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Higher Education Debate on 26 June: Higher Education This Library Note aims to provide background information for the debate to be held on Thursday 26 June: “To call attention to the future direction of higher education” The Note gives an overview of the UK’s higher education sector, and outlines recent Government policy and issues raised by leading commentators. Alex Brocklehurst 23 June 2008 LLN 2008/016 House of Lords Library Notes are compiled for the benefit of Members of Parliament and their personal staff. Authors are available to discuss the contents of the Notes with the Members and their staff but cannot advise members of the general public. Any comments on Library Notes should be sent to the Head of Research Services, House of Lords Library, London SW1A 0PW or emailed to [email protected]. 1. Introduction This House of Lords Library Note provides background information for the debate ‘to call attention to the future direction of higher education’, tabled for 26 June 2008. Much has been written on the various aspects of higher education policy in recent years, with some controversy over the funding of, and access to, higher education, in a context of seeking to enable UK higher education to compete internationally and provide the necessary skills for the UK’s economy. This Note does not provide a comprehensive analysis of these debates, but summarises some of the key issues. The following sections provide an overview of the higher education sector as it stands today; outline some of the recent policy developments surrounding funding and access; summarise current Government thinking on higher education; and cover some of the recent issues raised by leading stakeholders and commentators. The bibliography includes links to key documents and a range of materials produced by the House of Commons Library, including statistical information on student support and numbers. 2. The higher education sector Drawing on data produced by Universities UK, the representative body for Vice- Chancellors and Principals of UK universities and colleges of higher education, and the Higher Education Statistics Agency (HESA), the following is a snapshot of the higher education sector as it stands today: • At August 2007, there were 168 publicly-funded higher education institutions (HEIs) in the UK, of which 106 were universities. In England there were 132 HEIs, of which 88 were universities; in Scotland there were 20 HEIs, of which 13 were universities; in Wales the figures were 12 HEIs and 3 universities, and in Northern Ireland 4 and 2. The University of Buckingham is the UK’s only private university. • UK universities include a few institutions that date back to the medieval and early modern periods (such as Oxford, Cambridge, St Andrews, and Edinburgh); the civic universities of the 19th and early 20th centuries (including the Universities of Birmingham, Leeds and Sheffield); those founded in the 1960s following the Robbins Report (for example the Universities of Essex, Warwick and York); and those institutions that acquired university status following the Further and Higher Education Act 1992 (such as the Universities of Bournemouth, Hertfordshire and Sunderland). • All UK universities engage in a mixture of research and teaching, in varying proportions, and offer a range of degree qualifications at undergraduate, postgraduate and doctoral levels. Higher education colleges offer a range of qualifications, many vocational, and some award their own degrees. • HEIs are self-governing, and although funded and regulated by the state, are largely independent of government. Various institutions have formed associations, including the Russell Group, the 1994 Group and Million+, to represent their interests and share good practice (see annex). 1 • There were approximately 2.36 million students following a higher education programme in 2006/07, including both undergraduates and postgraduates. 57% were female, and 43% male. • Non-UK domiciled students comprised almost 15% of the student population. The majority of international students in the UK came from Asia (40% in 2006/07) and other European Union countries (32% in 2006/07). In 2006/07, there were approximately 112,260 students from European Union countries other than the UK, and 239,210 from non-EU countries. • In 2006/07, there were some 364,000 staff employed by HEIs, of which just under 170,000 were academic staff and 194,000 non-academic. • In 2003/04, gross export earnings for the higher education sector were estimated to be over £3.6 billion, including international revenue earned directly by HEIs together with additional personal expenditure of international students and visitors. In the same year, the sector spent some £15.4 billion on UK-produced goods and services. Through direct and multiplier effects this generated over £45 billion of output and over 581,000 full time equivalent jobs throughout the economy. The total employment generated was equivalent to around 2.5% of the workforce in employment. (Sources: HESA, Students in higher education institutions 2006/07, March 2008; and Resources of higher education institutions 2006/07, May 2008; Universities UK, Higher education in facts and figures, Summer 2007; and The economic impact of UK higher education institutions, March 2006) 3. Policy background From the 1960s to the late 1980s, arrangements for student support remained largely unchanged. Full-time UK domiciled students studying for a first degree received maintenance grants, and tuition costs were largely funded by the taxpayer, through block grants to institutions and through students’ Local Education Authorities, then reimbursed by central Government. This system reflected an era when it was envisaged that only a relatively small number of undergraduates would study full-time away from home. Nicholas Barr and Iain Crawford, long-standing advocates of reform to the system for funding higher education, described the higher education sector in the late 1980s as in need of expansion and opening up to people from poorer backgrounds: In the late 1980s, the UK had one of the lowest participation rates in higher education (about 14 per cent) of any advanced industrial country. Expansion was necessary, first, as a national response to technological innovation, which has increased the demand for highly skilled people and reduced the demand for the less skilled. In addition, alongside broader arguments about personal development, education and training improve a person’s life chances. (Barr, N. and Crawford, I., Financing higher education: answers from the UK, 2005, page 2) 2 The Further and Higher Education Act 1992 brought a new structure of higher education, replacing the division between universities and polytechnics with a single unitary system for all higher education institutions (HEIs). It also created Funding Councils to allocate Government grants to individual institutions. By the 1990s, it was recognised by many that the higher education sector had suffered from a period of underinvestment. Funding per student had fallen while the proportion of young people entering higher education had risen significantly, with negative consequences for staff-student ratios and university infrastructure. With cross-party support, the then Conservative Government appointed a National Committee of Inquiry into Higher Education, chaired by Ronald (now Lord) Dearing, in 1996. The Committee’s report, Higher education in the learning society, was published in July 1997, and recommended that students should themselves contribute towards the cost of their tuition. The Labour Government accepted the principle of student contributions, and under the Teaching and Higher Education Act 1998 introduced annual up-front tuition fees of £1,000, together with income-contingent loans. The current arrangements regarding tuition fees and student support were introduced under the Higher Education Act 2004, which emerged from the proposals in The future of higher education white paper (Cm 5735, January 2003). The 2004 Act provided for ‘top- up’, variable tuition fees to replace the existing up-front fees, coming into effect in England in 2006. Institutions could choose to charge students a fee between £0 and £3,000 per year. The maximum would be capped at £3,000, rising only with inflation for an initial period to 2010. Loans to cover the cost of tuition fees were introduced at the same time. They would be repayable on an income-contingent basis (rather than ‘mortgage-style’ repayments) after graduation, and any outstanding debt would be written off after 25 years. A new package of maintenance loans and maintenance grants for the poorest students, together with bursaries offered by individual universities, was also introduced. The Higher Education Act 2004 also provided for a new non-departmental public body, the Office for Fair Access (OFFA). Its aim was to ensure fair access to higher education for under-represented groups in light of the introduction of variable fees in 2006. OFFA’s principal task was to regulate the charging of variable fees through approval and monitoring of access agreements, which higher education institutions were required to produce before they could charge higher fees. Access agreements set out how the institution would promote fair access, particularly to students from poorer backgrounds, through bursaries and outreach activities. Ministers argued this package of reforms would strike a fair balance: students, who benefited most from higher education through higher salaries and improved
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