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Noble Lords: Oh!

Baroness James of Holland Park: Of course all universities are under financial pressure with workloads increasing, the burden of an onerous bureaucracy, inadequate resources and, frankly, disgraceful salaries.

The tutorial system at Oxford and Cambridge is particularly expensive but is regarded as fundamental to the high quality of teaching students receive. The system of state support for Oxford and Cambridge is complicated but at Oxford the Government have decided to reduce their support by £6.5 million over the 10 years to the year 2009--that is £650,000 a year in the values of 1999.

If the state is no longer able to support university education of this standard, or to allow Oxford and Cambridge to charge top-up fees, then perhaps we should indeed face what previously seemed unthinkable: that major universities should have the

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right to become independent, charging such fees as are necessary to maintain their standards and providing for the poorer students by a liberal system of bursaries and grants, as happens at Harvard.

Oxford and Cambridge are not, of course, the only centres of academic excellence. Those universities in the top rank are well known to prospective students, to employers and to the community at large. Instead of seeking to diminish the quality of the best, should we not take a more critical look at the other end of the spectrum? From the published tables the divergence in results is depressing. At the bottom of the table in one university 31 per cent of students left without a degree. We can imagine the cost of this financially, in the waste of time and resources, and in the effect on the students' morale and prospects. We have a two-tier, perhaps a three-tier, system of higher education. I suspect that this is as socially divisive as it is educationally unsatisfactory.

If the policy of the Government is that every young person who wants to go to university should be able to do so, perhaps we should face up to the implications of this policy. It makes even more vitally important what is surely our educational priority--the improvement of state secondary education. Even so there will always be some for whom university is not possible. How disadvantaged will they feel when university entrance is regarded as a right irrespective of intellectual achievement or effort? When that happy day comes, we shall no doubt do away with the system of classifying degrees. If everyone cannot achieve a First, then no one should achieve a First. If some students find examinations difficult, let us do away with examinations. We cannot build excellence on a world in which no one is ever allowed to fail.

We live in a populist, media-driven, envious and destructive world in which we seem to take more delight in destroying than in preserving. But if our higher education is to continue to attract international respect, with all the financial and other advantages which follow, let us recognise value and support excellence wherever it is found in individuals and in institutions. In our enthusiasm for everything new, let us not forget that much that is best in our society has been patiently built up over centuries. It can easily be destroyed by neglect, ill will or deliberate policy. Once lost, it can never be regained.

4.24 p.m.

The Lord Bishop of Portsmouth: My Lords, like many others I am grateful to the noble Lord, Lord Baker, for introducing this debate, coming as it does six months after the debate initiated by the noble Lord, Lord Jenkins.

As a young student in my home city of Edinburgh during the 1960s I witnessed at first hand the rapid expansion of higher education following the Robbins report. I returned to higher education in the 1980s as chaplain and lecturer at the University of Manchester and spent much time picking up the human cost of the stringent cuts that had been introduced seemingly at random and, without doubt, too rapidly.

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The University of Portsmouth, about which I want to speak briefly, has been at the forefront of widening access to higher education. Here I refer with appreciation to the maiden speech of the noble Baroness, Lady Walmsley. I am a governor of the University of Portsmouth. Its history is simple. It was founded as a technical college in 1894 and received its university charter in 1992. It has made a significant contribution to the economic, cultural and educational development of the south coast around the M27 corridor.

With close links to local and regional employers, particularly in defence and technology, the university, like other former polytechnics, has made the transition to its new status and is now a thriving community with 13,000 full-time and 5,000 part-time students and 2,000 teaching and administrative staff. It has focused on vocational and professional programmes, selectively promoting research of national and international quality. What I believe to be of more importance is that it serves an area which bucks many of the trends normally associated with the South East. Portsmouth as a city has a history of under-achievement of a severe kind and low expectations in education. The university is committed to an agenda of widening participation and seeks to do so in collaboration with further education partners and the local education authority.

I see in the University of Portsmouth a clear desire to put into practice the principles of "lifelong learning". There has been some recent expansion in pharmacy; the development of engineering in collaboration with the Royal Navy; and, as I have just gathered from the vice-chancellor, the provision of training on fraud prevention for the Benefits Agency. Perhaps toll bridges will be introduced across the river, the creek, to Portsea Island!

There is also a keen desire to participate in the newly established regional development agency to provide services for new and small businesses and to promote enterprise hubs. In addition, because Portsmouth is one of the gateways to continental Europe there is now a significant number of students, as well as commercial and educational links, both within and beyond the European Union.

I wish to make two brief observations which I hope will be of value to the debate. First, I draw attention to the human impact on university teachers and students of rapid change both in culture and in budgetary constraints--an impact detrimental to morale and to the character and relationships of the academic community. I say this with no sense of nostalgia because that ethos lives on; it does not remain static. But it is under severe pressure, and some would say that in some places it is almost non-existent.

In part budgetary constraints are a healthy development. In whatever sphere we operate--I am sorry to speak rather badly; I have toothache--we must be held accountable for the right and proper use of our resources, which we might term "good stewardship". However, I simply do not believe that our university lecturers, administrative staff and

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students are intent on frittering away public money. While there will inevitably be more efficient ways of doing things, and occasionally projects whose value we question, there remains a basic principle about adequate funding for the role that we ask our universities to undertake. At root, this is part of a larger question about the way in which we as a society value those whose life's work cannot be counted on an abacus but has to be experienced in lives given fresh direction and new opportunities through access to education. This seems to me to be a profoundly valuable contribution to the whole human experience, as well as one which pays dividends in the cultural and economic life of the United Kingdom and beyond.

Secondly, there is the question of stability and change. I concur strongly with the words of Vice Admiral Jonathon Band, former assistant chief of naval staff and now head of the defence training review, who wrote in the current Royal Navy journal Broadsheet,

    "I cannot remember a time when I, and all around me, have not been saying 'what we need is a period of stability'. Yet it never seems to happen. Indeed, today many commentators are suggesting that in the twenty-first century the only constant will be constant change".

To translate this into the current debate, I believe the much-valued words of St Augustine at the beginning of his confessions are apposite:

    "My heart is restless till I find my rest in thee".

In an age of increasing speed of communication, stability and stillness will not be found exclusively in the mode of delivery of educational opportunities. These must of necessity be constantly reinvented or realigned to meet current needs. However, there is an underlying ethos and character, often intangible but none the less real, to our educational institutions which should provide a valuable level of continuity with previous generations of students and with the students of generations to come. Those values are about acknowledging the individual within a large institution, respecting the diversity of views and beliefs inherent in a university and developing a deeply-rooted search for truth which lies at the heart of the human condition.

4.30 p.m.

Lord Dahrendorf: My Lords, as I pondered what contribution I might make to this important and, as we now know, thoughtful and informative debate which the noble Lord, Lord Baker of Dorking, has introduced, I discovered to my horror that I have now been involved in either running or reforming institutions of higher education for no fewer than 40 years, starting as a campaigner for education as a civil right in Germany, continuing as a European commissioner for a while responsible for research and education, going on to be Director of the London School of Economics, after that Head of House in Oxford and Pro-Vice-Chancellor of the University of Oxford and, more recently, becoming deeply involved in reform of higher education in the post-communist countries of east central Europe.

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The conclusion that I have drawn from my experiences as far as concerns higher education is that for a higher education system to be first rate it has to do three things. It has to be accessible to all who are able and willing. It has to be sufficiently diversified to cater for a variety of needs, from the cutting edge of research to applied training, from general education to lifelong learning. It has to have open borders to the world around, to business and the professions as well as to local communities and wider society. Britain's higher education system achieves those needs to a remarkable degree, certainly better than that of any other European country. It is no accident that some of our top universities could probably fill every place with an able European applicant who is trying to escape the shambles of universities on the Continent.

In view of these facts, I have long been bewildered about the attitude of governments to higher education and notably to universities. The last Prime Minister, in my experience, who appreciated universities was the noble Lord, Lord Callaghan, who was not a graduate himself. His successor kept on haranguing us for having betrayed the country by neglecting the needs of business in favour of the "cosier" professions. Her successor prided himself on having been to the "university of life". Ministerial colleagues of his successor now carry on about universities neglecting the under-privileged. First, we were insufficiently capitalist, now we are insufficiently socialist. It is almost as if governments are ashamed of the great national treasure of Britain--its universities.

I cannot help adding that there is quite a lot about which to be ashamed in this country--child poverty, the growing illiteracy of considerable numbers--but not universities. In my view, the real problem of Britain is not remnants of privilege but the absence of a decent, basic standard of life for all. It is not Oxford, but Lambeth, Gateshead and Easterhouse.

Talking about Oxford--which in my case is an acquired taste since I am an LSE person, not quite born but certainly bred--I find it remarkable what efforts Oxford has made to widen access, ex gratia, as it were, for it was hardly given government support. I also find it remarkable how Oxford has, along with other top universities, certainly along with Cambridge, upheld its standards of excellence despite massive financial and other pressures. If Oxford has a problem, it is, in my view, not access but opportunities for research and advanced study. In the sciences great progress has been made, but in the humanities and social sciences much more needs to be done, certainly if Oxford wants to continue to compete with Harvard, Columbia, Stanford and others.

When this Government took office I had hopes that we would see an end of the onslaught on places of excellence that has characterised the past quarter of a century in Britain. Even one ministerial speech delivered with the enthusiasm with which Ministers have greeted the Millenium Dome would have been quite helpful. If that is too much to ask, silence would have been acceptable as a second best.

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I admire the resilience of Britain's institutions of higher learning, but I suspect that it cannot last for ever. Already there are signs of strain caused by resource starvation, assessment mania, bureaucratisation and public attacks. I say to the Government that, in my experience, Britain's universities are well aware of the needs of the day, but every now and again they could do with a little encouragement, and they deserve it.

4.37 p.m.

Lord Trefgarne: My Lords, I only wish to make the shortest of interventions in this debate. I must start by thanking my noble friend, Lord Baker, for introducing the debate in such an articulate and effective way. I must also declare an interest as the paid chairman of the Engineering and Marine Training Authority, the national training organisation for engineering manufacture.

Several of your Lordships have already referred to the rather unwise attack on some of our higher education institutions, particularly Oxford, by the Chancellor of the Exchequer and other members of the Government. Not only was it unwise, but it was also, I believe, misguided. It is simply the fact that the competition for places in some universities nowadays, especially Oxford and Cambridge, is tougher than ever. Straight A grades at A-level no longer guarantee a place and many institutions, when filling courses, must now look at other ways of judging suitable candidates.

It is not the universities that are at fault for setting high standards but the shortcomings of our secondary education system which continues to fail some of our young people.

I hope that I may be permitted to add, in parentheses, that the abolition of the assisted places scheme has not helped in this regard. Under that scheme so-called public schools were able to accept students who could not otherwise pay the fees and, perhaps, prepare them more effectively for Oxford or Cambridge entry.

I am particularly concerned that the debate sparked by the Chancellor will have damaging consequences for industry. One of the principal roles of my organisation--EMTA--is to encourage the brightest and best of our young people to pursue engineering as a career. Throughout the year we visit schools and attend exhibitions with a view to attracting young people into the industry. That is not an easy task and it will, I fear, be made more difficult. We do not seek to persuade young people to take one educational route or another, whether it be via vocational qualifications or higher education. But we work very hard to encourage enough young people, at the age of 16 who may feel so inclined, to consider pursuing a vocational rather than an academic route.

For many young people, that is a difficult decision to take. They face competing pressures from their parents, teachers and friends to remain at school with the intention of going on to university. For some such youngsters, the route may be totally appropriate but for others, taking a vocational route would be a much better option.

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The plain fact is that a university degree is not necessarily the right course for every young person. I fear that one of the consequences--and a very serious consequence--following the Chancellor's remarks is that young people will believe that anything less than a university degree is failure. I am concerned that we shall face an ever more difficult job in persuading young people to consider the vocational route.

If the Government's desire is to increase the percentage of young people going into higher education, then that will reduce the number of young people which industry can attract into the vocational route. Industry will not have the apprentices it needs and we shall have an even greater skills shortage.

For an industry such as engineering, we need people with early experience of the workplace and many businesses question whether a university education provides that. In truth, the shortage of degree-qualified engineers is much less marked than the shortage of vocationally-skilled persons.

I hope that one of the consequences of this whole debate is that future emphasis on higher education will be job-related degrees, such as the Government's proposed foundation degrees. I am sorry that I disagree with my noble friend Lady Perry in that regard. At the moment, we have only limited information on that proposal but it sounds to me to be imaginative and, at this stage, I very much support it. I look forward to hearing further details from the noble Baroness, perhaps this evening.

This is a useful debate. My intervention has been short but deliberately so. I look forward to hearing the Minister's reply.

4.41 p.m.

Baroness Lockwood: My Lords, this debate is timely, coming as it does just before the next triennial spending review. But I do not want to concentrate entirely on funding. I want to refer to some of the successes of our universities.

Like my noble friend Lord Bragg, I think that it is quite remarkable that universities are so buoyant and enterprising after two decades of continual cuts in the unit of resource. I remind the noble Lord, Lord Baker, that between 1990 and 1996, there was a 16 per cent cut.

Therefore, I hope that the Minister can reassure us that the rumour of a further 3 per cent cut is without foundation. I fear that the Government's targets for the participation rate for overseas student enrolment and technical transfer are at risk if that is so.

I want to refer to two of those targets: first, access. There is still a long way to go in recruiting a higher proportion of students from non-traditional backgrounds, as the report of the Sutton Trust indicated. But the continual growth in the participation rate is encouraging. Equally so is the progression rate. We might remind ourselves that the UK's graduation rate is the highest in the whole of Europe.

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I am proud to say that the University of Bradford, of which I am Chancellor--so I declare an interest--recruits 89 per cent of its students from the state system. It has a progression rate of over 90 per cent, of which 31 per cent are from the bottom three socio-economic classes.

Widening access is not cheap, nor will it be cheap to reach the Government's ambitious target of a 50 per cent participation rate by 2010. Access students need more preparation prior to enrolment and continual support throughout their course. Bradford has a number of initiatives to help in that respect, including Saturday morning and summer universities.

I welcome the access funding mentioned by the noble Lord, Lord Baker, which has now considerably increased. But I should like to see it increased even more, particularly to support those students who come from poor backgrounds, have no previous university expectations and, frankly, whose minds boggle at the thought of a debt into the thousands before even starting working life.

Secondly, I should like to refer to universities' contribution to our economy and competitiveness, which is greater than ever before. Last Friday, I attended the launch of a revolutionary technique in particle design, which will vastly improve drug delivery to patients and will be a valuable asset to a wide range of industries. Blue skies research such as that, with technology transfer, is not cheap either. It is a long, expensive process before the reward justly comes back to the scientist, the university and the UK economy.

I mention that because I hope that the Minister might remind her friends in the Treasury and the DTI that medium-sized universities like Bradford also lead in some of those fields and would benefit from university challenge funds.

Another leading field of my university is in the School of Informatics. The first graduates of the Department of Electronic Imaging and Media Communications came through in 1994 and now many are leading entrepreneurs in the multimedia and electronic field. Current graduates are much sought-after recruits by their predecessors, although many, on graduation, go into setting up their own business. Those students rely not on the traditional patenting route but on their own skills and entrepreneurship.

But there are problems. When students, on graduation, can start up their own business or immediately earn more than their tutors, staff recruitment becomes a problem, particularly at professorial level. I join with those who say that university staff must now be properly rewarded.

While it is appropriate for some funding to reward access, teaching quality, research and technical transfer, I believe that for a university to be successful in those fields it needs first to be a well-founded university. That is dependent on core funding.

I urge the Minister to fight hard for the financial viability of the universities and I assure her that they will not let her down.

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4.48 p.m.

Lord Butler of Brockwell: My Lords, I declare an interest as the head of an Oxford college. I thank the noble Lord, Lord Baker of Dorking, for initiating this debate. In my experience, his activities are usually life-enhancing and this one is no exception.

The curious aspect about the recent argument about admissions is that both sides claim to be--and I believe sincerely are--on the same side. Both government and universities want selection of students to be on the basis of ability. They do not want able youngsters to be denied the opportunity of achieving their aspirations because of their race, gender or, in particular, their educational or financial background.

For the universities, the irritating aspect of the recent debate is to be criticised by the Government who, in some major respects, have made it harder rather than easier to get more state school candidates into higher education.

The Government are at pains to say that the introduction of the tuition charge and the ending of maintenance grants has had no perceptible effect on university applications. I make no complaint about those changes. As I have said before in this House, I believe that they are inevitable and would have happened under any government. If they bring more money into higher education, they may be beneficial. However, it defies common sense to say that they have not put new obstacles in the way of youngsters from poorer families taking up higher education.

Here I shall revert to an issue that I have taken up with the noble Baroness, Lady Blackstone. With the help of generous alumni, my college wants to offer bursaries of £3,500 per year to cover the living expenses in Oxford of youngsters from state schools which have not previously sent candidates to us--just the kind of student to whom the noble Baroness, Lady Lockwood, eloquently referred. The purpose of that is to save those students from having to take out the substantial student education loans which may be daunting for families not previously used to debt.

We ran up against a DfEE regulation which states that if a student has more income from bursaries and other sources than £1,820 a year, their tuition grant will be reduced pound for pound. In effect, we are not allowed to take up the option of doing for poorer children what any well-off family can do for its children; namely, to pay their living expenses and save them from having to take out a large loan. I know that the Minister, Lady Blackstone, is reviewing these regulations. I urge her to apply her political mind and to take the simple and obvious course of disregarding entirely bursaries given to those students who qualify for exemption from student fees.

Other obstacles lie in the way of increasing the proportion of state-educated students coming to Oxbridge, such as lack of confidence, lack of parent or teacher encouragement and fear of rejection. It is much more in the power of universities and schools to remove those obstacles. I believe that these are more important factors than bias in the selection procedures.

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Last week I happened to visit a non-selective comprehensive school in south Brent. The school has many problems, but largely due to the efforts of the head teacher and her staff, it is a school that has made huge strides over recent years. In 1986 the proportion of students attaining five GCSEs at grades A-C was in single figures and virtually no students went on to university. Now 68 per cent of pupils gain five or more GCSEs at grades A-C and last year, all 45 A-level students gained university places. Oxbridge entry is now becoming regular.

I met the splendid teacher who acts as mentor for the pupils applying for these university places. He told me of all the work that he has to put into achieving what he does achieve: summer schools, mock interviews, open days and much more. He also told me that since he started this task 10 years ago, all the students he has put up for Oxford and Cambridge have received interviews. Ninety per cent have been offered places. He has not known of a single case in which a pupil has had a bad experience at interview.

The truth is that the removal of obstacles to all youngsters achieving their full potential needs hard, patient work from all concerned: from universities; from schools and from the Government. A little gingering-up from the Government does no harm, but real progress requires serious efforts and resources rather than words--and certainly ill-founded words. Higher education, like other forms of education, is a very important matter. However, like the noble Lord, Lord Baker, I am afraid that I have to say that I am not convinced that the Government are yet treating the difficult choices as seriously as they should.

4.54 p.m.

Lord Norton of Louth: My Lords, I should declare an interest as an academic at the University of Hull. I note that I have already been preceded in this debate by one Hull graduate and I am to be followed later by another.

I do not propose to devote time to the issue of university admissions. That, in many respects, is to detract from the problems facing higher education. The Government's stance on admissions is akin to threatening to take a battering ram to an open door. The problem lies not with the process of admissions to the universities, but rather--as has already been mentioned--with what happens before students apply and what happens after they have been admitted to university. The Government are focusing, deliberately or otherwise, on the part of the process that is probably the least problematic. The question of admissions is being addressed. The universities do not need to be told what to do in this respect. They know what to do.

However, there is certainly a problem at the stage prior to applications. Students coming from particular backgrounds need to be encouraged to apply, to think in terms of taking a degree. Here, families and schools have a vital role to play. Universities themselves are contributing to the process. Through a range of devices, they are encouraging students from backgrounds where there is no history or culture of going on to higher education to apply to university.

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As I have already said, there is also a problem subsequent to admission. This brings me to the central problems confronting higher education. It is these problems that, in the time available, I propose to address.

Universities are being squeezed by a pincer movement. On the one hand, the number of students admitted to universities continues to climb. There was little change in the numbers during the 1980s and a massive increase in the 1990s. The Prime Minister has spoken of 50 per cent of young adults going into higher education. It is not clear that that is the target, but for my purposes the important point is that we have already seen a dramatic increase in the number of students in higher education.

However, the resources available to universities have not kept pace with that development. There has been a cut in real terms in the funding per student. The situation is exacerbated by a qualitative as well as a quantitative change. The number of students applying to universities has declined while the number admitted has increased. This affects the quality of the intake. If one reaches out to bring in students who are less qualified than those previously admitted, then this has clear implications for how one is to teach those students. One cannot necessarily rely on existing resources and on current modes of teaching to cope with a growing body of students who do not have the qualifications of previous intakes. In short, the demands on universities are increasing in nature as well as extent; the resources to meet those demands are not. Universities are not going to be able to maintain the quality of teaching, given the failure to provide the resources so to do.

The position is made worse by the other arm of the pincer. Universities are being overburdened by bureaucracy, with no commensurate incentives to make academic life attractive. Consequently there are problems with recruitment, retention and motivation, as has already been pointed out by several other noble Lords. When last December your Lordships' House debated the state of the universities in Britain, I referred to the new and extensive methods of quality control being applied both in terms of teaching and research. I argued then that they are highly bureaucratic and that they impose a substantial burden on the institutions and those who work in them. Although the methods employed may in some cases be effective, they are highly inefficient. They place a burden on academic and administrative staff that, in many cases, serves little or no purpose. The opportunity cost is substantial.

These burdens are not offset by any incentives. The sticks get larger as the carrots wither away. Academic pay has declined markedly in relation to other professions. There is little incentive to stay in the academic world, or indeed to enter the academic world, given that the pay is far better in other professions and, indeed, in a great many other jobs. Bright graduates in the City, or in journalism, or in political lobbying, can be earning in their late 20s or

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early 30s more than a lecturer twice their age is earning. Indeed, they can be earning well in excess of what a professor is paid.

It would not matter quite so much if the working environment were attractive, but, at present, it is not. Academics are being asked to do more with less. It is no use the Minister talking about a real terms increase in the funding of higher education when the real terms increase in the burden on universities has out-stripped it.

I suspect--indeed, I am fairly certain--that there is a relationship between the two problems I have identified. If government are not able to provide the funds to meet the goals they would like to achieve, then they look to regulations--to paper exercises--to reach the goals, or at least to appear to be trying to achieve their goals. This is not something peculiar to the present Government. Governments feel the need to be seen to be doing something. It does not work. Indeed, for the reasons I have touched upon, it can be counter-productive. Academics are employed to teach and research. That is what they do well. They are now being given other tasks that get in the way of teaching and undertaking research. They are being denied the resources to do that which they do well. Unless the Government tackle the real problems--and I emphasise "real problems"--then the situation will get very much worse.

mong other things, fresh thinking in terms of finance is required. My noble friend Lord Baker and the noble Lord, Lord Dearing, have encapsulated the kind of thinking that is required. Leaving matters as they are is not acceptable.

5 p.m.

Baroness Warwick of Undercliffe: My Lords, first, perhaps I may join with other noble Lords in complementing the noble Lord, Lord Bernstein, and the noble Baroness, Lady Walmsley, on maiden speeches that were not only interesting but extremely entertaining.

I must declare an interest in this debate as the chief executive of the Committee of Vice-Chancellors and Principals. I congratulate the noble Lord, Lord Baker, on introducing the debate. It is certainly timely, as higher education squares up to the Treasury in the spending review.

We last debated the state of UK universities in this House in December, and much has happened in the sector since then. In that debate, I recalled how higher education had been transformed during the 1980s and 1990s; and more recently, we have seen the impact of the Dearing report on the sector. I do not want to rehearse that territory again today, but instead to consider the immediate prospects and medium-term trends.

Several noble Lords mentioned the recent political and media furore on access and admissions which, I am sad to say, has obscured the true picture of how hard all universities are working to meet the challenge of widening participation in higher education. I said in

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the debate in December that access is one of the key issues facing universities, and the CVCP wants the debate to look at access for all those who might benefit from university, whatever that university. As other noble Lords have said, that is still a challenge.

Fifty years ago, we did indeed have an elitist system. Those who made it to university were, largely, sons of the middle classes. In the 1970s and 1980s, the daughters of the middle classes rapidly caught up. But neither the universities nor the schools have yet cracked the problem of raising the aspirations of young people for whom the obstacles of economic and social disadvantage are just too great. Those are the people we have failed.

Universities are taking initiatives. Many have set up schemes to encourage young people from low participation areas to apply to higher education. I referred to many of those initiatives in the previous debate. But the efforts do not stop there. I was delighted to hear the noble Lord, Lord Baker, refer to the CVCP's report, From Elitism to Inclusion. We are now taking that further. We want to assess how we can do better on part-time and flexible structures and on collaboration between further education and higher education, and how we can engage employers and professional bodies to do more to encourage students from lower socio-economic backgrounds.

Above all, youngsters who have little or no aspiration, who have negative school experiences and whose families may have long histories of unemployment need to see that education, and indeed higher education, can be fun. But the efforts to raise young people's aspirations and attainment must be joint ones, between schools, parents, pupils and universities, as my right honourable friend the Secretary of State for Education and Employment has emphasised on many occasions. I welcome the recently published Sutton Trust report, Entry to Leading Universities. The report acknowledges that universities are aware of access problems, and that they have initiated programmes to improve access.

The Department for Education is aware of that too. With the help of DfEE funding, the CVCP has commissioned a report about the way in which universities make decisions about admissions. The project aims to improve the "fit" between information used to make decisions that is obtained from UCAS, which is largely about past achievement, and ways of judging potential. In other words, can we find objective indicators of future success?

The CVCP is looking forward to working with the Sutton Trust and with the DfEE to find ways of improving the admissions process and to raising performance and expectations in our schools.

But all of this cannot be conjured from the thin gruel of financial starvation. If the higher education sector is to continue its efforts to meet the Government's goals on access and expansion, adequate funding is vital. The Government have halted the inexorable and debilitating decline of the previous 15 years. But, as so many noble Lords have said, as successful institutions, universities need real investment for growth.

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Next month's spending review may see public funding of higher education cut once again. A cut of 2 or 3 per cent per student is rumoured. That would have a hugely damaging effect on the quality of education received by precisely those youngsters we want to attract to universities.

The sector is keen to meet the Prime Minister's key target to raise the participation rate in higher education to 50 per cent of 18 to 30 year-olds by 2009, and also, in the international arena, to meet the target of raising the UK market share of international students from 17 per cent to 25 per cent by 2005. But without extra funding, universities will be unable to meet this challenging agenda.

We have to ask: what will all that do to our ability to contribute to competitiveness? There is a danger that industry will shun our out-of-date equipment, labs and teaching facilities. It operates in the global market-place; it can go elsewhere, and it may well do so. Further investment is required to build our knowledge transfer capacity.

In order to compete, universities must have their fair share of the best staff. But why become an academic, after several years of study, when you can do so much better--of course, in the City, but also in teaching, in health, in the Civil Service, and in business?

Everything that we have heard in this debate suggests that UK universities are one of this country's best kept secrets when it comes to success stories. But we cannot depend on out-performing international competitors, even in the medium term, on less and less money. Universities will be crucial both to ensuring the UK's global success in the 21st century, and to ensuring that today's "have-nots" are given a chance to join in our growing prosperity. I urge my noble friend the Minister to agree that a real boost in investment will enable that to happen.

5.7 p.m.

Lord Renfrew of Kaimsthorn: My Lords, I, too, am grateful to my noble friend Lord Baker for introducing this debate on the slow, gradual decline in many aspects of higher education in this country today. In fact, my noble friend did not initiate the current debate, as we well know. It is sad that a senior government officer--I refer, of course, to the Chancellor of the Exchequer--should open the much-needed national debate on higher education in the manner in which he did. It was a cheap diversion from what is certainly an important area of our national life which our Government are in some respects failing. Where is the national vision? If the Chancellor of the Exchequer's contribution is an element of the national vision, heaven help us!

One issue, of course, as the Chancellor emphasised, is access. The noble Lord, Lord Dearing, is right. Nursery education is a first key, and I am grateful that the Government are making progress in that direction. But secondary education is where the problem of access is most clearly manifest. The question is not, "Why are people in the lower income groups not being admitted to all our national universities?" but "Why are they not applying?".

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I express an interest. I am still a university professor but no longer a head of house. When I had something to do with admissions about 50 per cent of the entrants to the college with which I am associated were from the state sector. That was largely because 50 per cent of the applicants were from the state sector. A general pattern across Oxbridge, and probably beyond, is that the admissions are in general in ratio to the applications. If one wants, as we do, to have more students from ethnic minorities one must encourage applications from ethnic minorities. Why are they not being encouraged to apply? Here the problem lies in schools more than universities. The noble Lord, Lord Plant--we look forward to his speech--wrote in the Guardian a few days ago that he is regularly asked by private schools to talk to A-level classes. In 33 years of teaching he has had one request from a state school.

That is one place where the problem lies. It is a matter of attitude in the schools and among the potential applicants. I am saddened that by his words the Chancellor has exacerbated the problem and not improved the situation. By enhancing the myth that some universities are difficult to access by, or not suitable for, state students, I fear that he has set back the problem by a couple of years. I think it is a scandal that he should have done so.

Perhaps I may give a view from the inside on two issues and echo some of the points made by my noble friend Lord Norton. On the financial side, clearly academic salaries are a scandal. However, perhaps it does not come well from someone whose principal income is in that direction to say so too emphatically. My noble friend Lord Baker, and the noble Lord, Lord Bragg, made those points effectively, as did the noble Baroness, Lady Warwick. I refer not only to academic salaries but also to capital expansion. There are the problems of student funding, the funding of libraries and laboratories and, above all, research.

Many academics spend many hours writing applications to research councils and boards such as the ESRC, NERC, SRC and AHRB. Many applications receive alpha ratings but few are funded. One of the sad factors in university life today is that many excellent, alpha-rated research applications are not being funded. I strongly believe that one of the excellent features of our universities is the research component. I believe that good teaching is related to good research. It is a scandal that research is so seriously under-funded.

In yesterday's edition of The Times there was a letter from the President of the European Physical Society referring to an international evaluation and emphasising the inadequate level of research funding in British universities. If one wants to start, I agree with the noble Lord, Lord Dearing, the nursery end is one place; but the research end is another.

I wish to raise one further issue. It echoes the point made by my noble friend Lord Norton. I refer to the bureaucracy which now strangles the unfortunate teachers in the university sector--under-funded, under-provided for, under-financed. There are mountains of paper work. I have referred to research

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applications. It is far more difficult to get a good grade research application funded; it is also far more laborious to apply for the money.

The research evaluation exercise determines the funding which comes to university departments. In principle, it is excellent. It is right that departmental research should be evaluated. In practice, it is extremely burdensome. It has set up an artificial market in transfers between university departments in order to meet the annual deadline. That is false and rather foolish.

It is right that teaching quality should be assessed, but I assure noble Lords that it makes for a mountain of paperwork. Many departments now employ a full-time administrator to prepare the paperwork. The Government are creating a new profession--bureaucratic administration.

I turn to transparency. Before 24th June I have to fill in a form indicating not the number of hours but the percentage of my time--I have no idea what it is supposed to signify--I have spent on research, administration and so on.

The merits of the Institute of Learning and Teaching--we have to thank the noble Lord, Lord Dearing, for it--are obscure to me. The Quality Assurance Agency is introducing benchmarking. The dead hand of bureaucracy is falling upon British universities. That feature is almost as serious as the chronic under-funding. Where is the vision? I have been to the Millennium Dome three times. I have looked at the Work Zone; I have looked at the Learning Zone. The Government are not offering us any vision in this field.

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