UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 755-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE EDUCATION AND SKILLS COMMITTEE UK eUNIVERSITY Monday 8 November 2004 DR KIM HOWELLS MP Evidence heard in Public Questions 347 - 479 USE OF THE TRANSCRIPT 1. This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others. 2. Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings. 3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant. 4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee. 1 1 February 2005 From www.publications.parliament.uk/pa/cm200304/cmselect/cmeduski/uc755-iii/uc75502.htm Oral Evidence Taken before the Education and Skills Committee on Monday 8 November 2004 Members present Mr Barry Sheerman, in the Chair Mr David Chaytor Valerie Davey Jeff Ennis Paul Holmes Mr Robert Jackson Helen Jones Jonathan Shaw Mr Andrew Turner ________________ Witnesses: Dr Kim Howells, a Member of the House, Minister of State for Lifelong Learning, Further and Higher Education, Department for Education and Skills, examined. Q347 Chairman: Good afternoon, Dr Howells. It is very nice to have you here for your first appearance before the Committee, since I have chaired it anyway. There was some speculation that this is in fact a cruel irony in that normally we are asking questions of ministers and they say, "It happened before my time, Chairman", but we have a case here where you were in the department previously. So, perhaps we can find a time when some of the questions we want to ask about are in your previous incarnation. As this is your first meeting with the Committee and we want to start off on a good basis, would you like ten minutes on some general questions before we get on to the eUniversity just to limber you up? Dr Howells: I would be delighted. Q348 Chairman: When we were doing a recent inquiry into the Transport Bill, we were enthused in our report at children arriving at school aerobically excited! 2 1 February 2005 From www.publications.parliament.uk/pa/cm200304/cmselect/cmeduski/uc755-iii/uc75502.htm Dr Howells: That was me! That was my initiative! Q349 Chairman: First of all, anyone who reads the newspapers this morning will be concerned that the Committee has been hearing, certainly as individual members, about the problems with the student loans coming through to students and the problems with computers and so on. Although we see you quoted in various newspapers this morning, could you give us an update on just how serious this situation is and how many students are in danger of going without food and shelter. Dr Howells: None is the answer to that latter point. I asked for the latest figures and I received them about 15 minutes ago, so would you like me to give them to you? Q350 Chairman: We would very much like them, yes Dr Howells: We had 817,882 applications received and registered by LEAs and, of those, 738,219 were approved and finalised within the LEAs. That, according to the mathematics here, leaves 79,663 of which 13,828 have been refused or cancelled because they were not eligible. So, the number left was 65,835 and those essentially are the ones that are still awaiting payment or notification. Of that 65,835, 12,193 are students who did not provide the information which LEAs were requiring, so that information has gone back to them. Basically, outstanding are about 53,000 cases and all of those, as far as I know and I cannot give that as an unequivocal answer, are ones received after the July deadline when the information went out. As I am sure you know, there will be people who would have applied for these loans even a few weeks ago when they finally discovered that they had admission to a university but it is still, as far as I am concerned, a very serious number and we are working very hard to try to get it down. Q351 Chairman: The Times this morning said that terms started three months ago and, even by my calculation, that seems an exaggeration, but nothing should get in the way of a good story! Dr Howells: I think generally it is about seven weeks ago. Q352 Chairman: An old interest of this Committee was that we made a recommendation in our first report on student finance that we were interested in students paying a proper rate of return on the money they borrowed because we thought, as that was such a great deal of money, that we could in fact use that money, a considerable amount of money, to provide grants for poorer students. The Government rejected that proposal but at the same time did some quite sophisticated modelling, as I understand, of those sums. There were other suggestions recently that have been coming from Her Majesty's Opposition, for example, in terms of a similar proposal. Can the Committee see any costings that you might have of any proposals that you have received? Dr Howells: I would be perfectly prepared to share the modelling with you. My prints are not on this set of models but, when I was the minister who was charged with taking the first Tuition Fees Bill through Parliament - and I still have the scars to prove it - then we 3 1 February 2005 From www.publications.parliament.uk/pa/cm200304/cmselect/cmeduski/uc755-iii/uc75502.htm did a lot of modelling at that time and we were very worried that real rates of interest would be very regressive in the sense that if women took time off to have a family, they would find that that interest was making that overall loan figure bigger and bigger and bigger and we were very worried that that would result in those who earned the least having the biggest bill to pay at the end of it and I do not see that that is really any different now Q353 Chairman: The Committee, in its original report, suggested that it should not be a commercial rate of interest, it should be a small rate of interest that could be charged only to those people who were from higher income backgrounds and that could be used as a subsidy, as I said, for poor students. As I understand it, at the time, that was modelled as well, long after your time in the department Dr Howells: I remember us looking at a very similar model at the time but I know it has been looked at since and it has certainly been looked at in terms of the Higher Education Bill this last time around. Q354 Chairman: Would you share those figures with the Committee if they exist? Dr Howells: Yes, of course I will Q355 Mr Jackson: I think we all know from the debate we had a couple of weeks ago that the Minister appreciates very, very much personally the extreme political sensitivity of this whole question about university admissions and the operations of OFFA and so forth and he knows how this interacts with the media, how it gets certain vice- chancellors, quite legitimately, very excited and perhaps above all how it can actually seep into the schools and have demoralising and depressing consequences for all sorts of very bright young people. I know that the Minister is very sensitive to this but I do have the perception that the bureaucracy with which he is associated in one form or another does not have that sensitivity. So, I want to ask the Minister two questions about that in the hope that he will say something which will be communicated to those bits of the bureaucracy. First of all, I would like to ask the Minister what he has done to follow up his response to my intervention on his speech last week/ten days ago about HEFCE moving the goalposts by incorporating GMVQs and ASs in the so-called benchmarks. He told me that he had not been consulted about this/was not aware of it until it happened. What has he done about the situation? Dr Howells: I certainly answered the right honourable gentlemen on this matter during the course of the debate and what I told him was that I wanted to talk with HEFCE and with HESA - I am just getting on top of these acronyms and abbreviations now - to ask them why these figures suddenly seem to be so out of sync with certainly what I had been expecting and it seemed what the universities had been expecting. I had a very interesting answer to this. We are certainly going to discuss it and we are going to look at the nature of the figures and what kinds of things are being measured and what should count and should not count. I do not know about you, Mr Jackson, but the extraordinary thing I found is that HESA is owned by the universities, it is of the universities, the figures are 4 1 February 2005 From www.publications.parliament.uk/pa/cm200304/cmselect/cmeduski/uc755-iii/uc75502.htm produced by the universities, albeit with HEFCE chairing the organisation, and I understand that they were fully consulted on these figures, so they should not have come as a surprise.