Tip:
Highlight text to annotate it
X
Thank you for that kind welcome. I am hugely grateful for your invitation to speak today
at this critical time for our universities and
the Higher Education sector. This gives me the first opportunity to give
a speech on this major part of my brief since my
appointment as the Shadow Secretary of State for Business, Innovation and Skills.
At a time of considerable change and instability Universities UK has been a constant voice
of good sense and reason. I know both my predecessor
in the role, John Denham, and our former lead on Higher Education, Gareth Thomas,
greatly appreciated your wise counsel and advice.
Though he is not here, Iíd like to take this opportunity to thank John, who is a real champion
of Higher Education. He brought a huge amount of expertise to bear on the brief as a former
Secretary of State for Innovation Universities and Skills and as Shadow Business Secretary.
Both I and Shabana Mahmood, our new Shadow on Universities, want to maintain and grow
the close working relationship John and Gareth had with you.
I, of course, shadow Vince Cable. Vince is a bit different to me ñ he has been around
for somewhat longer than me. In fact, a journalist
pointed out when I was appointed in October that not only is Vince twice my age but, during
his lifetime, he has been a member of the Labour Party for longer than I have.
Anyway ñ notwithstanding the comparisons with Vince - though Shabana and I may not
be in Government, we have an important role to play
as an Opposition holding the government to account and ensuring they do right by our
students, by the institutions our students attend,
by those who work in them and, above all, by our country. You want this too which is
why a constant dialogue, between us and you, is
absolutely essential. For example, we will want to
work closely with you on the forthcoming Bill and the changes that it will bring.
Shabana and I will also be making a series of visits to universities in the coming months
to listen and learn, and we look forward to engaging
with many of you then as we develop our policy, and thank you for all your help and
assistance to date. Just as there has been change in our team
I know there has been some in yours too. I look forward to working with Eric Thomas,
and I would like to pay tribute to the work of
Steve Smith before him. I want to pay tribute to you, the members ñ Vice Chancellors and
Principal s up and down the country ñ for the work you do, not just as leaders of your
institutions but also as leaders in your communities. You preside over a world class Higher
Education sector with a strong international reputation.
Collectively, you represent excellence in teaching and research. Your institutions
consistently feature high up in global rankings as the latest figures demonstrate and you
continue to drive innovation through your advanced research and its application.
People forget that our HE sector is our seventh largest export industry, generating over £59
billion in output, and more than 650,000 jobs. You are drivers of jobs and growth nationally.
2 And the institutions that you lead are major
employers, and important drivers of regional growth too. With the abolition of the Regional
Development Agencies, your voices as advocates for your regions are more important
than ever. The bottom line is that universities are integral
to our future success as a country. Nowhere was this more evident to me than during
my recent trip with Ed Miliband to the Warwick Manufacturing Group which is part
of Warwick University. In 1980, Professor Lord Kumar Bhattacharyya
set up the WMG to reinvigorate UK manufacturing through the application of cutting
edge research and effective knowledge transfer. Thirty years on, it is continuing
to do just that. It brings academic rigour together
with industrial and organisational practice. It is an example of how the Higher Education
sector, working with industry, can drive growth in the real economy.
There are other excellent examples too like Cambridge Technopole, at the heart of which
sits Cambridge University. It provides research and innovation support for high-tech
businesses in that region. There is the University of Abertay, at the
centre o f a video games designing cluster, with
degree courses providing highly skilled graduates but also managing a research and
development fund for local developers. One of the business advisers helping our review
talks extremely positively of the knowledge transfer from Sheffield Universities and his
bakery business, in improving skills progression and development and productivity improvements
to achieve his goal of being the best baker in Britain.
I am sure you would all be able to give me more examples of what your centres of learning
are doing to add to this list. These kinds of collaborations and partnerships
should be a bigger part of getting growth going in our economy and our future success.
And so it is an essential element of our policy review work.
Later I will say something about our thinking to date and the principles that will guide
the development of our policy:
Fairness for students; Autonomy for universities enabling them to
deliver excellence; Sustainable funding; and,
Universities playing a central role in the economic as well as the cultural life, in
regional and national economies.
However, before I do this I must turn to the elephant in the room (so to speak) - the cloud
hanging over your futures ñ what the Government is pushing through and where it is getting
it wrong. Where the Conservative-led Government is getting
it wrong 3
With the anniversary of the vote to triple fees next week, I think it would be worth
recapping on what has been, let us say, a challenging
year and where we have got to. When the Conservative-led Government initially
set out its changes to Higher Education - cutting the teaching grant by 80% and hiking
up fees - we said what was proposed was unnecessary, unfair and unsustainable: not
good for students or the future of Higher Education, one of Britainís great success
stories. It was why we asked the Government to lay
out their p lans in full so we could subject them
to the necessary scrutiny. So what happened? The vote to triple tuition fees came first
before any White Paper, surely the wrong way round.
Then the changes on access and widening participation were forced out, with subsequent
changes to those plans. As fees levels began to emerge with £9,000
looking to be far from the exception to the rule
which the Government promised, their sums didnít add up and a black hole came into
view. First Ministers ignored this and claimed it
would all even out in the end. But their miscalculation saw a scramble to claw back
in other ways. There were exhortations; claims OFFA was now a regulator and would set levels;
even threats to universities with Ministers crudely claiming that fee levels were so high
because universities were inefficient. Lets take a step back and reflect on that
particular claim for a moment - in business, companies have to factor in risk and cost
it. You are businesses too and this Government has displayed an abject lesson in creating
unnecessary risk for you. So the White Paper arrives at the end of June
of this year. When the threats failed, frankly because of the mess the Government had created,
they pulled ëcore and marginí and AAB out of a hat which they then bolted onto the
original plans. This is no way to run government policy on
Higher Education ñ this is no way to treat our
universities. Vince Cable called his dismantling of the RDAs Maoist and chaotic. It could
equally have applied to another area of his brief.
The reforms are not the evolutionary change UUK has argued for.
Institutions have had to make decisions affecting their future financial viability not knowing
how the rules will change month to month. You are now in the ridiculous position where
you have previously set your fee levels and agreed access agreements with OFFA in April
only to find that the rules of the game changed with the White Paper. Following its
publication you found you were faced with a
deadline to bid for the 20,000 places which were taken from universities and for which
you could now bid ñ that deadline closed before
the deadline for revised access agreements to
be signed off by OFFA. 27 institutions have re-submitted their access
agreements proposing lower fee levels and 25
today have been told they can change their agreements according to OFFAís announcement
a few moments ago. We still need to look fully at the detail but the OFFA letter confirms
there is no evidence on what works best to widen access - fee waivers or bursaries - but
the Government still ploughs ahead none-the-less.
Fee waivers of course help the Governmentís mess as it reduces its bill.
The chaos remains for students and the university system, a system which gets ever more complex
and bureaucratic. 4
If the Government had backed Labourís proposal at conference, which I will get onto in a
moment, none of these current access changes, nor core and margin would have been
necessary, nor would quality be under threat. Fees would have been capped at £6,000.
ëCore and marginí is designed to reduce the cost of courses to make up for the Government
getting its sums wrong ñ it isnít for the benefit of students or the Higher Education
sector. And because of this mess students have applied
for courses without knowing the fee levels ñ making far reaching decisions about their
lives without the information that they need. This
is no way to help our young people get on in life.
Then there are the visa changes to Tier 4 - the student visa route ñ which hasnít
helped either. As I said, the UKís 7th largest export
is Higher Education for foreign students. This
was thrown into chaos by the Home Officeís changes which deter foreign students from
applying to UK universities. There was little regard to the impact and to the reputation
of the UK HE Sector around the world. Where was the
Business Department pressing your case? As an Opposition we recognised this threat
and I know John worked with you in trying to get
the Government to recognise the damage it was doing.
Overall, though, their reforms are seeking to introduce something more fundamental: a
more market-led system, or mini-markets, overlaid
with a more complex and bureaucratic structure.
We are supportive of student choice. Within a diverse sector, students currently have
a wide range of high quality options by course and
by institution. We welcome the extension of choice that will result from allowing Further
Education colleges the power to award degrees, which will allow people who live in areas
that are not near a university to access Higher Education courses.
But this market is beset with problems and few have said it will work well. There will
be intended and unintended consequences. Ministers
admitted that there would be institutional failure as a result.
There are rightly fears that the reforms will discourage universities from offering science
and technology courses and student take up of
the same, at a time when these types of course should be the centre-piece of a future Higher
Education system as our competitors countries recognise.
There are rightly fears that social mobility and access will stall. Aim Higher has been
scrapped, the National Scholarship Programme, though described as ìnationalî is
misleading ñ it does not have national eligibility criteria but is more a lottery with students
with the same social and economic backgrounds getting different types of benefit depending
on where they study; and there is widespread confusion among students as to its purpose.
The respected Sutton Trust has said the tripling of fees will reduce the gains made on
widening access and social mobility. This is exacerbated by ëAABí and ëcore and marginí,
which has led to complex access arrangements being crow-barred on to try and correct
imbalances. Widening access is very much an afterthought not an outcome of the new
system. OFFA, with a hugely expanded role, is still
an office of a handful of staff assessing access
agreements. It is not clear what the sanctions are going to be for universities that do not
fulfil their obligations.
5 In fact, UCAS figures have seen a drop in
application to universities and a variation is
emerging across regions with the North East seeing the highest drop. What does that say
about ërebalancingí the economy? Also, there are fears that the expansion of
for-profit providers will unbalance Higher Education further and undermine quality. Apollo
Group, Kaplan and the Education Management Corporation have all met with the
Higher Education Minister, David Willetts. All
currently have lawsuits being pursued against them in the US for aggressive recruitment
practices and miss-selling of courses. And with the changes that have taken place
we still do not know how much future turbulence will be added on top ñ will there be further
rounds of core and margin? So that is the landscape. In light of all
this, let me pause a second and pose some questions:
Are the changes to Higher Education helping to widen access, ensuring that those with
the best potential are in our universities?
Are they enhancing opportunities? Are they giving stability to universities
to plan and to build on their success? Are they helping our universities compete
in the world? Are they helping to put universities at the
heart of growth, working with business and Government to create future success?
Are they working to support the STEM needs of our economy?
In all case the answers is sadly a no. So it is in this context that we are having
to think about the future of Higher Education ñ who
knows what we would inherit at the time of the next General Election were we elected.
And I know that you have of course worked with the Government to try and secure a better
outcome to the changes. It hasnít been easy. You all want the best for your institutions
and the sector. For some there are silver linings
- perhaps the ability to raise more income. Some
argued from the start that, with the Government cutting the teaching grant by 80%, higher
fees were the only way. Some perhaps see opportunities flowing from the access changes
and bidding for courses. Others we know are deeply frustrated with what has been going
on. So what is our thinking? Well, we must deal
with the world as we find it, not as we would like
it to be. This lies behind the policy announced by Ed Miliband at the Labour Party
Conference. First, let me turn to fees. It is absolutely
right that graduates make a contribution. It
underpins the changes we introduced in Government and which brought an extra £1bn into
Higher Education. But this Government is now forcing many students to take on debts of
more than £40,000 ñ long-term debts, and long-term impacts.
It strikes at the root of what Ed Miliband has called the Promise of Britain ñ that
the next generation should do better than the last.
Many families fear their children will do worse than
6 the generation before. Thatís why we have
put forward an alternative funding package, reducing the maximum level of fees from £9,000
to £6,000. No university would be worse off under this
plan, as any money lost through a reduction in
tuition fees would be compensated for - for individual universities the proposal is revenue
neutral. And, there would be no need for the core and
margin system and the uncertainties and mess it creates. With the sums back under control,
there would be no black hole from £9,000 fees.
Iíll explain how this works: reducing the maximum level of fees to £6,000 while compensating
universities for the difference costs £1.1 billion. Of that £1.1 billion:
£350 million will come from automatic savings from reducing the cap to £6,000 because it
will means some associated expenditure, such as on as fee waivers, will no longer be
required; £300 million comes from cancelling the Governmentís
planned cut to the corporation tax on the banks; and,
£500 million comes from asking the top ten percent of graduates ñ graduates earning
over £65,000 in each year of their working life
ñ to pay more through a combination of a higher
interest rate (from 3% to 4%) and to continue to pay for an additional two years if they
pay off their loan within 20 years.
So this could be implemented now. It would maintain funding for universities but avoid
harm to families and graduates from the Governmentís
plans. It would reduce the debt which graduates will be loaded with, and would be
an important step towards a more graduate-tax like system with wealthier graduates being
asked to pay more due to the combination of a
higher interest rate and time limited overpayment for two years.
Our proposal and our approach are guided by our core principles ñ that graduates should
make a fair contribution to the cost of Higher Education and that those who benefit the most
should pay the most. And if by the time of the next election we
can do more, then we will ñ so starting out from the
position set out at our Party Conference this year, we will be looking at further ways to:
Reduce the burden on families and students who are being saddled with high debts;
Maintain funding for universities; and Develop a fairer payment system for graduates.
Our policy review will be looking at these issues further.
To date the review ñ and the interim findings were published a few weeks ago ñ has been
focused on the economic challenges we face which brings me to my second point ñ
international competitiveness and paying our way in the world.
We need a new economy, which is fair, resilient, competitive, and supports the long-term. It
needs active, intelligent government working with business to build a vision for the future
7 economy, and develop strategies for the sectors
for which we have a competitive advantage and where can compete. It is not business
as usual but a different approach. Higher Education is an essential element of
our future success ñ not only as an export sector as I have laid out, but in terms of
training, skilling and developing what will be part of
the future workforce, supporting the research and leading the collaborative work with
industry. Your report published yesterday supports this view.
One of the challenges Britain faces is that the economy has skill shortages at the same
time as under-utilising the skills we have. We
need more companies that can utilise those skills.
That means creating the conditions where we encourage companies who invest in the long
term; creating the conditions in which we do not rely on low skills, low paid jobs where
we cannot and should not compete.
The role of universities is central to increasing our productivity and building a more skilled
workforce to bring this new economy about. In 2001 we set a commitment to get 50% of
18-30 year olds entering Higher Education to go
to university. It was ambitious. It was right. It helped focus our collective efforts. It
wasnít arbitrary as some claimed but achieved real
change. In 1999 39% of young people went to university and this grew to 47% in 2009/10.
This is a huge achievement. And it happened at
a time when we rescued apprenticeships and supported vocational education too.
But, the target was virtually met when we left office. A fair question is therefore
what should the future hold?
As part of our review, we will be looking at how we can build on this and the best way
we can assess ourselves against our competitor
countries ñ I think that has to be the yardstick against which we should judge our progress
in the future. It is right in the global world, with global
markets, that we are outward looking in this way. We
need to be focused on being among the best in the world. So we need to benchmark
ourselves against the best. Yes, the numbers of young people going into
university but also a broader account too, of
the quality and type of courses students undertake which supports our industries and
economy of the future and - in a similar way - the quality, level and take up of vocational
education. We need to look at the overall skill and education levels of 100% of our
future generation and be among the best in the world.
In concluding, let me draw on your report and quote two things to support the arguments
Iíve just made for a new economy - something I
can leave you to think about. In your report you say, and I quote:
ìCountries with high levels of innovation [also] tend to have, on average, higher proportions
of graduates in their populations and a stronger track record of investment in Higher
Education.î I think innovation is key.
In your report you also list the number of Chinese, US and EU graduates per year in 2010
and the estimates in 2020. I added up the numbers. The increase in per year graduates
in 8
China in 2020 compared to 2010 is nearly the same as the total number graduates in 2020
in the US and EU combined. The landscape is changing.
Together we must work to ensure Britain is set up to meet the new challenges.
Thank you.