: given the number of different higher education institutions, including those from the polytechnic and higher education sector and the different historical records for research ranging from a high degree in some universities to very little in others, is it government funding policy to recognise those differentials, to level up, or to average out across the whole sector? The Government should clarify the role of universities and give serious consideration to the consequences of a relentless expansion of higher education without proper regard for standards, quality of teaching and learning, academic salaries, funding and the capacity of universities to cope without compromising standards.

Finally, I wish to point out that the burden of bureaucracy, the lack of flexibility and increasing central government control are strangling education, from nursery school to the university, emasculating and demoralising professional teachers and lecturers. As my noble friend Lord Norton said, echoing the sentiments of the late Lord Beloff: set the professionals free by less intervention. Unless those issues are addressed, what has been a world-class higher education sector will be at risk of losing that reputation. As I said when opening, a country is judged by the quality of its education and particular focus rests on the success and quality of its higher education.

7.45 p.m.

The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I begin by congratulating the two maiden speakers in this debate. We learned a great deal from the wisdom of both the right reverend Prelate the Bishop of Derby and the noble Baroness, Lady Prashar. They made two really excellent speeches. I look forward greatly to hearing both speak in the House on many future occasions.

I am grateful to the noble Lord, Lord Jenkins of Hillhead, for introducing the debate. I am sure that the noble Baroness, Lady Blatch, will agree with me that the position of a Minister responding to a debate on universities in this House is always difficult because there is a great deal of expertise and knowledge here, of which we have heard much today.

When the Government took office, higher education was somewhere between a shambles and a crisis. There had been drift and uncertainty over several years. Universities were certainly unsure of

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their mission, funding per student had been sharply cut, investment in the universities' infrastructure had collapsed and there was a serious threat to quality. Soon after the report of Lord Dearing's National Committee of Inquiry was published, which set challenges for Government, the universities and students, the Government responded quickly to the main recommendations on the shared responsibility of students and the state for funding higher education and to the remainder of the recommendations not long afterwards. I shall send a copy of the Government's response to the noble Lord, Lord Annan, who did not seem to be aware of it.

I was immensely surprised by the comments of the noble Lord, Lord Baker, about the lack of interest by the Government in our universities. I believe that he was exaggerating; indeed, I thought that his measure of lack of interest--which was how many speeches the Prime Minister, the Deputy Prime Minister and the Secretary of State for Education had given--was rather limited in any case. His remarks in that context were quite inaccurate. I was present at a speech given by the Prime Minister on higher education in the summer in which he advocated an increase in the number of students from around the world coming to, as he rightly described it,

    "our world-class universities in a world-class system".

My right honourable friend the Secretary of State has made a number of speeches on the subject. In a speech at the University of Exeter last year, he said:

    "It simply is not true that this Government is not interested in our universities. Nothing could be further from the truth".

We are always entertained by rather colourful prose from the noble Lord, Lord Annan. He described the Government as having treated the universities like a "discarded mistress." I prefer the analogy of an active lover. There is an extremely strong partnership and good relationship between the Government and the CVCP, which represents our universities, and, indeed, with many individual universities.

The Government are quite clear about the critical role of universities in an era when the rhetoric about the knowledge economy is becoming a reality. First, universities must provide high quality training and knowledge across a wide range of subjects because the economy is demanding more highly trained people than ever before. Graduates need to be equipped with both specialist knowledge and the skills which our employers expect from them.

Secondly, our universities must generate knowledge through research and be ready to ensure that that knowledge is exploited where possible, as through links with industry and others.

Thirdly, as I believe was said so clearly and eloquently by the right reverend Prelate the Bishop of Derby, universities must contribute to the social and cultural fabric of the nation through teaching, research and scholarship. However, the Government do not expect all universities to be identical. Rather, we expect them to play to their strengths, with some universities paying particular attention to research and others perhaps to developing new approaches to

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teaching in vocational areas. As my noble friend Lady Warwick rightly emphasised, diversity is of enormous importance in the system we have today. And we shall ensure that resources for teaching, research and special projects are carefully directed so that those diverse missions are properly underpinned. Therefore, for some there should be more money for research and more money perhaps for widening participation and for other projects.

In commenting about diversity, perhaps I may say also how much I agree with the right reverend Prelate the Bishop of Durham. Excellence is to be found not only in our research universities. Excellence can take many forms and many of our new universities are demonstrating that in a variety of ways.

I believe that our universities need to do two things. First, they need to preserve their justified reputation as world centres of excellence in learning, research and scholarship. They are continuing to prove this. An extra 4,200 postgraduate overseas students have chosen to study in the UK compared with just two years ago. The noble Lord, Lord Wallace of Saltaire, rightly referred to the importance of universities in this area of invisible exports. We should not downplay that. And they need to be a powerful economic force, not only in their own right but also in enabling a wide variety of industries to grow through exploitation of the knowledge that universities generate, which will be to the benefit of us all. We want them to maintain their excellence and to promote diversity.

The Government are playing their part. In spite of what has been said in the debate, there has been an appreciable increase in the number of students over the past decade or so. We welcome that, and I believe that most speakers in the debate have done so with the possible exception of the noble Baroness, Lady Blatch. I can confirm to the noble Baroness that the Prime Minister has now announced--he had not done so when she asked me a question about this in July; therefore, I was not able to inform her about this--a further target of having 50 per cent of young people benefiting from higher education by the time they reach the age of 30. Many of those new places--I believe that this is more along the lines of what the noble Baroness was suggesting--will be for sub-degree courses with a vocational leaning, which students will be able to take part time as well as full time. Those who take the courses part time will be able to combine work with study. Many of those students will be mature, coming into higher education when they are ready and fitting it in with work and family responsibilities. That will contribute further to the widening of access to which the noble Baroness, Lady McFarlane of Llandaff, and a number of other speakers referred.

At this point I must say that I was rather saddened by what the noble Baroness, Lady Warnock, said. She does not seem to want to encourage to go to university those students who do not come from a tradition of universities and higher education. We must reach out

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to those students. We cannot say that because they appear not to want to go, we should simply leave them to miss out on the potential they may have.

As I believe the noble Baroness, Lady Blatch, did, some may argue that the expansion of higher education which her government initiated has gone far enough; even too far. I invite noble Lords to look at the evidence. Graduates still earn more than non-graduates with university entrance qualifications. Graduate unemployment is low; their starting salaries rose by 7 per cent between 1997 and 1998. As the noble Baroness, Lady Sharp, said, the personal rate of return of a university degree--roughly what an individual can expect to gain over a lifetime--remains very high. Employers are reporting shortages of graduates in a number of disciplines, and especially at sub-degree level. Those do not seem to me to be the symptoms of over-production or falling standards. Moreover, our schools and FE colleges are now preparing more young people who have the qualifications that are needed to enter university.

As I have already said, rapid expansion was introduced by the previous government. There was an enormous increase in the age of participation rate; indeed, it doubled. The noble Lord, Lord Baker of Dorking, said on an earlier occasion in this House that that is something in which he believes. I believe he endorsed that position today. The expansion we are initiating at present is a more measured one. It will take into account improvements in achievement in schools and further education to ensure that we can maintain standards of entry in our universities.

Many speakers have commented on the issue of funding for higher education. Of course, the Government have increased funding for universities in order to maintain the quality of our higher education and to support a small amount of further expansion. I did not recognise the comments of some of the contributors to the debate on this matter. I feel that they are perhaps still trapped in the environment left by the previous government when universities were indeed starved of funds. The Secretary of State--

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