Examination of Witnesses (Questions 1
MONDAY 10 DECEMBER 2001
1. Good afternoon, it is very nice to see you
both, old friends, both of you, as far as the Committee can be
friendly. It does not seem too long ago we met you Professor Newby
and Mr Bekhradnia in our endeavours to come up with a reasonable
report on access and retention, we are grateful for your help
on those inquiries. As you know, it is our intention to dust off
our HE interest in our report and really to have some contribution
to the on-going discussions and cross-departmental discussions
on student finance which was, I suppose, if we look back it was
a long time ago, I think it was the Prime Minister's speech at
the Labour Party conference.
(Sir Howard Newby) The last time I gave
evidence to you on this was certainly before the election, round
2. In a rather different room with rather better
acoustics in the old Palace, we will bear with it. We are going
to concentrate on the student finance side, although, as I said
before, we might bounce a couple of other things to keep you in
trim. The key thing is, Professor Newby, you have, yet again,
changed your role from being at that time the President of Universities
UK, and before that CVCP, you were responsible for the changeover
and, of course, as Vice-Chancellor of Southampton. Welcome to
your new post. I want to ask you, really, what do you think has
happened since the Prime Minister made his speech? There is a
gut feeling abroad if you talk to journalists and if you read
what has been happening over this last two and a half months,
that there has been a significant shift, at one stage to something
must be done about student finance in higher education, to a kind
of change that people are looking much more down the line at the
ability to retain students in education until 18. Do you sense
there has been a sea-change since the Prime Minister's speech?
(Sir Howard Newby) I would not call it a sea-change,
clearly what has happened with the election is there was an election
manifesto commitment by the Labour Party to widen participation
in higher education and the Prime Minister has set a target of
50 per cent of 18 to 30 year old's being involved in higher education
by 2010, that is actually a very challenging target. I think all
of the other activities that are relevant to that, including student
finance, have been brigaded behind this over-arching priority.
3. What percentage on your figures in HEFCE,
what is your percentage now?
(Sir Howard Newby) In England we put the current participation
at 34 per cent.
4. 34 per cent?
(Sir Howard Newby) Yes.
5. What is your view in terms of what is going
on at the moment? Do you think it was too early for a review or
would you like to have seen the arrangements that had been introduced
post 1997 bedded down for a longer time, or do you think it is
an appropriate time to have a review?
(Sir Howard Newby) I think it was an appropriate time
to have another look. I think one of the difficulties we faced
was the perception amongst those students who were contemplating
entering higher education about financing arrangements were somewhat
distant from the reality. Many, many more students believed they
were going to have to pay fees than was actually the case. The
issue of the maintenance award and the loans regime was not terribly
well understood amongst students. Since the initial announcement
in 1997 the government have introduced quite a large number of
schemes to support particular categories of students with their
maintenance grants or maintenance awards through various bursary
schemes. I do not think these have been brigaded into schemes
that one would regard as very coherent nor were the students,
for the most part, aware of the opportunities that were available
to them. I know this always sounds a rather feeble reason for
anything but I think communications with students, especially
17 or 18 year old students, were not as good as they might have
been, they were not simply aware of what was available to them.
6. Is that the main thrust of your criticism
of the system we have? What is the central remiss of the system,
in your view?
(Sir Howard Newby) I have always taken the view that
the key problem in not deterring students from entering higher
education was the issue of the maintenance award rather than the
fee. Far too much debate centred around the fee issue after 1997,
rather than the maintenance award. Members will recall that Dearing
Committee actually recommended the retention of the maintenance
award alongside the introduction of a fee. My view still is that
the key to encouraging more young people into higher education,
not deterring them on financial grounds, relates far more to the
issue of their living expenses than it does to the payment of
the fee, after all half of them will not have to pay a fee in
any case, although not many of them, in my experience, are aware
7. What are the cost implications of going back
to the maintenance review?
(Sir Howard Newby) You referred just now to my new
role and I have to say as the Chief Executive of the Funding Council
my main concern is that whatever solution emerges you should not
take money away from the sector, from the institutions, because
we can scarcely do everything that is asked of us at the present
time on the resources available, resources are very tight. Of
course they will become more so if the predicted expansion of
those going into higher education is not carried out. If I was
to wear my hat as Chief Executive of HEFCE that is something that
I could attempt to insist on. Beyond that, of course, the particularities
of how this is organised is not the Funding Council's concern,
so I revert to a personal opinion rather than my view as the Chief
Executive of HEFCE. I still believe that getting the maintenance
regime right is the bigger priority of the two.
8. Were you very disappointed with the Chancellor's
(Sir Howard Newby) Yes, I was. I did feel that more
might have been said about education generally, actually, further
and higher education, in particular, given this manifesto commitment.
It is a very stiff challenge and it is stiff challenge not just
to higher education but to all the partners involved in education,
school, colleges and universities. Ensuring the progression of
well-qualified youngsters through from the age of 14 onwards is
going to be the key to achieving this target. We know that by
international comparisons our major weakness in this country,
larger than our competitors, is the dropout rate between 16 and
18. At the moment the sector is admitting virtually all those
students who are qualified on conventional criteria to benefit
from higher education. What we really need to do is improve the
number of students and increase the number of students who are
9. If you were advising the Prime Minister prior
to putting this in the manifesto, as you just said, if you had
the benefit, the foresight, that there could be an economic downturn
to the review stream to Treasury and it was not going to be as
great as it had been or was at the time and the Prime Minister
said to you, "I want 50 per cent of 18 to 30 year old's going
into higher education and there is not going to be a whole heap
of cash round, where should I spend the money? What is the priority?
Where can I make savings? Is this achievable?" What would
your answer be to those points?
(Sir Howard Newby) On the first point I think, as
the Dearing Committee recognised and as the government has recognised
subsequently, there is a balance to be struck in meeting the cost
of higher education between taxpayer, the students and/or their
parents and employers who benefit from having a more highly qualified
work force. Where one strikes that balance is really what we have
been debating now for the last five years. There is no doubt that
students benefit across their lifetime from being graduates. One
of the surprising aspects of the previous round of expansion we
had in the sector has been that although the number of people
participating in higher education has gone up very quickly and
steeply the premium on lifetime earnings has not gone down. That
suggests that not only are we supplying students into the economy
whose skills are needed and have a market value but also the students,
even in the present day and age, are benefiting from their participation
in higher education in direct economic terms, that is leaving
aside anything else. As far as the economic downturn is concerned
the historical evidence is this may not be such a bad thing for
recruitment into the sector, although that comment probably applies
more to more mature students who wish to come back into higher
education to improve their professional development and do part-time
courses at masters level or whatever. The third part of my answer
to the Prime Minister through you would be, whatever the short-term
downturns in the economic cycle you have to regard expenditure
on higher education as an investment, it is an investment that
maintains not only our economic competitiveness but also has other
wider social benefits to society as a whole in terms of social
inclusion and in terms of all sorts of other outcomes for which
higher education does benefit the population as a whole. I do
not think one should stop investing in higher education because
of the temporary downturn in the economy.
10. What about the poorer students, do you think
the current system is putting them off or not having much effect?
(Sir Howard Newby) I think you will be talking to
other colleagues who have conducted some research on this and
there is evidence from research that the perceptions which such
students have had may have deterred them in terms of their being
averse to debt. The full answer to your question is actually quite
difficult because we do not have the counterfactual, we do not
know how much more the demand for higher education would have
been had this system not been introduced. I think that is about
all I can say at this stage.
11. Do you think that student hardship is affecting
the institutions that you fund, ie because of increased debt that
we heard about universities are not getting money back from the
(Sir Howard Newby) It undoubtedly has some effect,
although it is very patchy between different institutions, depending
upon the composition of the student intake. We have at the Funding
Council recently been endeavouring to discover what are the additional
costs of drawing an increasing number of students from poorer
backgrounds, not only attracting them into higher education in
the first place but also retaining them once they are in, that
is also very, very important. We believe that there are some additional
costs involved in both of those things and they will fall disproportionately
on different institutions, depending on the character of their
intake. I think students in their first year in particular do
need more care and attention in terms of improving their learning
skills, they need more mentoring, more counselling and more personal
support, they need more generally. That is something that we are
looking at to see whether or not we can take some measures to
meet more of the costs of supporting such students through the
funding regime we operate.
12. Dr Bekhradnia, you are nodding, did you
wish to come in?
(Mr Bekhradnia) I only want to reinforce the point.
I refer you to the supplementary memorandum we put to your Committee
in respect of your previous investigation. We do provide additional
funds in respect of students from disadvantaged backgrounds because
we believe that it takes additional support to help them. We know
the relationship between dropout and the student background. Actually,
as we pointed out to you before, when we dig down deeper into
it it is the relationship between a student's previous educational
achievement and the support they need in higher education. The
relationship between social background and achievement falls away
when you look at their achievement. A student from a privileged
background is as likely to dropout as a student from a poor background
given the level of educational achievement. It is a little bit
subtle when we look at that question.
13. I take that point. Is it true to say, is
it not, that students from lower income backgrounds probably have
a greater fear of debt than others? Do you not think that fear
of debt is putting students off going on to university and even
may account for an element of dropout rate once they get there?
(Mr Bekhradnia) One would expect that but we do not
have the evidence of that. We certainly do know from some research
that there is a greater fear of debt among such students but whether
it is actually leading students to decide not to go to university
or not is another issue. We do not know. Perhaps you will uncover
research in the course of your study that will shed some light
on that. If I might add one more thing to that. We have published
a report on supply and demand in higher education and it is quite
clear from this that it is the decision to stay on at the age
of 16 that is the key one. That has been falling away and that
is followed by a falling away of students coming into higher education.
The issue is to create a link between student debt and that. You
have to believe that students at the age of 16 are deciding because
of future funding arrangements not to stay on to the sixth form.
That is quite a leap, and it is not one that we have any good
evidence for. It is quite clear from the work that we have done
that it is the staying on at 16 that is the critical decision
and so we have to look for what it is that drives that decision
and whether it is the prospect of future debt.
14. At 16 you are old enough to realise the
negative impact of debt.
(Mr Bekhradnia) I am not making a judgment either
way, that is the link.
15. You are saying that the cause has to be
(Mr Bekhradnia) You have to see what it is that is
driving those 16 year olds not to go to higher education, indeed
not to take A-level, for which the regime has not changed.
16. That is a different question. We have a
group that come through to 16 and then give up. Do we have a substantial
group coming through at 18 and giving up with good qualifications?
(Mr Bekhradnia) Not with A-level but with other qualifications,
yes. All most all those who get to 18 with A-level go into higher
17. I know that HEFCE have come up with a broadly
similar conclusion. The recent report certainly believes that
debt is a major disincentive for going on to further education.
We have not improved in recent years our participation with students
from lower or disadvantaged families.
(Mr Bekhradnia) Yes, we have, but we have not improved
it relative to those better off.
18. Overall there has been, but relative to
those better off there has not been an improvement. That must
be an aim?
(Mr Bekhradnia) Yes, of course.
(Sir Howard Newby) If I may come in here, I think
to achieve the 50 per cent objective we must, this is not an ideological
statement, it is purely factual, improve the proportion coming
in from poorer backgrounds, because the sector is virtually saturated
in terms of those coming in from higher income levels. We are
really talking about same issue. I think it may or may not be
that fear of debt is a disincentive to those going through from
16 to 18. Alongside that one would also have to put a number of
cultural factors about attitudes to learning, which we believe
are formed at 13 to 14, that is why I quite deliberately earlier
said we have a 14 to 19 progression problem, it is not just a
16 to 18 or even 18 to 21. That implies that to address this issue
we in higher education have to work very much in partnership with
colleges and schools to, if I can put this way, manage the supply
chain of young people coming through into higher education.
19. Can I just tease you out further on that,
what would you like to see being done more by government to address
this issue, because we are not going to reach that target, as
you say, unless we involve more and get greater levels of participation
for students from disadvantaged backgrounds. What would you do?
(Sir Howard Newby) First of all we have to remove
the perception, I emphasise perception rather than reality, because
the perception has been different to the reality, from youngsters
that they cannot afford to go into higher education, whether that
is a fear of debt or for other reasons.