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Higher Education: Financial Sustainability

Volume 758: debated on Monday 15 December 2014


Asked by

To ask Her Majesty’s Government what is their assessment of the Higher Education Commission’s report Too Good to Fail: The Financial Sustainability of Higher Education in England.

My Lords, the Government welcome this contribution from the Higher Education Commission and are looking closely at its findings. In fact, the Chancellor, in his Autumn Statement, has already addressed the recommendation on postgraduate education. The UK enjoys a world-renowned reputation for the quality of its universities, and we have protected and enhanced that through our reforms. According to the OECD, we are one of the few nations to have introduced a sustainable system of higher education finance.

The report notes that the overall number of students in higher education in England is actually declining due to very large falls in the numbers of part-time undergraduates, postgraduates and mature students. Does the Minister agree that this reduction in the diversity of our higher education system is a cause for concern, and can she tell the House what plans the Government have to address the situation, particularly when it comes to part-time undergraduates?

My Lords, the figure for accepted entrants as of August 2014 was up by 4% and that for mature students was up by 6%. In terms of postgraduate funding, your Lordships will know that loans of up to £10,000 will be available from 2016-17. Indeed, in 2012 the Government introduced non-means-testing for loans for part-time students of 25% or more of the full-time equivalent.

My Lords, does the Minister not recognise that her original Answer sounded rather like someone sitting in the back of a canoe facing upstream just before going over a very large waterfall? Can she perhaps say something about financial sustainability, which she has not covered very fully? In particular, 45 modern languages schools in British universities closed in recent years on the grounds that they were not financially sustainable. Does that leave the Government calm or worried?

My Lords, I do not recognise the words “canoe”, “upstream” or “waterfall” mentioned in that question. According to the OECD, we are one of the few nations to have introduced a system of sustainable higher education finance. Indeed, our numbers of students are up to record levels at nearly half a million.

My Lords, is there not a triple whammy? The Government are no longer funding higher education; they are funding the debts of students who are attending universities. Students are acquiring debts—the latest figures from the IFS show an average debt of £44,000 per student leaving university. In addition, as we have just heard, universities have lost funding for important courses such as languages. The Government say that there is no imminent pressure on the system. Which way is the Minister facing?

My Lords, I am facing firmly in the direction of the widely accepted view that both the student and the state should share the burden of higher education. In fact, graduates have higher earning potential than non-graduates.

My Lords, we need to bridge the social mobility gap. As the report states, universities will have to face huge cuts in the future. How will the Government ensure that spending on widening access to higher education is not the first place where savings will be found? I declare an interest as the chancellor of the University of Exeter.

My Lords, the cap will be lifted in 2016, widening access as far as possible. In fact, disadvantaged students now make up 17% of the total, which is a record level.

My Lords, as someone who has worked in higher education all my life, I was very surprised by the Minister’s response to this report, which is a devastating critique of government policy on higher education. The report shows that it is unsustainable and that commercialism is undermining academic values and it indicates quite clearly that a change of course is absolutely necessary. Can the Minister say what change of course this would be and not just go into defensive mode about it?

My Lords, I do not think I am going into defensive mode. I reiterate the view of the OECD, which is a widely respected body, on the sustainability of higher education finance. Like the noble Earl, Lord Howe, I have forgotten the second part of the question. I remember—since the report was published, as the Chancellor set out in the Autumn Statement, we have in fact announced that postgraduate loan-based funding would be available from 2016. We have addressed some of the concerns within the report.

My Lords, will my noble friend take comfort from the fact that when Mr Blair advanced the policy of “education, education, education”, he did so after the Conservatives had raised participation in higher education to a percentage in the middle 30s after inheriting a figure of 12% from the Labour Party in 1979?

My Lords, will the noble Baroness tell us how, in the light of this report, she hopes to mitigate the risks to financial sustainability? Those are very big risks. Can she tell us how she will mitigate them? Forget the canoes.

My Lords, the Government have asked HEFCE to monitor this situation, particularly in the light of the cap being lifted in 2016. That is a very important point.