PARLIAMENTARY DEBATE
Post-18 Education and Funding - 4 June 2019 (Commons/Commons Chamber)

With permission, Mr Speaker, I would like to make a statement on the Government’s review of post-18 education and its funding—the first review since the Robbins report in 1963 to look at the totality of post-18 education. The Government will carefully consider the independent panel’s recommendations before finalising our approach at the spending review.

I would like to take this opportunity to thank the independent panel, led by Philip Augar, for their exceptional work. Alongside Dr Augar were Professor Sir Ivor Crewe, Jacqueline de Rojas CBE, Professor Edward Peck, Beverley Robinson OBE and Professor the Baroness Alison Wolf. The panel consulted a wide spectrum of experts, leaders and senior figures and received almost 400 responses to its call for evidence. I would like to thank all the stakeholders, including colleagues from across the House, who contributed to the review. We will continue to engage with stakeholders now that the independent panel phase is complete, as we work towards the completion of the review.

A lot of the attention will be on what this report says about higher education, but the majority of students in post-18 education are not at university. The report identifies the importance of both further and higher education in creating a system that unlocks everyone’s talents. As the Prime Minister said last week, further education and technical colleges are not just places of learning; they are vital engines of both social mobility and economic prosperity. Colleges play an essential part in delivering the modern industrial strategy and equipping young people with knowledge and skills for the jobs of today and tomorrow. We are conscious of the need for reskilling and upskilling at a time when we are all more likely to have multiple careers during our working lives.

We are already carrying out a major upgrade to technical and vocational education by introducing T-levels for young people and developing proposals to introduce employer-focused higher technical qualifications, at levels 4 and 5, which will provide high-quality technical qualifications to rival traditional academic options. We have also overhauled apprenticeships, to provide people with the skills and career paths they need for great jobs and great careers. But appropriate attention to our college sector—the backbone of technical education in this country—is required to ensure that technical education is an equally valid path for a young person as a degree route. The principles set out in this report will help lay the foundation for a sector that is stronger and more robust and will help cement its reputation as being among the best in the world.

Our higher education system transforms lives and is a great contributor to both our industrial success and the cultural life of the nation. It can open up a whole world of opportunities and broaden horizons. Whatever decisions we make about how best to take forward the recommendations in the report, it is vital that we support these institutions to continue to offer world-leading higher education to students in future.

The opportunity to study at university should be open to anyone with the talent and potential to benefit from the experience. Gaining a university degree has benefits for both individuals and society—or, in the jargon, both a private return and a social return. On average, doing a degree has strong earning returns, equating to more than £100,000 of extra lifetime earnings per graduate after tax, so we believe it is right that contributions to the cost of higher education need to be shared between the student and the taxpayer.

The scale of the Government subsidy today is in fact much larger than most people imagine—close to half of the total—and it is a progressive system, whereby those on the highest income contribute the most and those on incomes lower than £25,725 make no contribution. We believe it is essential that we provide the right support, to enable people from all backgrounds to access and, most importantly, succeed at university and other higher-level courses.

In 2018, we had record rates of 18-year-olds accepted to full-time university, up 0.4 percentage points to 33.7%. Students from the lowest-income households have access to the largest ever amount of cash support for their living costs. Already this year, we have increased living costs support for the 2019-20 academic year to a record amount.

However, although 18-year-olds from disadvantaged backgrounds are now 52% more likely to go to university than 10 years ago, there is more progress that we need to make. Disadvantaged students are still less likely than their more advantaged peers to attend the most selective universities, or to have the support they need to successfully complete their degree and to achieve a 2:1 or a first. The panel’s proposals on support for disadvantaged groups are an important contribution to the debate in this area.

I very much welcome the focus that the panel has placed on making sure that all higher education is of high quality and delivers well for both students and the taxpayer. There are very high-quality courses across the full range of subjects—from creative arts to medicine—but there are also courses where students are less well served. I have also spoken in recent months of bad practices not in the student interest, such as artificial grade inflation and so-called conditional unconditional offers.

The panel’s recommendations on student finance are detailed and interrelated, and cannot be considered each in isolation. We will need to look carefully at each recommendation in turn and in the round to reach a view on what will best support students and the institutions they study at, and what will ensure value for taxpayers. In considering these recommendations, we will also have regard to students currently in the system or about to enter it to ensure that any changes are fair to current and new cohorts of students.

I am sure the House will recognise that this comprehensive report, with detailed analysis and no fewer than 53 recommendations, gives the Government a lot to consider. We will continue to engage with stakeholders on the findings and recommendations in the panel report, and we will conclude the review at the spending review. However, I am clear that whatever route a student chooses and whatever their background, post-18 education should set them on a successful path for their future. With this vision, I strongly believe that both the higher education and further education sectors can and should continue to thrive together. I commend this statement to the House.

I thank the hon. Lady for her questions. She asked a number of times whether I would guarantee to consider x, y or z, and I do absolutely guarantee to consider everything in the report. We will come forward with the conclusion of the review at the end of the year, at the spending review. That has always been the plan.

The hon. Lady asked about timing. If she cares to compare the timing of this review of post-18 education and its financing with that of the Diamond review in Wales, under the Labour Government there, she will find that it compares favourably. Regarding the devolved nations, I confirm that if there are any spending implications in the proposals we make at the conclusion of the review, and given that education is a devolved matter, funding for the devolved nations would apply in the normal way, including through the Barnett formula.

The hon. Lady asked me to commit to not playing off further education and higher education. I give her that absolute commitment. That principle is at the heart of the independent panel’s report: both routes of higher learning are essential for widening social mobility, for letting young people fulfil their full potential, and indeed for enabling our economy and our society to fulfil theirs.

We should not lose sight of the fact that we have a successful system in place, particularly for the financing of higher education. The hon. Lady and her Front-Bench colleagues constantly complain about it, but since the 2012 reforms, resource per student has increased dramatically, the living costs support available to disadvantaged students has risen to its highest ever level, more young people are going to university than ever before, and more young people from disadvantaged backgrounds are going to university than ever before.

Look at the record of the Opposition. Labour vowed to cancel student debt and to make university free, sometimes appearing to forget that there is no such thing as free. We want a well funded higher education and further education sector in this country, and there are only two types of people who can pay for that: the people who benefit from it and the people who do not. Having made that vow, Labour backtracked on its pledge on student debt. No one will ever trust the Leader of the Opposition again on student fees. People know that talk is cheap, but paying the price of broken promises is not.

I welcome much of the report, particularly its strong emphasis on further education and technical education. Our Education Committee report talked about value for money in higher education and universities, focusing on skills, employability and social justice. Does my right hon. Friend not agree that the real engine of those three things is using funds to boost and put more emphasis on degree apprenticeships? They help people from disadvantaged backgrounds to gain the skills they need, they help us to meet our skills needs and they ensure that people are employed in properly skilled jobs.

My right hon. Friend has been a consistent champion of apprenticeships—specifically, degree-level apprenticeships. I thank him and the Committee for their work on that, including the wider work he mentions on higher education. I confirm that I think degree-level apprenticeships play a very important role in our system.

Elements of the review should be welcomed. It is encouraging that the UK Government finally recognise the barrier that tuition fees can place in the way of a young person’s decision to go to university, but I suggest that the recommended reduction in fees is the bare minimum, rather than a meaningful reduction, for the young people who are considering this pathway. The Scottish Government will study the review’s recommendations carefully to examine the impact on the college and university sectors in Scotland.

UCAS figures currently show that the number of Scots winning a place at university, including those from disadvantaged backgrounds, is at a record high. That is a testament to the Scottish Government’s commitment to free education. I therefore welcome the recommendation that students from a low-income background in England will have maintenance grants reinstated, following the example set by the Scottish Government for low-income students.

The reduction in earnings threshold for repayment will hit those on a low income hardest. That, in addition to increasing the repayment time from 30 years to 40 years, will have far greater impact on low earners, who will have little hope of repaying early and will therefore accrue additional loan interest. What assessment has the Secretary of State made of the impact on lower earners of the earnings threshold reduction and longer loan repayments?

Universities have raised concerns that unless the income shortfall is made up by Government funding they will pay the financial penalty for these proposals. Will the Secretary of State confirm that the Government will make up the funding shortfall?

Finally, the review was carried out at the request of a Prime Minister now serving her last week in power. Will the Secretary of State assure the House that the proposals are to be considered now as firm Government policy, and that they will not be shelved once the Prime Minister departs and a new Tory leader takes over?

No, that is not correct. This is an independent panel report that feeds into the wider process of the Government’s review into post-18 education and its financing. As I said to the hon. Member for Ashton-under-Lyne (Angela Rayner), who speaks for the Opposition, we will of course consider very fully all the recommendations.

The hon. Member for Glasgow North West (Carol Monaghan) asked about repayment thresholds. I might ask her why Scottish students are still waiting—and, I gather, will still be waiting until 2021—for the recommendation made by her independent review into repayment thresholds to be put in place. She talked about barriers to young people going into higher education. I am afraid that the reality is: in England, we have record numbers of people going into higher education. In Scotland, as a direct result of her policy, the number of university places remains capped, which limits the number of young people who can benefit from the opportunity of going to university. The impact of that is that the disadvantage gap, if we look at England, Scotland and Wales, is biggest of all in Scotland.

The Augar review does not mention the teaching excellence framework. What use does the Secretary of State think the TEF will have in assessing which courses offer value for money for students and the general taxpayer?

I am grateful to my hon. Friend for giving me an opportunity to pay tribute to all the work he did as universities Minister. The TEF is a very important reform and is part of the framework from HERA—the Higher Education and Research Act 2017—and the OFS that enables a much more holistic view of quality in higher education. It remains a central part of that architecture.

A Government who abolished maintenance grants for our poorest students commission a review that concludes that we need maintenance grants for our poorest students. That same Government welcome the idea, led by a Prime Minister in her end of days as PM before it is all change for this Cabinet, so how will the Secretary of State make amends for this mess in time and see grants brought back and the best of Augar brought in? This is a ghost ship Government—if it ain’t Brexit, don’t fix it. They do not have a hope for themselves. How can they possibly be the hope for higher education colleges and our students?

I gently mention to the hon. Gentleman that in his work on the Education Committee he has had an opportunity to look at the variety of what is available in our higher education system, much of which is of the very highest quality and competes with the best in the world. We also need to make sure that everybody is getting good access to that very high quality, that participation in university is widely spread through our society and that we concentrate not just on access to higher education, but on access and successful participation. We need to work more on all those things, but it remains the case that under this Government more young people than ever before have had the opportunity to benefit from a university degree.

Thanks to tuition fees, the unit of funding in real terms per student is now twice what it was when I went to university, despite universities having many more students. A student from a deprived background is now twice as likely to go to university if they are in England rather than in Scotland. Does my right hon. Friend agree that it would be attractive to reduce the cost of going to university by cutting the number of low-value courses and not by making the general taxpayer pay, because that creates an unfairness, is regressive, moves money from poor to rich, and it means that those who have already been get nothing and have been ripped off by a promise made on the front of the NME but burned just days after the general election?

I pay tribute to the work that my hon. Friend has done and the thought leadership he has shown in some of his writings on these subjects. He is absolutely right to identify the increase in resource available to universities, but total HE financing has risen by £6 billion or so over the period through a combination of more students and higher resourcing. One thing that the report analyses in fine detail is exactly how we make sure that we properly reflect both the value and cost to serve of these courses. What he says is very apt.

It is good, I am sure, that we have agreement across the Chamber that more money should go into lifelong learning and further education, but we want to hear a guarantee from the Minister that those resources will not come from higher education. We also want a guarantee that if tuition fees are reduced, any shortfall of money going to universities will be made up by teaching grant from the Government not just for science, technology, engineering and maths subjects, but for arts and humanities subjects, because they are also very important for our economy. If these proposals will eventually see their way into legislation—it is not clear to any of us how that would happen—is the Minister going to consult the sector widely so that he does not destabilise it further? We need those guarantees so that universities have certainty if they are to compete globally.

The hon. Lady will shortly meet the universities Minister in her all-party group on universities and will have an opportunity to discuss some of these things further. She mentioned teaching grants. The Augar report recommends precisely that—that there should be top-ups, although not exactly the same for all subjects. Few people realise the extent of the teaching grant. It is £1.3 billion, with some 40%—two in five—of courses attracting some sort of teaching grant. What the report talks about is how we balance that correctly properly to reflect not only value but cost to serve, as I said to my hon. Friend the Member for Harborough (Neil O’Brien).

One way to reduce the cost burden of achieving a degree is to conclude the studies over two years rather than three. What does the Secretary of State have to say to those who argue for greater availability of two-year degrees?

Pioneered by the University of Buckingham, the only independent university in the country and housed in my constituency. [Interruption.]

My hon. Friend the Member for Rugby (Mark Pawsey) says, “Bring it on!”. Your intervention, Mr Speaker, also gives me an opportunity to say nice things about Buckingham, which is always welcome.

We have legislated on this exact point to make two-year degrees more prevalent and available. Having different models of learning—models that are more flexible and which fit in with people’s lives—and greater diversity of choice is a very good thing.

Like others, I warmly welcome the thrust of the Augar report, which is that we desperately need more funding for further and lifelong learning, not least because, as the report states, adult education under this Government has been slashed by a whopping 45%. We have not heard the Secretary of State give a commitment yet on robbing Peter to pay Paul. Whether he likes it or not, the idea that the Treasury will make up the shortfall from a cut in tuition fees is as credible as the claim that austerity is over. In reality is he not proposing the worst of all worlds for universities and students—graduates paying more for longer for degrees that are worse funded?

The short answer is of course no. This is not my set of recommendations; it is a set of recommendations from an independent panel feeding into a Government review of post-18 education and its financing to make sure we have a vibrant and sustainable education system in higher education and further education. We are committed to that and will respond at the spending review.

I welcome the Secretary of State’s statement. The Augar report identifies the strategic imperative of a transformation in adult education in this country. I represent a constituency in the west midlands where further education is of central importance to the future of young people. Does he agree that we need to focus our attention and resources on transforming the further education offer to adults and on high-quality vocational skills that serve the needs of economies such as the one I represent in the Black Country and the west midlands?

My hon. Friend is right that we need to evolve the way we do further, continuing and adult education so that it fits with the realities of the economy today and—perhaps more importantly—with the unpredictable change that we know is coming, and part of that is about the national retraining scheme, for the development of which we have already committed significant resources.

As I learned from the 10 years I chaired the Select Committee, we make most progress in higher education when we find a cross-party consensus, as anyone who looks at the Robbins report or subsequent reports, such as the Dearing report, will know. There is some good stuff in this report. Some of the people on it were special advisers to my Committee when I was Chair. We have to build a consensus. There are good things in the report and some things I really would not like. Our universities and colleges are the most important institutions for most towns and cities in the country, and we endanger their existence at our peril, so let us build a cross-party consensus. I love the part about a new fund for lifelong learning. Tony Blair introduced one in 1997. It failed, but everybody knew we should bring it back to secure the future of further and higher education. So I say well done in part, but if the Secretary of State could keep a higher education Minister for more than a few months we would do a lot better.

The hon. Gentleman’s long-term aspiration should be to ensure universal public awareness of the length and distinction of his tenure as Chair of the Select Committee.

The hon. Gentleman was right about more than one thing—let us say several. He spoke of the local importance of universities not only to the cultural life of our towns and cities but to, for instance, local economies, business development, innovation, and research and development. He was absolutely right about that, but he was also right to speak of the importance of securing a degree of consensus about these matters. The last two major reports, the Browne and Dearing reports, straddled a change of Government. I hope that that will not happen on this occasion, but I think it right for us to have an opportunity, between now and the conclusion of the spending review, to engage in a good discussion with, among others, representatives of the sector and politicians on both sides of the House and elsewhere, because I think that such discussions help policy making to evolve.

Reduced fees mean reduced university income—that is why the University of St Andrews caps its Scottish students’ fees at 20%, isn’t it?

I think the economists say “ceteris paribus”. Universities have a number of income streams, of which fee income is one. As I said earlier, a teaching grant already exists for two in five courses, and the report recommends a rebalancing between fees and teaching grants.

Successive Governments have neglected the importance of lifelong learning. This change of emphasis is welcome, but the proposed lifelong learning loan allowance is restricted to a limited range of courses, and mature students may not want to take up a loan late in their careers and lives. Will the Secretary of State consider expanding the allowance to cover a wider range of education and training and to provide grants rather than loans, so that no one is unable to afford the education that they need, even in later life?

The hon. Lady is right: these are important proposals, and the question of how we provide learning for people later in their life is also important. I am not sure that what is being proposed is quite as narrow as she has suggested, but the current system is rather difficult for people to pick their way through. That applies particularly to the equivalent or lower-level qualification rules—the so-called ELQ rules. They can be a little hard to understand, and that is one of the aspects to which we need to pay close attention.

Earlier this year, I met recent graduates in Cheltenham who indicated to me that, while the degrees they had received were enormously valuable to their life chances, they felt that those degrees could have been provided within a shorter timescale. I know that the Government have legislated for this, but can the Secretary of State assure me that, as part of any review, he will do everything possible to accelerate the provision of cheaper and more effective degrees?

My hon. Friend does great work on behalf of students in Cheltenham, and I know that he takes a close interest in these subjects. As I said earlier to my hon. Friend the Member for Rugby (Mark Pawsey), I want there to be more diversity and more options. In some instances, it is possible to accelerate degrees. That will work for some people but not others, and in certain courses and subjects but not others. However, I think we should try to stimulate as diverse and as tailored a market as possible.

The Secretary of State has given us warm words about further education colleges, describing them as

“vital engines of both social mobility and economic prosperity.”

That does not match what we have seen in the report. It highlights the scandalous drop in study at levels 2 and 3 in recent years, which the panel believed was due to funding changes. Will the Government support calls for the restoration of funding at those levels, to remove the barrier to social mobility and help young people and adult learners to improve productivity?

The hon. Lady is right about the gap between level 3 attainment in our country and the attainment in countries such as Germany. That is a long-standing issue, rather than one that has just arisen. There is also a significant gap at the so-called levels 4 and 5—higher-level technical qualifications, above the A-level or T-level equivalent but below the degree-level equivalent. Our deficit in relation to other countries is particularly striking in that regard. Those are some of the issues that were considered by the independent panel, and we will, of course, consider its recommendations very carefully.

Most fair-minded Members will regret the tripling of tuition fees and what has happened to student support since 2010. We fought a huge battle over higher education here after I became a Member of Parliament in 2001, and it has been dreadful to see how the system crafted back then has been so comprehensively dismantled. It is now living costs that are often so crippling for students and their families. As a matter of priority, may I ask the Secretary of State what the review’s recommendations will do for families whose incomes are above the limit for all but the basic maintenance loan, and who are by no means wealthy but have two or three children who aspire to go to university?

The changes that we made in the move to maintenance loans increased the cash support available to young people starting at university by some 10%. There have been subsequent increases of 2.8% and 3.2%, and we have announced a 2.8% increase for 2019-20, as well as making maintenance loans available on a part-time basis. However, we must continue to keep these matters under review, and I welcome the report’s contribution in that regard.

Will the Secretary of State meet me or, preferably, come to Dudley, so that he can see how we are making education and skills the No. 1 priority for the borough? We are aiming to strengthen our economy, building on the brilliant work at Dudley College of Technology, the best college in the country, not just through the new institute of technology—for which we have just received £32 million, and we are very grateful—but through a new high-tech skills centre which will provide university-level qualifications in new high-tech industries? That will enable us to attract new jobs and new investment in exciting areas of the economy for the future, and to replace the jobs that we have lost in traditional industries.

I am well aware of the high reputation of Dudley College, and of some of the collaborative work that is being done. It is always a delight to meet the hon. Gentleman, and I look forward to doing so again soon.

The Secretary of State has given us warm words about technical education, but does he accept that the reality is frequently a postcode lottery in which towns such Barnsley have too often lost out? When I met representatives of Barnsley College recently, they told me that many of the first-wave T-levels were simply unavailable. What will change for people in Barnsley as a consequence of the review if there is no funding to follow?

We are starting in a relatively small way in 2020 with three T-level subjects in a selection of colleges, but that will grow over time. The T-level programme is a national programme, but I think it is right for us to introduce it in a measured way in order to ensure that we get it right as we go along, for the benefit of those young people.

I welcome the Secretary of State’s assurance—which I believe he gave in response to the hon. Member for Ashton-under-Lyne (Angela Rayner)—that Welsh higher education institutions would be compensated for any spending implications that arose from the review, but does he envisage that being done through the Barnett formula or through full compensation for Welsh institutions? If he inclines towards the former, may I ask him to consider doing the latter instead?

There are no spending implications today. This is an independent panel review report which feeds into a wider Government review, and—as I have mentioned a couple of times now—we will finalise it later in the year. The funding for the devolved Administrations, including funding through the Barnett formula, will apply in the normal way, as per the statement of funding policy. It will then be up to the Government and the devolved Administrations to decide on the allocation of that money in the light of competing demands.

As chair of the all-party parliamentary group on further education and lifelong learning, I can welcome and celebrate many parts of the report. However, as someone who went to the University of Sussex as a mature student, experienced for the first time in my life an institution that saw potential in me, and worked hard to fulfil that potential—whether it has been successful or not is up for debate—I am worried about the possibility that we will enter a world in which further and higher education will be pitted against each other in a zero-sum competition. Can the Secretary of State reassure the House that whatever the recommendations are, he will never allow that to happen?

I pay tribute to the hon. Gentleman and the work of his all-party parliamentary group. We must not allow different parts of our education system to be pitted against each other, and I can give him an absolute commitment not to do so. In fact, as he will know through his work, there is already a great deal of cross-over between what higher education institutions do and what further education institutions do, but they are both incredibly important parts of the overall system.

Does the Secretary of State not agree with me that ensuring that free or low-cost high-quality childcare was available on demand for parents who need it to go to college or university would be transformative for women’s lives? If he does agree, will he commit to properly fund early years education and high-quality childcare for children of all ages, and to do so properly on the supply side, so that women can get training or qualifications and develop their potential and we can make progress in closing the gender earnings gap?

I was worried when I saw the hon. Lady pick up what looked like a novel, but it turned out only to be a question in a notebook, albeit a very important question about childcare. Of course this Government are investing more than ever before in early years and childcare. I will have to write to the hon. Lady on the specifics of support for students, but I absolutely agree that childcare is a very important consideration for many people.

I wonder if I can give the Secretary of State the opportunity to answer a question he has sidestepped so far. He said in his opening remarks:

“The panel’s recommendations on student finance are detailed and interrelated, and cannot be considered each in isolation.”

If the Government accept the recommendation to reduce the fee cap, will the Secretary of State commit to the Augar recommendation to

“replace in full the lost fee income by increasing the teaching grant, leaving the average unit of funding unchanged”?

I believe that Ministers used often to stand at this Dispatch Box and say, “I refer the hon. Gentleman to the answer I gave a few moments ago,” but the Gentleman has just been good enough to repeat it so I do not have to. All these things—the various terms of repayment, the level of the fee, the T-grant top-up and so on—are interrelated; of course they have to be considered in the round and we will do so when we come back with our response.

There is much to welcome in this review, not least the proposals to tackle the neglect of those who do not go to university, but the universities are right to worry about the proposals for differential funding for different courses, which the Secretary of State appeared to speak quite warmly of a few moments ago. Universities are different; they are not all the same—they have different strengths and different roles—and they are best placed to determine how to allocate resources, so can the Secretary of State reassure us that he respects and understands university autonomy?

I not only respect and understand but celebrate university autonomy. I think the hon. Gentleman represents a university city so I am slightly surprised at his question, because of course different subjects attract different amounts of money right now, and quite markedly different amounts of money. For example, a great deal more teaching grant goes into medicine than other subjects. The independent panel review report suggests there should be a different balance in the cap on overall fees and therefore how much variability there would be in the T-grant, but it is not introducing that principle for the first time.