Supplementary memorandum submitted by Mr David Normington CB, Permanent Secretary, Department for Education and Skills
Question 118: Sale of student loans?
Loans were sold at face value, with subsidies to compensate buyers for the non-commercial terms of the loans. For the first sale of £1 billion in 1998, the net present value (in discounted terms at 1997 prices) of subsidy payments was estimated to be in the region of £50 million more than the estimated present value cost which would have been incurred by the Government if the loans had not been sold (ie the continuing cost to the Government itself of the non-commercial nature of the loans). The net present value of the subsidy payments for the second sale of £1 billion in 1999 was estimated to be in the region of £85 million-£100 million above the cost of keeping the loans in the public sector. Part of the subsidy payments will flow back to Government through administration charges by the Student Loans Company (which administers both portfolios) and tax receipts on private sector profits.
Questions 132, 169 and 178: The relationship between grammar schools and participation in HE?
The graph below shows that since 1960, the Age Participation Index (API) including the API for poorer social classes has risen very significantly, while the percentage of pupils in grammar and direct grant schools has fallen. Although there are no direct grant schools now, there are still 164 grammar schools, educating about 4.4 per cent of secondary school pupils in England. The future of the remaining grammar schools is a matter for local parents to decide, by petitioning for a ballot.
It has not been possible to provide information on the numbers of entrants from state schools into individual institutions in relation to the decline of grammar schools.
Questions 186, 249, 302 and 318: Clarification of the Initial Entry Rate (IER)?
The Department uses the Initial Entry Rate (IER) to measure progress towards the target of 50 per cent participation in higher education by young people by the time they reach the age of 30. It is an extension of the well-established and familiar Age Participation Index (API) which measures the proportion of UK domiciled young people who enter full-time HE courses for the first time by the time they are 20. The IER extends this to include part-timers, and those aged over 20 and up to and including age 30. The IER uses comprehensive student data collected by the Higher Education Statistics Agency (HESA) from HEIs and by the Learning and Skills Council (LSC) from FE colleges.
The Department first used this calculation for 1998-99. Using the available data, it calculated then that the IER was 43 per cent.
As part of their quality assurance procedures, the Department and HEFCE carried out a thorough investigation of the student data used in calculating the IER and found that a small number of the entrant figures had been over-estimated. This was due to some students being recorded by institutions as "initial entrants" when they had in fact already been in higher education in previous years.
Using the revised, and more robust data, as a measure of entrants we are now able to calculate the IER to be more accurately at 41.5 per cent for 2001-02.
References to the IER are made in the Service Delivery Agreement section of the Department's website: http://www.dfes.gov.uk/sda2000/psanotes.shtml; and the notion of the IER was mentioned in a Departmental Press Release of 28 September 1999: http://www.dfes.gov.uk/pns/DisplayPN.cgi?pnid=19990612.
Question 436: International comparisons of the performance of school children in state schools?
The Organisation for Economic Co-operation and Development's Programme for International Student Assessment (PISA) is the most comprehensive international student assessment study to date. Thirty-two countries participated, including all the major OECD countries. 15-year-old students were assessed in Spring 2000 in tests of reading, mathematical and scientific literacy. The "major domain" was reading literacy, and around two-thirds of the questions were devoted to this. PISA is being repeated in 2003 and 2006, when mathematical and then scientific literacy will be the major domains.
In England, a representative sample of 4,120 students in 155 randomly selected schools took the tests. Of these, 71 per cent were in local education authority (LEA) maintained schools, 20 per cent were in grant maintained schools, which later in 2000 reverted to LEA control or became Foundation Schools, and 9 per cent were in independent schools. This is in proportion to the national picture and is the usual practice in international comparisons studies such as the earlier International Association for the Evaluation of Educational Achievement (IEA) studies of mathematics and science performance, TIMSS. We are not aware of any studies, which look only at performance in state schools.
PISA was administered in England on behalf of the Department by the Office for National Statistics (ONS), within a technical framework laid down by the OECD PISA consortium to which all participating countries had to adhere. The consortium was also responsible for developing the test items and implementing strict quality assurance procedures, including the translation verification of items, standardised procedures for school and student sampling, precise instructions for the implementation of the survey, the selection and use of test administrators, the use of monitors from the PISA consortium to visit all national centres to review data collection procedures and the production of software specially designed for PISA data collection.
The OECD PISA consortium also undertook the analyses of PISA data, culminating in the OECD report, Knowledge and Skills for Life, which was published on 4 December 2001. The report found that UK performance was significantly above the OECD average. The UK scored seventh-highest out of 32 countries on the reading literacy scale, eighth-highest on the mathematical literacy scale and fourth-highest on the scientific literacy scale. On the "reflecting and evaluation" reading literacy scale, skills, which, as the OECD put it, are "increasingly valued in knowledge-based societies", the UK's score was second-highest.
Question 458: Comparison of financial position of a lone parent on benefits, and in higher education?
Making direct comparisons with a previously unemployed student, or one in low paid work are problematic due to the many variables involved.
An unemployed person would be expected to look after children and would not be entitled to Government funds for childcare. Basic entitlement to income support would be supplemented by housing benefit, which would vary according to circumstances and geographical area. We believe most lone parents with formal childcare would find the new student package attractive by comparison with continued dependence on benefits.
The total income as, for example, a low paid employee would depend on the level of earnings. If they were earning £5,000 per year with two children, and assuming that they worked at least 16 hours a week, they might receive Working Families Tax Credit (WFTC) of £146 including a childcare credit of 70 per cent of their childcare costs. So their income as a student would not drop substantially. The loan element in student support, however, would have to be repaid.
EXAMPLE: A LONE PARENT WITH ONE CHILD AGED 6
£100.50 a week (which includes child benefit at £15.50 a week)
Housing Benefitdepending on level of rent.
Council Tax Benefit
Will also receive free school meals and other "passported benefits" such as free prescriptions.
£90.83 a week student loan (£3,815 a year) (of which £67.05 taken into account by Benefits Agency) 
£51.79 a week Dependants Grant (£2,175 a year)
£5.95 extra dependants grant (£250 a year) (disregarded as income by Benefits Agency)
£11.90 Books, Travel and Equipment grant (£500 a year) (disregarded as income by Benefits Agency)
£5.95 School Meals Grant (£250 a year) (disregarded as income by Benefits Agency)
£11.90 Access Bursary (Discretionary from institution) (up to £500 a year)(disregarded as income by Benefits Agency)
Childcare Grantup to £114.75 a week, depending on childcare costs (disregarded by Benefits Agency)
In addition, Child Benefit of £15.50 a week is payable on top of the student support (this is taken into account by Benefits Agency)
(Full-time students are exempt from Council Tax).
Total Weekly Income £193.82
(Including child benefit but excluding childcare grant)
Total weekly income taken into account by Benefits Agency £134.34
During term-time, while the student's income that is taken into account is above the threshold for Income Support, they may be eligible for some Housing Benefit, depending on the level of their rent. During July and August, the Benefits Agency considers that the student has no income from student support, and the student will be eligible for Income Support and Housing Benefit, providing they have no income from employment.
Any income from employment during term-time or the vacations is not taken into account when calculating the student's entitlement to student support, although it will impact on their Income Support. If a lone parent student works at least 16 hours a week during term-time, they may be entitled to receive WFTC. The childcare credit of WFTC is payable at 70 per cent of actual costs (maximum of £94.50 a week for one child), so it would be more advantageous for such a student to claim the childcare grant through the student support system which will pay at 85 per cent of actual costsa maximum of £114.75 a week during term-time and the short vacations, although it pays at the 70 per cent rate during the long vacation.
Question 470: Research into the Benefits of Enhancing the Initial Period of Teaching for New Students to Higher Education?
Retention rates are closely related to levels of prior attainment. Therefore any efforts to raise students' attainment and preparation for higher education should reduce the likelihood of students dropping out.
The Department is not aware of any published research on enhanced teaching for students in the first year of HE courses. However, using work commissioned by HEFCE from KPMG, areas where additional costs might occur in the retention and progression of students have been identified: additional pastoral and academic care; ongoing study skills; literacy; numeracy; and IT courses. HEFCE recommend that higher education institutions should provide these services when students enter higher education and that they be sustained throughout their study to help aid retention. No cost-benefit analysis has been undertaken of these different activities partly because it is difficult to isolate and quantify the effect that each of these activities has on retention. As a result, the evidence available is generally based on case studies.
For example, many institutions have recognised the need for more targeted support for learning during the first year of a course and have implemented strategies to include practices such as:
Shifting the balance of funding from the, usually more costly, final year to the first year of study.
Introducing a module in the first year which deals with the fundamental issues of studying the particular subject.
Introducing diagnostic testing to determine whether students need more or less direct support ie additional lectures, one to one tuition etc.
Having more explicit outcomes in the programme specifications for the first year of study.
Using Progress Files or similar approaches to monitor individual students' learning and progress.
Last year HEFCE produced best practice guides on strategies to widen participation and learning and teaching. These, and related seminars, highlighted that "the learning and teaching strategy is central to comprehensive attempts to widen participation". These guides highlight the importance of learning and teaching from the first term/semester and throughout the rest of the HE course. HEFCE's guidance states: "The greater the investment in this period [first term/semester] the less likely a student is to leave, as they feel more supported."
This subject was also raised at a recent symposium held by the Institute of Learning and Teaching. One academic had undertaken some private research into student retention: some institutions with a high proportion of non-traditional students had better retention rates than the norm. This was attributed, amongst other things, to a greater balance of resources devoted to Year 1 at university, rather than, as is commonly the case, having large first year classes and individual support only for final year projects.
David Normington CB,
Department for Education and Skills
18 The weekly amount shown is reached by dividing the elements of student support over the 42 benefit weeks (September to June) over which student support is paid. Back
19 The Benefits Agency disregards £260 for travel, and £319 for books and equipment from the student loan. In addition, £10 a week is disregarded from the loan. Back