Higher and Further Education Debate
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Lord Willetts
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Higher and Further Education
Lord Willetts Excerpts(11 years, 7 months ago)
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The Minister for Universities and Science (Mr David Willetts)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“congratulates all those who have recently achieved their educational qualifications; notes the number of full-time higher education students in 2012 is expected to be higher than in any year under the previous administration; believes that the pupil premium, which is designed to raise the attainment of pupils from low-income households, represents a powerful mechanism for widening participation in higher education; welcomes the increased spending on widening participation in higher education, including the higher maintenance grants, the National Scholarship Programme and the extension of tuition loans to part-time students; further notes the Institute for Fiscal Studies’ recent finding that the new student finance system ‘is actually more progressive than its predecessor: the poorest 29 per cent of graduates will be better off under the new system’; supports the extra information provided to prospective students through the student finance tour and the Key Information Set; further supports the efforts being made to ensure the best possible match between students and institutions, with one-quarter of all undergraduate places removed from centralised number controls; and congratulates the Government for working with employers to deliver an unprecedented increase in apprenticeships, with 800,000 new starts since September 2010.”
I welcome this opportunity to debate our reforms to higher and further education. It is the right time to have this debate, as hundreds of thousands of students are starting at university. We congratulate them on their achievement and wish them well at university. We also welcome this opportunity to set out our policies. I will describe our approach to higher education and my excellent new colleague, the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), will set out our approach to training and further education.
Mr Willetts
In a moment.
Of course, it is also right to scrutinise the Opposition’s policies, as set out in the motion. I will turn to the previous Minister for universities, the right hon. Member for Tottenham (Mr Lammy), in a moment. I hope he will accept that under the inevitable partisanship of these exchanges, we should remind ourselves that all three political parties, faced with the dilemma of how to finance higher education in the future, have concluded that the right way forward is to have no up-front payments by students, but instead to have a graduate repayment scheme, paid for through pay-as-you-earn and incorporating the best features of a graduate income tax. All three parties, when faced with the responsibilities of Government, have reached the same decision.
Mr Willetts
We have published our White Paper and have set out our proposals in several consultation documents. We are implementing those proposals step by step.
Shabana Mahmood
The Minister has tried to defend his £9k policy, but has avoided saying anything about the 80% cut to teaching grant funding, which has necessitated the trebling of tuition fees to £9,000 a year. What does he have to say about that?
Mr Willetts
That leads me on neatly to setting out what our reforms are accomplishing. The first thing they are accomplishing—[Interruption.] The hon. Member for Birmingham, Ladywood (Shabana Mahmood) will have to be patient, because I am going to set out the figures for her. Our reforms ensure that students will continue to get well-funded higher education, while at the same time—we make no apology for this—saving money for the Exchequer, because of the fiscal crisis that we inherited from the previous Government. The total amount of cash going to universities to pay for the teaching of students is £7.2 billion for 2011-12, £7.4 billion for 2012-13 and £7.9 billion for 2013-14. We are increasing the amount of cash available to finance the education of university students, while significantly reducing the Exchequer contribution.
Contrary to what the Opposition spokesman said, we are maintaining a partnership between Exchequer funding and private funding. The latest OECD figures, which were published yesterday in its excellent education handbook, estimate that approximately 40% of the costs of educating students will be met directly by the Exchequer. The other 60% does indeed come not from students, but from graduates when they can afford to pay it back. That is a sensible way of financing higher education in an age of austerity.
As well as providing more cash for universities while saving money for the Exchequer, our second achievement is increasing the choice and flexibility in the system by liberalising the controls over numbers that we inherited. We have started that this year with our liberalisation for AAB students. We estimate that approximately one in four students will benefit from the freedom of choosing a university without any of the old corporatist controls on the total number of places at individual universities that we inherited. We are proud to be going further next year by including ABB students, meaning that one in three students will enjoy those freedoms.
Mr Willetts
I want to make some progress, but I will of course give way to the Opposition spokesman for a second time.
Shabana Mahmood
I thank the Minister for giving way a second time. Will he remind the House why he had to introduce his core and margin model? Does he remember telling the House on many occasions that £9k fees would be the exception, not the norm?
Mr Willetts
I did not recognise what the hon. Lady said about fees of £7,500. I have explained to the House many times the basis of the calculations. We introduced the policy to bring more diversity into the system. There are local further education colleges across the country that, for the first time, will be able to offer higher education, financed out of our core and margin policy, which is to be welcomed.
We have therefore increased choice and flexibility. We have also transformed the amount of information that is available for prospective students, which we believe will drive up standards in universities as prospective students think about what contact hours they will have, what the class sizes will be, how universities score on the national students survey and, crucially, how universities score on employment outcomes for graduates.
Indeed, this morning, I joined Which? at a London comprehensive for the launch of its excellent new website, which offers far more information to prospective students than ever before. It was a great moment. It was also a pleasure to be joined by the president of the National Union of Students. The NUS is working with Which? to provide better consumer information for prospective students.
Mr Andrew Smith (Oxford East) (Lab)
If the information that the Minister is giving out is so good, why are withdrawals from the application process up by 16%? Does that not show that the more information people get about the costs that the Government have imposed, the more they are put off?
Mr Willetts
No. I think that we have succeeded in getting across to prospective students the important message that they do not have to pay up front to go to university. I hope that all Members from all parts of the House, regardless of their views on the fees, will agree that we should all communicate the message that no student pays up front and that they pay back only as graduates. I pay tribute to the enormous efforts of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) in that regard.
Emily Thornberry (Islington South and Finsbury) (Lab)
I wonder whether the right hon. Gentleman will help me communicate a message to one of my constituents, who is here legally as an overseas student. He is unable to go into the third year at London Metropolitan university because, for some reason, he is no longer allowed to go there. He wishes to pay the fees and wants to complete his degree. Will the right hon. Gentleman help me convey to him why his education has been so abruptly and unfairly stopped?
Mr Willetts
Several points have been made about London Met, so let me explain the latest position to the House. I fully understand that there are genuine overseas students who are here legitimately and who need as much assurance as we can offer them about their ability to pursue their studies. That is why we set up a taskforce on the day that the UK Border Agency took its operational decision. The taskforce has met several times. It is led by the head of the Higher Education Funding Council for England and other bodies are involved. Next Monday, as a result of the efforts of the task force, there will be a mini clearing procedure. We are collecting offers from universities around London and elsewhere of places on particular courses, which will be available to overseas students at London Met. I will be happy to keep the House updated, in whatever way is suitable, as the taskforce makes progress in ensuring a fair deal for overseas students.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Why did the Department for Business, Innovation and Skills not stand up to the Home Office and the UK Border Agency, and not stand up for British universities and their reputation around the world, by not allowing this crazy decision to go ahead, which is doing untold damage to this world-class industry?
Mr Willetts
It was an operational decision by the UK Border Agency, for whom the matter is very clear. Highly trusted status, which is enjoyed by individual universities, is highly prized and brings heavy responsibilities. UKBA’s assessment, independently made, was that London Met was not meeting the responsibilities that it needed to in order to have highly trusted status. In those circumstances, it was unable to advise Ministers that the situation should be allowed to continue. That is the background to the decision, but we are focusing on ensuring the best possible support for legitimate overseas students as constructively as we can.
Simon Hughes
Does the Minister agree that we need to persuade everybody to get the message across not only that there are no fees to be paid up front or while at university, but that there are still places available not just for first-time, 18-year-old students but for more mature students? We should also encourage people to consider university not as the only option in the weeks ahead but as one option.
Mr Willetts
My right hon. Friend is absolutely right, and that leads me to my next point.
Another feature of our reforms is that we have done everything to encourage students from the widest possible range of backgrounds to continue to apply for university. I remind the House of the figures, which the Opposition spokesman carefully ignored in her lengthy speech. The percentage of applications to university by young people has indeed fallen—I accept that—to 31.6% from 32.6% last year. Last year’s rate was the highest on record, and this year’s is the second-highest on record. It is a higher rate of university applications than in any year when the Labour party was in government. I believe that that is because we have successfully communicated to young people that they will not have to pay up front to go to university. Of course, we are also increasing maintenance support for students at university this year. The maintenance grant and support for bursaries are going up. That is why we still have record rates of application to university, and we should celebrate and remember that fact.
Steve Brine
Given that the Minister inherited a commitment to cutting £600 million from the budget, what would the outcome have been if he had not taken the decision to base university financing on a system of student fees and loans? Presumably it would have been a dramatic drop in numbers and my having to say to thousands of my constituents, “Sorry, university’s not for you.”
Mr Willetts
We inherited from the previous Government a simple line in the 2009 autumn statement announcing £600 million of cuts in higher education, science and research. Absolutely no work had been done about where the cuts should be and how they should be delivered, but they would have meant either falling student numbers or less support for science and research. We have been able to offer cash protection in a ring-fenced science budget, and as I showed the House earlier this evening, there has been an increase in the total funding available for teaching in our universities. To achieve that when we are facing the severe financial problems that we inherited from the previous Government is evidence of our commitment to opportunities for young people and to universities and research.
That is exactly what the outside experts say. For example, I remind the Opposition spokesman of the assessment by the Institute for Fiscal Studies. It stated in June:
“The HE funding regime to be introduced in England in September 2012 will be substantially more progressive than the current system. Roughly the poorest 30% of graduates, in terms of lifetime earnings, will be better off…than under the current system…Universities will also be better off, on average, and the taxpayer will save around £2,500 per graduate.”
Only yesterday I met the head of the education division of the OECD, who was here to launch “Education at a Glance”, its annual publication. He described our system of repaying loans as
“the most advanced system in the OECD”,
and added that
“probably no system does it better.”
That was what the impartial head of the OECD’s education division said yesterday.
Mr Willetts
I hope that the hon. Gentleman will agree that he should endorse the assessments of the IFS and OECD.
Tristram Hunt
While the Minister was having that conversation, did the OECD back the Government’s strategy of an 80% cut in the teaching budget at a time when every other major nation is investing in education and higher education and thinking about those industries as part of the future rather than cutting them? We are in the same bracket as Romania.
Mr Willetts
The OECD actually believes that our proposals are a way of continuing to ensure that a good number of people go to university even when we are having to save Exchequer funding. It believes that other countries can learn from our model.
I have set out our policies, and I should like to turn to the Labour party’s policies, about which the hon. Member for Birmingham, Ladywood said surprisingly little in her lengthy speech. We know from the motion that Labour’s policy is £6,000 fees. There is a long and unhappy history to Labour’s higher education policy. I will not take her through the whole of it, although I am tempted. I will jump straight to where we are at present, as stated in the motion and in the longest single statement of Labour’s policy that we have found, the speech by the shadow Secretary of State on 2 December. His explanation of that policy took up a tiny fragment of the speech, a few lines. It was the type of fragment of text that academics in our universities love to pore over. He said:
“I’ll explain how this works: reducing the maximum level of fees to £6,000 while compensating universities for the difference costs £1.1 billion.”
That was his starting point. Well, the Department’s official costings show that his policy of bringing fees down to £6,000 would cost £2 billion. That £2 billion is currently going to our universities to pay for the education of students and for outreach, bursaries and access programmes that we thought Labour supported. He would take away that £2 billion of funding for higher education. He claims that he would miraculously be able to finance that, although admittedly he would only have £1.1 billion so he is £900 million short already.
Let us go through how the shadow Secretary of State claims he would plug that gap. He stated:
“£350 million will come from automatic savings from reducing the cap to £6,000 because it will mean some associated expenditure, such as on as fee waivers, will no longer be required”.
The trick is in the words “such as”, because it is not just fee waivers. Let us be clear about what that “associated expenditure” is. It is programmes to assist with student retention; outreach programmes whereby universities go to local schools and encourage students to apply to university; and bursary programmes financed out of the higher fees to offer our students increased financial support. I have a simple question for the hon. Member for Birmingham, Ladywood. I have already permitted her to intervene twice, and I will do so again. Can she offer a guarantee that no student at university would be worse off as a result of the changes that she would make to save that £350 million?
Shabana Mahmood
I am very happy to intervene on the Minister, and I can absolutely guarantee that. What he is missing in his desperate attempt to attack the much more progressive £6,000 fee proposal is that it would automatically obviate the need for quite so many fee waivers and bursaries created by his more expensive system of tuition fees.
Mr Willetts
That is a very confusing intervention. First, the hon. Lady said that she could guarantee that nobody would be worse off, then she said that Labour’s policy would obviate the need for bursaries. Let us be absolutely clear that no student will pay fees up front. They will be paid by graduates. Bursaries matter because they are cash for students now. Is she pledging that the extra money from fees above £6,000, some of which finances bursary programmes and extra support for students, would continue after fees were reduced to £6,000? Yes or no? Would all bursaries be preserved?
Shabana Mahmood
The position of bursaries would be unaffected under the £6,000 proposal. We are saying that the additional cost incurred by moving to £9,000 tuition fees would be brought down. We would not need quite so much money, because people would not have the same level of debt.
Mr Willetts
We are talking about future graduate debt, and the House is noticing that the hon. Lady is wriggling on the issue. We are saying that the extra funding helps to pay out cash for students at university through higher bursaries that are paid for out of revenues from higher fees. Students will have observed the failure of the Labour party to commit to maintaining that money.
Let us look at the next item that will supposedly meet those losses. We have established that the cost is not £1.1 billion but £2 billion, and that £330 million of that already comes from a set of measures that students will dislike. The shadow Secretary of State went on:
“£300 million comes from cancelling the Government’s planned cut to the corporation tax on the banks”.
That is the next extraordinary device that he thinks will help him save that money. Let us be clear: this Government have introduced a bank levy to raise at least £2.5 billion a year. That was set out by the Chancellor in the 2012 Budget, to take account of the benefit to the banking system from additional reductions in corporation tax on banks. In other words, we are already raising this money; we are already collecting extra money from the banks through the banking levy which is to offset the effect of lower corporation tax. There is no reduction in the taxation on banks that the Labour party could use to pay for this policy; the banking levy is extracting that funding.
If any Member of this House were remorseless in ensuring that every pound of revenue was extracted from our banks to contribute to education and other purposes, it would be my right hon. Friend the Secretary of State. We are already extracting a large amount of money from the banks, and it is evidence of the bankruptcy of the Labour party’s thinking that when faced with any problem or public expenditure challenge it keeps claiming that it can meet the cost by taxing the banks. The evidence shows that the funding is simply not available to pay for it.
Reversing the VAT increase—£13.5 billion—is supposed to be met by taxing the banks. The Opposition have called for more capital spending—£5.9 billion—which will supposedly be met by taxing the banks. Reversing the child benefit savings of £2.5 billion will apparently be met by taxing the banks. Reversing tax credit savings—£5.5 billion—will be met by taxing the banks. They want more regional growth funding, and now we learn their plans for universities as well. There is simply no way in which taxing the banks will solve the gaping black hole in the Opposition’s financial proposals, and we will not let them get away with it.
Mr Willetts
Let me continue to make progress.
The final item, and the biggest on the shadow Secretary of State’s list, is in some ways the most curious. Some £500 million is to come from the top 10% of graduates. I quote the shadow Secretary of State, who wishes to ask
“graduates earning over £65,000 in each year of their working life—to pay more through a combination of a higher interest rate…and to continue to pay for an additional two years.”
That is £65,000 in each year of their working life. The shadow Secretary of State is possibly the only person in the Chamber who could have imagined earning £60,000 a year in each year of his working life. The idea that a levy on people earning £60,000 in each year of their working life could raise £500 million is absolutely incomprehensible. Does the Labour party perhaps mean that when someone’s earnings eventually reach £65,000, they will be charged a higher rate or be charged retrospectively? Again, however, there is no way in which such a measure could raise anything like £500 million, not least because in a free and voluntary system in which we have—quite correctly—protected the right of people to make early repayments of their loan, people whose earnings are heading that way will simply repay their loans. The idea that they will find themselves trapped in penal repayment terms when they are earning over £65,000 a year is complete fantasy. There is no £500 million.
I am, incidentally, offering the hon. Member for Birmingham, Ladywood a free briefing on her policy, and I hope she appreciates how helpful it is. I am trying to explain it to her. In addition, if she were to move to anything like the commercial terms envisaged by the Opposition, consumer credit legislation would come into force and she would find a whole host of new regulatory requirements placed on her scheme that it would not be able to meet because of the design of the scheme that we inherited from the previous Government. It would simply become unworkable. There is no £500 million to finance the Opposition’s proposal, and they have no way of financing fees of £6,000.
Mr Thomas
Perhaps I can bring the Minister back to the Government’s own policy—or lack of it. Perhaps he will explain why it is fair for a student and their family to be able to probe the offer from a mainstream university using freedom of information legislation, but not that of a commercial, for-profit university.
Mr Willetts
It has come to a pretty pass when a loyal Opposition Back Bencher has to help those on the Front Bench by diverting attention from his party’s own policies, but that is what it has come to. The fact is that there is a black hole in the Opposition’s accounts, and we need to know whether they will cut £2 billion from resources that are now going to our universities. How are they are going to provide an extra £2 billion that is financed properly and honestly, and not by the slick accounting tricks used in the only attempt that they have so far made to explain their policy?
George Freeman
The Minister is famously well read, and I wonder whether he saw the comments made by Lord Mandelson in his paperback autobiography. He said that when he launched the Browne review in November 2009, he
“assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double.”
Is not the truth that dare not speak its name on the Opposition Front Bench that the Labour party would have doubled fees had it stayed in power?
Mr Willetts
I do recall that vivid and frank admission from the former Secretary of State.
The final irony of the Labour party’s proposals is that it is not at all clear what purpose they achieve. Let us be clear: there is nothing in those proposals for students who are currently at university; there are only risks. There are risks of having less money to pay for the student’s higher education, and, as we have seen, of less money for their bursaries. There seems to be no proposal to change the repayment terms of the scheme—9% on earnings above £21,000—and there is no reduction in the monthly repayments that graduates pay. There is, therefore, nothing in those proposals for people in their 20s or 30s; it will simply mean that they end their repayment period a bit earlier than they would otherwise have done. There is absolutely nothing for recent graduates.
Therefore, there is nothing for students, nothing for recent graduates because monthly repayments are not reduced, and there is no help for the poorest graduates, the one third who are better off under our scheme because we fully accept that they will not be able to repay the full amount under the current scheme. The Opposition managed to spend £2 billion that they do not have, with no help for students, no help for recent graduates, and no help for the poorest graduates. That is an extraordinary achievement.
I do not know which bit of the policy-making process produced this proposal, but the Opposition really need to do better. Just possibly, the Leader of the Opposition recognises that problem. In September last year he was asked on the “Andrew Marr show” about his policy, and about the status of the commitment to £6,000 and whether it was a policy that the Labour party would take into the next election. He said:
“The status is that it’s something that we would do now, that it’s something we’re committed to. But the manifesto’s three and a half years away. We'll announce the manifesto”.
It does not even look as if the Leader of the Opposition believes that that policy will ever make it into the Labour manifesto, and after what we have understood about it in today’s debate, I am not at all surprised.
Mr Clappison
I will later, if I have time. I think I have used up my extra minutes already, although I know that the right hon. Gentleman is very interested in this subject.
Although I disagree with OFFA in principle, I pay tribute to its outgoing head, Sir Martin Harris, who is a man of great academic distinction. That brings me to the question of his successor. As my hon. Friend the Member for Northampton South (Mr Binley) touched on, the Business, Innovation and Skills Committee expressed concerns that led it to withhold approval for his appointment. I share these concerns and, as a parliamentarian, take little pleasure in seeing a Select Committee’s view being completely ignored, but I wish Professor Ebdon well, will take a close interest in his work and will endeavour to help in any way I can. His recent interview with The Daily Telegraph, however, has attracted much comment. [Interruption.] I can see the Minister in a leaping position, as though he wants to leap into the debate. I will certainly give way, if he wishes intervene.
Mr Willetts
I look forward to continuing these exchanges in a variety of ways, but let me assure my hon. Friend that the most recent advice that I and my right hon. Friend the Secretary of State have sent to OFFA makes it clear to Les Ebdon, for whom I have the greatest respect, that he is to work within the framework of agreed Government policy, as set out in the higher education White Paper. We explicitly set out in our letter that he has a duty to protect the ultimate right of higher education institutions to select their own students. That right of universities to choose their own students was put into law by the previous Government—possibly by the very Committee that he sat on—and is one that we will continue to respect and protect.
Mr Clappison
That is like the small print of a contract. I have seen the advice to OFFA and what is said on its website. I do not know whether my right hon. Friend, through that intervention, sought to withdraw the injunction given to OFFA last year—the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) is looking very interested—that universities should focus more sharply on their outcomes, rather than simply on their inputs and activities in trying to generate applications. The universities were given the clear message that there had to be a sharper focus on targets. If my right hon. Friend the Minister is withdrawing that, I would be pleased to hear it. Otherwise, what he has said remains the case, as it always has been, including under the previous Labour Government—it has been put in the small print as a longstop.
Mr Clappison
That sharper focus was the clear message in the guidance. If my right hon. Friend is prepared to withdraw that, I will happily give way to him.
Mr Willetts
Let me try to set out the position—this goes back to my comments about the Opposition’s policies. We are talking about universities having perhaps £700 million of access spend, because of the extra revenues they have from higher fees. It is absolutely right to say to OFFA that we want it to scrutinise the effectiveness of all that spending. Some of it goes on summer schools and some of it goes on outreach visits to secondary schools, and there are also foundation-year programmes. Indeed, there is a whole range of things. When we are talking about expenditure on such a scale, it is rather important to ask OFFA to work out what works and what does not. That is a legitimate question when substantial sums of money are involved.
Mr Clappison
I would be grateful if my right hon. Friend could therefore clarify—perhaps I will leave it to the wind-up, because I am intervening in my own speech now—what else “outcomes” can mean other than admissions. That is the only way one can look at it in this context. My right hon. Friend’s advice was to go beyond applications and look at outcomes, and outcomes in this context can mean only admissions. If there is another meaning, I look forward to his clarifying that, but as I see it, the position is that OFFA’s original activities were given a “sharper focus”, as the advice to OFFA from the present Government puts it. I shall be taking a great interest in this matter.
I am also particularly interested in what Professor Ebdon has said—perhaps the Minister would care to deal with this in the wind-up as well—about what he describes as the “most selective universities” in terms of admissions. He said:
“It would be wrong to underestimate the challenges they face.”
I think we should praise and celebrate our most selective universities, including Oxford and Cambridge, not seek to undermine them. My frame of reference is the fact that they are a great national asset. They are not doing anything wrong. If Ministers and Professor Les Ebdon want something to look at, they should perhaps look at those universities that have an extremely high drop-out rate—not Oxford and Cambridge, or the other selective universities—which is such a waste of public money and resources.
I hope that the Minister will be able to convince me in his winding-up speech and answer the concerns that have been raised. At the moment, I feel very much as though I am not helping to build the big society—which is what I want to do—but recreating the Soviet Union, because that is what this apparatus reminds me of.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
My hon. Friend the Member for Sheffield Central (Paul Blomfield) is spot-on about the effect of such high tuition fees on those wanting to apply for postgraduate courses. Like him, I want to focus on one particular issue, which is clearly linked to the Government’s plans for higher education and their policy of £9,000 tuition fees, but which has not been given such a high profile in the debate so far.
As others have mentioned, Ministers wanted students to consider degrees costing less than £9,000, to reduce the Treasury’s exposure to student debt. What has not been highlighted in the debate is Ministers’ plan significantly to increase the role of commercial, for-profit universities owned by private shareholders to help to achieve that objective. They have significantly increased the number of courses run by such institutions for which students can secure a student loan.
I should say that there are already a large number of students studying and doing well at private universities in the UK. However, it is far from clear that Ministers have grasped the scale of risk involved in allowing an even bigger expansion of access to student loans for commercial universities without proper safeguards. In the US, the for-profit higher education world has been rocked by a series of scandals involving very high drop-out rates, very low degree completion rates and aggressive recruitment practices. Indeed, according to a recent American Senate investigation, in the three previous years almost 2 million students had withdrawn from for-profit institutions without completing a degree but with significant personal debt. One such institution had a drop-out rate of 84%.
I accept that Ministers have said that some safeguards are needed as the commercial, for-profit part of the universities sector grows. It would be helpful if the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), whom I congratulate on his appointment, set out in his response a little more detail about the Department’s plans.
For-profit commercial universities are still much less well regulated than mainstream universities. Surely Government Members would want the marketplace, as they describe it, for university education at least to be on a fair basis. Surely all for-profit companies offering a university education that want to recruit students who can access publicly backed loans should be subject to the same information and publication requirements as public universities. Those requirements should include student data and financial information and, as I made clear in my intervention on the Minister—uncharacteristically, he resorted to blather and ducked the question—be subject to freedom of information legislation.
When he replies to the debate, I encourage the Minister not to follow the example of his right hon. Friend the Minister for Universities and Science but to answer the question: when will Ministers bring forward plans to require commercial, for-profit universities to be subject to freedom of information legislation? When will they be required to provide the same level of data and information as mainstream universities so that they can be held to account in the same way?
Mr Willetts
Briefly, we are using the designation power—the power to designate courses and institutions—much more actively than the previous Government. That will ensure both the financial strength and the quality of provision in courses at alternative providers. There are still differences in the regulatory regime and it cuts both ways—FOI legislation cuts one way, equalities cuts the other, but that is the power we are using.
Mr Thomas
I say gently to the Minister that it is interesting that he and his colleagues in the Treasury are examining whether commercial, for-profit universities should be exempt from VAT in order to create a level playing field, but other sensible regulations, such as the requirement to be answerable to FOI legislation, as mainstream universities are, do not apply. Our collective experience of banking regulation and its failings, about which hon. Members across the House have uncomfortable memories, ought to encourage Ministers to be wary of market failure. As I have said, surely commercial universities that want exemptions should be properly held to account.
In her excellent opening speech, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) set out clearly how this policy of higher tuition fees exemplifies the Government’s failures in a series of other areas. Our motion outlines a clear, sensible alternative, and on that basis, I commend it to the House.
Mr Gordon Marsden (Blackpool South) (Lab)
I begin by commending all speakers for the Opposition. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) was forensic on debt, and my right hon. Friend the Member for Tottenham (Mr Lammy) was impassioned about participation. My hon. Friend the Member for West Bromwich West (Mr Bailey) was sharp on upskilling as was my hon. Friend the Member for North West Durham (Pat Glass) when she spoke about the chaos in the FE sector. My hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) spoke about teaching, my hon. Friend the Member for Sheffield Central (Paul Blomfield) about social mobility, and my hon. Friend the Member for Harrow West (Mr Thomas) about the problems of private providers.
We move from one fee fiasco in higher education to another in further education. In her opening remarks, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) spelt out the uncertain future that faces the nearly 400,000 adult learners affected by the proposals. That situation came about as a direct result of the blood offering made by Ministers from the Department for Business, Innovation and Skills to the Chancellor’s cuts in late 2010. As if appalled by the implications of what they had done, they then sat on the issue and dithered for over a year before commissioning any surveys or discussing its practical consequences with stakeholders. Those consequences are now putting huge pressures on the FE sector.
FE colleges, which are key drivers of social mobility and hubs within our communities, are being hit left, right and centre by Government policy. First they were saddled with the 25% cut in resource grants, then the abolition of the education maintenance allowance put a strain on their budgets and, for the first time in many years, they have seen a fall in the number of enrolments of 16-to-18 years olds. They are now confronted with an FE loans policy that operates on a base assumption that student numbers will drop by 20%. In fact, the Department expects as many as 45% of learners—up to 150,000 people based on current numbers—to drop out, and that will hit learners old and young alike as the viability of college courses is affected.
The system is inevitably more complex than HE loans because of the varying start dates, course durations and the costs of FE courses, and no central administration similar to that of UCAS has been entrusted to the Student Loans Company. I say no more. Many hon. Members bare the casework scars from that organisation, and there are no pilots in place to trial the new system.
Mr Marsden
You have not. With their ability to offer a second chance, FE colleges are at the vanguard of promoting social mobility and loans could be a huge barrier to that. Four thousand pounds is a huge amount of money during the recession and could be a major deterrent for learners, restricting the social mobility that I thought the Business Secretary was keen to promote. He should not just take my word for that, but should listen to his party’s immensely respected former spokeswoman on education in the Lords, Baroness Sharp. In May this year she said:
“I cannot understand why we, as a government, why on earth we are pushing forward with loans for level 3…I really think that if we are concerned about social mobility, it’s very important that we try to overturn it.”
She speaks for women, with whom level 3 FE courses are popular. The Departments statistics show that women make up roughly two thirds of the cohort who will be hit by FE loans. For many women—those doing low-paid jobs or juggling family and caring commitments—a £4,000 a year loan is not a realistic proposition.
My discussions with women learners around the country reminded me of the outlook of many of my women students when I was an Open university tutor. They wanted to broaden their horizons and welcomed what their completed qualifications could offer them. However, none felt they would be able to do those things under a loans system. The Government, and not least the Minister, have told us that we should forgo Government activity in favour of nudge theory. The jury may be out on the latest intellectual fad, but Ministers need to be reminded that people can be nudged away from things as well as towards them.
HE access courses are a popular route for female learners, so I am glad that, after a long campaign, the former Minister for Further Education, Skills and Lifelong Learning announced a series of concessions before the summer recess. That was a welcome first step, but his successor needs to ensure that those commitments are implemented rapidly and effectively. Even so, Million+ warns us in the briefing for today’s debate that the net result of the overall changes will, in the long term, be fewer mature learners, and that progression by those who want to study later in life will be undermined.
However, the Government have not budged an inch on scrapping direct financial support for level 3 and above apprenticeships and forcing apprentices to take on individual loans. In responding to the FE consultation, the UK Commission for Employment and Skills specifically counselled the Government that not just large employers are concerned and lukewarm about the proposals, but adult apprentices themselves. UKCES gave the Government at best an amber light, and at worst a red light, and yet they press ahead. If huge numbers of adults drop out, the Government’s much-vaunted drive to increase apprenticeships, which is heavily dependent on increases in post-25 apprenticeships, will be in tatters. The numbers will simply fall off a cliff. That might blow a hole in the Government’s hubris, but more importantly, it will deny the life chances of tens of thousands of adult learners.
At the other end of the age spectrum, grants are offered for small and medium-sized enterprises to take on 16 to 24-year-olds, but they are moving at a snail’s pace. That is why the Opposition proposed earlier this year to expand the number of apprenticeships, by buddying up with large employers and expanding group training associations. In the meantime, local authorities, including many Labour local authorities, must pick up the slack as the Government stall and flail around. Councils such as Liverpool, Wakefield, Barking and Dagenham, Knowsley, Dudley, Oldham, and my council, Blackpool, work with local colleges and providers to place young people in quality apprenticeships.
Many young people are still unable to access some of the most competitive apprenticeships without the necessary pre-apprenticeship training. The Government’s fiascos—they first allowed and then curtailed short-term apprenticeships—have wasted precious months and years, as the Association of Employment and Learning Providers said in its September newsletter. Young learners in further education face a double-whammy. Those not in education, employment or training and those just above have not had the training and support to allow them to access apprenticeships, while those in the middle must compete with young people who have stronger academic grades.
On top of that, Department for Education Ministers have failed to fulfil their part of the FE bargain by dropping work experience from the schools curriculum, dropping independent advice and guidance, and by failing to help young people to climb the FE or apprenticeship ladders. They do not say that that is what they are doing; they simply abdicate their responsibility for providing frameworks to make those things happen.
The classic example is the Government’s response to Jason Holt’s excellent review on how small and medium-sized enterprises could be given more support and encouragement to take on young people. The Department’s response to his plea to them on careers advice and guidance was this:
“Whilst we welcome the specific suggestions made by Mr Holt …we believe it should be up to schools, together with local partners including employers, to determine how best to address this challenge”.
I am therefore not surprised that, in this week’s issue of Further Education Week, Mr Holt states:
“I am disappointed the Government has not taken more notice of my proposal…I had hoped they would require schools actively to promote apprenticeships and to put a stronger emphasis on equipping pupils with…skills…there is still no obvious structure in the school system to encourage young people to think of apprenticeships…The Government’s decision to hand the baton to already hard-pressed and financially constrained schools will result in little actually happening.”
When I chided him on this last week in Question Time, the Secretary of State said that he did not regard the hands-off approach at the Department for Education as the last word on active Government. The new Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), has a golden opportunity. He is a Minister in the Department for Education as well as BIS. Will he take up the cause and address Jason Holt’s concerns? His predecessor would have done so.
At the same time, little or nothing has been done to respond to the pleas from business to get involved in such programmes—again, waffle but no action. This is a dithering Government. For all their talk of being joined-up, the chasms and conflicts between the Department for Education and BIS are widening. They have wasted the best part of two years, failing to use billions of pounds of public procurement to guarantee apprenticeships from companies bidding for large contracts.
While the Opposition have been working closely on policies to give young people a linked partnership of opportunities—from school days and college through to further education, including for older learners—the gap between the two Departments has become a chasm. While they want to erect barriers, we want to build bridges. As my right hon. Friend the Leader of the Opposition said this week, we need a skills system that does not leave us a country where the 50% who do not go to university feel completely left out. We plan to build that new agenda with schools, young people, businesses and trade unions working to fashion new vocational training systems. My right hon. Friend has said it all: while the Government dither, we are stepping forward. I commend the motion.