HEWP: draft oral statement

With permission, Mr Speaker, I would like to make a statement on the Higher
Education White Paper. It sets out how our reforms will build on the changes
to student support announced last year. We will put higher education back
onto a sustainable financial footing. We will put students at the heart of the
system, improving the academic experience with universities and colleges
more accountable to their students than ever before. We will also take steps
to improve social mobility without compromising academic excellence or
institutional autonomy.
We inherited an enormous deficit which required difficult decisions. We could
have reduced student numbers, or spending per student, or provided less
help with living costs. But these options would have been unfair to students, to
universities and to the country.
Instead we are introducing a pay as you earn system that provides more
support for students, does not require reductions in student numbers and
increases the cash flowing into higher education. We estimate there could be
a cash increase in funding for higher education of around 10 per cent by
Our reforms ensure that no first time undergraduate will have to pay fees upfront and only asks them to contribute to the cost of their education once they
are earning over £21,000.
This increase in the repayment threshold - up from £15,000 under the current
system - means that graduates will benefit from smaller monthly repayments
than under the current system. For example, someone earning £20,000 – the
median starting salary for graduates – repays £38 a month under the system
we inherited from the previous Government. In future they will pay nothing. At
the moment a graduate earning £36,000 – the median salary for all graduates
– pays £158 a month: in our scheme that falls to £113 a month.
Our reforms also recognise that, for many people, higher education does not
mean a full-time, residential degree. Some students want to work or take care
of their family while studying. To support them, many part-time students and
distance-learners will become entitled to loans to cover their full tuition costs
for the first time.
And I can announce today that my Rt Hon friend the Secretary of State for
Health and I have agreed that, for undergraduate medical and dentistry
students starting their course in autumn 2012, the NHS bursary will be
increased in years 5 and 6 to cover the full costs of tuition. For graduate
entrants starting in autumn 2012, access to student loans will be made
available so that there are no additional up-front tuition costs. We will consider
arrangements for subsequent years. More information is being placed in the
libraries of both Houses.
These changes to higher education funding enable us to put financial power in
the hands of learners. But to make that effective we need to liberalise the
system of quotas we inherited from the previous Government so that more
students can go to universities that offer a good quality, good value student
The White Paper therefore proposes unconstrained recruitment of the roughly
65,000 high achieving students, scoring the equivalent of AAB grades or
above at A-Level. Quotas for these students will be abolished and funding will
go to whichever university offers them a place they accept. In addition we will
create a flexible margin of about 20,000 places to reward universities and
colleges that combine good quality with value for money and with average
tuition charge (after waivers) at or below £7,500 per year. This adds up to
around 85,000 student places – that’s roughly 1 in 4 places for new entrants
contestable between institutions in 2012/13. We aim to expand this further
year after year.
We will also extend the scope for employers and charities to offer sponsorship
for extra places, provided they do not create a cost liability for Government
and provided, of course, there is fair access for all applicants regardless of
ability to pay and no sacrifice of academic standards.
These reforms put students in the driving seat. Putting this power to best
effect means not just liberalising the quotas regime. Prospective students also
need to know far more about the academic experience on offer. We will
therefore transform the information available to them about individual courses
at individual institutions. Each institution will make available key items of
information such as contact hours and job prospects. Information will also be
available to outside bodies such as Which? to produce their own
comparisons. It will lead universities to match their excellence in research with
a high quality academic experience.
We also want our universities to work with business to improve the job
prospects of their graduates by providing the knowledge and skills employers
value. The Sandwich course, giving students practical experience of work,
declined under the last Labour Government. We want to reverse that. We
have therefore asked Professor Sir Tim Wilson, who made the University of
Hertfordshire one of our most business friendly universities, to review how we
can make England the best place in the world for university-industry
collaboration. We want our universities to work with business across their
teaching and research activities to promote better teaching, employer
sponsorship, innovation and enterprise.
Student choice is more real if, as well as liberalising quotas and transforming
information, there is greater diversity of institutions to choose from. We will
therefore remove the barriers to more provision from the Open University,
further education colleges and private providers. We will simplify the regime
for obtaining degree-awarding powers. We will also review the artificial
barriers to smaller higher education institutions taking the title “university”.
We want students from a wide range of backgrounds to benefit from these
reforms. We are increasing maintenance grants and loans for nearly all
students. We are introducing a National Scholarship Programme. And we will
strengthen the Office for Fair Access to make sure institutions fulfil their
outreach and retention obligations for people from disadvantaged groups.
This will not be at the expense of institutional autonomy. The Director of Fair
Access will continue to have a duty to protect academic freedom, including an
institution’s right to decide whom to admit and on what basis.
In order for universities and academics to focus on educating their students,
we will strip back the burden of excessive regulation and form-filling. We will
explore whether it is possible to reduce costs associated with corporation tax
returns. HMRC have today announced their consultation on the possibility of
introducing a relief to remove some of the VAT barriers which currently deter
institutions from sharing costs. We will reduce burdens from information
collection. We will give power to students to trigger quality reviews where
there are grounds for concern, yet cut back the burden of automatic review for
high performing institutions.
The Higher Education Funding Council for England will be the lead regulator,
taking on a new role as consumer champion for students and promoter of a
competitive system.
We are now inviting people to comment on our proposals as part of a broad
consultation. Subject to parliamentary time, this will be followed by a higher
education bill next year, to make the necessary legislative changes to deliver
these reforms.
This White Paper offers universities the prospect of more funding provided
that they attract students. At the same time it saves money for the exchequer
by asking graduates to pay back more as their earnings increase.
Our universities already transform people’s life chances: we expect them to
do even more. We will protect their autonomy and reduce the regulatory
burdens they face.
Above all our proposals benefit students by driving universities to focus on the
student experience. They will have real choice – with better information and a
wider range of institutions to choose from. I commend this White Paper to the