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Baroness Warwick of Undercliffe: My Lords, I congratulate the noble Baroness, Lady O'Neill, on what she has said and for exploring the complexities that will be part of all our discussions on the unit of resource. We will ensure that the Government stand by their commitment that the income from fees will be additional, and if necessary that they must be made to stand by it.

What the noble Baroness has sought to do in her amendment is already possible. The information referred to here is at least in part already publicly available. Institutions can use a measure—it is a Universities UK measure, but it is produced by the London School of Economics—called the HEPPI index, the higher education pay and prices index.

However, the amendment proposed by the noble Baroness touches on an important point. While I do not think that the Bill should be amended in the way that she suggests, it would be helpful if the Minister could indicate that the retail price index does not give an accurate measure of inflation in the higher education sector. While the Minister may not be prepared to accept that the HEPPI is the only possible, or even the right measure, perhaps as part of our discussions on the definition of unit funding, which has already been agreed, we might discuss what an appropriate measure of inflation would be and arrange for that to be published annually.

Baroness Sharp of Guildford: My Lords, I will be brief. I had hoped that my name would appear alongside those of the noble Baroness, Lady O'Neill, and the noble Lord, Lord Wilson of Dinton, on the
 
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Marshalled List. I had asked for it to be so, but a slip up in the Public Bill Office meant that it was not so. I had an apology this morning to that effect.

We support this amendment, because it adds to transparency. There is already ambiguity as to what constitutes unit funding, and it would be useful to clear that up. There is also ambiguity as to what price index is used when we have real figures as distinct from those on current terms. On all scores, and for the reasons already set out splendidly by the noble Baroness, Lady O'Neill, we support this amendment.

Lord Wilson of Dinton: My Lords, I also support the amendment. It will be fair for students, who are already going to be expected to contribute to their education, to know what the Government are going to contribute. That transparency is very much in line with the openness that the Government want in many fields. I also point out—this may be some encouragement to the Government—that if, as we all hope, the Government are going to be much more generous to higher education in the future, it will be a good way of indicating to people in higher education how their generosity is moving over time. I support it very much, and I hope that the Government will respond positively.

Lord Renfrew of Kaimsthorn: My Lords, I, too, support this amendment. The notion of transparency is admirable. I am enchanted by the suggestion made by the noble Lord, Lord Wilson, that it might bring us increasingly good news. On that happy thought, I warmly support it.

Baroness Ashton of Upholland: My Lords, I congratulate the noble Baroness, Lady O'Neill, for the way in which she has identified the issues that are of concern to her. I know that the purpose behind this amendment is to look at the transparency around the amount of funding that the Government commit to higher education. This amendment is not necessarily the way to do it. Although I shall be brief, I hope that in doing so I shall reassure the noble Baroness.

I spoke to HEFCE this morning. It confirmed that it already provides extensive information to heads of higher education institutions, as my noble friend Lady Warwick pointed out, about their annual funding allocations, including information on the effects of inflation using the GDP deflator. The grant letter that it provides is around 50 pages long, plus annexes. I have a copy here, but I will resist the temptation to read from it. I cannot say that I have read every page—

The Countess of Mar: My Lords, I hate to interrupt, but I remind the noble Baroness very gently that she is addressing the whole House, not just my noble friend Lady O'Neill. The Liberal Democrats are seeing only the back of her head.

Baroness Ashton of Upholland: My Lords, it is always my intention to move around the House, as I believe the noble Countess will see as she watches me in the course of this speech. I was addressing the noble
 
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Baroness, Lady O'Neill, and I shall move to address those who have spoken in this debate, as is my wont on every occasion—

The Countess of Mar: My Lords, the noble Baroness is not addressing those noble Lords who have spoken, she is addressing the House.

Baroness Ashton of Upholland: My Lords, in doing so, I always attempt to be courteous. As I have indicated, there is the letter from HEFCE. Detailed information is available on how the higher institution block grant figures are arrived at, based on a combination of the expectations of the mix of courses that institutions provide. Of course, higher education bodies are autonomous and are free to use their overall block grant to fund provisions at they see fit. I say particularly to the noble Baroness, Lady O'Neill, that HEFCE is happy to provide additional details on request.

On Report, I took care to respond to the issues around additionality, which I know your Lordships' House feels strongly about, and our plans to work with Universities UK on such a definition. As I explained, we plan to publish the new definition in the departmental annual report, which is laid before Parliament in the usual way. We know that HEFCE has plans to carry out a further fundamental review of the funding method, to take into account the impact of variable fees. This will lead to further changes in due course.

I have a number of concerns about the practicalities of the amendment before us, because I do not think that it will be so straightforward to devise a new index—the index of higher education costs. To summarise, I hope that I can reassure the noble Baroness that this amendment is unnecessary. HEFCE already provides regular annual information, and we are planning to develop a new definition of the unit of funding. Taken together, this will provide institutions with the clarity that they need about levels of public funding.

I am also concerned that we ensure that the noble Baroness, Lady O'Neill, who has such an interest and expertise in this area, is able to do that. I offer the opportunity to bring the noble Baroness and the noble Lord, Lord Wilson of Dinton, to discuss these issues with HEFCE, so that there can be absolute clarity about the way in which we are proposing to go forward. I should point out to my noble friend Lady Warwick that university costs are generally estimated by Universities UK to be higher year-on-year, as the noble Baroness will know, than the retail price index or the gross domestic product deflator. The amendment is unclear on which index to use. In our deliberations with HEFCE, we shall be concerned to ensure that consideration is given to how we might take forward the correct way of identifying the means of inflation.

In the context of recognising the work that HEFCE is already doing, the offer to discuss this further with the noble Baroness and to facilitate those
 
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conversations, and our continuing work with Universities UK to identify the transparency that noble Lords want, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness O'Neill of Bengarve: My Lords, I am grateful in many respects for that reply. I was interested in the shift in the course of the Minister's reply from an emphasis on the amount of information that HEFCE discloses to the clarity of the information that it discloses. These are rather different considerations.

One of the concerns that lay behind our amendment is that institutions should be able to make apparent to students the extent to which their education is being paid for by the public purse and to what extent it is covered by their fees. I have in mind, for example, a student taking a course of study which includes a bit of laboratory work. It is not a simple matter for any student, or their family or their sponsors, to answer that question from the scads of information that HEFCE produces.

If the noble Baroness can assure me that this issue of firm, communicable information on an annual basis for category of course is the objective of this review, then I would consider withdrawing the amendment. If, however, it is simply the development of a new index—and I was very careful not to tie the Government's hand to one index or another—then I think I would consider dividing the House. I wait to hear what the Minister has to say.

Baroness Ashton of Upholland: My Lords, it is my understanding that we would look to do that. I will try and be as firm in my commitment to the noble Baroness as I can. My only hesitation in being absolute is to make sure that when the noble Baroness joins us—it is to be hoped—in discussions with HEFCE she will feel confident that the way in which the work is undertaken—and, indeed, the work with Universities UK, which I am sure will also wish to join in the discussions—will cover that issue properly. I can commit to the underlying issues behind the amendment being addressed fully by the ongoing work. With that assurance, I hope that the noble Baroness will feel able to withdraw the amendment.

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