The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, I shall now repeat the Statement made in the House of Commons on Monday 17 July:
“With permission, Mr Speaker, I would like to announce the publication of the Government’s higher education reform consultation response. This country is one of the best in the world for studying in higher education, boasting four of the world’s top 10 universities. For most, higher education is a sound investment, with graduates expected to earn on average £100,000 more over their lifetime than those who do not go to university.
However, there are still pockets of higher education provision where the promise that university education will be worth while does not hold true and where an unacceptable number of students do not finish their studies or find a good job after graduating. That cannot continue. It is not fair to taxpayers who subsidise that education, but most of all it is not fair to those students who are being sold a promise of a better tomorrow, only to be disappointed and end up paying far into the future for a degree that did not offer them good value.
We want to make sure that students are charged a fair price for their studies and that a university education offers a good return. Our reforms are aimed at achieving that objective. That is why the Government launched the consultation in 2022 in order to seek views on policies based on recommendations made by Sir Philip Augar and his independent panel. The consultation ended in May 2022, and the Department for Education has been considering the responses received. I am now able to set out the programme of reforms that we are taking forward.
I believe that the traditional degree continues to hold great value, but it is not the only higher education pathway. Over the past 13 years we have made substantial reforms to ensure that the traditional route is not the only pathway to a good career. Higher technical qualifications massively enhance students’ skills and career prospects, and deserve parity of esteem with undergraduate degrees. We have seen a growth in degree-level apprenticeships, with over 188,000 students enrolling since their introduction in 2014. I have asked the Office for Students to establish a £40 million competitive degree apprenticeships fund to drive forward capacity-building projects to broaden access to degree apprenticeships over the next two years.
That drive to encourage skills is why we are also investing up to £115 million to help providers deliver higher technical education. In March we set out detailed information on how the lifelong loan entitlement will transform the way in which individuals can undertake post-18 education, and we continue to support that transformation through the Lifelong Learning (Higher Education Fee Limits) Bill that is currently passing through the other place. We anticipate that that funding, coupled with the introduction of the LLE from 2025, will help to incentivise the take-up of higher technical education, filling vital skills gaps across the country.
Each of those reforms has had one simple premise: that we are educating people with the skills that will enable them to have a long and fulfilling career. I believe that we should have the same expectation for higher education: it should prepare students for life by giving them the right skills and knowledge to get well-paid jobs. With the advent of the LLE, it is neither fair nor right for students to use potentially three quarters of their lifelong loan entitlement for a university degree that does not offer them good returns. That would constrain their future ability to learn, earn and retrain. We must shrink the parts of the sector that do not deliver value, and ensure that students and taxpayers are getting value for money given their considerable investment.
Data shows that there were 66 providers from which fewer than 60% of graduates progressed to high-skilled employment or further study 15 months after graduating. That is not acceptable. I will therefore issue statutory guidance to the OfS, setting out that it should impose recruitment limits on provision that does not meet its rigorous quality requirements for positive student outcomes, to help to constrain the size and growth of courses that do not deliver for students. We will also ask the OfS to consider how it can incorporate graduate earnings into its quality regime. We recognise that many factors can influence graduate earnings, but students have a right to expect that their investment in higher education will improve their career prospects, and we should rightly scrutinise courses that appear to offer limited added value to students on the metric that matters most to many.
We will work with the OfS to consider franchising arrangements in the sector. All organisations that deliver higher education must be held to robust standards. I am concerned about some indications that franchising is acting as a potential route for low quality to seep into the higher education system, and I am absolutely clear that lead providers have a responsibility to ensure that franchised provision is of the same quality as directly delivered provision. If we find examples of undesirable practices, we will not hesitate to act further on franchising.
As I have said, we will ensure that students are charged a fair price for their studies. That is why we are also reducing to £5,760 the fees for classroom-based foundation year courses such as business studies and social sciences, in line with the highest standard funding rate for access to higher education diplomas. Recently we have seen an explosion in the growth of many such courses, but limited evidence that they are in the best interests of students. We are not reducing the fee limits for high-cost, strategically important subjects such as veterinary sciences and medicine, but we want to ensure that foundation years are not used to add to the bottom line of institutions at the expense of those who study them. We will continue to monitor closely the growth of foundation year provision, and we will not hesitate to introduce further restrictions or reductions. I want providers to consider whether those courses add value for students, and to phase out that provision in favour of a broad range of tertiary options with the advent of the LLE.
Our aim is that everyone who wants to benefit from higher education has the opportunity to do so. That is why we will not proceed at this time with a minimum requirement of academic attainment to access student finance—although we will keep that option under review. I am confident that the sector will respond with the ambition and focused collaboration required to deliver this package of reforms. I extend my wholehearted thanks to those in the sector for their responses to the consultation.
This package of reforms represents the next step in tackling low-quality higher education, but it will not be the last step. The Government will not shy away from further action if required, and will consider all levers available to us if these quality reforms do not result in the improvements we seek. Our higher education system is admired across many countries, and these measures will ensure that it continues to be. I commend this Statement to the House”.
Baroness Smith of Newnham (LD)
My Lords, from these Benches I find very little to disagree with in the questions and comments from the noble Baroness, Lady Twycross. She looked across at me as I was voicing approval, as if slightly confused that there should be agreement across the Opposition Benches. On the defence side of things, the noble Lord, Lord Coaker, and I tend to agree, but on this higher education Statement, a lot of questions need to be raised to understand His Majesty’s Government’s understanding of the purpose of higher education.
Before I go any further, I declare my interests as a professor at Cambridge University, one of the UK’s four of the top 10 universities mentioned in the Statement. I am also a non-executive director of the Oxford International Education Group, which runs pathway colleges that in turn run foundation courses. That is something I want to come back to, because there are a couple of questions about the domestic versus the international dimension of higher education that could be explored a little more.
Finally, I feel that I have to admit that I am a professor of European politics, which puts me in the school of humanities and social sciences, the sort of area that the Government seem to be a little sceptical about. I know that the noble Lord, Lord Moylan, has in the past suggested that if we rejoin Horizon Europe we should not be part of the social sciences aspect. Yet social sciences and arts and humanities play a vital part in educating our young people, whether at 18 or through lifelong learning. The noble Baroness, Lady Twycross, mentioned being a graduate of languages. Surely that is an area where we should be encouraging young people to go into higher education, to learn languages as a tool for working internationally. As a country that wants to look globally and have global trade markets, we need to be able to communicate internationally. Yet if you were a graduate of modern languages, you might not earn a high salary.
This is where the Statement leaves open a lot of questions. What do His Majesty’s Government really understand by value for money in higher education? We cannot always evaluate value for higher education purely in monetary terms. For some people, a higher education matters because they have an intrinsic love of the subject they are studying. You cannot put a financial metric on that. Also, there are people who go through higher education because they want a particular career track. They get the job they want in the industry to which they are attracted—perhaps the creative industries. They will not necessarily earn a high salary but they will be doing the vocation that they have trained for. Do His Majesty’s Government think that they should not be doing that? What do His Majesty’s Government mean by “a good job”, a phrase used in the Statement? Is it good in terms of salary or interest? Clearly, it is right that people should not be paying into the future for a degree that has had no benefit, but how do we evaluate that? Does it mean that the training needs are not met or simply that some arbitrary metric on income is not met?
His Majesty’s Government say that there are 66 providers where fewer than 60% of graduates progress to highly skilled employment or further study within 15 months of graduating. Can the Minister tell the House what is meant by highly skilled employment? That really matters for how we understand what His Majesty’s Government are seeking to do.
Finally, in terms of foundation courses, pathway colleges train international students who perhaps want to learn English and transition to being able to undertake degrees in British universities. Do His Majesty’s Government feel that they should be evaluated against the same metrics being outlined here, or is there perhaps a need to understand a little more about foundation year study? It could be about international students transitioning to the UK, but it may also be, as the noble Baroness, Lady Twycross, mentioned, about widening participation. We need to think very carefully about foundation courses, because there should not be some arbitrary mechanism whereby decisions by the Government or the OfS lead to foundation year courses being closed down, thereby diminishing the chances of participation rather than widening participation.
Baroness Barran (Con)
My Lords, I thank both noble Baronesses for their remarks and for the opportunity to clarify what feels like a bit of a misunderstanding about where these reforms are focused. Where the Government have sought to specify quality as the issue, both noble Baronesses took that to mean potential earnings, and that is not what the Government intend—and I will seek to clarify that.
The noble Baroness, Lady Twycross, started by philosophically asking what higher education was for. I am sure I cannot do justice to this, but I think it is reasonable to say that one of the key things that this Government and, I think, her party believe is that higher education is an incredible route to opportunity and social mobility and a great mechanism for fairness in our society. But we also believe that it is not the only engine—hence our emphasis on apprenticeships, degree apprenticeships, level 4 and 5 qualifications as opposed to exclusively level 6 and, of course, the flexibility, which I know both noble Baronesses support, that will come from the lifelong loan entitlement. The definition of “quality” is not earnings: the definition we are using comes from that used by the Office for Students—looking at continuation from one year to the next, completion and entry into graduate jobs or continuing education 15 months after completing a degree.
The point we are trying to get across is that degrees vary significantly in quality. One element of that is earnings potential. Because of the way I work, I went on the Discover Uni website, which I commend to noble Lords who have not looked at it already. You can say, “I want to study maths”—which in my case would have been quite a push. But anyway, I pretended I wanted to study maths and put in four different institutions and it gave me a great deal of information about earnings potential. Most of us think of maths as the highest earnings potential degree that one can do, but there are institutions where, if you read maths, three years later you are earning £20,000. I do not think that is the expectation of a young person going to university to read maths. So just understanding the difference is important for empowering the student. The same is true for law degrees and business study degrees and, I am sure, many others. In addition, on Discover Uni you get a huge amount of feedback from students about quality of teaching, student experience, et cetera. I know it is not the only source, but it is a helpful one.
Earnings do matter because we know that feeling financially secure is incredibly important for any individual’s sense of well-being. It gives them choices in life about how many children they have, where they live, where they work, and so on. I absolutely understand both noble Baronesses’ points that it is not the only metric but to ignore it is not realistic either.
The noble Baroness, Lady Smith, talked in particular about creative arts. She is right to raise that because if one looks at creative arts degrees and future earning potential, that group stands out as being lower. But the focus here is where institutions have failed to meet the B3—which she will understand very well—OfS quality metrics. To repeat, that is about continuation, completion and graduate employment. B3 does not include earnings and there are very few foundation years in creative arts, so I really do not think that is going to be an issue there.
The other point that your Lordships will have heard me make more than once is the fairness between student and taxpayer and fairness to students who do not complete their degrees and then are left with part of their student loan to pay off.
In relation to accessibility, the noble Baroness, Lady Twycross, questioned whether this is going to be discriminating against other people’s children rather than our children. I remind her that record numbers of 18 year-olds went to university this year, with the highest percentage ever from the lowest quintile in terms of deprivation, so 25.1% of those children. A child from a disadvantaged background is 86% more likely to go to university today than in 2010.
Both noble Baronesses questioned whether our focus on foundation years might be discriminatory. The data on foundation years suggests that there are a few subjects that have grown exponentially at a relatively limited number of providers. The noble Baroness, Lady Smith, talked about modern foreign languages. In 2015-16, 360 students completed MFL foundation years; in 2021-22 it was 465, so there was very little growth. Bring on those students who want to do more MFL. If we look at medicine and dentistry, the growth was very high, but from 125 students to 555. Business and administrative studies over the same period has gone from 4,250 to 35,580. There really are some examples that warrant greater focus.
I hope that I have addressed most of the points. Forgive me, the noble Baroness, Lady Twycross, talked about quality of apprenticeships. I have to say that I thought she was being slightly harsh. When this Government were elected, one of the things we really focused on was improving the quality of apprenticeships. A huge amount of work has gone into that. Actually, if we have a worry about the apprenticeship levy now, it is that it is going to be overspent rather than underspent. She will know that last year it was fully spent. I genuinely worry, with her party’s proposal to give employers a choice, that we will end up with half the number of apprenticeships that we have today.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend for repeating the Statement in this place this afternoon, giving us the opportunity to question her. I declare my interest, such as it is, in that I completed an internship—a stage—in the European Commission, followed by a Bar apprenticeship, both of which counted towards my professional qualification as a Scottish advocate.
Can I just press my noble friend on two small issues? One is that the academic institutions concerned will have sufficient notice of the phasing out of any of the courses concerned and that those who might have applied to them will be given alternatives to which they may be equally suited, with better outcomes for them.
Secondly, my noble friend will be aware that one of the challenges at the moment is obtaining skills and finding those with skills in plumbing, joinery, building, construction and other such areas. Will the new qualifications to which she referred actually plug that gap? That would tick a box because they are among the highest earners at the moment.
Baroness Barran (Con)
In relation to where qualifications might be phased out, I think that my noble friend is referring to the imposition of recruitment limits by the Office for Students. To be clear, that will happen after it has judged that an institution has not met the quality standards known as the B3 standards. The scale of limit will be a judgment for the OfS to make. There could be a limitation on growing a course. At the other extreme, the OfS might judge that it is not suitable to be delivered at all. I am not taking a view on either of those. I am just saying that it would follow an investigation by the OfS into quality.
I hope very much that universities are considering alternatives. Obviously, they are autonomous organisations, but there is a great human opportunity in offering some of the qualifications to which she referred. Also, from their responsibility for the financial viability of their institutions, there is an opportunity as those courses grow in popularity. For building, construction and other areas, from T-levels through to apprenticeships and other higher technical qualifications, the Government are trying to make sure that there is a pipeline of skills to meet the opportunities to which she refers.
Baroness Blackstone (Lab)
My Lords, the last time I got up and asked the Minister some questions I was able to be very congratulatory to the Government in relation to the Lifelong Learning (Higher Education Fee Limits) Bill. Regrettably, I cannot be for one second congratulatory about this Statement. I think it is both retrograde and ill thought-out. In implementation, it is going to end up as an unholy mess.
Let me begin with the criteria that the Government are using to define quality, which is essentially drop-out and earnings. I thought the Minister was equivocating in her response to the noble Baronesses, Lady Twycross and Lady Smith, on this subject, saying that it is not only about earnings and that she knows that other facets of higher education are important. But, when it comes to the criteria for closing down courses, this Statement makes it absolutely clear that the level of earnings from different courses is going to be a factor. It is a ludicrous thing to take, because there are many areas where people are badly paid but will have done very good degrees. There are other areas where people will be well-paid graduates but will not have done especially strong degrees from the many different academic criteria that you could use. This needs to be thought about again. It is just so mechanistic. Moreover, there is a well-established system of regulation of the quality and standards of degrees in universities, and that is what should be used to try to do something about those which have low standards.
Take the criteria of drop-out. I spent 10 years running an institution, Birkbeck College, with part-time mature students where there were very high levels of drop-out. But if anybody dares to say to me that it was because the courses were poor, I shall tell them they are talking nonsense. The reasons for drop-out are very rarely anything to do with the quality of the course. It is something about the problems students face, particularly disadvantaged, part-time or mature students. It would be far better if the Government focused a bit more on trying to find support for universities which have a large number of these students so that we do not have fewer disadvantaged students getting to the end of the courses, which of course we want to avoid.
I must not talk for too long, but I will comment on a couple of other things. I do not know how the Office for Students will collect evidence about all of this that is up to date, clear and valid. It will be enormously expensive and extremely complicated, and the OfS is bound to end up with errors about which courses it decides should not be continued and which should continue. What kind of discussions have the Government had with the Office for Students about exactly how to implement this particular programme?
I will make a final point about the social sciences. As a social scientist myself, I was somewhat offended to see that they have been identified as an area where we perhaps want fewer students doing foundation courses. I do not know why that should be the case; they are popular among students who want perhaps to come back to university a little later. Incidentally, economics is a social science, and it has some of the most highly paid graduate jobs that exist. The whole thing is an awful muddle, and more attention needs to be paid to the details of how to implement this, because standards are not static; they change all the time.
Baroness Barran (Con)
I am obviously disappointed that the noble Baroness did not give the same feedback as in the Statement the other day, but I am more concerned because I think that there is still a misunderstanding about how this would work in practice. I will try to go through the noble Baroness’s points in turn.
I am not equivocating about earnings: the criteria are clear. They are the new B3 quality criteria, which are continuation, completion and graduate-level or further study or employment 15 months after graduation. However, obviously, higher earnings normally correlates with graduate-level jobs—not across every sector and industry, but frequently. If I was confusing, I apologise, but we are not equivocating.
On how it will work, the regulation and the potential for recruitment limits will happen only after intervention. So the OfS will have gathered evidence—this goes to the noble Baroness’s later point about evidence—that shows concerns about whether an institution is meeting the B3 standards. It will investigate and, if it finds that those standards are not met, it will consider recruitment limits.
The noble Baroness referred to her experience at Birkbeck. On the profile of students accessing different courses, I tried in my earlier answer to give examples of how one compares some courses. Obviously the noble Baroness is right: we know that, overall, the profile of non-completion is higher among mature and disadvantaged students. However, it is when a particular course at a particular institution appears to be an outlier in that that we think it is appropriate to apply recruitment limits.
On the social sciences, let me be clear that we are reducing the foundation year funding for classroom-based subjects, among which by far the biggest growth has been in business and management—I gave the numbers earlier. There have been some other subjects where it has grown, but business and management is the outlier. We are reducing it to the same level as that at which an access to higher education course is funded. The question I put back to the noble Baroness—perhaps unfairly, because she cannot reply—is this: is it fair to ask a student to pay almost twice as much and take on almost twice as much debt for two courses that purport to get students to the same level?
Baroness Bennett of Manor Castle (GP)
My Lords, looking round the House, I venture to ask the Minister two questions.
The Statement refers to trying to deal with students
“paying far into the future for a degree that did not offer them good value”.
That led me to look at a recent House of Commons report on student debt in general, which has some terribly telling figures. The total level of student debt is about to pass £200 billion, the maximum rate of loans that students are paying is 7.1%, and the average debt at graduation this year is £45,600. Looking back at the history, I see that 2002 was the first year of a cohort with large amounts of debt. More than 20 years later, 44% of those debts are still not paid off.
So my first question to the Minister is: paying far into the future, are the Government really taking account to the impacts—economic, social and health—of now the second generation of students having to keep paying off debts, many of which they will never pay off at all, that will now weigh them down over 40 years?
My second question builds on the comments from the noble Baroness, Lady Blackstone, and others. Even if, as the Minister asks us, we put the question of income to one side and just look at graduate jobs, as the noble Baroness, Lady Blackstone, said, there is very much a regional issue here. People may do a maths degree in some places, but they might choose, because of the circumstances of their life, not to move to a place where they can get a graduate job, as defined by the Office for Students. But that does not mean that they are not benefiting from that degree.
What about, say, a grandmother—the Government say that they are keen on lifelong learning—who does a history degree and puts all her time, energy and talents, when she is not caring for her grandchildren, into doing local history and writing up local history? That is never going to make any money, but it is hugely contributing to the community and her enthusiasm will undoubtedly transmit to the grandchildren and their friends. Or what about someone who is a carer; they start a degree, the university knows they are a carer, it has affected their studies at school and they drop out half way through to go back to their caring responsibilities? Are we not going to see an impact on admissions? Will institutions be forced to direct themselves towards admissions of people who are then going to fulfil the criteria down the track?
Baroness Barran (Con)
In relation to the noble Baroness’s first question about the impact of debt on students far into the future, it is genuinely very interesting—given the level of debt and the amount of debate about debt—that demand to go to university continues to increase and continues to increase in very disadvantaged communities. Young people with an older brother or sister who is grumbling about repaying their student loan know that this is the case, yet there is huge demand for our universities.
I think the noble Baroness would also recognise that there are other taxpayers. Somebody must pay the costs of higher education and currently we have a balance between the students themselves and other taxpayers, some of whom have not been to university. That is a delicate balance to strike. But if one were to do away with student debt entirely, somebody would have to pay and that would obviously fall on every other taxpayer.
In terms of the individual examples she gives, whether it be deciding to live in a particular part of the country or choosing not to take a graduate job, or the grandmother, or the carer, I do not think any of those things change as a result of this. What we are saying is, you have two courses delivering the same thing, and in one course 40% of people drop out and in the other course 10% of people drop out with a similar profile; should we not be asking why that is happening?
Baroness Lawlor (Con)
My Lords, I thank my noble friend for her interesting analysis of the Statement in replying to questions. I was particularly interested in the questions from the noble Baronesses, Lady Smith and Lady Blackstone. Can I probe my noble friend on two points?
The noble Baroness, Lady Smith, referred to salaries not necessarily being a good indicator of the value of a course, particularly in arts and humanities. Humanities graduates can earn lower salaries than those who go into other subjects, but might I suggest that there is a middle way on this? History is my subject; I began my professional life in Cambridge as an academic historian for my first two jobs. But I found that many historians went into other jobs: they converted by the GDL—a law conversion course—or moved into media and the BBC, or the Civil Service. What humanities give, and I urge my noble friend to pay full tribute to this, is that a subject such as history encourages the training of the mind, which can be adapted and applied to more professional or vocational subjects. For instance, it is no accident—this is anecdote, but I think it is true—that classicists helped to start Silicon Valley, so there is not such a gap.
With regard to the point made about dropouts by the noble Baroness, Lady Blackstone, I could not agree more that one cannot necessarily blame an institution for poor teaching. Good heavens—Birkbeck College is renowned for attracting good students who take advantage of the flexible courses on offer, which can be taken at night. However, I suggest that we have a real problem here. It must be for the institutions to pay particular attention to selection procedures, so that applicants for their courses are suited to the courses on offer, despite the pressure for fees which most institutions are under today.
Baroness Barran (Con)
I thank my noble friend very much for her remarks. She does not need to convince me about the importance of a history degree in allowing you to do different things. Personally, I read history, went into the City, ran a charity and now I am here. I am not quite sure what your Lordships might take from that, whether it was a training for the mind or that I just got lucky. My noble friend is absolutely right that the kind of critical thinking skills that one gets in a number of academic disciplines, including history and other arts and humanities subjects, are incredibly important—arguably, increasingly so as we move into a world of AI and beyond.
Again, my noble friend is right about selection procedures. I would say in addition that we see really excellent examples of not just selection but initial support for students, whether that be in an institution such as Birkbeck or in an institution which typically takes more students who have just left school. That is clearly very important and something that many institutions work on. The last point I would make in relation to her remarks about selection also relates to the remarks in the Statement about franchise providers. It concerns the importance of the care that we believe the main institution that is issuing the degree needs to take on which franchise providers it works with.
The Deputy Speaker (Baroness Henig) (Lab)
My Lords, I think there are no further questions.