Higher Education: Affordability and Quality

Lord Patel Excerpts

Thursday 2nd July 2026 Lords Chamber

[Lord Patel (CB)]

My Lords, if the right reverend Prelate the Bishop of Leicester’s speech was inflammatory, mine is burned—so I am starting afresh, ad-libbing. I congratulate the noble Baroness, Lady Deech, on securing this debate. It is not an easy task to win a ballot for debates among the Cross-Benchers, as the competition is usually pretty fierce, particularly as one of the competitors was the convenor—but she won it and I thank her.

I will briefly speak about the challenges that universities face around research. We know that our leading universities are world leaders in research. We contribute more publications than any other country in the world. Our citation index for universities is 1.54, which is extremely high, and 16% of publications are rated at more than 10% in citations.

The value of universities is enormous. We do blue-sky research, and universities contribute to early innovations and help build billion-pound industries. For the population of 0.8%, we have a publication record of about 6%. Some 60% of the publications are international collaborations. Of the £72 billion that the United Kingdom spends on R&D—which is 2.64% of GDP—higher education is responsible for 24% of all of it, which is £17.1 billion a year. What is amazing is that that is the highest of the OECD countries. Japan, for instance, is the next highest, but it is at 11%, compared with 24% for higher institutions in the United Kingdom.

Where do universities get their funding from? They get it mainly from UKRI, which is structured, dual-support funding of about £6 billion, given to universities on a competitive basis. The second is the so-called QR funding, which is related to the efficiency metrics of research efficiency funding. They also get it from charities, mostly from Wellcome and Cancer Research UK in the health sciences; from philanthropy; and, for some universities, from the alumni network.

However, there are deep structural flaws in how the universities get the funding and what happens. The so-called 80% full economic cost that they are supposed to get from UKRI is, in reality, about 68%. The funding deficit amounts to about £5 billion, which the universities have to fund from somewhere else. Mostly they do this now from international student levies, but that is going down. QR funding has gone down to less than 15% since 2019, so universities are in trouble around supporting research. If they do not support research then either there are job cuts or a plan to cut research in certain areas, and universities will not bid for charities’ research because the overall funding required to support it will be higher. The implications are severe.

There are also implications for PhD training, with UKRI supporting only 5,000 students, compared to the nearly 7,000 students it used to support. PhD training institutions have been cut from about 76 to about 45, so there are huge implications for the PhD training that supports university research—PhD students are the fuel that supports university research. If we take them out, it impacts on our industrial strategy and therefore on our economy.

We need something to fix this. What are the fixes? The fixes are restoring 80% support for research funding to 100% and supporting QR funding for REF to a level that is compatible with inflation and with other costs, such as energy, et cetera, rather than 15% down from 2019. What will the Government do to restore university funding to full economic cost and QR funding to the level it should be? In future, how will they control the global talent visas—not the international student visas—that attract international scientists to work in our highly competitive and globally recognised research universities?