My Lords, I thank the noble Baroness, Lady Warwick of Undercliffe, for tabling this debate. I draw attention to my register of interests. Having served as chancellor of Northumbria University for nine years, I have shaken tens of thousands of hands and can see first-hand the difference that a university education can make. I am also privileged to have a number of honorary degrees.
I am pleased that many people are generally supportive of the report and happy to see that elements are already being addressed by His Majesty’s Government, but continued progress is required to ensure that it is a blueprint for change. Having spoken to colleagues at Northumbria University, they welcome the Government’s recent increase in tuition fees in line with inflation for 2024-25, but, as has been suggested, a longer-term solution is required. The increase in fees only just covers the increase that employers must now face to pay for the increase in national insurance. That means that, while tuition fees were raised, additional resources are not necessarily available for students, teaching and research.
A recent study by the London School of Economics has shown that 84% of the costs of higher education will be borne by graduates, with the state contributing only 16%. I and many others in this Chamber were privileged to have free tuition, so I wonder whether we need to consider whether we have the balance quite right. This split is out of kilter with many other countries and does not recognise the benefit to the nation of higher and further education.
While I am pleased that the Government have taken steps to increase maintenance loans for students, the increase of £414 a year comes to only £34 a month, which does not go far in challenging times. It shows that many students from the least well-off backgrounds must take out the maximum maintenance loan. Often, because their parents cannot continue to subsidise them financially, they have to work long part-time or full-time hours alongside their studies to cover the rising living costs. Not only does this detract from them making the most of their education; they leave university with the most amount of debt.
Like others, I support maintenance grants, which I notice were not included in recent government announcements. However, many universities are proud of the work they do to facilitate social mobility, and consideration of this issue would ensure that students who are struggling financially can make the most of their education.
The Open University—of which, I am proud to say, I am an honorary doctor—is facilitating part-time distance learning, which is critical to widening access, supporting social justice and levelling up, so it is not surprising that it welcomes this report. In the academic year starting in 2022, 28% of Open University undergraduates lived in the top 25% most economically deprived areas, and over 37,000 registered students declared that they had a disability. This is really important for the workforce, but it also shows how important flexibility is.
I will take a moment to draw your Lordships’ attention to the wider impact universities have, not just on students; it is about the communities in which they are based. In the north-east alone, universities provide 32,000 jobs. We should capitalise on the central role so many universities are playing in their areas to ensure local growth, and promote collaborations such as the Universities for North East England partnerships, in order to ensure that universities can provide greater social and economic impact. It is clear that steps need
to be taken so that universities up and down the country can establish a firmer financial footing for a sustainable future.
I have just one question for the Minister, on the implications of all this. Many universities are looking to diversify in order to bring more money in, and Northumbria is just one example. It has a service called Norman, which provides out-of-hours IT support to approximately a third of UK universities. It generates income, and it is high quality and cost-effective. However, if it partners with another university, it incurs VAT, but if it goes it alone it does not. This is a barrier to the collaboration that I think we would all like to see more of. What reassurance can the Minister offer, in order to help universities promote collaboration and to continue to educate our young people to the best of their ability?
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