CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 885-v

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Business, Innovation and Skills Committee

THE FUTURE OF Higher Education

Tuesday 10 May 2011

Mary Curnock Cook OBE, Sir Martin Harris and Sir Alan Langlands

Bahram Bekhradnia

Evidence heard in Public Questions 356 - 471

Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 10 May 2011

Members present:

Mr Adrian Bailey (Chair)

Mr Brian Binley

Katy Clark

Margot James

Mr Dan Jarvis

Simon Kirby

Mr David Ward

Nadhim Zahawi

________________

Examination of Witnesses

Witnesses: Mary Curnock Cook OBE, Chief Executive, Universities and Colleges Admissions Service, Sir Martin Harris, Director of Fair Access, and Sir Alan Langlands, Chief Executive, Higher Education Funding Council for England, gave evidence.

Q356 Chair : Good morning and thanks for agreeing to come before the Committee. Before we start the questioning, could you introduce yourselves for voice transcription purposes?

Sir Alan Langlands: Good morning, I am Alan Langlands and I am the Chief Executive of the Higher Education Funding Council for England.

Sir Martin Harris: Good morning, I am Martin Harris, the Director of the Office for Fair Access.

Mary Curnock Cook: And I am Mary Curnock Cook, Chief Executive of UCAS, the Universities and Colleges Admissions Service.

Q357 Chair : Thank you very much. The first question is about the news we have heard this morning-the media speculation that there could be in the White Paper what I believe in education jargon terms is known as the core and margin approach: the ability of rich students to buy a place in a university over and above the loans system. Would you summarise your initial reaction to that? Can I perhaps start with Sir Alan Langlands?

Sir Alan Langlands: I have not heard the news this morning. I did see the Minister yesterday; it was not mentioned. I do not know anything about it. I assume it is part of the build-up to the White Paper, so I have no basis on which to answer the question, because I have not seen any detail.

Q358 Chair : The understanding is that, on the same basis as foreign students can buy a place, there should be a certain ability of universities to offer places to rich people. Whereas you might not have seen this in the press, have you considered this at all and thought about the implications of it?

Sir Alan Langlands: I am afraid I have not, and I think we would need to see in much more detail the Government’s proposals before we could take a view on that issue.

Q359 Chair : Sir Martin, do you hold the same line or have you got any thoughts that you are prepared to divulge?

Sir Martin Harris: I think, Chairman, it is not a line. I am indeed in the same position as Alan. I had no prior knowledge of this suggestion. All I would add to what Alan said is that my principal remit is to ensure fair access in the broadest sense, which I am sure we will talk about later, and I would be anxious to be sure that the details did not in any way adversely affect that, but until one sees the plan, one cannot really comment.

Mary Curnock Cook: Well, I have to say that instinctively I feel that a level playing field for all applicants is probably desirable. Like my colleagues here I have not seen any detail of the policy, but presumably there is a finite capacity in each university or college accepting students, and one would need to look carefully at how many places were being ring-fenced for which kinds of applicants.

Q360 Chair : Well, it is an issue that we may well be taking up post-publication of the White Paper. To come back then, my question, specifically, is to Sir Martin Harris. What legal powers do you actually have to direct universities in respect of fee setting?

Sir Martin Harris: The answer, I think, is fairly straightforward: the 2004 Act, which was envisaged in different circumstances and for different purposes, says that I can limit universities to charging the basic fee, which was then £1,000 and is now £6,000, if, and only if, I do not feel they are making strenuous efforts to ensure fair access to their institutions. In other words, there is no power to control the fee as such, that is quite clear, but there is a power to prevent the charging of a higher fee but only under certain, very specific circumstances relating to efforts universities are making in respect of the inclusivity of their pool of applicants.

Q361 Chair : So if a university puts forward proposals that, on the face of it, are a genuine attempt to broaden access, there are no grounds for you to limit their fees?

Sir Martin Harris: That is correct, and it might be worth adding that it is precisely some of those universities that maybe Ministers might have hoped would charge less who actually make some of the greatest efforts to ensure the social inclusivity of their entry, so the law was written for a different purpose and in a different time.

Q362 Chair : Can I get this absolutely clear? On the Government assertions that you will regulate tuition fees, basically, you have not got the legal capacity to do it, provided universities, if you like, demonstrate that they are making legitimate attempts to broaden access?

Sir Martin Harris: Yes, that is true, although your proviso is, of course, the critical proviso. They do have to make genuine efforts, which vary enormously from institution to institution, because they are very different positions. They do have to make genuine efforts to recruit and retain students from an inclusive range of candidates.

Q363 Chair : Yes. Have you ever exercised this power?

Sir Martin Harris: Well, what happened when fees were first introduced was there was a great deal of going backwards and forwards until I was satisfied with that initial range of access agreements. That process will now take place again over the next few months. It is my purpose to persuade universities to increase access, not to punish them for not doing it.

Q364 Chair : Yes. Based on previous experience, and I do not want to put words into your mouth, would it be reasonable to assume that, if their preliminary proposals do not come up to scratch, they are likely to go back to the drawing board and redo them?

Sir Martin Harris: There is always a period of sustained discourse, one of which is starting right now.

Q365 Chair : You put it superbly diplomatically. The Government has said that it might introduce further legislation or powers for you to do that. Do you feel that would be necessary in order for you to regulate tuition fees?

Sir Martin Harris: I think it is just worth making the point again: there is at the moment no power to regulate tuition fees. There is a power to regulate access agreements. I think it would be a very profound policy decision to decide that the Government was going to set the fees of individual institutions, whether directly or through a quango like OFFA, and you will recall that the power to control admissions is specifically excluded by the Act; that is, the 2004 Act makes it absolutely clear that neither the Government nor any agency of Government can control the admissions of a university.

Q366 Chair : So there is basically no legal power that the Government can use, either directly or indirectly, to control tuition fees?

Sir Martin Harris: Not provided universities are willing to make the efforts that they need to make to ensure widening participation and fair access.

Q367 Chair : Turning on to resources, we understand that 130plus universities have chosen to charge more than the £6,000 basic amount. To scrutinise and to enter into dialogue with all these universities must put a big strain on your staffing levels. Do you need further resources?

Sir Martin Harris: I think if you had asked me three months ago I would have said it was essential, but in the last three months the Department has seen that that need is real and has, by seconding from other institutions and organisations, given us the resources so that I think we will be able to cope by the middle of July, which is our self-imposed deadline.

Q368 Chair : Right just to finish off my questions here, obviously this is not a new ball game but it has changed quite dramatically in terms of scale and the influence you have. How do you see the shape of your organisation changing over the next few years?

Sir Martin Harris: I think a lot depends on the answer to some of your earlier questions; that is, is the Government going to seek any greater powers, and if so, what kind of powers-for example, to influence the kinds of ways in which universities engage in outreach and so on? As I understand it, there are as yet no decisions in this respect, and what I have argued to Ministers is that the shape of OFFA must depend on the policies that are selected and not the other way round.

Q369 Nadhim Zahawi: Sir Martin, on that last point, can you say a little bit more about the shape of OFFA today? With the secondments, what does it look like?

Sir Martin Harris: When OFFA was set up-in a sense I am the only employee of OFFA-what I decided was that it was best if everybody else was a secondee. It avoided so much hassle and trouble, and that is how we have survived to this day. You must remember: this is my seventh year as Director of OFFA-it seems incredible now, doesn’t it? For most of the time that group, within our little £500,000 budget, has been adequate. There was a great flurry at the beginning and there is going to be another great flurry now, but in general it has been an adequate organisation.

Q370 Nadhim Zahawi: How many in the group?

Sir Martin Harris: There are three and a half people.

Q371 Nadhim Zahawi: A question to Ms Curnock Cook. UCAS has said that it intends to publish all verified fee information on a single day in July. What is the fallback if that does not prove possible? If, for example, OFFA is delayed in approving some access agreements, what happens then?

Mary Curnock Cook: Obviously, we are working very closely with Martin and colleagues, and we are all working under the assumption that we will be able to publish all the fee information on a single date in July. I am quite sure that Martin and colleagues would alert us as early as possible if there was any change to that situation, and we would have to consider what would be in the best interests of applicants and institutions in terms of alternative publication decisions.

Q372 Nadhim Zahawi: So is there a fallback position if OFFA cannot deliver?

Mary Curnock Cook: At the moment, we are not planning for anything other than a single date of publication in July, and as I said I am sure Martin will be keeping us closely posted if that changes.

Sir Martin Harris: The worst that could happen was that one or two or three universities were not able to publish at that time because they had not had approval, and Mary would then not be able to publish their fee information.

Q373 Nadhim Zahawi: So it would be piecemeal publishing then?

Sir Martin Harris: Well, we are both hoping to avoid that.

Q374 Nadhim Zahawi: Right. Has any assessment been made of the impact if that does happen? I only ask because you brought up the example of the worst that could happen.

Sir Martin Harris: My guess, and it is more than a guess, is that, based on all our experiences, universities will make all necessary efforts to ensure they get an access agreement, and the discourse I referred to earlier will, in the end, be effective.

Mary Curnock Cook: It is worth noting that, whilst applicants might start doing their preparation for making an application to higher education, they cannot actually make live applications until September, so they will not be put in a position of having to make a choice before they are certain about the fee levels that pertain.

Q375 Nadhim Zahawi: Thank you very much. Can I go back to the concept of value for money? How should a prospective student judge whether the cost of a course represents value for money? In your answer, could you take into account broader issues like whether the student wants to move away or live at home, what the university town or city is like, or where the student’s siblings or school friends are going?

Sir Alan Langlands: I think all of these factors come into play. I think principally people chose their course and then, typically, their institution, but of course there are a myriad of other factors in play. We tend to think about university admissions sometimes by only thinking about 18-year-olds leaving school; they are a part of the wider university population. There are a lot of older students where practical questions about partners, about elderly relatives that they might be caring for, or about children, come into play, and that tends often to drive people to more local provision. I think before we get to the question of making some sort of assessment of the academic quality of an institution, and now, of course, doing the all important financial arithmetic, many of these factors have a bearing.

Obviously the new factor is the higher fee levels and the system of support and income-contingent loans that the Government is currently introducing. I think it is very difficult, given that you are dealing with the behaviour of nearly half a million individual people, to judge how that is going to play out. Clearly one of the uncertainties at the moment is what effect this new fee regime is going to have on demand and, ultimately, the conversion of students into places: what effect it has on participation levels.

Q376 Mr Ward: Sir Martin, I have been mulling over some of your comments on this discourse. Is the likely outcome an increase in the negotiated level of access and wider participation activities, as opposed to a reduction in the proposed fees?

Sir Martin Harris: Yes. If you look at the communications that OFFA has had with universities subsequent to the letter that David Willetts wrote to me, one of the things we have stressed is that student support at 18 is important, yes, whether it is bursaries or fee waivers but much more significant in changing attitudes is clearly outreach-to work with schools, to make sure that at 14 and, again, at 16, young people are fully aware of the consequences of making these choices and those choices. It is in that area where one might wish to say to a university that their planned efforts look, for example, less committed than some of their peer universities. This is the kind of thing one discusses. In the end, universities decide and I have to say yes or no, but one has a dialogue in order to try to make it possible.

Q377 Mr Ward: Could I just pursue that? We have discussed Aimhigher before in these sessions. I worked in universities for 25 years, and my experience is that some universities are better than others and did more than others. There may be adverse by-products, but is a possible by-product of the new regime that there will be an increase, an improvement in the general level of wider participation activity across the university sector?

Sir Martin Harris: I would be very surprised if that is not an outcome. In other words, I do think that increased outreach to both 11-to-16 schools and 16-to-18 institutions is likely to be an outcome of the set of access agreements that are currently being discussed. I hope that is indeed, one of the outcomes-perhaps the most important single outcome.

Q378 Chair : Before I bring Nadhim back in, a question has been running through my mind, because in our previous sessions there has been, I think it is fair to say, quite a consensus of opinion that, in effect, outreach activity is more effective than offering bursaries or fee waivers in recruiting young people from lower income backgrounds. However, I would guess this is based on past experience of tuition fees at a level of, what, £3,000? It could be the relative advantage will change given the fact that tuition fees could be as high as £9,000 and bursaries may in the future be a greater pull. Has any research been done on that to get some sort of assessment?

Sir Martin Harris: No research, because what people say they will do and what they actually do, we have seen for the whole of the last seven years, have almost no relation to one another, but I do agree with Alan. It is a bit like financial services advertisements, isn’t it? What happened in the past is no necessary guide to what will happen in the future. I was always confident that £3,000 fees would not deter and they have not deterred. We are in another ball game now and time will tell. Obviously, it is my job and the job of many of us to make every effort we can to make sure that demand is sustained and that students are supported, but I think we would be unwise to predict absolutely what will happen in 2012 and subsequently.

Q379 Nadhim Zahawi: I do not know whether, Mary, you want to come in on the original question about value for money?

Mary Curnock Cook: Yes, I wanted to reference some research that UCAS has done, which shows that different groups of applicants have very different motivations when they apply for higher education. There are some quite clear groups who are seeking to, for example, maximise their career outcomes, so they will be very interested in what the employment outcomes and salary outcomes are from particular courses. Others are passionate about a particular subject, and they will research the best course and the best institution for a particular subject. Some will be looking to support professional career development, and some will be looking for academic passion. But I think the point that I wanted to make is that it is a mistake to think that all applicants will treat value for money in the same way, and obviously you have got a very wide age range: about 25% of applicants are mature applicants now, so they will have very different types of motivations.

Q380 Nadhim Zahawi: Can you share some of the numbers with us? You went through the different types of applicants. Do you think that the majority of prospective students are in a position to make those sorts of informed choices on value for money?

Mary Curnock Cook: There is a great deal of work going on, not only within UCAS but within a number of other organisations, to improve the sort of information that is available to applicants so that they can make choices that end up with them making the right decision for the right reason and hopefully with a very good outcome. I do not have the figures, but there is a big chunk of applicants who are just broadly favourable, have always thought they would go to university, and are kind of applying and presumably with advice from their schools and so on; but there are these distinct other categories, and I have no doubt that the pattern of the categories will change as the applicant cohort changes as well.

Q381 Nadhim Zahawi: We know that in the White Paper the Government wants to encourage the involvement of more private higher education providers. What impact will the growth of private provision have on your organisation?

Sir Martin Harris: I think that will depend on the extent to which the Government expects or demands that any private provider is included within the appropriate regulatory framework or not. There are two kinds of ways you could envisage private provision, aren’t there? One is where they are required to conform to all the current regulatory frameworks, quality and standards and so on, in which case they would come within the remit of our bodies or our successor bodies, whatever they may be. The other is that they would be totally at liberty to do what they wanted, and I cannot believe that that is likely to be the route we go down.

Sir Alan Langlands: I think there is probably a distinction to be made between those private providers who want to access public money, i.e. HEFCE funding, or indeed who have students who will access public funding in the form of loan support. I think the position, obviously subject to the Government’s current discussion about regulation, should be very clear: there should be a level playing field; it should operate in both directions. My sense would be that there would have to be quite clear criteria in terms of quality, which there currently are in relation to the private sector because they are required to be part of the QAA system if they are accessing public money. For access-Martin’s area, information and where new private providers are, if you like, entering the arena, there has to be some sort of system of financial due diligence. We have seen very clearly in other countries that private sector failures in higher education have a very serious knock-on effect on the reputation of what we currently regard as the mainstream of the sector. I am not advocating, indeed not at any point this morning, overbearing regulation in these new arrangements, but I think the public interest and the student interest have to be secured across the board.

Q382 Nadhim Zahawi: A final point to you, Sir Martin. The thought has gone through my head that you have been in the job for seven years; have you seen this year a change in behaviour from the management teams because of this dramatic shift where fees are concerned, and what that behaviour is like in terms of access and, I guess, thinking out of the box?

Sir Martin Harris: I think the answer is that we, the sector-that is, the institutions-are going through a period of rapid adaptation to a new environment. I think if you had a set of vice-chancellors here, very few of them would be categorical about what will happen in 2012, but most are trying to position their universities to be able to continue to attract students and at a price that will enable the university to continue to thrive. I do think there is a great deal of thought going on in most institutions about how to do that, because, as the Chairman said, it is a new game. It is not just a slight difference; it is a very radical difference.

Q383 Nadhim Zahawi: By the way, have you seen the new advertising campaign and what do you think of it?

Sir Martin Harris: I have not seen it.

Q384 Nadhim Zahawi: Anyone else?

Sir Alan Langlands: I have seen the written material; I have not seen the web-based or the film material.

Q385 Nadhim Zahawi: Mary, you were nodding?

Mary Curnock Cook: Well, I have seen the written material, and I do think that a key message has been missed so far, and that is that the affordability in terms of the amount of money that an individual would pay back out of their weekly or monthly pay packet is the same whether you have chosen a £6,000 or a £9,000 course, and I think that is a critical piece of information, because most people borrow money on the basis of its affordability out of their monthly income.

Q386 Nadhim Zahawi: That is interesting. Why do you think that has been missed out?

Mary Curnock Cook: I do not know, but I am engaged in meetings with various groups and my colleagues are, and we will obviously push for that information to be made more open.

Q387 Mr Binley: I was interested in your response to my colleague about adaption to a new system, and it sounded to me like there is not a great deal of excitement about that process, which slightly disappointed me. I just wonder how you see the balance amongst vice-chancellors in those terms, because I have come across a couple who feel really rather excited about what might be happening, and I just wanted to know how that was reflected across the spectrum.

Sir Alan Langlands: I think a number of people do see tremendous opportunities here. We have to be careful when we are having this discussion-and two of us here have been vice-chancellors-that we do not really just confine ourselves to a discussion about changes in the undergraduate fee regime. That is the issue of the day, but the postgraduate economy is hugely important; the overseas market is very important; the research progress of universities and their access to overseas, and indeed, UK charity-based research funding are virtually important. Most vice-chancellors, in terms of thinking about the academic development of their institution, and indeed, its financial sustainability, will be thinking across a whole range of activities, not just about the fees issue.

I think many of them do see opportunities. A lot of universities are going to great lengths to ensure that their prospective students and the schools that they tend to have relationships with have good information, advice and guidance. The Government campaign that has just been mentioned is something that will be built on at a local level. People are working very hard on-I am sure it has come out before at your hearings-something called the key information set, to make sure that there is course-based information available to prospective students that tells them about learning, teaching and assessment methods, accommodation costs, and sometimes professional accreditation and begins to-although you cannot forecast with any certainty-open up the question of graduate salaries. A combined effort is being made to convey the virtues and the intrinsic value of higher education, but also some of the practicalities in terms of what return people might expect to get on their investment.

A huge amount of interesting work is going on. Institutions have prepared extremely well for these changes, and as soon as we have the White Paper, the national agencies and the higher education system are in a strong position to move forward. We are moving forward from very strong foundations, despite some really tight financial settlements over the last couple of years. It is quite clearly the case that £1 billion has been taken out over the last couple of years, before we even start on the fee regime, so universities have had to really smarten up their act, deal with their cost base. Yet they are returning good financial results, which I think is a sign of true and effective management and strong academic standing. So there is excitement and opportunity, but of course people are worried about the risks.

Q388 Simon Kirby: A question to UCAS: you mention in your written evidence a comprehensive communications plan, and in view of your comments about a key message having been missed, can I ask you to explain what your comprehensive communication plan involves and when it might be available for us to see?

Mary Curnock Cook: I think the first thing to say is that we aim to have the most uptodate information and the most comprehensive information available on our website, which is where the majority of applicants will actually look for that kind of information. so we are working very closely with the Department and others to make sure that is available. We are also trying to populate an increasingly complex matrix that allows students to understand the fee arrangements depending on their current domicile and which country their chosen institution is in, because you will be aware that there are very different arrangements in Wales, Scotland, Northern Ireland and England. We are aiming to get that factual information out as far as possible.

We are also planning to try to make sure that, when applicants look at fee information, they are also exposed to some sort of benefit information as well as some cost information. We are putting together plans at the moment to make sure that we have some statements and vox pops from credible spokespeople, so that when applicants do look at that fee information they are also getting messages about why it is a good choice to apply for higher education. We also have a very comprehensive outreach campaign. We have folk on the ground who are visiting schools, colleges, education providers, but also higher education so that we make sure that when institutions are going out to schools or colleges they have got the most up-to-date and comprehensive information that UCAS has available. It is a comprehensive communications plan. The absolute key to it is to make sure that the factual information is correct and up to date for applicants when they are deciding to press the apply button.

Q389 Chair : Before you go on to your next question, Simon, can I raise a very specific point? I believe a lot of the information will be accessed online. Now, there is a natural presumption that students will be totally conversant with online techniques, but there may well be students from lower income backgrounds that may not have the same availability, or indeed there may be disabled students who for one reason or another have specific difficulties in that area. Are you addressing these issues?

Mary Curnock Cook: We do still have a pretty comprehensive range of print materials that are sent out to schools. A lot of schools are not necessarily very online friendly themselves, so a typical sixth-form common room will have UCAS posters and calendars and how tos and key dates and all that sort of information. We also have a contact centre, and we take thousands of phone calls every week from not just applicants but also their advisers, from parents, from schools and colleges.

Q390 Chair : Do you have any specific approach to disabled students? I saw a figure somewhere-I may have got this wrong-of something like 20,000, so it was a much larger number than I might have anticipated.

Mary Curnock Cook: We meet all the normal standards on our website and for our print material of making available material in, for example, large print and so on, so we do try to do that as comprehensively as possible; but as I said, we do have individual advisers on the telephones and going out to schools, if anybody needs specific information.

Q391 Simon Kirby: Can I follow on and ask you what you would say if I were suggest your communication plan was not as joined up as it might be? I am asking and thinking about whether you are working with the Student Loans Company, and, indeed the Government campaign that has already been mentioned.

Mary Curnock Cook: We work in various communications groups, and our own communications team works with all the other organisations, not just the Student Loans Company and Government Departments but, for example, UUK and mission groups and others who are active in this space, and they meet on a very regular basis. In fact, coming up to this peak time of anxiety for applicants, around A-level results, they meet weekly to discuss communications issues. In my experience of education communications, I would say that the respective agencies and interested bodies are as joined up as I have seen them.

Q392 Simon Kirby: Okay. Thank you. Can I move on, if I may, to Sir Alan? The new system is obviously going to affect your ability to monitor the financial health and the risk of failure within the HE sector. Is that a problem?

Sir Alan Langlands: It is not a problem if we have a clear set of ground rules beginning to emerge from the White Paper. These new arrangements start from 1 August 2012. We have a clear instruction from Government that there is not going to be legislative change before then that in any way affects our powers, role or responsibilities, so we continue with our current powers, if you like, until the end of July 2013. Also remember-I am trying to put this change in perspective-that in the first year of the change it is only the first year undergraduate students who will be in the new system. All other undergraduate students and, indeed, the rest of the university system, in terms of research and knowledge exchange and everything else, carries on pretty well as normal. It is a gradual change over a three or four-year period.

Clearly the change that is taking place is that, as our grant funding runs down, sums are going to be channelled, or routed, through the Student Loans Company, and clearly the challenge in transition, and indeed ultimately, is for these two bodies, HEFCE and the Student Loans Company, to work together to synchronise funding, even at the very operational level of ensuring reasonable cash flow to universities, so that people get their money on time. All of that work is quite far advanced; there have been detailed discussions. We are working with the SLC on that.

Now, the other element of your question is who has control-or if not control, who is acting as the kind of steward for Government funding? We do that at the moment by attaching to conditions of grant to our funding, so we insist that money is used for the purpose intended. We pursue, through conditions of grant, particular Government policies. If we are not allocating that money, we will not have that leverage over the sector, and therefore I think the discussion in Government at the moment is about developing a regulatory framework that is light touch but nonetheless ensures the proper stewardship of public funding, ensures that money is used for the purposes intended, and protects, ultimately, the interests of students and the wider public in terms of institutional sustainability.

Q393 Simon Kirby: Can I stop you there? That is an interesting point. If it protects the interests of the public and the student body, therefore the new system, by its very nature of being funded by the level set for fees and the number of students applying to a particular institution, is less financially secure for some institutions than is currently the case.

Sir Alan Langlands: Yes, there is going to be more volatility in the new system and, of course, some of the things that were mentioned earlier in relation to core and margin are a possible attempt by Government to introduce a bit of early dynamism in the system. It is a very static system at the moment because we operate institutionally based student number controls to keep control of the money, but if student numbers start moving around the system, that will increase volatility in the system, because clearly the money from the Student Loans Company will follow these students.

There are also other factors in play that increase volatility: reductions, for example, in NHS funding and TDA funding will have a very significant bearing in some institutions that do a lot of teacher training and that train nurses, midwives, the allied health professions. Often in the new world it will be a combination of a number of factors that test the sustainability and the financial well-being of institutions, and I think someone somewhere in the system will have to keep reasonable track of all of that.

Q394 Simon Kirby: Okay. In the new world, is there a need for HEFCE to be the size it is today, or is there an inevitable downsizing?

Sir Alan Langlands: Not really. It is a very small organisation at the moment. It has just been judged by the Public Accounts Committee to offer tremendous value for money. If anything, the tone of the Public Accounts Committee hearing was about loading more responsibilities onto HEFCE rather than fewer, but I have an open mind on that issue. It will absolutely depend on what powers, roles and responsibilities Government give to HEFCE and, just as Martin said earlier, HEFCE is not an end in itself. Whatever body is required to do what the Government want to do in higher education is the one that we will create. We are not precious about that.

Q395 Simon Kirby: Okay, thank you.

Sir Martin Harris: Chairman, can I just add one thing that follows from Alan’s point about potential volatility, and thinking about the funding from HEFCE, from TDA, from the NHS and how these factors will all vary differentially in respect of different institutions? I just wanted to make one point specifically from my access perspective. I take your point that at many universities there are great opportunities here; I really do agree with that. What I am worried about is that in any given community there should remain an institution with a sufficiently broad range of subject offerings, so that those people who are geographically or socially tied to that area can still take full advantage of higher education. In other words, it is all very well saying, especially in London, that if one institution changed radically in shape and so on we could cope, and that may well be true, but just think about the whole of England-you can make analogous points for Wales and Scotland, but that is not my role. There are universities where there is not another university within the near travelling distance, and the survival and the flourishing of those universities seems to me to be essential to maintaining fair access in the very broad sense of that phrase. I do think this Committee should bear that in mind.

Chair : A good point.

Q396 Nadhim Zahawi: It is really a question to Sir Martin. Is it fair that students paying the highest fees should be required to subsidise students from underrepresented groups through their tuition fees, do you think?

Sir Martin Harris: In the system we are moving to, the total income that a university has will have a much higher proportion that comes from student tuition fees than has been the custom in this country, and that money is then used by the university for a whole variety of purposes. One of those purposes, which is public policy, and, I think, an all-party public policy, is that there should continue to be fair access for poorer students of ability, so in a roundabout way, I am saying yes to your question.

Q397 Nadhim Zahawi: How can you be sure that institutions are not setting their fees higher than they might do in order to fund some of the widening participation work that they are having to do-that they must do to justify the fees in the first place?

Sir Martin Harris: I do not see widening participation and fair access as a kind of bolt-on extra. I think universities have many, many purposes and functions. Alan has outlined a number of them today. One of them is to make sure that they continue to be able to admit on merit and merit alone and not be compelled to turn students away on financial grounds. I think that would be the worst possible outcome.

Nadhim Zahawi: Thank you for that.

Q398 Mr Jarvis: My question is for Sir Martin. In a previous evidence session, Sir Peter Lampl of the Sutton Trust recommended that universities should run summer schools. Do you agree with Sir Peter’s recommendations?

Sir Martin Harris: Peter and I have worked together in many ways over a large number of years, and I think one of the things the Sutton Trust has done is show that certain forms of outreach, including summer schools, have more demonstrable benefits than certain other forms. One of the things I have asked universities to bear in mind very much in the access agreements they have now submitted is to focus on those outreach activities where there is a proven record of changing young people’s aspirations or intentions, and there is no doubt that, for summer schools that are properly run, Peter is right.

Q399 Mr Jarvis: Thank you. Are there any specific measures that you want to see in all access agreements?

Sir Martin Harris: One of the things that is clear is that working with schools-and I do not mean this to sound negative-on a random basis, such as, "I accept a speech day here; I go there; I do this," is significantly less effective than for a university or a group of universities to have a sustained relationship over a period of years with a number of schools, maybe in their vicinity or more widely. So what I have asked universities to bear in mind is that a schools relationship programme needs to be structured and consistent. It may well be with other universities and with a large group of schools, but that consistent advice and guidance, so that over a period of years young people and the teachers build up a relationship of trust, is much more likely to be effective. There are universities that do a lot of things and make a lot of effort, but the more the effort is focused the more likely it is to achieve fairer access of the kind that Peter Lampl is very much focused on.

Q400 Mr Jarvis: What about provision for raising participation by disabled students?

Sir Martin Harris: I think that different universities are going to approach this in different ways. Making sure access is fair in terms of the social background of students will, I feel, feature in every access agreement, but many universities will add to that special efforts that they might make in respect of disabled students, in respect of particular ethnic groups and so on. A lot depends on the precise situation of that university and the communities around them: remember, a very high proportion of students now go to their local university, and who lives in the locality varies very much from institution to institution. I do not think it would be sensible to say every university must address all of these things, but the sector, between it, should address all of these things, yes.

Q401 Chair : Just before Dan moves on, I earlier raised the issue of disabled students and I mentioned a figure of 20,000. For the purposes of the record, I believe the OU has said they have 12,000. I do not have any figures for the number of disabled students throughout the university population, but it may well be in excess of 20,000 if you include the OU. Do you have any figures for that?

Sir Alan Langlands: We can provide you with figures, but I do not have them in my head.1

Chair : That would be very helpful.

Q402 Mr Jarvis: In announcing the Government’s initial response to the Browne Review, the Minister said that the maximum tuition fees of £9,000 a year would only be charged in exceptional circumstances and with the agreement of OFFA. Can I ask you what exceptional circumstances means to you?

Sir Martin Harris: I think what has emerged, and I think everybody understands it now, is that the legal powers that it was perhaps thought existed, as we established right at the beginning, do not exist, and that the constraint on charging £9,000 is in fact dependent entirely on whether or not a satisfactory access agreement is submitted. I have tried to explain what might be satisfactory in that respect but I think that is all I can say.

Q403 Mr Jarvis: Now that you have received all of the universities’ proposed fee levels and access agreements, what proportion of universities do you expect to give permission to charge the maximum £9,000 fee?

Sir Martin Harris: I am not in a position to answer that yet. We are doing detailed work, detailed analysis, and as I said earlier, in some cases, perhaps quite a lot of cases, there will be a conversation with the university suggesting enhancements and improvements that may be made. There was quite a flurry in the press last week, where my assistant director said something that was misinterpreted, but was actually, if I put it in the words that I would choose, quite right-that the purpose of this exercise is to persuade universities to produce access agreements that are acceptable. To that extent we do expect, as happened five years ago, that universities will hopefully-that is the purpose-come up with access agreements, albeit maybe modified over the next week or two or month or two, that meet the needs to charge the fee that they have set. After all, it is in the universities’ interest as well as our interest that they are able to achieve what they have set out to achieve.

Q404 Mr Ward: Going back to the issue of legal powers and the discourse taking place, is there a current control mechanism through the allowed student numbers that could be applied to universities?

Sir Martin Harris: I have to be very careful now that I do not tread on Alan’s toes. Let me just start and I am sure Alan will want to come in. Nobody yet knows what the total cost of the student support will be under the new regime because there are so many variables, but it is clear that total cost interacts with-I put it no more highly than that-the cost of running the rest of the university system. There are many variables, of which student number is only one, but, Alan, you might want to come in.

Sir Alan Langlands: We have been asked over the last couple of years by Government to implement a system of student number controls, and the reason for that was simply that the budget on student support was overshooting. We did so at the end of 2009. Ministers intervened, reducing HEFCE funding to offset an overshoot on student support funding managed by BIS. They also reinforced what had been a prior commitment to keep student numbers at a certain negotiated level in each institution. We are continuing with that. Clearly part of the Browne Review’s recommendation was to open that up.

I think even Lord Browne realised, however, that there would still have to be some sort of overarching national control if the pressure on the loan book and the student support system was to be sustained at the required level, although he did recommend additional student numbers, which has not been followed through as an issue by Government. Then we get back to an earlier discussion this morning about whether from 2012-13, rather than have a static system defined by money and by student number controls at an institutional level, the Government want to start introducing marginal changes that will create some dynamism, begin to simulate the process of competition. This is the stuff of the White Paper. I know that various options are being looked at, but I am not in a position to say more than that at the moment.

Q405 Mr Jarvis: The Government asked OFFA to make sure that universities’ level of ambition in their access agreements was proportional to the fee that they would charge. What difference should we therefore expect to see between a university charging fees of £9,000 and one charging fees at the other end of the scale?

Sir Martin Harris: I think the outcome will actually be something that is more attractive to everyone, and that is that as almost every university seeks to charge a fee higher than £6,000, I think you will find that all of them will indicate the kind of extra steps they wish to take to justify the fee they are seeking. While I understand the point of your question, I think it is more about the nature of the outreach activities and so on that some universities do compared with others.

Let me give you one example. We have specifically changed the rules this time so that universities where retention is an issue are allowed to spend part of their resources on retaining students they have admitted. Now, that is obviously an issue in some universities and not in others, broadly. That seems to me an entirely rational way to say to some universities, "You have recruited these students. Now let’s see what extra pastoral and academic support they need in order for them to eventually graduate." But that will not appear in some access agreements where the dropout rate is very, very low.

Q406 Margot James: I want to come in, Sir Martin, on this whole issue of fair access. Would you agree that the issue is really with improving access to the Russell Group of universities, because the data from the last 10 years show that participation among all universities widened considerably, but participation among the Russell Group universities did not. Am I right in that?

Sir Martin Harris: You are broadly right, yes. I think what has happened is a very interesting semantic shift. When the Office for Fair Access was set up what people actually had in mind was widening participation, and widening participation has been one of the great success stories of the last seven or eight years. It has been a tremendous success in all kinds of ways, but within that widening participation, what is now called fair access, which is students from relatively disadvantaged backgrounds going to the most selective universities-what I called just now the Peter Lampl agenda, because he is the one that has championed it most-has flatlined. Interestingly it has flatlined if you go right back to the 1960s, when nobody paid anything for anything. The proportions have remained very constant and it has always been a social issue in this country.

It is a social issue, and my own view is that unless we burrow deep-I am not saying for a minute that universities must not make every effort to get 18-year-olds into the applicant pool and to encourage them to come to the most selective universities-all the evidence is that what you choose at 14-well, you can go back as far as you want-what transition you make at 16, all of these things are what really determines and makes the difference for a bright student from a family with no HE experience or an 11-to-16 school with limited interest in HE. That is where we are really going to make the difference.

If there is time, Chairman, can I just relate a very short anecdote? I did a lot of work in the last year with head teachers of 11-to-16 schools where two years later very few of their young people went on to university and even fewer to the most selective universities. I was struck by the fact that, of the 3,000 or 4,000 young people that we are really talking about and that Peter Lampl focuses on, there may be as few as one or two in any 11-to-16 school. The head teacher said to me-I have never forgotten this-"In my school there is one pupil for whom three sciences at 14 to 16 is essential. There is no way I can run the curriculum of this school for that." All kinds of extraordinary arrangements-twilight teaching, Saturday teaching and so forth-were having to be made. These 3,000 young people are not in big groups; they are in ones and twos. It is there in the schools that you are really going to give them the right subject opportunities, the right advice and get them, eventually, at 18, into the applicant pool of the selective universities. It is a big task and it will not happen overnight.

Q407 Mr Ward: This follows on. Mary, in the written evidence you talk about the information provided to schools, colleges and advisers on HE admissions, but there are two aspects to this, aren’t there? First of all, there is information about what is available, and the second area is that of aspirations, which is really what we have been discussing just now. Is there a UCAS remit for that aspect of the WP?

Mary Curnock Cook: We do not have a remit; we are an independent organisation and we are funded through fees from applicants, from the institutions who take applicants and from some commercial activities as well. As an organisation we would like to be able to do more to reach out into schools, and particularly those in low participation areas for higher education. We are not funded specifically to do that, but UCAS does have a robust financial strategy, which aims to increase the funds available, particularly through commercial activities, so that we can do more of that kind of work, and I think it is a good role for an organisation like UCAS to broadly be an advocate for higher education. Obviously we are not in the business of recommending one particular institution, one of our members, above any others.

Sir Alan Langlands: I think it is probably fair to say that HEFCE has had firstly to raise aspiration around STEM subjects but also more generally to support aspiration raising through programmes like Aimhigher. That was at the heart of that programme, which supported campus visits and mentoring and student support and all sorts of things. Clearly there is a worry at the moment that a gap has been created. We are spending I think £84 million or £85 million on Aimhigher this year; next year we are spending nothing. Now, universities, as Martin has been describing, are putting a lot of their own money into outreach, but I think we are at a difficult point where we are unplugging one approach and introducing another-the Pupil Premium, the National Scholarship Programme and other new policies. We just need to make sure that the endgame is a coherent plant for widening participation that deals with the whole lifecycle of widening participation from aspiration raising at a young age right through to access support in universities and support, hopefully, into employment or even perhaps further study. I think at the moment we are in this kind of change phase where one coherent system-more than £3 billion has been spent over the last 10 years on widening participation and retention-is being removed and we are inventing another one. It seems to me that coherence is the key and, as Martin has been saying consistently not just today but before, 11 to 16 is crucial.

Q408 Mr Ward: I will push you on this Alan, because there was very much a horse and water approach to Aimhigher, and most of the universities wanted to drink the water and were very keen to do it, but some did not. We have talked about the Russell Group, and there is evidence there that they were not too bothered about that. The fact that there has to be a justification for the £9,000 fees should ensure that each of the universities is doing something, and Sir Martin will make sure that they are, but that does not amount to a national plan, does it?

Sir Alan Langlands: Well, I do not know if I believe in national plans, but the question is will it amount to a coherent approach? I think that is what we should be striving for in the future. We achieved that; it was hard won. You are right, it was not always perfect, but we made very substantial progress. What we want to ensure is that we can use the new system to maintain that progress and to move things forward. For our part, that means continuing to support resource allocation for widening participation and retention, as we have done this year and as we think we will be able to do in future years.

Q409 Chair : Inevitably I relate this whole issue of access to my constituency, because I represent a constituency where historically there has been very low educational aspiration and relatively low university attendance-indeed, I believe we have had one Oxbridge student in the last five years, and if you compare that with Hertfordshire, I believe they have had something like 1,500. On analysing it, I see an issue genuinely with the aspirations of young people: they tend to have travelled less, be less socially self-confident and so on, so moving to a Russell Group university moves them out of their, if you like, comfort zone.

Secondly, we were told by the Sutton Trust, last week I think it was, that 45% of teachers said they would rarely advise their brightest pupils to apply to Oxbridge. Now, is the fault with Oxbridge, the Russell Group? Do they have a certain culture that alienates people from these sorts of backgrounds? Is the fault with teachers-and bear in mind it is very easy to blame teachers for all the faults in society-or is there a deeper cultural issue that that you have not really drilled down to, to use your expression, Sir Martin, and can you address that problem through the new access agreements?

Sir Martin Harris: I would not use the word "fault" on anybody’s part. I think what we have here is a very complex set of social interactions, many which you have just explained very, very clearly. Let me just add one, which is actually perhaps the hardest one of all to tackle, and this again is based on work we did last year. I will not talk about the precise locality, but you will all recognise the kind of locality it could be. If you have a school that is unusually good at encouraging young people from an area where not many go to higher education to do so, then you find a second layer that is within that group: one or two of those do really well and others do moderately well, but the one or two who do really well want to go to the same place as the ones who have done moderately well, and the moderately good ones go to the local university, so their two or three mates who could be doctors or whatever say, "Well, that is where I am going to go," and it is back to comfort zone: "I know I will be comfortable there." That is very hard to address.

Q410 Margot James: Before I come to the questions I must ask you, I do want to keep continuing down this theme, Sir Martin, as we have got you here. I feel that some of the discussion has been more about intervening too late, and I was affected by the anecdote you told about the teacher who says, "I cannot organise my curriculum around the needs of one or two students." This is not a loaded question, but is that not an argument for academic selection at a younger age, so you have not just one or two in a school, you have many more?

Sir Martin Harris: It is certainly an argument for identifying not later than 14 who these young people are, and teachers tell me that is possible and it is then possible, through groups of schools and whatnot, to arrange the kind of extra support that some people need. I think full-scale selection at an earlier age is simply not a starter for all sorts of reasons. Just to come back to something the Chairman said, teachers are critical in this. Universities cannot identify the small number of 14-year-olds who particularly might become doctors or vets or engineers or whatever it might be. They can only do that in conjunction with teachers. It has to be a partnership, and that is why independent advice and guidance, something I think again is now seen by all parties as fundamental, is imperative at 14 as well as at 16. If you do the wrong subjects at 14 it is not impossible to change later, but it is a jolly lot harder.

Mary Curnock Cook: If I could just mention, I think the main accountability for secondary schools has been around the achievement of five GCSEs including English and Maths at grade C. It seems to me fairly clear that that has created a whole lot of patterns about where schools have put their efforts, and the efforts have gone into nudging the Ds up to Cs, and very often those who are capable of achieving As and A*s are put in for their GCSEs early and are left alone after that, and similarly the very low achievers. I think the whole accountability framework in secondary education has to change because schools are simply not incentivised at the moment in terms of outcomes for youngsters going on to higher education, and therefore it is not a focus.

Q411 Margot James: Do you think the English Baccalaureate will improve that?

Mary Curnock Cook: I think the English Baccalaureate is quite controversial because it is basically saying that, instead of having five GCSEs or equivalent, which has allowed a number of secondary schools to pile into BTECs and other similar qualifications, it should point schools towards a more academic curriculum. In terms of what the evidence is at the moment, predominantly the most successful qualification for progression into higher education, and particularly to more competitive, more selective institutions, is still the A-level without a shadow of a doubt. If you look at the proportions of those from more deprived backgrounds and those with lower HE participation, they are more likely to have a higher proportion of young people following a BTEC or similar route than an academic route.

Q412 Margot James: Moving on a bit, could I ask you about the admissions process review and why you felt that this led to a view that applicants are not using their choices wisely?

Mary Curnock Cook: There is a lot of evidence available to us at UCAS from applicant behaviours and so on. At the moment you will know that applicants can make five choices of institutions. One of the things that alerted us to the fact that they might not be making their choices wisely was the large number of applicants who drop out or who turn down offers from higher education institutions. For example, last year there were approximately 210,000 who, as the media might say "missed out" on a place, but in fact nearly 95,000 of those were people who had either withdrawn from the system or had turned down offers. That leads us to believe-we are currently conducting research to back this up-that of the five choices that many young people make, some of them may be just filling in boxes. Certainly, when I go out and talk to school advisers and sixth forms, many of them think that they have to fill in all five boxes and they think that those choices are ranked in order as well, so we are doing quite a lot of work to bust those kind of myths. Of course if an applicant has only genuinely got three choices, for example, of where they would like to receive an offer from, those extra two are just creating extra expensive admissions administrations in the institutions.

Q413 Margot James: We heard from the Open University about the problem of finding a single coherent source of information for students. Will the key information system address that problem, do you think?

Sir Alan Langlands: I think it is trying jolly hard to address that. I think all of the national agencies and the sector in the form of Universities UK and indeed the NUS have been working pretty hard on this, and I think all parties are pretty satisfied with what has been achieved so far. There will be a lot more information and it will be in a coherent and recognisable form. We think it will be intelligent information: it is based on a lot of research with students and prospective students about what they want to see. It might not be completely comprehensive but by 2012 we will have standard information for 21,000 courses up and running, covering learning, teaching, assessment, accommodation, employability, professional accreditation-all the things the student body have told us matter to them, dovetailing with the National Student Survey and other sources. So I think there has been a huge advance in a relatively short space of time on that issue.

Q414 Chair : Can I just interrupt you, Margot? My understanding is that if a prospective student wants to access the key information service, they have to go to a university website and then access the key information service. That seems to me the wrong way round-surely a student needs to use the key information service to determine which university they want to go to. There does not appear to be a central point of access for a prospective student to make this judgment.

Sir Alan Langlands: I think the universities have to own the information, and have to maintain it and develop it over time. I think there was an air of pragmatism in that decision too, though, that says we are under huge pressure to get this up and running for obvious reasons, given the Government’s emphasis on choice based on the availability of information, and that was the quickest most effective way of doing it without creating some great new industry; but the information will be compiled centrally and then passed back out-in other words, there will be quality checks on the information and checks on the consistency of the information across institutions. I think the solution that has been developed in partnership with the students and with institutions is all that can be done with very limited resources and in the time available.

Mary Curnock Cook: I think it is still the intention that the KIS, the key information set, will be available on the UCAS website, so any applicant researching courses at a particular institution will be able to get very quickly to that key information set.

Sir Alan Langlands: It will be linked with UCAS.

Mary Curnock Cook: So it will be, if you like, available from a central point.

Q415 Chair : Sorry, I do not understand. If you apply on Newcastle’s website, you would have information about other universities as well?

Mary Curnock Cook: Yes. UCAS contains a number of tools and web areas that help applicants to research what institutions and what courses they want to do, with links to other websites and, indeed, institutional websites, and the intention is that the key information set would be one of the key pieces of information you could access through the UCAS website.

Q416 Chair: But will those links be consistent across all universities?

Mary Curnock Cook: They will.

Chair: Margot, I interrupted you.

Q417 Margot James: That is alright. It was a very good question, if I may say. I want to just ask about the timing of applications. At the moment the system is based on predicted grades. Could I start with you, Sir Martin: do you feel that the application system being based on predicted grades rather than actual grades disadvantages students from state schools or poorer income students in any way?

Sir Martin Harris: This is a very difficult area to be sure about. What you have just said has been argued to be the case, and various attempts have been made to change to a post-qualifications admission system. So far I have never seen a method of post-qualification admissions that will actually work-in other words, I start from the pragmatic question. If there were such a system, then it certainly would not disadvantage disadvantaged students; it might even help them, but there are these incredibly complex practical difficulties that involve reorganising our entire national school system and our entire national university system or allowing a delay between results and the start of a new academic year, all of which have massive consequences, and so far everybody has backed away from tackling them.

Q418 Margot James: Do you think the current system is a major issue for poorer students or state education system students?

Sir Martin Harris: I think that I go along with Mary. If the initial choices are well made on the base of good advice and so on, then the system works perfectly well. Where I think there are issues, and where there is certainly an intellectual case for PQA, is that there are some students who do very substantially better than was expected either by themselves or by their teachers, and some of them have then to intermit a year in order to reapply, or students whose final year at school leads them to change sharply the areas in which they want to specialise. But, as Mary can tell you better than I, there are now all kinds of pick-up mechanisms after the initial Alevel results to recycle quickly. The problem is: will there be a space still available in the course you want in the institution you want at that point?

Mary Curnock Cook: Can I just add to that?

Sir Martin Harris: Please do.

Mary Curnock Cook: The predicted grades research indicates that about something over 40% of grades are predicted wrongly, but the vast majority of those are over-predictions rather than under-predictions, so there is not a large number of people who are having grades predicted below their capability- from memory, I think it is something like 6%. In my view the post-qualifications admissions debate has been somewhat hampered by the general impossibility that people have felt around the process, and one of the things that UCAS is doing through its admissions process review is to look at whether we can design a process that would make it possible to run a post-qualifications admissions system without having to do the kind of disruption that Martin mentioned of changing term dates and exam timetables and so on. My own view, for what it’s worth, is that it probably is possible to reduce significantly the amount of admissions administration that normally takes place over a ten-month period, not least because those who do go through a predicted grade and offer system in effect go through it twice: you get a conditional offer, which you either accept or reject, and when you get your results you go through that process again. We are certainly looking-amongst other options, I hasten to add-at whether there is a process that would make PQA possible.

I think then it is for the sector, both on the applicant side and the institutional side, to look more at the educational aspects of applying post-qualifications admissions. I think the most important point to make about this is that institutions seek to admit applicants very often based on potential, not just achievement, and I think there is a feeling that quite long relationship that has built up between applicants and institutions over the current system is valuable in that respect, and that if the process was pared back and done over a shorter period of time, the emphasis would shift very significantly towards simple grade achievement rather than looking at the potential. I think that is the area where possibly the real debate needs to happen about whether PQA would advantage or potentially disadvantage particular groups of applicants.

Q419 Margot James: That is a very interesting point. Thank you. One final rider, if I may. You mentioned the 40% of grades that were predicted wrongly were mostly over-predictions. Does your data enable drilling down to see the proportions between independent schools and state schools that were over-predicted?

Mary Curnock Cook: It does; we have done some research for the Department on this, and I believe that they are due to publish it fairly soon. I have not got the numbers in my head, but it will not surprise you to hear that, broadly speaking, independent and selective schools are better at predicting grades than those from more deprived areas.

Margot James: Oh, right. Okay, thank you.

Q420 Chair : Thank you. Could I just conclude with a very specific issue that has arisen, and this question is for Mary. I think it is estimated that 18,500 students are making applications effectively deferred until 2012, but their applications have had to be in already, by 5 May. Of course, they will not know what their financial commitment is, because the fees for the specific universities they are applying for will not have been agreed yet by OFFA. You said in your written evidence that it is essential that all applicants understand the financial commitments they are making before submitting their UCAS application. Do you think those students due to start courses in 2012 are getting enough information about the fees they are going to have to pay?

Mary Curnock Cook: This is quite an interesting situation, and I think the changes to the fee arrangements were made long after UCAS would have put to bed its application process for 2011, which would include those who wish to apply for deferred places. Nevertheless, you are right that those who have applied for deferred places were asked to make a commitment to accept or decline an offer by 5 May, before the time when they would have had certain information about the fees. I think there are a couple of important points to make here. First of all, the number of applicants applying for deferred places is a very small as a proportion of the total and, indeed, has halved this year for obvious reasons.

Q421 Chair : Sorry, is 18,500 a reasonable figure?

Mary Curnock Cook: I will have a quick look at the figures, which I have here. The other thing I think is important is that the standard admissions application process is to apply in the year for which you want to start, so the standard admissions process is built around people applying this year for admission this September and October. The deferred applicant opportunity, if you like, is entirely voluntary and discretionary at an institutional level, and most institutions do not even make deferred offers-they do it, if you like, as a favour with explained circumstances; it is outside of the normal process and done on a discretionary basis.

Having said that, I do see that some applicants who do want deferred places might feel that they are disadvantaged, and we have worked hard with the sector to make sure that they have the information they want. I think it is fair to say that, for a great number of institutions, their intentions about fee levels are in the public domain already, but where applicants have expressed anxiety about this, we have encouraged them to get in touch direct with the institutions. We believe that those institutions have made individual arrangements to, in effect, keep the offer open for next year, when all the fees information is confirmed.

Chair : Right. Thank you very much-very helpful indeed. If you feel there is anything you would like to add subsequently to an answer that you omitted, please feel free to submit it in written evidence. Of course, it may well be that we will think of a question that we did not ask you but we would like to, and we will write to you subsequently. Notwithstanding that, thanks very much; that was very helpful and will inform the outcome of our report.

Examination of Witness

Witness: Bahram Bekhradnia, Director, Higher Education Policy Institute, gave evidence.

Q422 Chair : Good morning, Mr Bekhradnia. Could you just introduce yourself, as the others did, for voice transcription purposes?

Bahram Bekhradnia: Certainly Chairman. My name is Bahram Bekhradnia, and I am Director of the Higher Education Policy Institute.

Q423 Chair : Thank you very much for agreeing to speak to the Committee. You have been waiting very patiently there, but will at least have got a flavour of some of the questions. I will start with the question that I started with for the other panel. What is the impact or potential impact of the proposals that are reported in the press that could be in the White Paper on core and margin education-the opportunity for rich students to purchase places at universities over and above or outside the tuition fee paying regime?

Bahram Bekhradnia: What I would say is that it is an interesting but not a unique proposal. This sort of arrangement does exist in other countries, generally developing countries where the Government does not have sufficient money to provide places that are demanded by a growing young population; it would be unusual in an advanced, Western country. Having said that, it is a response, and a response that could be made to work, perhaps, to a situation that is not one that we expected to be in when the Government first made its proposal, or when the Browne committee first reported, for increased fees. We did not expect to be in a situation I think where the budget that clearly the Department has from the Treasury is in danger of being quite seriously compromised. Ways have to be found to enable the university system to operate within that budget, and I think this might just help to achieve that-at a cost, but it might.

Q424 Chair : Do you think it will add to the capacity of universities to offer places to lower income students, or do you think it may actually take out those places, given the finite capacity of certain universities in terms of the number of students they can cope with?

Bahram Bekhradnia: It could do either, Chairman. One of the possible responses of the Government to a situation where there is more demand than it can meet within its budget, by giving loans that are subsidised and so on, is to cut student places-just cut the number of loans that it is prepared to give. If that happens, then almost certainly the students that will be affected would be those from the poorer income backgrounds, so in order to avoid that-and if this is the price to be paid to avoid that-yes, it would help to keep the number of places and help those from poorer backgrounds. In the sense that it avoids damaging their interests, you could say it does help their interests, but the other effect it might have, of course, is precisely the one that you mentioned. A university with a limited number of places that might get £9,000 from a regular student might prefer to take a student paying £13,000, say, who is able to do that, at the expense of a regular student. So it could well have that damaging effect.

Now, quite honestly what we have at the moment is an idea that is floated; we have had other ideas that have been floated. I am not surprised the Government is looking for a way to enable it to live within its budget and this could be such a way. I think the devil will be in the detail. I suspect it will be very difficult to achieve this; I suspect it will be deeply unattractive to quite a lot of the most prestigious universities if it were an arrangement whereby it could be portrayed that they were taking substandard students or students that were not as good as some others, perhaps, but for the money. There are all sorts of potential problems here.

Q425 Chair : Yes. No doubt we will return to this theme as the proposals get clearer. Now, can I just ask you a fairly general question? What do you think universities are for, and in an ideal world with no funding constraints, what proportion of the population would you expect to study at degree level or to degree level?

Bahram Bekhradnia: Well, that is a very open-ended question, Chairman. It does depend on your definitions of degree level, of university student and so on. I start from the position that a more educated person is generally a better thing than a less well educated person, and so the more education we can provide, one way or another, the better. I do not say that just for economic reasons, and I do not say that just from the point of view of the person concerned. There is some outstanding research from a group called the Centre for Research on the Wider Benefits of Learning at the Institute of Education that shows how society benefits by having better educated people in terms of their demand on the health service-they tend to have better health, better mental health, better social attitudes, less anti-social attitudes and so on. So more education is a good thing, by and large. The job market has changed and the employment market is changing as well, and by and large better educated people are demanded there. The other thing is that we lag far behind many other countries that are as successful, if not more successful, than we are. I take the view that we are a long way yet from where we might be in terms of demand.

The other thing is there are huge disparities at the moment in terms of who goes to university and who does not. We know about the social class disparity. There is the gender disparity: hugely more females go to university than males. Now, unless you believe that males are inherently more stupid than females, then there must be a lot of scope there for additional demand.

Q426 Chair : We will not go down that path.

Bahram Bekhradnia: No, I suggest you do not, Chairman, because it might not have a happy ending. There are regional disparities; unless you believe that Geordies are more stupid than people from the South, then you have got to believe that there is plenty of scope here for additional demand. My view is-and we produced our last report about this earlier this year-the potential for increased demand is very large indeed, and we are going to face a really difficult situation in the coming years as numbers are constrained, as I think they will be. The Government is already starting to constrain numbers for financial reasons, but I believe, despite the demographic downturn among young people, demand is potentially going to be very much greater.

Q427 Mr Ward: Could you tell us what your involvement was in the Browne Review? We know you have done an analysis of it, and we will come on to that later, but what was your actual involvement in the review itself?

Bahram Bekhradnia: No, no involvement in the review. I think we submitted evidence very early on-it was very low-level involvement.

Q428 Mr Ward: You analysed the report itself and made some comments. Can I just pick up one point that was in the quote received here, talking about the economic crisis and the contribution that may or may not have made to the review’s outcomes? You said, "It is unfortunate that the review appears at a time of economic crisis leading to public expenditure cuts," and that "the review and its timing offers the Government the opportunity to cut more than would otherwise have been the case." My point is just that "opportunity" is a very loaded word.

Bahram Bekhradnia: Well, that was unfortunate in that case. It was not intended. Perhaps it did not come over very clearly in our analysis of the Browne Review or the review we did subsequently of the Government’s proposals, and perhaps that is because this has only over time become apparent, but what we had in the Browne Review and what we have in the Government’s response is a very ideological position. We effectively are in a position where the Government is withdrawing from funding universities directly, but it is not withdrawing from funding higher education totally, as I am sure Government Ministers that you may have interviewed have said. They are instead funding higher education through the student, by not giving money to the students or not giving grants to the students, as in many other similar systems, but by giving them loans that are then subsidised, and that is the form of the Government investment. Now, this is the introduction of vouchers. We are moving towards vouchers in higher education, which is a perfectly respectable way of funding higher education, but it is a very ideological one. It is taking the state out of directly funding these institutions and funding them through a voucher system.

Now, there are voucher systems in higher education around the world, but not many. They have them in Azerbaijan, they have them in Kazakhstan and they have them in the state of Colorado in the USA. Now, I really would not hold up Kazakhstan and Azerbaijan as good examples for this country to follow. In Colorado they had a voucher system and they brought it in for very similar reasons: because they would increase competition, increase efficiency through competition, and increase choice. But the Government then subsequently, about three years ago, reviewed the operation of the voucher system and had to conclude that none of the benefits that had been anticipated had been achieved. I think there is empirical evidence, but not a lot, on the use of vouchers in higher education, but it is unusual. Most Governments that have thought about it have shied away from it because of the strategic importance of higher education for a country. Higher education is part of a country’s infrastructure, and so effectively to withdraw from a direct involvement in the funding of universities is really quite unusual, but that is what we have and that is why, I think, I describe it as quite an ideologically driven approach that both Browne and, subsequently, the Government adopted.

Q429 Mr Ward: Can I ask you about another quote? Talking about public expenditure and the impact upon that, and you say that "borrowing in order to make loans to students does not count as public borrowing"-so this is about whether it is on the balance sheet or not and so on, which we all understand-but then you say, "It is smoke and mirrors, and it provides an extraordinary reason for changing the whole basis."

Bahram Bekhradnia: Yes.

Q430 Mr Ward: Smoke and mirrors suggests that it is somehow hidden. I do not think that many people believe that the new tuition fees policy has been hidden away from people in terms of what it will mean. The ideology, I guess, is there is a transfer from general taxpayers, which includes low income taxpayers, including, of course, many non-graduate low income taxpayers, to, by and large, higher income graduate earners. This is not simply a transfer. How is that smoke and mirrors?

Bahram Bekhradnia: No, no, forgive me. What happens is that the Government borrows in order to lend to the students, but the money it borrows in order to lend to the students is off balance sheet, because it is able to claim a subsequent income stream to repay that; the same money is borrowed, but it does not count towards public sector borrowing. Smoke and mirrors is colourful language, but that is what is being described there: it is the same borrowing, but it does not count towards public sector borrowing, so without reducing our borrowing, we have reduced the borrowing requirement that the financial markets see.

There is another problem, however, which is that the money it is claimed will be repaid will almost certainly not be repaid to the extent that is claimed, and I think everybody now accepts this. We did our analysis a few months ago and showed that this 30% RAB charge, which is the real cost to the Government, was almost certainly a very serious understatement of the cost, for reasons that we set out, and I think that is now fairly widely accepted. Apart from anything else, the 30% RAB charge was based on £6,500 or £7,000 or whatever the figure was then being the norm, with £9,000 only the exceptional fee. Just the increase of the average fee to much closer to £9,000 is going to drive up that RAB charge hugely. That is why I say that the Government really needs to find mechanisms to reduce the cost to itself, and what you called the core and margin system is perhaps being floated as a mechanism for that.

I think it is more than that though; I think it is also a mechanism for creating a market. If Leeds University can take on more students, some of the students that it takes might have been students that Leeds Met might have hoped to attract, and therefore Leeds Met might need to compete on price. At the moment there is going to be no price competition, for obvious reasons. As I said, demand is very high and will continue to be high. Universities can afford to charge what they like because the demand will almost certainly be there.

Q431 Mr Binley: That is an interesting question. How will that impact upon value from a student’s perspective?

Bahram Bekhradnia: I heard the earlier discussion about value. I think it is an enormously difficult one. Students-most of us, actually-are not in a position to know what value is added in any individual case-

Mr Binley: That is what concerns me.

Bahram Bekhradnia: -before they go to university and go to any specific university. Students will look at things like-if you are talking about economic value, and I think you probably are-the job market success of the graduates who went to a particular university and so on. It is very difficult to disentangle how the universities contributed to that from the nature of the student body that it had in the first place. We know that students from Oxford and Cambridge get terrific jobs and they go on and are leaders of society subsequently, but they probably might have been anyway.

Q432 Mr Binley: But there are production criteria that can be used. I am sorry to use a crude, commercial term, but there are, and I just wonder whether they are being used to any good effect, quite frankly, to help students?

Bahram Bekhradnia: Do you mean things like knowing how many hours of contact they would have a week, for example?

Q433 Mr Binley: Yes, but there are a number of parameters of that kind.

Bahram Bekhradnia: I know that there are attempts to create the information services that you were discussing earlier, but there is nothing a) systematic, that is available, certainly at present, and b) that we know would actually be of benefit and of help to students in making their decisions on the basis of value. I think it is enormously difficult and I have serious doubts about whether £9,000 a year for many of the students that go to many of the universities that will be charging that is going to represent good value, but universities can charge it, and so they will.

The people who are coming out of this best-this whole new arrangement-are the universities, some of which might find it difficult, but most of which will be laughing all the way to the bank, quite honestly. They will be able to charge and they will be charging the maximum fee. Students will be paying. Taxpayers will be paying much more than the Government thought the taxpayer would be paying downstream, when the loans are not repaid or when the cost to the public is higher than has been shown. Universities are the ones that really will be benefitting from this new arrangement.

Q434 Mr Binley: Let me just pursue this with one more question. What you are telling me is that the whole of the academic establishment will be the prime beneficiaries from this situation. How do we turn that round by importing some sort of structure for perception of value for students?

Bahram Bekhradnia: Well, it must, as you say, come to better information being available to help students make decisions and maybe shame universities into doing better. The market and competition is what we rely on, but we do not and will not, on the face of it at the moment, have a market that will enable us to drive that improvement. I think that the suggestion that I read about this morning is actually more than anything else an attempt to create a market-the Leeds Met sort of arrangement that I described to you. I have doubts about whether it will, but it is an attempt to do so and I think we will see other attempts to do so, because the Government and the Browne Report were relying on market mechanisms to hold down price, and so far it does not look as though that will happen.

Q435 Mr Ward: I am interested in when the chickens will come home to roost on this, because the model is that, more or less, the reduction in the funding to universities would be filled by graduate contributions over a period of time; that is the model. What you seem to be suggesting is, particularly with the cluster around the £9,000 level, that the Government’s predictions will not work out as planned and something has to give, so there will either need to be a continued Government contribution to higher education, or student numbers will have to be reduced accordingly. At what point will that have to be faced by a Government?

Bahram Bekhradnia: It depends on the view of the Treasury, I suppose. Immediately it will be known if the Government has to give loans out that are more than in the Browne Report. I mean, that is something that will be known in the first year, but whether those loans are then going to be repaid at the rate that was assumed, only time will tell. It could be five, 10 years, or into the future before we find out what sort of a hole there is in the finances as a result of that, but I am not sure that we will get to that position, because we are seeing that the Government are looking very hard at ways to reduce the cost of its hole, and one of them would be to cut student numbers, for sure. Another would be simply to increase the cost to the student: instead of charging them 3% interest, it could charge them more. It would be politically very difficult, given what we know about the response of young people last year to that, but that is something else they could do.

It could, on the other hand, accept the hit on student loans and cut the HEFCE grant even further. There is not a lot there left to cut, but it could do. Now, that would have a very different impact from the other things, because, by and large, what is left of the HEFCE grant is for research and for STEM subjects, and those subjects, of course, are mostly provided in the older universities; similarly, research grants, by and large, are available to those in the older universities. So that would be a very differential sort of effect, impact.

I start from the position that, by and large, it is very likely that the Treasury will insist that the budget that BIS has is adhered to, and so something has to give: it could be student numbers, it could the HEFCE grant, it could be students having to pay more, and the core and margin arrangement that you saw. There are different sorts of core and margin arrangements by the way. We had a core and margin arrangement in the early 1990s, and that was a very effective way of driving down price. It was a different sort of margin: universities were invited to bid for places cheaply, so you effectively had a core and margin with that sort of arrangement, but that would be very different again because those universities that bid cheaply would be those universities that, again, you might not first think of as the ones you would want to expand.

Q436 Chair: You partly anticipated a question that I was about to chip in with, that the core and margin approach could be one way of addressing it, although on the surface of it, it would appear that this would help the universities, but not necessarily the Government funding.

Bahram Bekhradnia: Bidding for places at marginal points?

Q437 Chair: Yes.

Bahram Bekhradnia: Well, no. If the average price at the moment is £8,500 and universities are invited to bid for additional places, and they are bidding at £6,000, then that would reduce the average cost of loans to the Government. I think Alan Langlands was quoted in a newspaper as describing it as a cheap and nasty approach. It would be a way of reducing cost, it would give places to low-cost universities, but actually David Willetts has been speaking about low-cost further education colleges and low-cost private universities as being the ones that will help to create competition and drive down price, so it could be an approach that would be considered.

Q438 Chair: As you said, the devil will be in the detail.

Bahram Bekhradnia: The devil will certainly be in the detail, yes.

Q439 Margot James: I was going to ask you about employers’ expectations of graduates’ knowledge and skills. Do you think it is a reasonable expectation?

Bahram Bekhradnia: I think employers, reasonably perhaps, always want more than they get, and tend to want job-ready graduates, rather than graduates who have been deeply and broadly educated and who can then pick up different jobs. But ever since I have been in education-I was in schools and teacher training before this-employers have complained about the quality of what they were getting from the education service, and I think they do in other countries as well. I do not think we need beat ourselves up in this country particularly about this. I think that it is common around the world.

It was not that long ago that the Institute of Directors, who have not been friends of the system by and large in the past, did a survey of their members and found that actually their members were really quite satisfied with the outputs of education. The more thoughtful employers get it-they understand that what they need is not students that can do the first job immediately, but not necessarily do anything after that. I think that is understood. The question for universities will be to balance that: to give the depth of understanding that will enable students to go on, but also to enable them to get work straight away.

Q440 Margot James: Could I just go back, Chairman, to an issue that Mr Bekhradnia raised that was also raised last week as well? For the record, I would like to know what you mean by the statement that the Government are withdrawing or public funding is being withdrawn from the higher education sector? As far as I understand it, it is being reduced, not withdrawn, from the state funding approximately 60% of the cost of higher education to funding approximately 40% of the cost of higher education. Given things like the loan write-off, which is predicted at 30% of total loans never being repaid. the maintenance grant, teaching grant for STEM subjects, all of this-is that 40% figure roughly right, in your mind?

Bahram Bekhradnia: I do not know whether that is exactly right. Sorry, let me clarify what I should have said if I did not: they are withdrawing from funding universities directly, and they are funding them in future through the student. That is what I mean by that, which is, effectively, a voucher arrangement. And it is not even true, as you say, that they are withdrawing from funding universities directly completely, because there will be this residual amount for funding STEM subjects and, of course, very substantially for funding research as well.

So those elements of university grant remain, but, on the other hand, that is what is vulnerable if the Government has to make further cuts in its budget in order to meet the higher loan costs it is going to have to meet. The way it approaches this will affect different universities very differently. As I said, STEM subjects research is done by a certain type of university; if it goes for a core and margin model, such as the Chairman described, it would benefit probably those universities that are the cheapest anyway as well. There is lot to play for still, and a lot of uncertainty as to how this will work out.

Q441 Mr Jarvis: In your analysis of the Browne proposals, you suggested they were made in the shadow of the deficit. In your view, should we consider the Government’s proposals as longterm reforms or as temporary measures to cope with the current constraints of the economy?

Bahram Bekhradnia: A bit of both, if I may say. I think the Government and Browne probably were ideologically committed to a marketled approach. I do not say ideologically in any pejorative sense, that is a perfectly respectable position, but there is a certain ideology that will hold the market up as the way of regulating these things, and funding through the student rather than directly funding universities as being a better way forward. There is that, and I think that is long term; as long as we have this Government that will be long term.

I also think, however-interestingly, Sir Alan Langlands, in his address to the vice-chancellor of the HEFCE conference, said something similar-universities must be ready for direct Government funding to increase sometime in the future as well. I suspect the extent of the cut in direct funding has been driven by the public expenditure situation, and so we will see an adjustment in the balance between funding going through directly to universities as grants and through the students as loans and fees in the future.

I think there is a bit of both, and what I think is-and we said this in relation to the Browne committee in particular-it is a great shame they did not set it out more clearly in a principled way as to where they thought the balance lay, and they almost stated it as a matter of principle that the Government should withdraw its direct funding. I think that was a pity.

Q442 Mr Binley: Can I follow up that with a sort of prequel question in some respects? Do you think that the desire to enlarge the whole university student population was not matched by an understanding of how it should be funded? Do you think there was a basic problem there, which stretches back some way, that we are still only attempting to come to terms with, and not that successfully?

Bahram Bekhradnia: That is a very good point, I think you are talking about the early 1990s here. I cannot remember any discussion in the early 1990s about student fees or about this; it was simply about forcing universities to provide for more students with less money-and, if you remember, there was a 35% cut in the funding per student in about five years in the early 1990s. That was potentially catastrophic in terms of its impact on quality. Then we had the Dearing Review, which began to address that by bringing in another stream of money through student fees.

Personally I think that student fees are important, are necessary, especially the way we have them in this country, where we actually have and will have in the future the most progressive arrangement that I am aware of in the world for students to contribute. It is free at the point of use, as we have heard many times this morning-they pay nothing, so affordability should not be an issue-and then they only repay when in work, as they can afford it. There is a system close to that in Australia and one or two other countries, but this is the most progressive system I have encountered in the world for that.

But we sort of stumbled on that. First of all in the 1990s we expanded by forcing universities to provide more cheaply; then we had the post-Dearing settlement, which was a shambles, quite honestly-the £1,000 fee that only 30% of the population paid. So yes, you are right, we did expand originally without much concern or consideration as to how it was going to be funded.

Q443 Mr Jarvis: The universities told us that the student finance arrangements were complex and confusing. Do you agree with that assessment?

Bahram Bekhradnia: We have not looked at that, to be honest, so I cannot tell you that objectively. What I can say though is there is one aspect of it that we have looked at that is confusing, unpredictable, and almost certainly unjust, and that was touched on this morning with your previous witnesses: the arrangements for bursaries, which were in the hands of individual universities. The system as a whole bore no relation to the needs of students, so a student at one university could have twice as much bursary as another with the same family background, the same needs, although they were no better off and their needs were no different. The bursary system was not objective, was confusing, and was unjust.

We argued in favour of a national bursary scheme. If student needs are the issue, then there is no argument for them to vary by university. Interestingly we did research three years ago that concluded that bursaries played no part in creating fair access. Students were unmoved by the level of the bursary in terms of their choice of university. OFFA did research on this last year and came to the same conclusion. I think that is right.

Q444 Chair: Can I just quickly intervene? That, of course, is based on the previous level of tuition fees and loans?

Bahram Bekhradnia: Yes.

Q445 Chair: Do you think that situation may be altered as a result of the new level ?

Bahram Bekhradnia: You made that point earlier this morning, and I think it is a very good point. It would be unwise to extrapolate from the previous system entirely into the future. Interestingly, from the perspective of the individual student and then the individual graduate in work, the system in the future is actually more affordable for them even though the fees are going to go up three times, because the threshold for repayments goes up and they have to pay a lesser amount every week, but that message is going to be a hard one to get across. We just do not know the answer. I mean, £9,000 a year is a frightening figure if it is not explained, and if it is not handled properly. Have you had Professor Nicholas Barr as one of your witnesses here?

Q446 Chair: Next week.

Bahram Bekhradnia: Next week? Well, talk to him about it-he is terrific on this- but let me anticipate him and steal some of his thunder. It is basically a tax: the students will repay when in work through the taxation system by having sur- charge on their tax. He will tell you that, even at the present levels, throughout their lifetime a graduate will probably pay about a £1 million in terms of their tax and national insurance and all that. To add another £25,000, £30,000 or whatever it is going to be to that is significant, but it should not be frightening. If it is described properly it need not be frightening. But you are right: we do not know.

Bursaries might help students to decide, but that did not happen in the past. What you had was Leeds University and Manchester University both offering bursaries, both charging £9,000 of fees. Now, the findings of the OFFA research and our research were that a student would not be moved between going from Manchester and Manchester Met, or Leeds and Leeds Met, by whether bursaries were on offer. They would go to Manchester rather than Manchester Met because that is where they wanted to go, and for other, obvious reasons.

Q447 Mr Binley: I just want to press you on the so-called KPMG degrees, where students’ fees will be paid and they will receive a salary while studying. What do you think of that sort of arrangement?

Bahram Bekhradnia: Well it has always existed, and at the margins it is a great thing, for the student particularly. I suppose it depends on the conditions imposed on the student as they study and the subsequent commitment they have, but you are obviously sceptical.

Q448 Mr Binley: No. I am not. I agree with you.

Bahram Bekhradnia: Yes, but it is going to be marginal though. This is not going to solve the Government’s problem.

Q449 Mr Binley: And I do not expect it to, but what I would have expected is a more adventurous, robust attitude from the university institution to work and to think more imaginatively in those terms in the past. Am I sort of being rather romantic in thinking that that might have happened and did not?

Bahram Bekhradnia: Romantic is not the right word I do not think, but why would they?

Q450 Mr Binley: But they did not to any great degree, did they?

Bahram Bekhradnia: No, no-

Mr Binley: We have not seen a lot of adventure here.

Bahram Bekhradnia: Well, adventure is great, but if you are interested in money, as the universities increasingly have been, unless KPMG are paying more for these students than the university will get through the Government grant and through the fee that the student will pay, why would universities want to? You need to find a way of incentivising them, and that is perhaps something that HEFCE could do. HEFCE is very good, by the way, at incentivising universities to do all sorts of unusual things by providing financial levers and mechanisms, and it could. Universities will do what is in their interests to do, and unless you can make it in their interests to do that, they will not do it.

Q451 Mr Binley: I am arguing that is not the case. Let me give you another example, a situation where universities have been very slow to benefit from research in those universities in order to increase the well-being of the establishment. The Americans have been immensely good at that, and we found that out on a trip to the US for that specific purpose. That is another area where they could be more adventurous. I am just worried about the university establishment, and the whole educational establishment, being trapped in a mindset that says, "We are reliant upon Government." Am I right in thinking that?

Bahram Bekhradnia: It is a pity you did not ask Sir Alan that, because they have got all the data. They do something called the business interaction survey.

Q452 Mr Binley: I know they do.

Bahram Bekhradnia: Actually, I believe-I may be wrong about this-on many measures UK universities are outperforming even the American ones that you are referring to, and certainly outperforming any others in Europe. If you think English universities are laggards, my goodness me, you should see many of our colleagues elsewhere. I am sure there is always scope for more adventure and more imagination, but our universities have been quite entrepreneurial, although not necessarily in this KPMG sphere. Given that, by and large, universities are capacity constrained-not entirely, but to some extent-there has been no strong incentive for them to go after that sort of sponsored student, which would necessarily almost be-in many cases anyway-at the expense of an equally funded, easier to get student.

Q453 Mr Binley: Let me then go to the reverse of that coin and ask whether you think there are any concerns about academic freedom if business and industry had a greater involvement in, for instance, designing courses?

Bahram Bekhradnia: Concerns, yes, but not serious concerns . I do not see why there should be. I think universities must obviously be able and be willing to say, "T his is what we are doing on academic grounds, and we cannot accommodate your needs. " It is more of a concern, I would say, in research than in teaching.

Q454 Mr Binley: I f those sorts of degrees grow - I think a number of other companies have jumped on the bandwagon, and I find that interesting - is there any danger of creating social divisions in universities between those who are getting a £20, 000-a- year salary as well as having their fees paid and those that do not? Does that matter?

Bahram Bekhradnia: Possibly. I do not know. I remember when I was at university there were always people there from the Army or the Air Force, or somewhere, who had something. They just drank more.

Q455 Mr Binley: Is that a regret? Okay, let’s move on. Can I ask if you anticipate a general change in the types of courses and degrees offered by universities? I am thinking here of modular courses, more vocational or employer sponsored courses, and less focus on attaining a degree-that sort of change from what universities have traditionally been, to providing a sort of wider menu of educational opportunity?

Bahram Bekhradnia: No. There may be a trend in that direction for other reasons, but I would say, on the contrary, raising the cost is going to focus students even more on the certificate, diploma or whatever it is they get when they leave that will then serve them in the job market. I think it depends largely on the attitudes of employers. You talk about conservatism; employers have shown themselves to be extraordinarily conservative in terms of their attitude to graduates. They know what they like: they like graduates from certain universities; they like graduates to have the qualifications and the degree. In all of this, it will depend on the attitudes of employers and what they reveal they want from students. If they want students who have done very narrow vocational subjects and students cannot get employment without that sort of subject, that is what students will do. Employers might say, "We want you to produce your diploma and your degree certificate, and without that we are not interested in you," and that has been the trend. That is why a lot of the demand for university now is driven by employers who previously would have been happy with A-Level entrants and are now demanding degrees. Now, you cannot get a civil service job without having got a degree-you cannot get all sorts of jobs without having a degree. That is what is driving part of the demand.

One of the earlier questions you asked me was, "What is going to happen to demand?" As long as that trend is not reversed-and I do not see any sign of that being reversed-the poor old student, the poor old 16-year-old and 18-year-old, is going to want to go to university if for no other reason than the graduate jobs are not going to be available for them without doing so.

Q456 Mr Binley: And is that trend primarily about fashion, about lower educational standards at school level, or is it about any other factor? Are you really telling me that they want better educated people, and consequently are getting them as a result?

Bahram Bekhradnia: I suspect there is a bit of that. I would hope, we must all hope, that going to university does actually add value to the student and the job they do subsequently, but part of it is because they can. It is very difficult to break into this loop. I do not call it a vicious circle, because it has got many good aspects to it, but why would you as an employer, given that 50% or close on 50% of the population go to university now, select somebody who had not been to university for a job when you had plenty of applicants who had been to university? Going to university at all, and then which university you go to, is a sifting mechanism for employers.

Q457 Mr Binley: I will answer, as an employer, providing the other qualities are equal; it is not the only criterion.

Bahram Bekhradnia: Of course, of course. It goes without saying, absolutely.

Q458 Katy Clark: Do you think the Government, the Higher Education Funding Council and the Office for Fair Access have got the balance right in where funding for widening participation and access work is coming from?

Bahram Bekhradnia: That is a very interesting question. I am very disappointed about the decision to phase out the Aimhigher programme. It had its critics, but it was a programme, funded centrally, focused very much on the one thing, which was to get more students aspiring to and into higher education. What we have now is very interesting. By the way, I am a great admirer of David Willetts, and I know that as a Minister you have to do all sorts of things that you might never have thought you would have to do when you were in opposition, but David Willetts, when he was in opposition, said that he would not countenance higher fees unless the universities concerned could show how the students were going to benefit from the fees that they were paying, but what we have now is OFFA being told that they have to insist that universities spend a higher and higher proportion of the fees that they get from these students explicitly on activity that is not going to benefit those students; it is going to benefit future generations of students, and perhaps not even that. I think it is a disappointment, and I think it is a misjudgment to withdraw central funding for programmes like Aimhigher and to insist that those are funded by students in future, which is what they are going to be. I think it is disappointing; it is not consistent with what has been said in the past, and it risks atomising the activity. I hope not, but that is what the risk is.

Q459 Margot James: I want to challenge your assertion that this fairer access money, coming from universities that are charging £9,000 or thereabouts, will not benefit the existing student body. Surely it will benefit the students who would not have otherwise got there, who have got there under the fair access scheme?

Bahram Bekhradnia: Okay. So the money gained from students today will benefit the students in three or four years’ time, and the money that they pay in three or four years’ time will benefit those who come through four years after them. Yes, okay-but it is replacing central Government money. I actually think it is pretty doubtful and quite a longterm argument that you have got there.

Q460 Katy Clark: What is your opinion of the Office for Fair Access recommendation that a percentage of all fees above £6,000 should be spent on access and widening participation?

Bahram Bekhradnia: That is really the point that I was making. I welcome the expenditure on access and widening participation. It is important, but I think that it is unfair and a pity that it is not coming from the Government from general taxation but from students themselves, from the higher fee that they are going to be obliged to pay. I can see you can construct an argument that, over a long period, although the money that you are contributing today might not benefit you personally, the money contributed by some of the students sometime in the past will benefit you, because it might have got you there in some cases, but not in the majority of the cases. The majority of students do not need widening access-type activity to get them to university; they are going to go anyway. So I think I would dispute Margot James’ point. I take your point that it is difficult to explain to students that a significant part of the fees that they are paying is not to benefit them but to contribute to widening access activity that will benefit some students sometime in the future.

Q461 Mr Binley: What do you think of the National Scholarship Programme? Will it support and encourage more students from disadvantaged backgrounds to come into higher education?

Bahram Bekhradnia: I hope so. I think that a well targeted scholarship scheme would. I take the point that your Chairman has made: the data are there and the evidence is there, so we know that in the past students have not been deterred by the higher fee, and, because, for the reasons that I mentioned, this is a progressive arrangement that we have and free at the point of use, it logically should not deter people in the future, but we also know from research evidence that students from poorer backgrounds are more likely to be deterred from going into higher education than others. So yes, I think that the schemes like that are probably needed in order to ensure that there is no financial disincentive.

Q462 Mr Binley: What changes do you expect to see in student numbers over the next five, 10 years?

Bahram Bekhradnia: That depends entirely on the Government’s attitude to growth and on the budget. If you are asking me what changes I expect to see to student demand, I would say I expect student demand to be buoyant, to be greater than the supply of places, and for there to be unsatisfied demand sometime into the future.

Q463 Mr Binley: So it is a seller’s market all the way through then?

Bahram Bekhradnia: I think it is a seller’s market all the way through. I do not know. We keep coming back to the fact that a £9,000 fee is very different from a £3,000 fee, even with all the arrangements for repayment that I described. It might choke off demand. I do not think so, but it might. If it does not, it will be for reasons I have described: males catching up with females, and regional and social class differences being eroded. One of the great success stories in recent years has been the very large increase in participation by students from the poorer backgrounds. It really has. I think it was a 30% increase in participation in only five or six years, so there has been a big increase there. There is a long way to go, so the potential for increased demand is huge. Add to that the fact that the last Government introduced, and this Government has not reversed, an effective increase in the school leaving age, so all those students that left at 16 in the past-10% of students with 10 or more GCSEs left school at 16 and were never seen again-that will stop. They will have to stay on in education into the future. That will itself necessarily give rise to increase.

Q464 Mr Binley: How do you know they did not go on to build multimillion pound businesses?

Bahram Bekhradnia: No, some of them went on to have great successful careers; many of them did not.

Q465 Mr Binley: That is right. Okay. Now, I am going to be very kind to you and I am going to change you with David Willetts-I am going to put you there to write the White Paper. What three things would you most want in there?

Bahram Bekhradnia: May I write to you subsequently about this? I would not start from where I am, you see. If I were David Willetts, I would not have made some of the decisions that have been made to get us to this point. The main thing, as I said at the beginning, is they have to find a way of creating a market to moderate prices. I think there has been a serious misjudgment that has enabled prices to be announced at the levels they have been announced, so we have to think hard about how to do that, and I think today’s announcement, or today’s speculation, is one step in that direction.

Q466 Mr Binley: I realise I threw that question at you. Would you be kind and write to us when you have thought about it: what three things would you have in the White Paper?

Bahram Bekhradnia: Okay.

Mr Binley: That would be very helpful.

Q467 Chair: You have been asked to be David Willetts. I am now going to ask you to be Sir Martin Harris. What specific measures would you like to see included in access agreements?

Bahram Bekhradnia: I am glad we have an Office for Fair Access. I think it has stimulated and galvanised activity and focused the mind, but as Sir Martin hinted and as has been apparent all along, access agreements will be met. Universities will do whatever they have to do in order to meet their access agreements. They are not going to a mechanism for regulating fees. I have said already that I regret the central activity that has been choked off with Aimhigher being closed. I would like to see more coordinated activities, so I would hope to see that access agreements, in part anyway, pooling resources and activity between perhaps different types of universities in an area, to fund these sorts of things. By and large the sorts of things that they do, such as summer schools, which somebody mentioned, are great, but summer schools tend to be attended by the well motivated middle class students anyway. In a way, that sort of thing is too late.

Q468 Chair: I was going to say, I can just imagine some of the students in my constituency being asked to go to a summer school. Given the fact that some of them may well not have travelled very far at all, the thought of going somewhere to a summer school would be a very intimidating prospect.

Bahram Bekhradnia: You need to start back at primary school and that sort of thing. There have been some very imaginative initiatives. If only those had been learnt from and built on. There was Professor Fluffy in Liverpool, who used to go round the primary schools trying to motivate really quite young children to understand that going to university was a perfectly normal thing, although Professor Fluffy was not very normal, I have to tell you-anything that is imaginative like that. You have got to think very widely, but I think the problem is that what you need is expenditure and activity at school level, and, in a way, what universities are doing is almost too late.

Q469 Chair: You said before-I think I got this right-you do not like Government interference in university policy, but do you think OFFA should be given enhanced legal powers over fee setting?

Bahram Bekhradnia: No, I do not, because I do not think that they would necessarily make the right decision and do a good job, and nor does Sir Martin Harris think that they ought to have that. Of course nobody likes interference, because interference is a pejorative term. I do think, though, that Government does have a role in setting the national direction of higher education, and should have some powers in relation to universities, and should have influence in relation to universities and, in the past, exercised that influence quite effectively through the funding that it provides through HEFCE. By cutting the Government direct funding of universities to the extent it has, and by relying on the market in the future to the extent that it is, I think it is getting the balance wrong.

Q470 Chair: O bviously you do not feel that OFFA should have legal intervention powers, but you hinted that the Government should step in?

Bahram Bekhradnia: No, but you were asking about fee levels.

Q471 Chair: Yes.

Bahram Bekhradnia: No, on fee levels I do not. I think that fee levels are a funny sort of thing. I mean, they are a market mechanism almost by definition. I think that there needs to be much better information if we are going to have fees at this level. Everybody agrees with this, it is not an unusual thing to say, but I would not expect OFFA to be able to make very sensible, informed decisions about the levels of fees.

Chair: Thank you, once again. You have been a solo act for an hour, and I do appreciate the contribution you have made.

Bahram Bekhradnia: I enjoyed it.

Chair: I will repeat what I said to the previous panel: if you feel that you would wish to add anything to your response to a question that we asked or, indeed, would like to respond to a question that we did not ask you but should have, feel free to do so.

Bahram Bekhradnia: I will.

Chair: Thank you very much.


[1] Note by the witness: In response to question 401 from the above hearing, Sir Alan Langlands confirmed that figures would be provided for the number of students registered as disabled at UK Higher Education Institutions (HEIs). These details are given below:

[1]

[1] In academic year 2009/10, there were 185 ,000 students known to have a disability at UK HEIs . Of these, 155 ,000 were registered at an English HEI. The Open University reported the largest number of disabled s tudents with 14,000 registered.

[1]

[1] Note: Further details can be found in Table 3 of HESA’s “Students in Higher Education Institutions 2009/10”.

[1]

Prepared 6th June 2011