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Which of those potential students fits more easily with the Leitch agenda that is so enthusiastically backed by six Cabinet Ministers, all of whom have their pictures on page six of his report? Which of the two deserves and needs the stronger incentives and support? Which of the two is more vulnerable to discouragement? Surely the answer in each case is the lady. To judge from data supplied by Professors Latchman and Gourley, she is quite typical of the Birkbeck and Open University students whose experience and aspiration alike determine the kind of ELQ they need and who would be gravely affected or even excluded by an upward surge in fees.

John Denham’s letter of 7 September specified a consultation period which ends this very Friday. Will Her Majesty’s Government now recognise the storm of reasoned objections and gracefully back off?

Lord Morgan: My Lords, the Government have championed many admirable principles in higher education and I fear that this policy on ELQs runs counter to almost all of them. As we have heard, it weakens the commitment to life-long learning and it weakens the commitment to the upgrading and refreshment of knowledge and skills. Somehow, there is no realisation that this occurs at various times throughout a person’s life; it does not involve a finite period. It is clearly a harmful blow to part-time students, who have been left out anyway in many discussions about university funding and are now even more on the margins. It is unfair to many women, who wish to return, after having children, to extend their educational qualifications. It is also inegalitarian for a Labour Government, since many students are in deprived areas and are catered for by the ex-polytechnics.

The exemptions are far too narrow; they are a fraction of the whole. The three-year transitional period does not diminish the essential injustice. The deckchairs will be rearranged but the iceberg will still be there.

The proposal will be deeply damaging to many English universities. I am happy to say that in Wales we are less philistine; the provisions do not apply to Wales or Scotland. However, many universities will be

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affected, including—I declare an interest as a teaching member—Oxford, which is fourth in the table of the universities; it will lose £4 million. Kellogg College, a most distinguished institution, will be undercut. It is a terrible blow for the Open University, of which Labour is deeply proud—it was created by Harold Wilson and Jennie Lee, and is quite as important in our heritage as the National Health Service. More than one-quarter of its students will lose funding in 2008-09. It seems to be a terrible thing to do to an institution that is renowned as a pioneering institution throughout the world. It is right to widen participation but not by striking so fundamental a blow at part-time and mature students. John Denham said that,

It will indeed be locked. I very much hope that the Government, at this late hour, will think again.

8.12 pm

Lord Haskins: My Lords, I declare an interest as pro-chancellor and chair of the Council at the Open University. It has been suggested by some that many of the affected students are recreational and rather ancient. In fact, 85 per cent of Open University people affected are aged between 25 and 65, 74 per cent of them are working and paying taxes and 9 per cent of them are carers.

The Government keep implying that the Open University is grossly overestimating the financial impact of all this. However, our figure of a reduction in support of £31 million a year after three years can be found on the HEFCE website: £31,626,519 to be precise. The Government have seriously underestimated the impact of the proposal on Birkbeck and the Open University in particular. If they had known the scale of the damage, would they have still gone ahead?

My own experience of Whitehall—looking at regulations years ago—suggests that the department has created a huge regulatory shambles in its haste in pressing the proposal. How does one police a system that must prove that a student has not got a degree, including an overseas degree? That seems to be heading for trouble in a big way.

The Government and HEFCE keep talking about new sources of funds to replace those being lost, but why ditch a scheme that is delivering a mainstream policy objective of lifelong learning, enabling a vast number of people to widen and improve their skills base to cope with work in a modern economy?

8.14 pm

Lord Griffiths of Burry Port: My Lords, I thank the noble Baroness, Lady Sharp, for giving us the opportunity to give vent to our feelings on this matter. I offer sympathy to my noble friends on the Front Bench at the unassuaged assault that they are getting—to which I am anxious to add.

We have heard much about the perhaps unintended consequences for the Government’s lifelong learning programme; we talk about joined-up government. I want to make a bid for the way it runs counter also to the aims of the social cohesion programme by

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affecting not only, as we have heard many times, the way in which the Open University works, but also the training of clergy, who are the cheapest and most effective social workers and contributors to social cohesion in the country. Since the battering that is being experienced is coming from all corners of this House, let me speak for the one corner that is not represented here: the Benches in front of me. A Methodist minister is always glad to speak for the Bishops, and I am very glad to do that. I would be very surprised if one of the 26 of them would not have fallen foul of this proposal. I would have fallen foul of it myself.

There is no such thing as a lifelong job any more; we change careers and we need to be retooled for the new careers that we opt for. After a mini-career in university teaching, I went to get my degree in theology. Only if you think a Cambridge degree is superior to a Cardiff degree can you think that they are anything other than equivalent; the two are equivalent and I would have fallen foul.

I speak in the name of all those who redirect their lives and seek appropriate skills for the new direction that their life takes, my two sons included; they started abortively with bad careers advice from their schools but ended up finding their way, retooled themselves for their jobs and are now happily ensconced in them. In the name of all that is decent—I know that my noble friends on the Front Bench are decent if nothing else—I do ask for a reconsideration.

8.16 pm

Lord Puttnam: My Lords, I declare an interest as the chancellor of the Open University and as the recent chancellor—over the past 10 years—at the University of Sunderland; both institutions will suffer quite grievously from this measure.

I went downstairs to get some cash and saw that the cash machine says on it, in rather big letters, “Tampering with this machine may result in it going out of service”. I commend that thought to the Minister. That is exactly what is going on here. This is a bad policy; it is a policy that is based on a false choice and, like all false choices, it inevitably results in a poor decision.

There is an overwhelming case for significant and constructive change within this sector; I have believed that for a long time and I believe it, if anything, more than ever now. Do not the Government understand that continuing to batter the sector and pulling stunts such as this only allows the universities themselves to retreat into a bunker from which it is almost impossible to create change? In fact, the most reactionary of mechanisms dominates the entire debate.

I have a personal attitude towards this. I have spent 35 years arguing for employers to become more engaged and involved in the funding of students and people in the workplace. I am told that there is evidence that employers are beginning to come out of that bunker and are showing signs of interest in education. In his reply, will the Minister make clear what that evidence is? I beg him to make it more than “There are encouraging signs”; I have been listening to encouraging signs for 35 years, and have consistently been bitterly disappointed by the result.

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Lastly, addressing the point of my noble friend Lord Haskins, I gather that there are penalties for those who may find themselves forced to lie about their existing degree on their application form. Those penalties are quite severe. They can include a heavy fine and even jail. I ask the Minister to consider, given the Government’s other problems at the moment, that the notion of 1,000 or 2,000 graduates being sent to jail or fined heavily for fibbing on their application forms will not drive the success or popularity of the Government to new and improved heights.

8.19 pm

Baroness Walmsley: My Lords, it is impossible properly to wind up on a debate in two minutes, so I will just have to content myself with a few observations. First, the Government’s plans to reduce ELQ funding by £100 million by 2010 contradicts everything the Government have been saying about retraining and creating a flexible workforce. Part-time students, who already get a raw deal on financial support, are being kicked in the teeth yet again. There was no prior consultation and no parliamentary debate in advance of this major change in policy. Instead, HEFCE is now consulting only over how the decision is to be implemented.

The Government claim that the removal of funding will affect only second degree students, or “serial degree chasers”. In fact, the decision affects a wide range of students and universities in England, including many involved in short courses and part-time vocational and professional education and training. Modern labour markets require both upskilling and reskilling of the existing labour force, not just new entrants. Modelling by HEFCE and the UCU suggests that institutions will be badly affected by the proposed cuts; we have heard about that from several noble Lords. The Government’s suggestion that these students will all get funding from their employers to undertake their studies is not borne out by current statistics or evidence. Significant numbers of adults will therefore discontinue their lifelong learning because they cannot afford it. Their withdrawal will also make large tracts of university courses unviable.

Have the Government properly assessed the impact of these proposals on continuing education, on widening participation in higher education and on the institutions upon which lifelong learning relies? I accept that there are exceptions, but it is difficult to see the logic behind them. For example, teachers are exempt but, as the noble Baroness, Lady Blackstone, said, those teaching in further education are not. Foundation degrees will be exempt, but they may not necessarily be the appropriate kind of qualification for a student. Students may be pushed into doing an inappropriate qualification just because it is funded. I call on the Government to think again—to back off, as it was put by another noble Lord—and consult properly before coming back with much more appropriate proposals.

8.21 pm

Baroness Verma: My Lords, we were promised that lifelong learning would be a norm. Instead we find, yet again, the Government meddling with systems

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that provide opportunity and enable people to meet the new challenges facing Britain in a globalised market.

There is a demand from employers that we have systems that are flexible and responsive to demand, and relevant to the demands of competition. Does the Minister agree that it is in the interests of Britain that we not only provide for people with poor or no basic skills, but ensure—as has been mentioned—that those already in the workplace are able to change direction or access relevant skills to meet the needs of an ever changing workplace?

The Government’s own paper clearly laid out that everyone had a right to increase and update their skill levels and the right to a second and third chance to progress in their careers. So why has the Minister, Mr Denham, decided to take such a retrograde step and cut funding by such a huge amount? Does the Minister not agree that cutting opportunity will remove the right of people to change direction and broaden their skills? The message being given out is, “If at first you don’t succeed, you just don’t succeed”.

The NIACE draws attention to the fact that many people make false starts in life and need supported second chances. My honourable friend in another place, David Willetts, has said that cutting the funding for ELQs has all the hallmarks of a rushed and potentially damaging proposal. This is a big change to be made at such short notice. Can the Minister tell the House how this cut will affect indebted modern language graduates in need of vocation-specific top-up training? When the Government are looking to reform their flagship Train to Gain programme barely a year after its national launch, why are they also deciding to phase out CoVEs? I fear that the Minister finds himself in a conundrum, for he cannot say that the Government want to meet new challenges yet support funding cuts.

8.24 pm

The Parliamentary Under-Secretary of State, Department for Innovation, Universities and Skills (Lord Triesman): My Lords, I join others in thanking the noble Baroness, Lady Sharp—and, indeed, all the speakers in the debate. I must confess that I have not detected an outpouring of warm support for the proposals; none the less, I will do my best to deal with the issues raised.

Governments have to take decisions about priorities. We have increased funding by about 25 per cent in real terms since 1997, and we now spend more than £10 billion a year on higher education and £7 billion a year on further education. However, we face enormous challenges. In today’s workforce, 20 million people do not have higher level skills. We need to produce another 4 million people with the first higher level qualification between now and 2020 if we are to meet the challenges that Sandy Leitch—the noble Lord, Lord Leitch—has identified. Eleven million people do not have level 3 qualifications, and 6 million have not yet achieved a first qualification at level 2.

In both distributing and increasing what is none the less a finite sum of public funding, there is no

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getting away from choosing between competing priorities. It is possible to disagree with the choice that we have made, but quite impossible to avoid making a choice one way or another.

Against that background, let me try to explain what we are going to do. In further education, we have introduced an entitlement to free tuition for adults to achieve their first full level 2 qualification, and for young adults under 25 to achieve a first qualification at level 3. We are focusing further education funding on those priorities, in line with the Leitch recommendations for addressing low skills. The noble Baroness, Lady Verma, puts to me what I think is a rhetorical question. Of course we want people with first opportunities at all those levels and we also want progression, but that does not of itself write larger cheques.

Let me focus my remarks on higher education, because that is the subject. In higher education, we have asked HEFCE by 2010 to redistribute £100 million of teaching grant that currently goes to fund students studying for an HE qualification when they already have a qualification at the same or higher level—an ELQ. We ought to acknowledge in this debate that the amounts in the first two years will be far less than that—about £25 million next year and about £60 million in the following year. That is a redistribution—not a cut—of less than 1.5 per cent of the total teaching grant, even before the significant increases during the CSR period come into play. All the grant will remain in the system. It will be allocated by HEFCE to HE providers. It is a reallocation. The overall grant does not change, except in one sense: a significant increase for funding of higher education during the CSR period of 2 per cent in real terms per annum. That is a major and continuing increase.

Let me say that we did not ask HEFCE to stop funding all ELQ students. Indeed, the £100 million is less than a third of the total funding of £327 million that we are currently spending on ELQ students. We asked HEFCE to implement a change that took account of both the wider policy imperatives and the need to provide the institutions that might lose money with time to adjust. No institution will lose cash on its 2007-08 baseline over a three-year period, and no decision has been taken about whether to make additional savings after 2010-11. That is something for the next spending review.

The fact is that the more money we spend on students doing ELQs, the less there is for those who have never yet participated in higher education. We estimate that by 2010-11, 20,000 people will be studying for a first higher education qualification who otherwise would not have been able to do so. That is enough to fill an entire large university—I am not sure that I will do a comparison with how many modest-sized universities might be impacted. That group is our priority. Those who criticise the policy should explain why they would have made a different choice about the priorities. Why would it have been better to have 20,000 fewer students studying for a first qualification and left the ELQ policy unchanged?

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Baroness Blackstone: My Lords, where does my noble friend think that those 20,000 extra students are going to come from? Many universities are struggling to meet their HEFCE contracts. Money will be taken away from one group, but there is no obvious solution to where that new group of students is going to emerge from. There is a bit of a misconception around, unless there is a dramatic improvement in the number of young people leaving school with the relevant and appropriate qualifications. On a budget of £10 billion, I wonder whether it is worth playing around in this way for £100 million to be allocated in an uncertain way as soon as 2010.

Lord Triesman: My Lords, I hope my noble friend will bear with me. I shall come to that point shortly when I talk about the Leitch agenda and what it is intended to achieve because, quite aside from more pupils emerging from school with better qualifications, we have to answer a critical set of questions about adult learners.

Some people have suggested that a choice should not be made, but there has to be a choice because we can spend the money only once. If I were to follow, for example, the advice of my noble friend Lord Morgan, we would achieve what I think he suggested only by growing the budget in a way that is unavailable in current circumstances. I say to my noble friend Lord Puttnam that I understand his desire for stability and getting an engaged discussion about the future, but we do not have the luxury of being able to do that simply by avoiding the hardest choices of all. We chose as we did because we believe it is fairer; it helps more qualified people to get into higher education.

Lord Puttnam: My Lords, it is possible to allow the universities the space and time to think and to come up with the hard choices themselves. The choices do not have to be made by government. Given the parameters, the universities are perfectly capable of making some tough choices themselves. That might be a way forward out of this problem.

Lord Triesman: My Lords, I respect my noble friend’s view that, given time, the universities might do it; given a great deal of time in many respects, they have not always done it. We are getting to a point where some rather more difficult decisions have to be made. Our aim by 2020 is that 40 per cent of adults should have an HE qualification compared with 30 per cent now, which is an increase of 4 million people. That is why it is vital to look at these changes. I say to the noble Lord, Lord Rix, that I do not think that what is being proposed in making that change from 30 per cent to 40 per cent is denying people the opportunity to retrain. On the contrary, I think we can indicate that that is not the case. A number of noble Lords—

Lord Rix: My Lords, can the Minister indicate where that might be the case?

Lord Triesman: My Lords, where what might be the case?

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Lord Rix: My Lords, I am saying that there would be tremendous losses of people retraining and the Minister is saying that he can prove otherwise. Is that so?

Lord Triesman: My Lords, when the House had its debate on the report produced by my noble friend Lord Leitch, there was overwhelming agreement that the prioritisation of adults and getting people into higher levels of skills were prerequisites if we were not continually to play catch-up with others, as the noble Lord, Lord Dearing, said this evening. A huge amount of this policy depends on trying to drive forward that Leitch agenda, which the House warmly supported when it debated it. It is in that context that we can see the kind of growth that we need. I understand from what was said about lifelong learning by the noble Baroness, Lady Sharp, the noble Lord, Lord Watson, and my noble friend Lord Plant and from the example of the two students mentioned by the noble Lord, Lord Quirk, that some people believe that that sort of proposition out of Leitch may be very difficult to achieve. I do not think that the decision that we are discussing tonight is in any sense inconsistent with the Leitch proposition. The central message of Leitch is that we need to increase the number of people with higher-level qualifications. We will move away from that imperative if we continue to prioritise those who already have such qualifications over those who do not. Teaching grants will still be available in all cases for foundation degrees, which are vital for retraining and reskilling. That is part of the answer to ensuring that people have the opportunity to retrain and go on other courses where there is employer co-funding; and examples of the courses which have been exempted have been mentioned.

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