Higher Education Funding — House of Commons, 2015-01-08
Topic: Education
John Yorke Denham (Labour, Centre-left): We should therefore not say that there is a simple model to pick off the shelf from somewhere else, but, as I shall say in a moment, we should pick up the elements of our system that work and take elements that work from other systems. We could even invent things of our own that are appropriate to our needs. We have the most expensive model of higher education. Ten years ago, when we first aimed for 50%, very few people, including Labour Members, assumed that the expansion would be done through having so many young people in such an expensive model of higher education Because teaching funds have been deliberately cut, fees are higher than would otherwise need to be the case. The private cost has risen, which is important because we should be stewards of what happens to people’s private money just as much as we are stewards of public money. Those who repay do not just repay their own course costs. Their fees help to subsidise research and to pay the fees of those who will never repay in full. I predict that there will be a point at which those graduates kick up against the bills they are being asked to pay for other people That is wasteful because the introduction of increased fees has caused politicians on both sides of the House to introduce new elements of public spending that do not teach students anything—Government’s of all parties have made maintenance systems more generous. The current Government required universities, under the Office for Fair Access, to put back 30% of all fees above £6,000 into widening participation, much of which was in fees and bursaries of completely nugatory value, which does not encourage universities at all—they just make universities compete for the same students. We have built waste into the system because politicians have been afraid of the consequences of their decisions. There is huge potential to use public and private money more efficiently to deliver a better system I have had a lot of support from the House of Commons Library, for which I am very grateful. Apart from my colleagues, one of the things I will miss most about being a Member of the House is the excellence of the House of Commons Library staff. I asked them to look at a model that would retain current levels of public spending; maintain institutional income to the sector from public and private sources; protect low-income students, so that no one in future would pay as much as people pay today, whatever the mode of study; have more intensive and flexible two-year and part-time courses; and have more employer-funded courses. I asked the Library to consider a system in which 70% of students do the traditional three-year residential degree and 30% study more intensively, have employer-sponsored courses and so on I also said to the Library, "Let’s be radical. Let’s spend public money on higher education to teach students something. Let’s strip away as much as we can of the money that is not spent on teaching students something." That has the effect of reducing fees dramatically and reducing the cost of debt cancellation. In the spirit of my idea of keeping what is good, I said, "Let’s keep the current system that allows students to choose the university they want and take their resources with them—let’s not go back to a fixed allocation of numbers." Having created a much larger fund for teaching, I would grant every English student a student entitlement that goes to the university that accepts them towards the cost of their fees In summary, in my model, public spending is at current levels and university sector income is unchanged, but spending on teaching increases from £0.7 billion to £5.5 billion. RAB charges fall by £3 billion a year. The student entitlement for each student, irrespective of the type of course they do, is £15,000, meaning that fees at full-cost universities, which currently charge £9,000 a year for a three-year degree, would fall to £4,000 a year. A two-year intensively studied degree costs just £4,500 in total—the student would probably study from home. Employers could co-sponsor a degree for an average contribution of £5,000 towards fees, less than typical recruitment and retention costs for a graduate. The same number of people would graduate because intensive study means fewer students at any one time. Spending per student would rise by 13%, an immediate and important boost to university finances More graduates would pay for their course in full. Let me be clear that I happen to believe that that is morally right: if we ask people to take on a debt and buy something, they should pay for it in full. For every mode of study, average lifetime payments would be less than they are today. If under that new much lower-cost system the higher-earning graduates—the City high-fliers—were paying too little, there would clearly be scope to introduce a free-standing graduate tax on the highest earnings, which could provide a useful fund for reinvestment in higher education teaching and research.