Examination of Witness(Questions 400-419)|
MBE, a Member of the House of Commons, Minister of State for Lifelong
Learning and Higher Education, Department for Education and Skills,
Wednesday 12 December 2001
400. The review of higher education.
(Margaret Hodge) Let me just comment on the idea that
there is conflict between us, the Treasury and No. 10. If we are
to be effective in getting joined up working across Government,
working across departments is absolutely essential. I find it
slightly oddif I dare say so, Chairmanthat where
one works across Government very well, immediately it is portrayed
as somehow the DfES is being dominated by No. 10, No. 11 or whoever.
It just is not like that.
401. If you take student finance, and you take
faith schools, both of them were fashions that came out of No.
10 and were bounced on your department.
(Margaret Hodge) The finance review comes out of our
commitment to a target of 50 per cent. It comes out of a realisation
that there may be teething problems with the system in place.
We have to ensure that we have the detail right. That is felt
across Government. To be honest, the faith schools was an idea
that emerged in the old DfEE when we started turning our minds
to how we could raise the quality and standards in secondary schools
and looking at the record of church schools in the league tables.
Also the Church of England came to us saying that while they had
a considerable number of primary schools as church schools, they
wanted to expand their secondary schools. I come back to where
the review came from. I think it is now a good time to sit back
and reflect on what we want higher education to look like in 10
years' time. We have come through this generation of under-funding.
We are at a point where the role of higher education in our society
is emerging and changing. The purpose of the review is to enable
us to sit back and to think where we want HE to be in 10 years'
time and in the context of that wider review I hope that we can
make a sensible bid for resources over the next spending review
period and beyond it. We are looking extremely radically at the
relationship between higher education institutions and the rest
of the education sector. We know that in the past higher education
institutions have been pretty independent of each other and the
rest of the education sector. If we are serious about "cradle
to grave" provision, raising skills standards, and so on,
that is an important area at which to look. We are looking at
the role of research and we where we want to be globally. We are
also looking at the role we want research to play in regional
communities and regional economies. We are looking at quality
and how we can enhance that, not just in research but also in
teaching. If we are to extend participation it will be a different
cohort of students coming into higher education, and therefore
excellence in teaching will become ever more important. We are
looking at the governance issues. They have not been looked at
since I do not know when. Are they an inhibitor to enabling innovation
to take place? Institutions need to be well and efficiently managed.
We are looking at the relationship between HE and FE and at the
settlement around higher education institutions. That is quite
interesting, Chairman. The settlement has not changed in the past
40 years. A couple of smaller institutions have been absorbed
into larger ones, but we have the same university settlement that
we have had for decades. Is that appropriate for regional demand
and to meet customer demand? I believe that it is a good time
to sit back and to reflect on where we want to go and with that
overview we can make a sensible decision.
402. Is the review cross-departmental?
(Margaret Hodge) Is the review cross-departmental?
403. Will you be consulting the stakeholders
through this process?
(Margaret Hodge) Yes.
404. When do you expect to do that?
(Margaret Hodge) As early as possible next year we
shall produce a consultation report. Quite a lot of our thinking
has already emerged into the public domain as we work through
some of the issues; for example, in the letter that we put to
HEFCE last week or the week beforethe guidance letter for
next yearwe asked them to look at raising the cap on student
numbers for two reasons. One is that it seems a bit perverse that
we cap student numbers when we are trying to widen participation.
Secondly, it will probably introduce a new form of competition,
with learning at the centre, into higher education, and less planning
than in the past. We want some thinking around that issue as to
what that does in terms of the settlement of universities in the
sector. We have to think about the regional offer to ensure that
if we lift the cap and allow the market to flow rather more vigorously,
that we retain some regional spread of universities.
405. In the review you talk about looking, for
example, at excellence in teaching, especially as you expand the
number of students who go into higher education. There is a pressure
from some quarters to create elite universities to carry out all
the research and a wider group of universities to do all the teaching.
What is your position on that?
(Margaret Hodge) One of the interesting reflections
for me has been that in the past we have tended to presume that
every university does it all. The way in which we have funded
universities has forced them into the same missions. They receive
money per student and money for competing in the research assessment
exercise. One of the issues that we are grappling with in the
fundamental review is to see how we can recognise diversity of
admission, some focussing very much on research, some focussing
globally and some nationally and perhaps some focussing on regional
regeneration. It does not mean that each will do just one; they
may do a couple of those. Some may focus on teaching and some
on widening participation. There are all sorts of mission focusses
that universities may choose to have. If we have those different
missions, we then have to decide how to incentivise the system
through funding to ensure that missions are properly funded and
that people do not try to do the same. We have to recognise that
not every university is the same as another. In the past it may
have been a mistake to try to build a uniform higher education
sector. It just is not like that.
406. There seems to be a suggestion there that
we may see a concentration of research in certain institutions.
(Margaret Hodge) We have a concentration of research
at the moment. My officials will correct me if I am wrong, but
I believe that a third of the funding goes to four institutions.
Seventy-five per cent of funding goes to 26 institutions. A pretence
that there is not a concentration of resources is just wrong.
At the moment every university has only those two budgets against
which they can compete and bid.
407. There are two factors. The more you go
down that road and concentrate on certain areasOxford,
Cambridge and London
(Margaret Hodge) I have not said that.
408. That is where the concentration is already.
(Margaret Hodge) I have not said that. I have been
very careful. I said that we have to ensure that there is diversity
of mission, that each is valued and that we try to incentivise
to enable universities to fulfil their own unique mission. It
is not putting more money into one at the expense of another.
409. In the system there is a fear that there
is already some concentration on the Oxford/Cambridge/London axis.
(Margaret Hodge) What is the theory behind that?
410. They tend to receive the concentration
of research status at the moment. You appear to be talking about
a system that formalises that more. As a graduate of two northern
universitiesYork and SheffieldI feel that there
should be some redressing of that. There is also a fear in part
of the university sector about the effect on academic staff. If
you create that kind of situation, there is the argument that
the better academic staff will want to go to the prestige research
institutions and, therefore, they will not be in the teaching
(Margaret Hodge) Perhaps I may engage in a form of
conversation on this point. I am not sure what you are suggesting
is wrong. It must be right for UK plc that we fund appropriately
research and that we fund well those research institutions that
can compete globally so that they can compete on the international
market, not just because we want the status but because of the
economic growth and prosperity that emerges from excellent basic
research. It must be right that we should fund that. Equally,
it must be right in terms of our desire to raise the level of
skills and promote inclusion that we should fund appropriately
and well those institutions that excel in teaching. Some institutions
will excel in both; some may choose to focus more particularly
on one or two missions than another two. I would have thought
that that diversity would be at the heart of Liberal Democrat
thinking anyway. It is something that we need to support. We are
thinking how to incentivise missions rather than presuming an
uniformity of mission.
411. If the diversity arises naturally within
the system, that is fair enough. If, as people feara couple
of years ago there was fear
(Margaret Hodge) I do not understand the question.
I really do not understand. There was fear of what? There was
fear because four of the universities received a third of the
funding for research. Where is the fear? What are we supposed
to do about that? Are we not to fund properly the excellent world-class
research that exists in those four institutions?
412. If you go down the road of putting all
the research funding into the areas that are already successfulmostly
in the Oxford/Cambridge/London axis in the south of Englandthen
you are denying other areas the chance to expand into research.
(Margaret Hodge) The whole purpose of the research
assessment exercise has been to assess right across the institutions.
I probably have the figure here. Something in excess of 25,000
submissions went into the current RAE; 50,000 staff and 173 institutions.
They have all competed on it. Interestingly, the last time around,
all that competition still meant that a third of the money went
to four institutions. Twenty-six institutions received 75 per
cent of the money. It is right that the money should follow excellence
in research. That must be right. We now have to find ways in which
to fund excellence in teaching. Taking another element, there
is what we may call applied research, which is knowledge transfer,
developing spin-offs, taking ideas and developing them into products
which lie behind the HEROBC and higher education innovation fund
streams. There are all kinds of ways in which we can incentivise
universities to do what they are good at. It is crazy to fund
them all equally to do what some are good at and some are not
so good at.
413. Members of this Committee may be worried
that the system becomes more frozen. Over the past 20 years we
have seen universities that one would not expect to start ratcheting
up the research league if things had been left as they were. Off
the top of my head I am thinking of Nottingham and Warwick which
have made enormous strides in research. They are very entrepreneurial
universities. Some of the more established in global brands have
been seen as a bit lax in terms of management, drive, innovation
and quality of research. In a sense, we are saying that there
must be room for people to move up the league in research rather
than feel that they are stuck in some middle league.
(Margaret Hodge) I could not agree more. It is like
football. You want the teams to go up and down in divisions one,
two and three. I agree with that. I shall say two things about
that. First, we have the dual funding streams: one through the
research councils and the other through the research assessment
exercise, which is one mechanism that enables one to do that.
The second point is another way of looking at the fundamental
review: that is how you can get better collaboration across institutions,
which they have not been very good at, so that you can broaden
the research capacity across the country by academics working
together across institutions rather than working inside their
414. You mentioned the research assessment exercise
that is published this week. When that was last done in 1996,
one-third of the academics were judged as producing world-class
research that would attract appropriate funding. This week, we
understand that is to be 50 per cent. There are fears that there
is not enough money in the pot to give all the people reaching
the level the research funding that they would have received in
1996. Is there enough money in the pot to give everyone who has
reached the standard that research funding, or will some have
to be rationed?
(Margaret Hodge) As you know, this is being considered,
in the first instance, later this week by the Higher Education
Funding Council. That organisation has its budget and it will
have to live within that budget. We shall see what they decide
over the coming weeks and months. We shall need to reflect on
that in our research. Perhaps I can say something about research
that is quite interesting. It is another area of under-funding.
We spent 0.8 per cent of our GDP on publicly funded higher education
research compared with an OECD average of 1.1 per cent. Just to
catch up with France and Germany in terms of public funding of
higher education research, we think it would cost somewhere in
the region of £300 million. It would not all come out of
the "penny" either.
415. The budget for this year is fixed. If the
number of academics achieving world-class research standards has
gone up from one-third to one-half, the budget will not reflect
that, so there will be some form of rationing and some people
will miss out this time who would have got the money five years
(Margaret Hodge) The decision is one for the Higher
Education Funding Council. The document will not be available
until later this week. If there has been an improvement in the
quality of research, hooray. People are managing the system better.
We have to consider that and reflect on whether or not the right
research assessment exercise is working appropriately. It is supposed
to assess the relative quality of research. We shall have to reflect
on that over the coming months.
416. How much bigger is the HEFCE research budget
compared with last time?
(Margaret Hodge) This comprehensive spending review
is something like £880 million. It is just under £1
417. My colleague is asking whether it is a
bigger pie than 50 per cent.
(Margaret Hodge) We shall have to wait and see what
418. I am referring to the overall budget. You
allocate money to HEFCE. How much of a percentage increase is
there? This is your chance to show that you are doing better than
the previous administration.
(Margaret Hodge) To be absolutely honest, I cannot
remember. I think we are now about £858 million or £880
million. That is what the HEFCE document says. What it was before
this spending review I cannot recall.
419. Can you give us a note on that?
(Margaret Hodge) I shall certainly give you a note.
1 See Ev. p. 117. Back