asked Her Majesty's Government:

Whether they plan to change the funding arrangements for students pursuing a course in higher education which is lower than or equivalent to their existing qualification.

My Lords, the funding arrangements incentivise institutions to recruit more of the millions of adults without a higher education qualification. The ELQ policy unlocks talent and widens participation. While the details might be fine-tuned over time, if we are convinced by new evidence that changes are needed, the principle behind the policy that first-time students should come first is the right one.

My Lords, I thank the Minister for that very disappointing reply. At a time of very high unemployment, when many of the people now being made unemployed are professionally qualified or graduates, it will be vital for them to be able to retrain in new skills. Universities are being discouraged, not encouraged, with that particular group, who are very important in their contribution to the economy. Is it not time that the Government rethought this policy?

My Lords, we are putting in place other measures to help people who have been made redundant, including special funds for retraining and reskilling. I return to the original point, however: this policy is about social mobility, fairness and increasing higher-level skills in the workforce to internationally competitive standards. We still believe that our policy is right. We are not taking away from the point on whether we need to review it. There are a number of exemptions to the policy, such as foundation degrees, employer co-funded courses and strategically important subjects such as medicine and stem science. We are going to review that exemptions list in December.

My Lords, is the Minister aware that all those exemptions are currently subject to an annual review, which creates very considerable uncertainty and problems for the universities concerned? Could not the Government consider giving them the three-year guarantee that they get for general funding in universities?

My Lords, in September 2007 HEFCE was asked to redistribute £100 million by 2010-11 to provide 20,000 full-time equivalent extra opportunities for newcomers to higher education. It is a phased change—£25 million in 2008-09 and £60 million in 2009-10.

My Lords, with the economic problems we face and the prospect of an increasing number of people becoming unemployed, should not the Government's focus be on the poor and people on low wages who are being made unemployed or who are likely to be made unemployed? What additional work is being prepared to try to assist those people?

My Lords, certainly that is the focus of our attention. I give the House some further figures. There is a significant demand for higher education and something like 100,000 applicants fail to get a place every year. Twenty million people, 70 per cent of the workforce, have no first degree, compared to only 60 per cent in USA and Japan. Our student finance funding is focused on those most in need. Something like 40 per cent of students in the lower income group will receive a full grant. We believe that we have got the focus of our policy right.

My Lords, I declare an interest in that theological education is one of the areas likely to be most affected by these funding changes. I am grateful for the opportunity to express gratitude to HEFCE and the Government for the way they have worked with us to try to ensure that the unintended consequences of the changed financial arrangements do not impact disproportionately on those training for the ministry. It would be helpful if the Minister could reinforce his commitment that foundation degrees will continue to attract HEFCE funding for those who already have a degree. As the noble Baroness said, at a time when social capital is all the more important, I do not see, unless the Minister can help and explain, how these proposals will help to get back into work in mid-career those who already have a degree but need to be retrained and reskilled to degree level.

My Lords, I can certainly give the right reverend Prelate an assurance on foundation degrees. We regard them as an important route to higher education. Certainly, I do not see them at risk in any review. Again, I think we are doing the right thing in focusing on people going for first-time degrees. A separate amount of money has been allocated to help people who are made redundant in the current circumstances to retrain and reskill.

My Lords, I declare my interest as chief executive of Universities UK. Given that a thorough review of policy in 2010 is promised, will the Government confirm that the review will be comprehensive and that it will take into account the very different effects on different institutions, particularly the impact on different types of provision, given, as other noble Lords have mentioned, the downturn in the economy? Will he assure me that all institutions, however affected, will be consulted during the review?

My Lords, I can certainly assure my noble friend that all institutions will be consulted. We have taken some special steps for specialist institutions. Safety net funding on the Open University's budget was increased by £4 million and on Birkbeck College's by £5 million. Universities generally can recoup their money by recruiting more first-time students.