Agenda 2030 and Britain's Higher Education Speech to Business in the Community: Role of Universities in Fostering Leaders
Tuesday 1st April 2014
Thank you very much.
It's a great pleasure to speak to Business in the Community today.
I had to come and speak today in part to say thank you for everything you've done to help me in Hodge Hill, enjoining our fight against youth unemployment.
Over the years, and never more than today, you brought the enterprise, power and creativity of business to tackling problems we share in common, and today I want to draw on that tradition to talk about how we can work ever closer together in the field of higher education, preparing our young people and preparing our country for a very different world taking shape around us.
Let me start with where the country now finds itself.
You might say: what a difference a fortnight makes.
Last weekend saw much speculation about Labour’s position on how we pay for higher education. In due course, we will set out our plans. But Ed Miliband has made clear our direction of travel.
We have to reduce down the huge levels of debt write-off that make the today's system unsustainable.
That’s the lesson from the revelations of the last two weeks;
Revelations which have driven a coach and horses through the government’s higher education policy.
Revelations that have raised huge concerns for students, for taxpayers and for Vice Chancellors.
They are revelations which have comprehensively changing the terms of the debate.
First, there was the admission to me in a parliamentary answer that the government now expects the write off of student loans to rise so high, that the new system of tripling student fees might not save the tax payer any money.
A surge of speculation that student fees might have to rise even higher quickly followed. In the Commons, Nick Clegg said there was no case for such a rise, but in the TV studio, David Willetts was telling a different story.
After her interview with the Universities Minister, Cathy Newman of Channel 4 News reported:
“As David Willetts was leaving the studio, I suggested it sounded like another tuition fees rise was on the way... ‘Could be’ was his response.”
Mr Clegg tried to defend himself by arguing that the amount students would pay back each month was less than under the old system.
He somehow forgot to mention that the average student today won't pay their loans back for 27 years. That means students today will approaching 50 before they are free from the debt burden.
In stark contrast, it was estimated that for students starting after 2006/07 the average Student Loan would take 11 years to repay for men and 16 years for women.
This last week, we got the story's latest instalment, when a fresh batch of answers arrived to the parliamentary questions I tabled on the scale of private providers now enjoying hundreds of millions of pounds of support funded by the taxpayer.
The sheer scale of the subsidy surprised everyone.
Nearly £1 billion of publicly funded loans and maintenance grants are now flowing through students to private providers.
That, as the Guardian pointed out, is a 2100 per cent increase in recent years.
But what really surprised me, is that government has no idea about the level of profit these private providers are now making.
In a parliamentary answer to me, David Willetts said, "The Department has not made an assessment of the level of profits made by for-profit alternative providers with courses of higher education that are designated for student support".
But, worse, it turns out that the government doesn't even check whether a college is profit making or charitable before it agrees loan support.
A further answer confessed; 'In assessing students' eligibility for student loans, the Department does not distinguish between those alternative learning providers that operate on a commercial for-profit basis, and those that do not. The information requested is not available."
Just to round it off, Mr Willetts underlined; "The Department has no plans to regulate the profitability of alternative providers with courses of higher education designated for student support."
You heard it.
Together these revelations have profound implications for the future.
Not so long ago, many in the university sector set out to me how uncapping students into the next parliament was a vote winner for the Tories.
But now it's clear that what is proposed is a system that combines the worst aspects of a free for all and a money pit.
Call me old fashioned, but I happen to believe that public universities do a brilliant job.
The national system of higher education that emerged in the 1960s, with a national admissions system and a national grant regime ensured that today we enjoy not only world class universities, but a world class university system.
It's diverse, it's competitive in a way that encourages innovation in research and teaching and it deliver high standards.
It's also highly efficient.
I happen to think we should be very proud of it.
What is not clear to me is how it is good for public universities to maintain a system where half of the new money earmarked for expansion is locked up in an escrow account to provide for loan write-offs, and where there is zero control of how much is creamed off in profit by a hungry private sector. I look forward to hearing the arguments in favour.
With this is mind, it's very welcome that Universities UK is grasping the nettle and seeking to maximise cross party consensus on a new way forward.
I very much look forward to joining those talks, and to help get the conversation going I want to set out today the principles which I think should guide us.
These are principles deeply rooted in our history and academic traditions, but more importantly a sense of the future, in a world turning east, where technology is moving faster than ever, and where we in Britain need new answers to help us, collectively, earn our way to a better standard of living.
It's not so much Robbins Revisited. Its Robbins Rebooted.
The starting point for our principles is the speech Chuka Umunna made to the Engineering Employers Federation a few weeks ago.
In that speech, Chuka set out the basic truth in politics today.
In a country, where living standards are under such acute pressure and where the deficit still looms so large, innovation is the only way out of austerity.
As Chuka Umunna put it; "We, the Labour Party, are clear about our goal: a high-productivity, high-skilled, innovation-led economy."
That is why our universities are so important. They are the power-houses of the knowledge economy. They need to be bigger, stronger, more central to our economy in the years to come.
As the Royal Society put it so simply, so eloquently in 2010, Britain need to put science and innovation at the heart of a strategy for long-term economic growth.
Unless we grow smarter, we will grow poorer.
Over the last five months, I've travelled all over Britain talking to hundreds of students and teachers, scientists, innovators, business leaders large and small, sixth-formers and their parents, and most of the nation's vice chancellors.
I've been struck how our debate is in sore need of a few basic principles.
You can take as read, my sympathy with some fundamentals, set out with characteristic eloquence by Nigel Thrift in his recent speech: British Higher Education: Where Next?
In particular I want to double underline what Nigel said about the importance of universities as 'disinterested producers of knowledge for its own sake' and that 'universities must remain as conscious moulders of sceptical and informed subjects', 'focused on being public goods'.
Today, however, I want to step out further, and having reflected both on the IPPR's seminal Commission on Higher Education, and Mr Willetts own contribution to the debate, Robbins Revisited, I want to set out five tests that I think should help us judge what good university reform looks like.
First, obviously, is financial sustainability. Good research, good teaching, needs good and sure foundations.
And what is now clear is the Tories' student loan system that pays for our universities, voted through by the Lib Dems, is a time-bomb.
According to the Public Accounts Committee, its storing up perhaps £70-80 billion of debts that may never be repaid.
Today's system with tripled fees and big debts for graduates is now as expensive as the system where students were charged a third as much. It has become an indefensible system. So people should now stop trying to defend it. Or relying on it for the future.
The second test, must be: what is good for our science base, our store of knowledge and wisdom. Whatever is proposed for the future must pass one simple judgement: is it good or bad for the science base?
Today, while other powers emerging and established are investing in science like never before, we are cutting science spending across government according to the Campaign for Science and Engineering, to the tune of over £800 million.
Nationally, research and development as a percentage of GDP is at its lowest level since the turn of the century. Last year it fell for the first time since 1985.
Test number three, is student choice. Are we offering students a real choice of pathways through to higher level skills?
Today, while we do a decent job of getting A level students or those on an academic route to university, we do a terrible job of lifting apprentices up to the same standard.
While great firms, like Rolls Royce train fifty per cent of their apprentices to degree level skills, as a country we manage just six per cent. That's right, six per cent. The grand total of 6,000 people. It's not good enough. Its not good enough for the future.
As if I needed persuading, this was a point rammed home for me in Paris yesterday by OECD economists and policy advisors.
Fourth, we need to do far more to fix Britain's skills base; when regional skills gaps are opening wide all over Britain, then I'm afraid we do need a deeper conversation between business and universities about the graduates we're educating.
I'm a firm believer in education for education's sake.
But I know too that a good job is fundamental to the way we flourish and right now half of graduates are not in graduate level jobs.
Finally, Labour will always demand faster progress when it comes to social mobility.
The shutdown of Aim Higher was obviously foolish. The IPPR is amongst others who have proposed new ideas like a 'student premium'.
NUS has consistently argued for better hardship funds to help poor students stay the course.
It's time these arguments were taken seriously.
These are the tests that should shape the way we think about the future. The government's proposal to pour more money into 'more of the same' has now been exposed as impossible.
What's proposed isn't sustainable, it does nothing to boost the science base, diversify student choice, or bring universities and business together, or deliver fast enough progress towards social mobility.
Half the new money proposed in the next parliament bleeds straight out to provide for debt write-off - and much of what's left will go straight to the hundreds of private providers whose students now consume north of £850 million a year in public subsidy, while zero control on their profitability.
I put it to you that this is not a system that is fit for purpose.
This year we celebrate an important anniversary in the Labour calendar. The 50th anniversary of Harold Wilson's election - a moment when a party relentlessly focused on the future swept away an old boy network lost in the modern world.
Higher education was central to our offer then.
And so it is today.
The Tory ways have failed.
It's time for a new way forward.