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Earl Russell: My Lords, has the noble Baroness read the eighth report of the Treasury Select Committee on the comprehensive spending review? If so, will she tell the House why she disagrees with its arguments?
Baroness Blackstone: My Lords, if the noble Earl will wait just a moment, I shall give him the figures. I shall give him chapter and verse on the investment which the Government have already made in higher education. My right honourable friend the Secretary of State has just announced that an extra £295 million will be available in 2001-02. That is an increase of 5.4 per cent in cash terms, and is on top of £253 million in the previous year, £318 million the year before, and £165 million the year before that. All told, that is an increase of just over £1 billion--an 11 per
cent increase in real terms since April 1998. Most of the increase is new government funding, not just additional fee income.
Baroness Blatch: My Lords, those are precisely the figures I gave. But they represent a fall in funding per student and they represent also a fall in GDP from 0.6 to 0.7 per cent.
Earl Russell: My Lords, the noble Baroness has not answered the point about the Treasury Select Committee which found the method of calculation of those figures altogether deceptive and mistaken. The Treasury Select Committee's findings coincide with real experience as I see it.
Baroness Blackstone: My Lords, I am not going to enter into a discussion of the details of the Treasury Select Committee in a debate this evening on universities. Many issues have been raised and in the time available I should like to try to address those issues which are pertinent to the debate. I shall pick up later on the point raised by the noble Baroness, Lady Blatch, about efficiency savings.
Perhaps I may say to the noble Baroness, Lady Sharp, that over 80 per cent of that funding will come from new funding provided by the Government and not from the income raised from tuition fees. That demonstrates clearly our commitment to supporting higher education.
Lord Baker of Dorking: My Lords, the noble Baroness takes great pride in the money that the Government have made available. We debated earlier whether or not that is an increase. On this side of the House, we do not believe that it is an increase in the way that she has explained it. She said that money is available for higher education. Does she believe that the money which the Government have made available for higher education will go any way towards addressing the problems of academic salaries and the specific problem that a professor in a university will probably earn about £40,000 per year, which is exactly half the salary of a head teacher in a large city comprehensive? Will the money that the Government have provided allow the universities to close that gap significantly?
Baroness Blackstone: My Lords, I very much hope that noble Lords will allow me to continue this speech. If I am interrupted every other sentence, it makes it very difficult for me to answer the points which have been raised. I shall deal later with the Bett report.
It is a bit rich for members of the main opposition party, both of whom were in the previous government, to upbraid this Government for not providing enough funding for higher education. What this Government have provided is in stark contrast to the funding provided by the previous government. Between 1989-90 and 1996-97, the amount of funding per student decreased by 35 per cent. That is a figure confirmed by my noble friend Lady Warwick. That was a reduction of £2,553 in cash terms per student. By any
standards, that is a swingeing decrease. It is no wonder that when the noble Lord, Lord Dearing, looked at the previous government's spending plans, he said that further rapid reductions in unit funding were not achievable without putting quality unacceptably at risk.We responded positively. We have stabilised university funding. As the noble Lord, Lord Dearing, acknowledged, there is room for universities to make improvements in efficiency while student numbers continue to increase. The previous government wanted those improvements in efficiency while they put a ceiling on increases in numbers. In that respect, our universities are no different from any other sectors of the economy.
The noble Lord, Lord Dearing, believed that efficiency improvements should be limited to 1 per cent per year for two years and did not agree with the far higher level which the previous government demanded. We have agreed with that limitation and implemented it. We have now extended that for a third year.
I turn now to the Bett Committee. I know that there are concerns about the pay of university staff and I am extremely sympathetic to what has been said in the House this evening. I understand those concerns. After all, I was in that sector until two-and-a-half years ago. But as a number of noble Lords have conceded, the Bett Committee, which set out some evidence and suggested a number of elements of restructuring, reported not to the Government but to the universities. Moreover, the committee made it absolutely clear that there is no further funding in this CSR which can be used to address some of the problems which the universities face in that regard. Again, that is hang-over from the previous government.
For the time being, its recommendations are for the universities to respond to. The Government do not negotiate university pay nor would it be appropriate if they were to do so. I am sure that many Members of your Lordships' House would become extremely concerned were the Government to take that on. But I recognise the disparity in some salaries to which the Bett report has drawn attention. The next spending review is now under way and university staff will clearly be a factor. But the House will understand that I cannot prejudge the outcome. However, perhaps I may say to the noble Lord, Lord Butler of Brockwell, and to the noble Baroness, Lady Blatch, that the Government are not washing their hands of that issue.
Part of the funding arrangements comes from a new compact between universities, students and the taxpayer, to which a number of noble Lords referred. We accepted the principle of the noble Lord, Lord Dearing, that the burden should be more equally shared. That means that full-time students who can afford to should contribute to part of their tuition fees and those on lower incomes--about one-third--do not have to contribute at all. My noble friend Lady Lockwood was right to say that that has been welcomed by the universities. I was grateful to the noble Lord, Lord Butler of Brockwell, for his support in relation to that.
We have modernised the system of student support. Maintenance loans are offered at a very favourable rate of interest and with flexible repayments made when the graduate can afford to do so after leaving university. Perhaps I may say to my noble friend Lord Shore of Stepney that I thought he was being rather nostalgic in talking about a period when he went to university when the numbers of young people were about 3 or 4 per cent. We are in a very different position today.
Our new arrangements mean that those who benefit financially from higher education make a contribution to its cost, and not just the general taxpayer. We are waiving fees for part-time students on low incomes or those who lose their jobs while studying. Next year, loans will also be available to them. That will help mature students which my noble friend Lady Lockwood and a number of other noble Lords want us to do. We have increased help for those in financial hardship by trebling the access funds to which the noble Lord, Lord Baker, referred and introducing hardship loans. Of course, those are for maintenance and not for the payment of fees.
The evidence shows--a number of your Lordships asked about this--that there are more young people, not fewer, entering university. The figure is more than 1 per cent up on last year. So those new arrangements have not affected the numbers coming forward.
Perhaps I may say also to my noble friend Lord Shore and others that there has been no deterrence to students from the lower socio-economic groups. Indeed, they comprise a slightly higher proportion of new entrants than before. Nor need they have higher non-completion rates than other students. I do not believe that we should have lower expectations of such students. But of course it is right that we should continue to monitor the new arrangements. I am very concerned that we should do that and do it rigorously. After all, as a social scientist who has always believed that such changes should be properly evaluated, it would be most remiss of me in my present position not to ensure that that happens.
The recently published performance indicators to which other speakers have referred will give those who lead universities helpful, objective and clear information about how students are faring and provide a good guide as to what action universities need to take to improve completion rates across the board. Part of that will be modernising teaching and learning. Universities should grasp the opportunity that information technology presents. I believe that the noble Baroness, Lady Rawlings, referred to that. If we do not, we shall be rapidly overtaken by other parts of the English-speaking world.
I turn to the quality of teaching. Universities are unique in having such wide control over all aspects of their teaching, examining and awarding bodies. I see every advantage in our universities being able to demonstrate that their standards are high. I believe also that having some measure of external scrutiny is valuable to them. That should not restrict their
freedom nor the range of courses they teach. Nor should it stifle the freedom to develop new and imaginative courses. However, neither should it mean a mountain of paperwork.I endorse completely the need to avoid unnecessary bureaucracy. I want a light touch and have asked the Higher Education Funding Council to ensure that that happens. However, that depends on universities demonstrating that they already have sound systems for internal control. By the same token, the RAE does not prevent good quality research. I disagree with the comments of the noble Lord, Lord Jenkins of Hillhead. He suggested that it is only quantity that counts in the RAE. Quality does and should count. We must remember, in respect of both teaching and research assessment, that it is not done by bureaucrats in the Department for Education and Employment. I must defend my civil servants against charges of that sort. It is done by peer review; by other academics looking at the record of their colleagues in different universities. However, I take the point about the importance of not having measures that put universities into a strait-jacket. I do not believe they will. We must recognise the need to show that universities provide good value for money and are accountable for it.
Regrettably, I am running out of time. A number of specific questions were raised on a range of issues. I have the answers but perhaps it would be right for me to write to noble Lords concerned. However, perhaps I may say a few words on research. There has been a great deal of additional support for research from the Government with £1.4 billion being made available through the joint infrastructure fund. The first tranche of that spending was announced yesterday. That is a large amount of extra funding. I believe that it was desperately needed. Universities have been unable to invest over the past decade because funding has not kept up with their needs.
In conclusion, I do not recognise the rather gloomy picture painted in speeches made by some Members of your Lordships' House. Nor do I believe that many vice-chancellors, university staff and students would recognise it. Nor is that the view around the world of British universities. As I travel the world carrying out international work for my department, I discover that our universities are the envy of many people.
The Government have a clear vision for the universities in which they are both centres of learning and teaching at the highest level. They are central to the transformation needed for a knowledge-based economy. That means that the universities taken together must teach a wide range of subjects to a high standard. They must conduct the best research. The Government have assured the funding. We have a new target now for participation by students and have set clear objectives. I know that the universities will demonstrate what they can do. I am confident that they will continue to be diverse players in a world class system competing successfully with the best in the world.
8.14 p.m.
Lord Jenkins of Hillhead: My Lords, I have never greatly believed in an extended second bite of the cherry when initiating a debate. I shall therefore not detain your Lordships for any great length of time. I thank the many speakers who have participated. In particular, I much enjoyed the two maiden speeches, as I am sure did everybody else. I believe that the noble Baroness, Lady Prashar, whose speech was one of the few I missed, was kind enough to make a graceful reference to my time as Home Secretary. I am grateful to her for that.
I have rarely participated in or listened to a debate in which there were so few speeches with which I disagreed. I refer, for instance, to the speech of the noble Lord, Lord Shore. I have not agreed with a speech given by the noble Lord for a very long time, but I agree with at least 60 or 70 per cent of what he said today. The same applies to the noble Lord, Lord Baker. He made a fine speech. That is an example, of which there are many others, of how leaving office can improve the quality of a person's speaking. Perhaps to some extent that applies to us all.
I thank the noble Baroness, Lady Blackstone, for winding up and for her exhaustive replies to many parts of the debate. She did not reply in great detail to most of the points I raised. However, I make no great objection to that. She made a legitimate riposte to the noble Baroness, Lady Blatch, with a fine phrase; that she inherited a position in higher education which was between a shambles and a crisis. I do not necessarily contest that. I refrain from saying that after two and a half years she has produced a position which is between a crisis and a shambles; first, that would be too glib; secondly, it would be a little unjust; and thirdly, I would not wish to make such an unfriendly remark at the end of a debate of this kind.
However, in my considered view, the Minister is deluding herself if she thinks that there is high morale and a state of general satisfaction in the university communities. I am an admirer of many aspects of the work of this Government. I remain hopeful for the future, but I cannot say that higher education is, so far, one of their outstanding achievements.
Finally, at one stage in her speech, the Minister indicated that we might be going down a bifurcated road with some universities specialising in research and some in teaching. I am sure that the general view is that in all the best university institutions, research and teaching are necessarily closely linked.
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