Higher Education White Paper

Oral Answers to Questions — Justice – in the House of Commons at 4:09 pm on 28th June 2011.

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Photo of David Willetts David Willetts Minister of State (Universities and Science) 4:09 pm, 28th June 2011

With permission, Mr Speaker, I should like to make a statement on the higher education White Paper, which sets out how our reforms will build on the changes to student support announced last year. We will put higher education back on to a sustainable financial footing. We will put students at the heart of the system and improve the academic experience, with universities and colleges being more accountable to their students than ever before. We will also take steps to improve social mobility without compromising academic excellence or institutional autonomy.

We inherited an enormous deficit, which has required difficult decisions. We could have reduced student numbers or spending per student, or we could have provided less help with living costs, but those options would have been unfair to students, to universities and to the country. Instead, we are introducing a pay-as-you-earn system that provides more support for students, that does not require reductions in student numbers and that increases the cash flowing into higher education. We estimate that there could be a cash increase in funding for higher education of around 10% by 2014-15.

Our reforms ensure that no first-time undergraduate will have to pay fees up front and that they will be asked to contribute to the cost of their education only when they are earning more than £21,000. That increase in the repayment threshold—up from £15,000 under the current system—means that graduates will benefit from smaller monthly repayments than under the current system. For example, someone earning £20,000, which is the median starting salary for graduates, repays £38 a month under the system we inherited from the previous Government; in future they would pay nothing. At the moment, a graduate earning £36,000, which is the median salary for all graduates, pays £158 a month: under our scheme that would fall to £113 a month.

Our reforms also recognise that for many people higher education does not mean a full-time, residential degree. Some students want to work or take care of their family while studying. To support them, many part-time students and distance learners will become entitled to loans to cover their full tuition costs for the first time. Also, I can announce today that my right hon. Friend the Secretary of State for Health and I have agreed that for undergraduate medical and dentistry students starting their course in autumn 2012, the NHS bursary will be increased in years 5 and 6 to cover the full costs of tuition. For graduate entrants starting in autumn 2012, access to student loans will be made available so that there are no additional up-front tuition costs. We will consider arrangements for subsequent years; more information is being placed in the Libraries of both Houses.

These changes to higher education funding enable us to put financial power in the hands of learners, but to make that effective we need to liberalise the system of quotas we inherited from the previous Government so that more students can go to universities that offer a good-quality, good-value student experience. The White Paper therefore proposes unconstrained recruitment of the roughly 65,000 high-achieving students, scoring the equivalent of AAB grades or above at A-level. Quotas for those students will be abolished and funding will go to whichever university offers them a place they accept. In addition, we will create a flexible margin of about 20,000 places to reward universities and colleges that combine good quality with value for money and with average tuition charges, after waivers, at or below £7,500 per year. That adds up to around 85,000 student places—roughly one in four places for new entrants contestable between institutions in 2012-13. We aim to expand this further year after year.

We will also extend the scope for employers and charities to offer sponsorship of extra places, provided that they do not create a cost liability for the Government, and provided, of course, that there is fair access for all applicants, regardless of ability to pay, and no sacrifice of academic standards.

The reforms put students in the driving seat, but if they are to use that power to best effect, more than a liberalising of the quotas regime will be needed. Prospective students also need to know far more about the academic experience on offer. We will therefore transform the information available to them about individual courses at individual institutions. Each institution will make available key items of information, such as contact hours and job prospects. Information will also be available to outside bodies, such as Which?, so that they can produce their own comparisons. That will lead universities to match their excellence in research with a high-quality academic experience.

We also want our universities to work with business to improve the job prospects of their graduates by providing the knowledge and skills employers value. The sandwich course, giving students practical experience of work, declined under the Labour Government; we want to reverse that. We have therefore asked Professor Sir Tim Wilson, who made the university of Hertfordshire one of our most business-friendly universities, to review how we can make England the best place in the world for university-industry collaboration. We want our universities to work with business across their teaching and research activities to promote better teaching, employer sponsorship, innovation and enterprise.

Student choice will be more real if we liberalise quotas and transform information, and if there is a greater diversity of institutions to choose from. We will therefore remove the barriers to more provision from the Open university, further education colleges and private providers. We will simplify the regime for obtaining degree-awarding powers. We will also review the artificial barriers to smaller higher education institutions taking the title, “university”.

We want students from a wide range of backgrounds to benefit from the reforms. We are increasing maintenance grants and loans for nearly all students, introducing a national scholarship scheme, and strengthening the Office for Fair Access to make sure that institutions fulfil their outreach and retention obligations to people from disadvantaged groups. That will not be at the expense of institutional autonomy; the director of fair access will continue to have a duty to protect academic freedom, including institutions’ right to decide whom to admit, and on what terms.

So that universities and academics can focus on educating their students, we will strip back the burden of excessive regulation and form-filling. We will explore whether it is possible to reduce costs associated with corporation tax returns. Her Majesty’s Revenue and Customs has today announced a consultation on the possibility of introducing a relief to remove some of the VAT barriers that currently deter institutions from sharing costs. We will reduce burdens that result from information collection. We will give students power to trigger quality reviews where there are grounds for concern, but will cut back the burden of automatic review for high-performing institutions. The Higher Education Funding Council for England will be the lead regulator, taking on a new role as consumer champion for students and promoter of a competitive system.

We are now inviting people to comment on our proposals as part of a broad consultation. Subject to the availability of parliamentary time, that will be followed by a higher education Bill next year, to make the necessary legislative changes to deliver the reforms.

The White Paper offers universities the prospect of more funding, provided that they attract students. At the same time, it saves the Exchequer money by asking graduates to pay back more as their earnings increase. Our universities already transform people’s life chances; we expect them to do even more. We will protect their autonomy and reduce their regulatory burdens. Above all, our proposals benefit students by driving universities to focus on the student experience. They will have real choice, better information, and a wider range of institutions to choose from. I commend the White Paper to the House.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Business, Innovation and Skills), Party Chair, Co-operative Party

I am grateful to the Minister for advance sight of his statement. Is it not true that as higher education teaching has been cut by 80%, far more universities are charging £9,000 than the Government planned, causing huge political embarrassment for the Government and creating a funding crisis with the Treasury? Is not the real substance of the White Paper a desperate drive to cut fees, no matter what the effect on quality?

Is not the truth that this is another example of the Government’s failure to think things through, their disregard for the consequences, and the wrong choices being made for the country’s future? Is it not true that the Minister has slipped out on his Department’s website today a report on the impact on exports to this country of the proposal on tuition fees and of visa changes, suggesting that the total impact is some £8 billion of revenue lost to the UK?

It is

“difficult to recall a worse example of public policy making…wishful thinking has followed the apparent failure to do any serious modelling…the whole thing is a mess, and getting messier”— not my words, but those of Sir Peter Scott, one of Britain’s leading experts on higher education and the former vice-chancellor of the Secretary of State’s local university. Is not the real truth that any expansion in university places is set to come on the cheap, with the Government cutting student places at the majority of universities—so much for student choice now—in order to fund the race to the bottom; an auction of places—who can charge the lowest?

The Prime Minister promised that universities charging the maximum would be the exception, yet is not the truth that two thirds of universities will charge the full £9,000? Is not that a devastating example of the neglect and incompetence that the Prime Minister routinely shows to the hopes and dreams of the next generation? The Secretary of State threatened to cut student places even more or university funding even further. Guaranteed places have been floated for those who want to buy their way in, and last-minute cut-price degrees. Almost 24,000 student places are already axed or are going. The Minister is in secret talks with the banks to help him out.

Forests, the national health service, prison sentences, universities today—it is “Carry on up the Khyber” in Whitehall, the Minister the latest to do the Hattie Jacques role. I am all for vigorous competition, but on for-profit higher education corporations, has he not been warned by both the Higher Education Funding Council and the Higher Education Policy Institute? Too many examples of the worst quality higher education, not for every student, but shocking drop-out rates, appalling degree completion rates, and aggressive recruitment practices that make pensions selling seem a walk in the park, are too often their norm.

The market has not protected against poor quality there. We need to be able to spot and stop students and their families being taken for a ride. Should not new providers have to prove themselves more rigorously, more regularly? How will making it easier to get university title and degree-awarding powers improve quality or the reputation and value of particular degrees, or boost the employability of those studying for such degrees? Nobody could be against the principle of an increase in places at high quality universities, but does it sit with the Secretary of State’s promises on social mobility when 50% of those getting AAB grades are from selective or independent schools? Will contextual data be truly embedded in university admissions or has he caved in to the Tory right?

How will the Secretary of State prevent, as the Institute of Physics has warned, students being deterred from studying the sciences or maths? Student charters and better information will be little compensation for trebling fees. I accept that there have to be safeguards, but will students be able to move courses with their loan intact if they realise that their course is not suitable or if their complaints are not taken seriously? Who will be the consumer champion—the representative of students and their families—at the new providers? Why should not students paying vastly increased fees know if their university has financial problems that might affect the quality of their teaching?

I welcome the end to at least one area of uncertainty today—the NHS bursary increasing for 2012-13—but what about future years? Why no certainty on that now? On research quality, why no mention that the rest of the world is increasing its science spending, yet here in the UK British researchers are having to cope with cuts of 40% or more in the funding to invest in world-class research facilities at our universities? Because of the bungled visa changes, universities face even more intense challenges to recruit the brightest and best research students and their lecturers to work with our brightest and best. No mention of cuts in funding for postgraduate courses or the impact on postgraduate recruitment of graduates leaving university with £40,000 worth of debt. Will we see as a result of his complacency a new divide opening up between those who have a postgraduate qualification and those who do not?

On the day it was revealed that 80 graduates are chasing every graduate job, which is double the figure for last year, all we got on university and business collaboration is a review. Where is the financial plan to incentivise universities to do more to stimulate new jobs in the industries of the future? Regional development agency funding has gone, HEFCE funding has been reduced and Technology Strategy Board funding has been squeezed, so this is yet another example of opportunities for economic growth being spurned, and of Ministers fiddling while Rome burns.

It could have been so different. Why were university cuts not in line with other public service cuts? Tuition fees would have been far lower, with no black hole, and chaos and confusion would have been avoided. Universities would have concentrated on getting their research and skills into businesses to drive jobs and new growth and there would have been a rigorous drive to ensure that every student gained employable skills. The Government did not need to leave the next generation of engineers, police officers and nurses having to pay so much more for so much longer. The Minister did not need—

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Business, Innovation and Skills), Party Chair, Co-operative Party

I am extremely close to it, Mr Speaker. Is it not true that the Minister did not need to axe Aimhigher and—

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Business, Innovation and Skills), Party Chair, Co-operative Party

I am grateful, Mr Speaker. The Government may think that lower quality, poorer standards and a race to the bottom are a price worth paying for their incompetence, but we do not.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I have to tell the shadow Minister that I am informed that Hattie Jacques was not even in “Carry On Up the Khyber”, and many of his other statements were no more reliable. There were no questions, only a set of random scares that bear little relation to what we are proposing in the White Paper. Let me make it absolutely clear that there are no number controls on overseas students. We continue to welcome to this country overseas students who have the ability to benefit from studying at our universities.

The hon. Gentleman seems typically confused. One moment he complained about fees of £9,000, and the next he complained about our measures for providing a clear incentive to charge £7,500 or less. Our proposal for 20,000 places to be awarded on that basis is intended to ensure that students face a range of fees as they choose a university, which we think is the right thing to do.

I should also make it clear to the hon. Gentleman that we are reducing the burdens on universities, supporting them and liberating them from some of the impositions placed on them by the previous Government. It was his Government who introduced quotas and fines of

£4,500 per student for universities that infringed their quotas. We are liberating 85,000 places from such a quota regime.

I make no apology for the measures that we are taking on access. It was under Labour, despite their claims to care about social mobility and opportunity, that—to quote Sir Martin Harris’ report—the

“most advantaged 20 per cent of young people were six times more likely than the most disadvantaged 40 per cent to enter these institutions in the mid-1990s. This ratio has risen to seven times more likely by the mid-2000s”.

That refers to Russell group universities. Those figures are scandalous. Under Labour’s watch, the ratio got worse. We are committed to equality of opportunity, which is why we have set out in the White Paper proposals for strengthening the Office for Fair Access.

Not only were there no sensible questions from the hon. Gentleman, but there was no indication whatsoever about what Labour would do. Are they advocates of a graduate tax, as the leader of the Labour party is, or do they accept the need to increase fees, as Lord Mandelson did? We are none the wiser after the hon. Gentleman’s random rant.

Several hon. Members:

rose —

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I have spent the past six years on the advisory board of the London School of Commerce, a private higher education provider, and I wholeheartedly support the Minister’s proposals to provide diversity and innovation in the sector, but does he share my bemusement at the Opposition’s stance, given that the biggest beneficiaries of such a policy will surely be students from less well-off backgrounds?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

My hon. Friend is absolutely right. We believe that a more diverse sector with a greater range of institutions offers the greatest opportunity for students with a range of requirements to find the form of higher education that best suits them.

Photo of Adrian Bailey Adrian Bailey Chair, Business, Innovation and Skills Committee

This White Paper was originally scheduled for January. I understand that one reason for the six-month delay was No. 10’s concern to ensure that it did not herald a repeat of the NHS reform fiasco. What guarantees can the Minister provide that in “widening participation” and bringing in more of the private sector, we do not have a repeat of the any-willing-provider fiasco?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

OFFA is considering proposals from universities to improve access to their institutions, which is what they will have to do if they wish to charge fees above £6,000. The conclusions will be announced in the next fortnight, and I very much hope and am confident that they will show how it is possible to deliver wider access while maintaining high academic standards.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

I welcome the White Paper and, particularly, the additional money announced for those dental and medical students who will start their courses next year. May I assume that Ministers are clear that the White Paper’s two key effects will be increased access at decreased costs for students and, particularly, that students will have the power to influence their courses and the quality of their teaching? It would be helpful if the Minister were to explain how they will be able to do so, and that there will be plenty of time for students and universities to respond to the White Paper before the announcements are finalised in policy.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I pay tribute to the right hon. Gentleman for his very constructive engagement in this very important area. At the university of Loughborough, I sat in on a fascinating meeting in which students gave their feedback on their academic programme that year, raising with the academic staff issues such as the right balance between essays and lab work and the extent to which there should be continuous assessment during the year and final exams. We want to see more of that; we want universities to provide such information on their websites; and, yes, we believe that if students are concerned about the quality of academic standards and work at a university, they should have the opportunity to raise that with the Quality Assurance Agency.

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

In responding, my hon. Friend Mr Thomas referred to the assessment of the impact on university income and on the local and national economy of discouraging students from across the world from coming to Britain, and of the shambolic visa changes, which were clearly not put together by the two Departments responsible. How can the Minister come here this afternoon and say that we want to be the best in the world while discouraging the best in the world from coming to Britain?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

The changes in the visa regime were very carefully worked out by the Home Office and BIS working together, and they tackle the problem of bogus colleges and students who wish to come to a university but do not have the academic qualifications that would enable them to benefit from a university course. The changes absolutely keep open, however, the opportunity for legitimate students who have achieved the necessary academic standards to come to this country, with no quota or limits on the number that should be able to do so.

Photo of James Clappison James Clappison Conservative, Hertsmere

I welcome what my right hon. Friend has said today on the Floor of the House and, especially, what he has said on institutional autonomy over admissions. Will he say a little about how that is to be guaranteed? Does he agree that it is academics who should determine admissions to university, not politicians?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

In that respect, I hope that we will be able to maintain a cross-party consensus, because the previous legislation that the previous Government introduced provided a clear protection for universities, making it clear that ultimately they determined their own admissions. We will keep that legal protection.

Photo of David Lammy David Lammy Labour, Tottenham

I look forward to studying the White Paper in detail. It is surprising, however, that in his announcement the Minister made no reference at all to postgraduate study. Does he appreciate that the trebling of debt means that British students are being put off going on to taught masters courses, with only 23% of students taking such courses? If we are to compete with India and China, must he not now come to the Dispatch Box and say what he is going to do to ensure that British students can go on to postgraduate study?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I recognise the expertise of the right hon. Gentleman, who was previously a higher education Minister, and I accept the need to monitor very carefully what happens with postgraduates. We have asked Sir Adrian Smith—I think that the right hon. Gentleman originally asked him to do this—to investigate the whole issue of postgraduate education. We want him to reopen his inquiry and keep the matter under close review, and we will of course watch very carefully what happens.

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

I regularly meet the three principals of the FE colleges that serve my constituency, who are keen to deliver innovative degree-level courses. Does the Minister agree that we should be looking at a model whereby institutions of further education can deliver innovative higher degrees?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I absolutely agree with my hon. Friend; he is right. This is one of the main ways in which we can improve access to higher education. Perhaps one of the biggest beneficiaries of the 20,000 places that will be more flexible will be higher education delivered in further education colleges. We are all working together as Ministers in BIS—I pay tribute to my right hon. Friend the Secretary of State and to my hon. Friend the Minister for Further Education, Skills and Lifelong Learning—and we are committed to ensuring that that opportunity is available to young people.

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

Does the Minister not recognise that in marketising the whole system of higher education he is creating several markets, with a sort of Harrods at the top that gains prestige from charging the highest fees and a sort of Poundland at the other end that has to cut its costs and cut corners in order to attract the worst-off and most impoverished students?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I have to break this gently to the right hon. Gentleman: Government Members believe in choice and in empowering students. We believe that there should be a wider range of institutions and a wider range of fees, and that is what these reforms are all about.

Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford

I welcome many aspects of my right hon. Friend’s White Paper, particularly the better information about contact hours, job prospects and quality of teaching experience. Does he agree that there is a real need for more part-time courses so that more people can get the opportunity to study and work at the same time?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I absolutely agree with my hon. Friend, and I respect his expertise as a former FE college lecturer. One of the reasons we are extending loans for fees to part-time students is to address that long-standing injustice.

Photo of Nicholas Dakin Nicholas Dakin Labour, Scunthorpe

Will the Secretary of State guarantee that these proposals do not allow charitable private schools to buy places at university?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

That is not the purpose of these reforms.

Photo of Rob Wilson Rob Wilson Conservative, Reading East

I welcome the broad thrust of my right hon. Friend’s statement, particularly the increased competition and supply-side reforms, which will lead to a much more dynamic HE sector. I hope to respond separately to the consultation on OFFA. In the White Paper, what lessons have been taken from the community college system in the United States, where business plays a part not only in designing but in funding courses?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Again, my hon. Friend has a long-standing commitment to this. He describes exactly the type of innovation we hope to see as we liberalise the system. We very much wish to encourage the American model of two-plus-two courses, whereby someone may do two years at a community college and then move on to do one or two years on an honours degree at a university.

Photo of Jon Ashworth Jon Ashworth Labour, Leicester South

Does the Minister agree that higher education should be one of our greatest exports? Over many years, thousands of students have come over to study at the two universities in Leicester, yet with his comments on contact hours, the mess over student visas and the cuts to the teaching budget, more and more international students will choose institutions in Australia, Singapore and the USA instead of the UK. Is he not concerned about that?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

There certainly is growing international competition for students. Higher education is becoming more of a global market. I am confident that British universities, with high standards and no limit on the number of legitimate overseas students, will continue to attract many overseas students.

Photo of Duncan Hames Duncan Hames Liberal Democrat, Chippenham

Fourteen years ago, the Dearing report identified employers, alongside students and the state, as stakeholders in higher education. What measures will the Minister use to facilitate the contribution of employers to the costs of the higher education that they require of the graduates they recruit?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

This goes back to an earlier question. Let me make it absolutely clear that one of the proposals in the White Paper is to make it easier for employers and charities to sponsor additional places at university. That is an additional flexibility in the system. Already, 6,000 university places are sponsored by employers in that way. However, it is not our intention that these proposals be abused by people to purchase places at university that they could not achieve on academic merit.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

The Minister knows that this is the day of the launch of the higher education commission. All of us who care about higher education want to digest the White Paper, hope that it has green edges, and will see whether we can improve it. The Minister constantly talks about the student being in the driver’s seat, and about consumer satisfaction and student satisfaction. Our universities are made of other materials. Their values and principles come from their academic staff and long traditions. Getting the balance right is a difficult task. Please do not let us go just down the consumerist route.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

There is a real dilemma here and I respect the hon. Gentleman’s raising it in the House. I believe that putting more power in the hands of students, introducing the choice that we put forward in the White Paper and recognising that the student is in many respects a consumer will not destroy the traditional values of higher education, but strengthen them. I think that the proposals will bring traditional, high-quality teaching and close academic engagement with students back to centre stage. We should not fear these forces. Respecting the autonomy of universities is the best single mechanism we have to drive the traditional high academic standards that we believe in.

Photo of Jason McCartney Jason McCartney Conservative, Colne Valley

I had an enjoyable night last Monday at the students’ union awards at Huddersfield university, where many students are enjoying their student experience. When students are exercising their choice and picking their university and course, what additional information does the Minister envisage being made available to them?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

There is a lot of important information that we think prospective students should have, ranging from the contact hours through to the employment prospects at the end of a course. We think that such information should be widely available. Which? has given a clear indication that it will deploy the information and help prospective students to assess it.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

According to the House of Commons Library, there is a funding gap of between £600 million and £1 billion as a result of the mistakes the Minister has made. Are the Government not going too far and too fast on higher education, as on so much else? Is it not true that quality will suffer from his attempts to deal with the funding gap, as we have heard from my hon. Friends? To use his own words, that will be “unfair to students, to universities and to the country.”

Photo of David Willetts David Willetts Minister of State (Universities and Science)

There is no such funding gap, we are not going too far and too fast, and there is no threat to quality.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

When I voted against the rise in tuition fees, I did so because of the impact I thought it would have on some of our more vulnerable young people. I welcome much that is in the White Paper, particularly the increase in choice. However, the problem with increasing choice is that it can increase confusion. Many young people can access advice from their financially literate and educated parents, but for vulnerable children choice can result in confusion. What work will the Minister do with schools and colleges to ensure that proper support mechanisms are in place to support vulnerable young people?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

This is about the importance of information, advice and guidance in our schools and colleges. Again, I pay tribute to Simon Hughes for his work in examining the matter carefully. I urge Members of all parties to take every opportunity to visit schools and colleges and get past some of the misinformation, and be absolutely clear to young people that no young person or their family will have to pay up front for the opportunity of going into higher education. I regret the anxiety about the matter, but it is misplaced and all Members, whatever their political views, have a shared responsibility to tackle it.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central

There is concern on both sides of the House about the expansion of the for-profit sector in higher education. Will the Minister not learn from the experience of the United States, where the for-profit sector has a higher failure rate than other universities and is currently being investigated for misrepresentation to prospective students? Will he listen to the concerns of HEFCE, which says that the expansion of the for-profit sector here will damage the reputation of our university system?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

We are not Americanising our higher education system. There are important differences between the system that we are proposing and the American one, not least of which is universal access to Exchequer-financed loans, which is not possible in the US. Also, there is a robust quality assurance system, the Quality Assurance Agency for Higher Education, which we are keeping. We are not Americanising the system.

I noted that in what the shadow Minister said there was no recognition of the fact that under the previous Labour Government, five private providers were awarded degree-awarding powers. That seems to me an indication that even the previous Government were not opposed to the private provision of higher education. I very much hope that Labour is not abandoning that position.

Photo of Julian Lewis Julian Lewis Conservative, New Forest East

When all sorts of universities were obliged to charge the same, a student from a modest economic background had only to consider how well he or she would do in examinations and interviews in order to get a place at the best universities. Now, that potential student will have to consider how much he or she will be paying to go to a good university compared with the lesser amount required for a lesser university. Is that a step forward for meritocracy or a step backwards?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

My hon. Friend talks about how much they will be paying, but we should remember that no student will pay up front. What will be crucial in determining their repayments is their earnings, and because we have raised the threshold, their monthly repayments, regardless of the university fee, will actually be lower under our proposed system than under the system we inherited from the Labour Government.

Photo of Gavin Shuker Gavin Shuker Shadow Minister (Environment, Food and Rural Affairs)

I noted the Minister’s answer to the question about the funding gap, but I have to say that I found it quite inadequate. Will he tell the House by how much he will have underestimated the cost to the UK taxpayer should universities choose to charge an average of, say, £8,000?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I will happily share with the House the arithmetic on which we have made an estimate, although nobody can know the exact figure. [Interruption.] I can tell the shadow Secretary of State exactly how it is done.

We start by assuming that 350,000 students will apply to English universities in October 2012. We assume that 90% of them will take out a student loan, which is actually a rather higher proportion than do so at the moment—who knows whether it will be more or less than that? We assume an average loan, which is not the same as the fee—people may borrow less than the fee—of £7,500. Multiplying all that, we get approximately £2.4 billion of student loans. We are in an uncertain world, but if the hon. Gentleman is claiming, as Bill Esterson did, that there will be £3.4 billion of student loans, I have to tell him that that is very, very unlikely.

Photo of Robert Halfon Robert Halfon Conservative, Harlow

Is my right hon. Friend aware that Anglia Ruskin university is opening a university campus in Harlow later this year, which will be the first time in the history of the town that we have had a university? I noted that he said in his statement that the Government would extend the scope for employers and charities to offer sponsorship, and talked about the national scholarship programme. Will he explain what that means in practice, so that disadvantaged students in Harlow can benefit from our new university?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I do not fully understand my hon. Friend’s proposition, but we are committed to access for students in the circumstances that he describes. Perhaps we can meet to go through his proposition more carefully, but it sounds interesting and imaginative.

Photo of Helen Jones Helen Jones Shadow Deputy Leader of the House of Commons

Will not the real effect of the Minister’s White Paper be to allow private institutions to cherry-pick those courses that are easiest to deliver, and to drive down costs by driving down quality? What modelling has his Department done of how many courses will cease to exist, and how many existing universities will be non-viable as a result?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

The hon. Lady and the Labour party must decide whether they are to approach the future of higher education assuming that the private sector is the enemy. If they decide to take that approach, which, as I have said, is different from the one they took in government, they will be making a serious mistake. Students do not think about the exact legal status of the institution they study at; they want to focus on the quality of the education they will receive. We will ensure that any institutions for which students can receive student loans are properly audited, regulated and monitored. That is the right way forward.

Photo of Iain Stewart Iain Stewart Conservative, Milton Keynes South

I very much welcome the plans to increase the role of business in higher education. Four out of five FTSE 100 companies have sponsored their staff through courses at the Open university in my constituency. Will the Minister say a little more about how he plans to incentivise businesses in that respect, for part-time as well as full-time courses?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I pay tribute to my hon. Friend’s strong commitment to the Open university and his close involvement with it. The OU could be one of the main beneficiaries of the new flexibility with the 20,000 extra places, and we very much expect that it will be able to offer its degree for delivery at a range of local FE colleges and other providers. Our proposals make the funding available for that.

Photo of Diana R. Johnson Diana R. Johnson Shadow Minister (Home Affairs)

The Minister has talked a lot about what will happen to the top university institutions and those that were formerly polytechnics, but I am interested in my local university. Hull university is a good, local university, but under the proposals in the White Paper, it will be part of the squeezed middle and will lose places. What is the future for institutions such as Hull university?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

The future is one in which, year after year, we try to increase the flexibility in the system. We have had to strike a very fine balance in the first year. We wanted a significant shift to more openness and flexibility, but we fully recognise that there is a limit to how much change the system could take in that first year. I do not know the exact intake of the university of Hull, but I very much hope that in future, it, too, can participate in the types of flexibility that we have set out today.

Photo of Mary Macleod Mary Macleod Conservative, Brentford and Isleworth

I welcome today’s statement. Does my right hon. Friend envisage an enhanced role for colleges such as West Thames college in my constituency in delivering better outcomes in higher education?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

West Thames college can put in a bid to HEFCE under the 20,000 places scheme that we have launched today. I very much believe that some further education colleges that offer higher education can take advantage of the new flexibility that we have launched.

Photo of Gisela Stuart Gisela Stuart Labour, Birmingham, Edgbaston

I very much trust that as a result of the Minister’s White Paper, excellent colleges such as Newman college, in Bartley Green in Birmingham, can call themselves universities. However, may I take him back to the question from my hon. Friend Helen Jones? The Minister must have made an assessment that some institutions will no longer be viable. How many will there be, and what provision has he made for the students who will be caught halfway through their courses if their institution becomes non-viable?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Successive Governments have never given a guarantee that every institution will carry on. However, it is unlikely that the changes we have launched today will of themselves make any institution unviable—I do not know that, but it is unlikely. Of course, it is also clear that there would be a commitment that any student should be able to complete their studies.

On the hon. Lady’s first point, I very much hope that it will be possible for institutions that have a clear focus on higher education to take the title “university” when they were previously prevented from doing so because they had fewer than 4,000 students. We have said that that should be reviewed, because some excellent higher education institutions would like to take the name “university”. I am sure that any such proposal will be very carefully considered.

Photo of Julian Smith Julian Smith Conservative, Skipton and Ripon

I welcome the furthering of links between business and universities. Which developing and emerging economies does the Minister think we have most to learn from, and when will Sir Tim Wilson produce his report?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I hope that it will be possible for Professor Sir Tim Wilson to report to us by the autumn on his observations. Having visited our main trading partners, encouraging legitimate overseas students to study in the UK and building education contacts, I think there are opportunities for us to learn from them, but equally there remains a great desire among them to learn from us. Some of our vocational qualifications are well respected, especially traditional, well-established qualifications such as City and Guilds, HNCs, HNDs and BTECs. I want to see those expanded, as do the Secretary of State and the Minister for Further Education, Skills and Lifelong Learning. Indeed, one of the new flexibilities will be to have a BTECU. It will be possible to take BTECs beyond A-level, so we could imagine a level 4 or 5 qualification—it might not be a full-blown honours degree, but it could be called a BTEC even though the organisation offering BTECs is not a teaching institution. That is the type of new flexibility that we are going to make possible so that higher-level vocational qualifications can be properly studied in our country.

Photo of John Woodcock John Woodcock Shadow Minister (Transport)

I have met the Minister to discuss the difficulties faced by the university of Cumbria in recent years. That institution is trying the difficult process of turning itself around, but does he not accept that the chaotic package of reforms he is suggesting today could increase the risks faced by this university and others like it, which are critical to the economic success of the areas in which they are situated?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

We on the Government Benches believe in openness, flexibility and innovation, but every time we propose it, Labour Members call it chaos. We are not going to have a central plan, and we are not going to say exactly what the quota is for each individual university—and rightly so. We believe in openness and diversity, and the hon. Gentleman ought to be able to recognise that moving away from a centrally planned system, which of course will mean less central control, does not mean chaos; it means students getting the higher education they want.

Photo of Graham Evans Graham Evans Conservative, Weaver Vale

I very much welcome the White Paper, particularly the provisions for part-time students. Will my right hon. Friend give me more details about his idea for student charters?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

We invited the outgoing president of the National Union of Students and a vice-chancellor to work together, and they have produced a useful pro forma, which we refer to in the White Paper, and which gives an example of what universities are entitled to expect by way of student behaviour, and what students are entitled to expect by way of respect for them from their higher education institutions.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

I want to ask about the Minister’s private providers. My right hon. Friend Frank Dobson mentioned Poundland. Has the Minister thought about approaching BrightHouse? First, BrightHouse university is a great name, and secondly it is expert at loading heavy debt on to people who cannot afford to repay it.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

If Labour is going to take this approach to private provision, it is making a serious mistake. We are focused, quite simply, on the quality of the student experience, and this kind of snobbery—that some kinds of provision are okay and others are wrong—is out of place in modern Britain. The hon. Gentleman should remember that all universities are, strictly speaking, private institutions; they are not public sector bodies. Government Members believe in maintaining their autonomy. We wish to see a greater range of universities but all sharing the same feature—that they are not part of the public sector.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

When the previous Government increased fees, students started to ask about the value for money provided by their courses. What steps is the Minister taking to ensure that in future students get better teaching and a better overall experience at university?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Universities will have to provide far more information about that than they have in the past. We hope that they will provide the kind of information that local authorities now provide to council tax payers—that is, about how the money that students have paid in fees is being used. The more information, the better.

Photo of Clive Efford Clive Efford Labour, Eltham

The Minister has made much of wanting to introduce equality into the system, but one thing that infuriates many students, particularly from my constituency, is having to watch those who go to so-called charitable private schools easily obtaining places in the best universities. I did not hear the Minister say no in answer to the question from my hon. Friend Nic Dakin, so will he now say whether those students will be able to purchase places? If they will, they could get into the best universities not on merit but on their ability to pay.

Photo of Robin Walker Robin Walker Conservative, Worcester

I welcome my right hon. Friend’s statement. Like many Government Members, I particularly welcome the support for universities working with business. Will he ensure that Professor Wilson’s review does not just cover sandwich courses, but covers the support that they can provide their graduates, such as that provided by the very good paid graduate intern scheme supported by the university of Worcester?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I am aware of that scheme at the university of Worcester, which was very imaginative. My hon. Friend is right that the review will go beyond sandwich courses. Again, because we will expect universities to publish information about the employment outcomes for their graduates, this will give them a much stronger incentive to make more efforts to ensure that their graduates are indeed employable.

Photo of Neil Carmichael Neil Carmichael Conservative, Stroud

I welcome this excellent statement because it paves the way for more quality and better choice. How will we encourage businesses to co-operate with universities to encourage research and development?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

There are some barriers here. One of our frustrations—I am sure that we have all come across examples of this—is that small and medium-sized enterprises might like the use of a piece of equipment that they could not afford to buy themselves, or they might like some technical advice on a project, but they do not realise that there is a university in the area that might have that piece of equipment or those technical experts. The SME does not necessarily ever step foot inside the university, and does not know what is available. We want to break down those barriers, and that is what we are looking to Professor Tim Wilson’s review to tackle.

Photo of Elizabeth Truss Elizabeth Truss Conservative, South West Norfolk

Although I support relaxing the Stalinist quotas that we have had in our universities, I am concerned that a flat AAB hurdle may disincentivise people from taking subjects such as science and maths, which state school students are already half as likely to take as their independent school counterparts. What can the Minister do to address that?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

In a letter that the Secretary of State and I have sent to HEFCE today we make clear our continuing commitment to strategically important and vulnerable subjects. We will of course monitor the effects of the change in the first year, but we wish to take it further, so that gradually more and more A-level grades are included in the system.

Photo of Christopher Pincher Christopher Pincher Conservative, Tamworth

Will my right hon. Friend work with the Secretary of State for Education to introduce a system of post-A-level university applications? The current system, whereby many students are offered places based on their predicted grades, is bureaucratic and inefficient, and undermines the opportunity of many of our most disadvantaged students to get places, because their grades are routinely under-predicted. Will my right hon. Friend consider this long overdue reform?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I have a lot of sympathy with my hon. Friend’s points, which are important. The current system is exceptionally complicated, with a large amount of interaction between the prospective student and the university. We have asked UCAS to look into the situation, and we will await its proposals. The idea would take some time to implement—I suspect that successive Governments have wrestled with this challenge—but it is also one that we put forward in the White Paper.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Does the Minister believe that these proposals, together with the Government’s previously announced reforms, will lead to more two-year degrees, as opposed to three-year degrees, and is that something that he would wish to encourage?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I agree with my hon. Friend. That is exactly the kind of flexibility that we wish to see in the new system.

Photo of Marcus Jones Marcus Jones Conservative, Nuneaton

Will the White Paper strengthen the link between universities and employers, so that we can get even more of our graduates into employment, post-university?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

The White Paper is absolutely committed to that, and there are many different ways of doing it. For example, we could do it by encouraging the revival of the sandwich course, or by ensuring that university courses were kitemarked as ones that employers valued. And yes, it might indeed be the case, as we have seen with KPMG, that employers wish to sponsor students at university. If there were no Exchequer costs involved, that could provide extra places, so there are lots of different ways we could achieve what my hon. Friend quite rightly wants.