Higher Education

My Lords, I join other noble Lords in thanking the noble Lord, Lord Luce, for giving us the opportunity to have this debate. I declare an interest as master of University College, Oxford, for one more month. I start by acknowledging that higher education has a good deal to be grateful to this Government for. First, we have had strong support for research through the 10-year science and innovation investment framework, as well as the fuller economic recovery of research costs. As the noble Lord, Lord Broers, and the noble Baroness, Lady Warwick, said, the United Kingdom punches above its weight in this area, which is crucial to the success of our economy. Secondly, as the noble Baroness, Lady Warwick, mentioned, the 2004 spending review stabilised the funding of teaching per student, which had halved between 1976 and 2005. This debate is about the future and I want to cover three points: teaching costs, internationalisation and access. Despite the measures that I have referred to, there is still in most universities a gap between teaching costs and revenues. At Oxford, average teaching costs per undergraduate are £20,000 per year and average income from all sources, including tuition fees, is £7,500 per year. The task of bridging that huge gap falls partly on the colleges and partly on the university. The university meets its share by diverting money given to it by HEFCE for research—the QR grant—and using it to subsidise teaching. The extent of this, according to recent calculations, is £13 million a year. When I told this to my noble friend Lord Dearing, he was greatly surprised—and it takes a lot to surprise the noble Lord. This is legitimate because it is a block grant that the university can use for whatever purpose it wishes. However, it is a tax on research—a tax on the very activity that we want to promote. Secondly, higher education, as other noble Lords have pointed out, is a hugely international business. It is wonderful that it should be. In my college, we have 550 students from 45 different countries. Some people are now suggesting that universities recruit overseas for financial reasons. In my experience, academics resolutely refuse to respond to economic incentives. They take the best that they can get from all sources. Nevertheless, for a UK/EU undergraduate, we receive £7,500, whereas for a non-EU undergraduate we receive £20,000. It really is perverse to give such disincentives to the education of our own nationals. Finally, despite many fears, tuition fees have not choked off applications from poorer students. Nevertheless, there is still a huge problem to be addressed. I read with great interest the recent evidence given by the director of Fair Access to a Select Committee in another place. Sir Martin Harris said that in his view this was not a financial matter—bursaries are in place to deal with the principal financial anxieties—or a problem of discrimination in selection. He said: "““I do not believe for a moment that any university discriminates against applicants on the grounds of social class in any direction””." The problem, as other noble Lords have said, starts earlier. Sir Martin also said: "““However, one of the things I have been saying in all my pronouncements in the last 12 months is that maybe the focus should now shift and we should focus more on really reaching out ""to 14-year-olds and younger in schools to change aspirations and to recreate upward social mobility””." I follow the noble Lords, Lord Patten and Lord Krebs, in saying amen to that. The universities can and will play their part, but it is with schools and teachers that the solution primarily lies. I hope that these points will be taken into account next year in the Government’s review of the funding regime.