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Regional federations—particularly in England, because in Northern Ireland, Wales and Scotland there is much greater collaboration—and confederations should be formally established. As I have said in your Lordships’ House before, the tertiary system in California, developed by Clark Kerr, affords a very good guide as to how we should proceed. Centres of real excellence in research and postgraduate teaching can be identified for each region. This is especially needed in science and engineering
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Other HEIs in a region would be able to make their own dispositions in the light of the designated hub university. This would doubtless include greater liaison and collaboration with further education colleges, which is vital. This is already going on spontaneously in many areas of the country and across many disciplines. The trouble is that it is altogether too ad hoc. Hub universities need to be identified for each English region, and of course there can be more than one. Other HEIs in the region would thus be better enabled to make their own dispositions regarding future developments, including, as I have said, a more worked out and coherent approach to collaboration with the further education sector. This is a policy that the Department for Innovation, Universities and Skills needs now to articulate in England and to promote if it is to live up to its title.
12.41 pm
Lord Krebs: My Lords, I, too, congratulate the noble Lord, Lord Luce, on initiating such an important debate on a vital topic for the future of the country. I start by declaring an interest as the principal of Jesus College, Oxford.
In my brief contribution, I shall touch on two points that have already been discussed by others: the diversity of the higher education sector and access. We have already heard that the ideal of a university as a temple dedicated to the life of the mind is nowadays supplemented by the more utilitarian view that universities are also engines of future prosperity and useful knowledge to improve our lives, for instance through curing diseases or preserving the planet. However—this is my first key point—universities should not all strive to do the same thing. A small number should aim to be world-class research and educational institutions, while many others should aim to support their local economy, for instance by training people in technical skills.
As we have heard, as a result of the system of incentives and esteem in this country, too many of our higher education institutions strive to climb up the same ladder: to be excellent in both education and research. Let me illustrate this with a striking fact. Of the 168 higher education institutions in this country, 147—nearly 90 per cent—award doctoral degrees or claim to be research institutions. Let us contrast this with the United States, where less than 6 per cent of universities award doctoral degrees, with the other 94 per cent pursuing other valid and important purposes. Translated into UK terms, this would equate to a dozen or so research universities.
Why does it matter? The answer is simple. Scarce resources are spread thinly across the whole sector rather than being concentrated in a small number of elite institutions and, importantly, training in technical skills tends to be left out as the universities that should be doing this aim to ape the elite. Rather than blurring
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My second point is about access. My own university, Oxford, has been set a target to increase its intake of students from state schools to 73 per cent. It has been criticised by Ministers for not achieving this. Currently, just over half Oxford’s intake is from the maintained sector. It rightly strives hard to attract students from less well-off backgrounds and from state schools and it provides, as we have heard, extremely generous bursaries to support them if they get into university. We want to attract the best students from all backgrounds; there is no gain to us in not doing so.
A naive view would be that, while 7 per cent of children are educated in the private sector, around half the students entering the top universities such as Oxford are from the private sector, so there must be discrimination. This is plain wrong. The entry requirement for Oxford and many other top universities is three As at A-level. Just about half the pupils in this country who reach this level are from private schools. In other words, this matches our intake. There is no evidence of discrimination. This proportion of three As at A-level from private schools would be higher if you counted only the A-levels that were shown by the Durham study to be hard and that count for Oxford entrance. The real question for the Government is why the maintained system, which educates 93 per cent of children, produces only half those who are suitably qualified for entry into elite universities. By pointing their guns at the universities, the Government are heading towards the wrong target.
12.45 pm
Baroness Warwick of Undercliffe: My Lords, I am delighted to speak in this important debate and I am grateful to the noble Lord, Lord Luce, for providing the opportunity to do so. As he said, higher education is one of this country’s great success stories. To his list of successes, I would add that we punch above our weight in measures of research impact and that our universities are major wealth creators, generating about £46 billion a year for the economy. At this point, I declare my interest as chief executive of Universities UK.
This opportunity to cast our minds 15 years or so ahead allows us to reflect on the role that we want our universities to play beyond the purely economic. We are entitled to hope that our universities will provide some of the answers to the grand challenges that we are likely to face in the next half century. I am thinking particularly of climate change. The speed and scale of likely change mean that now, more than ever, we need first-class minds to push forward the limits of our understanding of the geopolitical, social, economic and health-related consequences of global warming.
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There are other unstoppable changes to which our universities will be at the forefront of helping us to adapt. Let us think about the healthcare implications of our ageing population and about the need for the coming generations to be part of the workforce for much longer. Demographic projections suggest that between 2011 and 2020 the number of full-time students will drop by 6 per cent across the UK. That is 70,000 students. On the other hand, there will be an increase in the older age groups from which most part-time students are drawn. This is a great opportunity for universities, as they are committed to helping more than 40 per cent of adults to attain skills to graduate level and above. This aim will almost certainly be achieved only through retraining that is delivered part time. Therefore, the Government will need to look again at whether provision for part-time students, which is at present much lower than that for full-time students, is adequate to meet this challenge.
That brings me to a further challenge. Public funding remains vital to the health of our universities. We have been grateful to the Government for restoring stability to the sector after years of underfunding. Together with the introduction of variable fees, this has been done by maintaining the unit of public funding in real terms. I urge the Minister to confirm today that this will continue beyond the current spending review. Without this commitment, any other promises will ring hollow. We need continuing public investment to maintain our international competitiveness. Although we lead the field in many areas, the UK lags behind many countries in spending on higher education. As the noble Lord, Lord Patten, reminded us, we spend 1.1 per cent of GDP, whereas the US spends 2.9 per cent, while countries as diverse as China and New Zealand are rapidly increasing their own investment.
There is no doubt that these challenges will be better met if the sector can work closely with the Government on shared aims. For example, we have already been trying to ensure that, for the future, the new visa system invites in the best students and staff, rather than putting up barriers that send them elsewhere. Consultation of this sort is vital for making change run smoothly. The university sector has a long-established, key role in promoting and helping to deliver public policy objectives. As has been mentioned, when such consultation does not happen—there was the recent withdrawal of funding for students with equal and lower qualifications and the Foreign and Commonwealth Office withdrew funding for Commonwealth scholarships —institutions are left able only to advise the Government on unanticipated consequences. I hope that the Minister will agree that, working as partners in a climate of mutual respect and collaboration, with a shared vision of the future that focuses on ensuring that all those who want to benefit from higher education can do so, universities and government can deal together with whatever lies ahead.
I end by reinforcing the points that the noble Lord, Lord Luce, made about autonomy. This long-established autonomy has enabled our universities to flourish, to the huge benefit of students, our communities and the economy. I trust that all parts of the House will concur that continued autonomy is vital if universities are to deliver solutions for the future.
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12.51 pm
Lord Butler of Brockwell: My Lords, I join other noble Lords in thanking the noble Lord, Lord Luce, for giving us the opportunity to have this debate. I declare an interest as master of University College, Oxford, for one more month.
I start by acknowledging that higher education has a good deal to be grateful to this Government for. First, we have had strong support for research through the 10-year science and innovation investment framework, as well as the fuller economic recovery of research costs. As the noble Lord, Lord Broers, and the noble Baroness, Lady Warwick, said, the United Kingdom punches above its weight in this area, which is crucial to the success of our economy. Secondly, as the noble Baroness, Lady Warwick, mentioned, the 2004 spending review stabilised the funding of teaching per student, which had halved between 1976 and 2005.
This debate is about the future and I want to cover three points: teaching costs, internationalisation and access. Despite the measures that I have referred to, there is still in most universities a gap between teaching costs and revenues. At Oxford, average teaching costs per undergraduate are £20,000 per year and average income from all sources, including tuition fees, is £7,500 per year. The task of bridging that huge gap falls partly on the colleges and partly on the university. The university meets its share by diverting money given to it by HEFCE for research—the QR grant—and using it to subsidise teaching. The extent of this, according to recent calculations, is £13 million a year. When I told this to my noble friend Lord Dearing, he was greatly surprised—and it takes a lot to surprise the noble Lord. This is legitimate because it is a block grant that the university can use for whatever purpose it wishes. However, it is a tax on research—a tax on the very activity that we want to promote.
Secondly, higher education, as other noble Lords have pointed out, is a hugely international business. It is wonderful that it should be. In my college, we have 550 students from 45 different countries. Some people are now suggesting that universities recruit overseas for financial reasons. In my experience, academics resolutely refuse to respond to economic incentives. They take the best that they can get from all sources. Nevertheless, for a UK/EU undergraduate, we receive £7,500, whereas for a non-EU undergraduate we receive £20,000. It really is perverse to give such disincentives to the education of our own nationals.
Finally, despite many fears, tuition fees have not choked off applications from poorer students. Nevertheless, there is still a huge problem to be addressed. I read with great interest the recent evidence given by the director of Fair Access to a Select Committee in another place. Sir Martin Harris said that in his view this was not a financial matter—bursaries are in place to deal with the principal financial anxieties—or a problem of discrimination in selection. He said:
“I do not believe for a moment that any university discriminates against applicants on the grounds of social class in any direction”.
The problem, as other noble Lords have said, starts earlier. Sir Martin also said:
“However, one of the things I have been saying in all my pronouncements in the last 12 months is that maybe the focus should now shift and we should focus more on really reaching out
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I follow the noble Lords, Lord Patten and Lord Krebs, in saying amen to that. The universities can and will play their part, but it is with schools and teachers that the solution primarily lies. I hope that these points will be taken into account next year in the Government’s review of the funding regime.
12.55 pm
Baroness Valentine: My Lords, I congratulate my noble friend Lord Luce on securing this debate. I declare an interest: 21 higher education institutions are members of London First, the business organisation that I lead.
Each year, London’s universities turn over £11 billion and earn £1 billion in export earnings. The higher education sector in the 21st century continues to fulfil its traditional role of providing our society with skilled graduates and intellectual capital, but it is now also a major economic powerhouse. The success of our universities and the future competitiveness of our economy have become intimately entwined. The Government, universities and business cannot afford to rest on their laurels. We must produce employable graduates and we must ensure that entry and completion standards do not drop if we are to meet ambitious throughput targets for higher education.
To illustrate this, I will borrow an example from our newly elected Mayor of London, who asked his audience to name the most competitive city in the world—politically, intellectually and economically—in 800 AD. The answer was Baghdad. Then the largest city in the world, with more than a million people, Baghdad was home to a great university, the House of Wisdom, where scholars came from all points of the compass to study mathematics, astronomy, medicine, chemistry, zoology and geography. Today, London attracts 86,000 non-UK students each year and is the top destination worldwide for international students, who contribute nearly £1.5 billion per year to the UK economy.
However, no city’s or country’s pre-eminence is guaranteed for ever. For the sake of our country’s future competitiveness and for their own self-interest, our universities must now build much closer relationships with the business world. Currently, the topics and contents of the courses offered by universities are largely determined by students’ preferences. Universities are funded according to the number of students who start and finish their courses. Their incentive from the Government is to provide popular courses that can be filled easily and make progress towards achieving the Government’s target of 50 per cent of young people entering higher education by 2020. Courses in more difficult and unpopular subjects, such as maths, science and engineering, which are vital to our economy, are undersubscribed and remain in notoriously short supply.
Furthermore, employers complain that too many newly qualified graduates apply for jobs without the essential skills needed in a modern workplace: problem solving, the ability to work in teams, communication skills and even—incredibly—reasonable levels of literacy and numeracy. I illustrate that with the example of a leading legal firm in the City, which recruited 70 new
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My plea to the Government and the higher education sector is to recognise more clearly the urgent imperatives of the 21st-century economy. Please listen more carefully to employers and take more account of what they need from the higher education system: more emphasis on quality, not quantity, and on higher standards of employability.
1 pm
Lord Norton of Louth: My Lords, I declare an interest as an academic at the University of Hull. I, too, congratulate the noble Lord, Lord Luce, on initiating this debate. It is by no means the first such debate, but it is a necessary one.
In the time available I should like to focus on two areas of continuing concern. The first is one that I have raised on a number of occasions, and that is the sheer burden of bureaucracy on universities. The situation is less bad than it was, and I welcome the approach taken now by the QAA, but there remain significant problems. These are quantitative as well as qualitative. As the QAA acknowledged in its strategic plan for 2006-11, higher education is subject to many regulators. Universities UK makes a similar point, when it says at paragraph 58 of its briefing note:
“With universities having so many stakeholders there is a considerable potential for duplicated demands, confusion and bureaucracy that not only hinder the effectiveness of universities but also undermine the effective use of public funds (by diverting them into administration and paperwork)”.
The problem, however, goes beyond the sheer weight of bureaucracy. It is the nature of regulation that has generated problems. Top-down sector-level regulation has tended to induce a risk-averse culture. As the unit of resource declined and the need for funds became more acute, universities were too prone to accept regulation, implement it and, indeed, gold-plate it. Much of the regulation itself led to a tick-box approach rather than reflection and a willingness to be innovative. I am pleased to note acceptance of the fact that there is a case for the rationalisation of regulation—I very much welcome the QAA’s approach, very different from that which existed when I initiated a debate on this subject in 2001—but we still have some way to go to achieve a light, as opposed to a lighter, touch.
The second theme is related. It concerns the burden deriving from pursuing goals that may not be compatible. Universities are expected to achieve goals, each of which may be eminently desirable, but which in combination create tensions and may render one or more of them unachievable.
Let me illustrate that by identifying three goals. First, the Government wish to achieve an increase in the undergraduate population. Increasing numbers produce not only a new body of students but many with different needs from those who previously went
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There is a valid case for each of these goals. However, with limited resources, the danger is that in seeking to achieve two of the three—and take any combination of two—you jeopardise achieving the third. My concern is that this is not recognised sufficiently.
I bring my two themes together. Because we have different regulators, each concerned with a different aspect of what higher education delivers, we fail to look at higher education holistically. There are not just heavy pressures but, at times, conflicting pressures. I believe that there needs to be a greater recognition of that fact and, basically, less of a tendency to say to academics “do this, do that” and more of a willingness to say “well done”. We are among the best in the world in higher education not because we outspend our competitors but rather because of the sheer commitment of those in higher education. Given the limited resources, higher education in this country has achieved a high level of excellence, and that is a cause for celebration. It may achieve even more if left alone more often to get on with the job.
1.04 pm
Lord Bew: My Lords, I thank my noble friend Lord Luce for giving us the opportunity to have this debate, and I want to place my remarks in the broadly humanist frame of reference that he established in his fine opening speech. Like the noble Lord, Lord Norton, I am a jobbing academic. Both the noble Lord and I still find ourselves at the chalk face, and I have been so since 1975. First, I want to say a little about what is positive in our current educational system before looking to the future, as my noble friend Lord Luce advised us to do.
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