Higher Education and the Economy

My Lords, I warmly congratulate the noble Baroness, Lady Warwick, on securing this debate. I declare an interest as professor of government at the University of Hull, and I am delighted to see that two Hull graduates, the noble Lords, Lord Giddens and Lord Dearing, are taking part, along with the chancellor of the university, my noble friend Lady Bottomley. As we have heard—I do not propose to repeatthe figures—the contribution of higher education to the UK economy is substantial. It is essential to the health of our economy that we maintain a vibrant culture of research and of teaching in our universities. Applied research is fundamental to our economic future. Theoretical research is fundamental, and so too is teaching. Research and teaching are complementary pursuits: each benefits from the other. It is the quality of teaching that is essential to producing those who are wealth creators, who serve increasingly to generate a successful economy. Our economy benefits from and is dependent on the generation of well qualified and highly motivated graduates. Research contributes to the quality of teaching. Teaching generates fresh ideas and ensures that researchers can locate the relevance of their research in their discipline. Because each benefits from the other, it is possible to thrive in both. I head a politics department that is rated as a 5A department in the Research Assessment Exercise and that came top in last year’s National Survey of Student Satisfaction. Pursuing both is demanding, but it is highly rewarding. I take one example of the economic effect. The combination of research and teaching explains the capacity of our universities to attract so many overseas students in a highly competitive market. Overseas student numbers are increasing, and off-campus spending by international students exceeds£1 billion a year. Students are attracted by the prospect of being taught by leading figures in their field. That alone illustrates the need to maintain world-class research and teaching. To do that, and here I reiterate what the noble Baroness has said, we need not only greater investment, but also to reduce burdens and provide greater certainty. As the noble Baroness said, we need to invest in order to maintain the quality of the teaching provision. It is not just a case of maintaining the unit of resource. We are teaching not only more students but, as she said, a more diverse range of students. We are expanding beyond the traditional intake of the 18 year-old A-level student. That imposes greater demands than before. We need to reduce the burden of bureaucracy. I welcome the fact that in many areas we are moving towards a lighter touch in regulation—but, as I pointed out in a previous debate, a lighter touch is not the same thing as a light touch. The regulatory regime may be effective, but it is inefficient and saps morale. We also need more certainty. It is difficult to plan ahead if one does not know what the goal is and what resources one has to ensure its fulfilment. The RAE is a case in point. We are unsure what will happen post-RAE 2008; indeed, we are not sure what will happen in the RAE itself, given the new mode of assessment, or what the financial implications will be. The uncertainty after RAE 2008, given the likely use of metrics, is pronounced in the humanities andthe social sciences, for reasons we have previously discussed. Does the Minister therefore agree that maintaining high-quality research and teaching is essential to the health of our economy, and that that entails maintaining or improving the unit of resource, reducing bureaucracy and ensuring greater certainty? If not, why not?