David Willetts

A speech given on 10th September 2008 to University UK’s members’ conference on the future funding of Higher Education.

Thank you for inviting me to your annual gathering. We are at a key moment in the debate over the status, funding and future of our university sector so I am very pleased to be here. And I am looking forward to hearing your concerns and ambitions for the future.

Universities UK are is an excellent organisation which is making a crucial contribution to an informed debate over the future of our universities. Over the past year, I and my colleagues have learnt a great deal from all your research on issues like the demographic challenge, the impact of tuition fees and, perhaps closer to home for you personally, the sector’s pension fund deficit.

Rick, Diana and your public affairs team are very effective communicators on your behalf. Without them, our job would be much harder. And I sense we will all need them even more in the coming year as the fees review and other challenges approach. So let me take this opportunity to thank them publicly for all their continuing help.

Some of you may have hoped and expected that I would be announcing major new policies today. That would not be the right way to proceed for you or for us. For a start it would pre-empt the fees review which Parliament has mandated and to which both parties are committed. And anyway we are currently listening hard and learning fast. But what you are entitled to expect, and is actually more useful than policy detail at this stage, is a sense of the direction in which we are moving and what our key priorities are. So I want to think aloud about the issues we are focussing on, to offer you a sense of our research programme so we can get your response before policy commitments are made.

I also want to pay tribute to British universities. Earlier today, CERN’s Large Hadron Collider in Switzerland was switched on. There is no clearer evidence of the enormous contribution of universities to our national life. Without the cutting-edge research conducted in UK universities, this project might never have got off the ground. The Higgs boson particle the project is searching for - sometimes called the God particle, and also called the ‘Goddamn particle’ because it is so elusive - is named after Peter Higgs of Edinburgh University, who had the original theoretical insight about how to include mass within the standard model of particle physics.

Whether the Collider discovers the particle or something else altogether, it will be a testament to numerous British universities - twenty-one British research institutions are involved and there is British input into all four of the detectors as well as the GRID. It is a wonderful example of intellectual investigation for its own right and, in the long-run, we all stand to gain from the knock-on benefits. It was, after all, a British scientist working for CERN who invented the internet.

Past challenges and the 50% target

Our venue today, Churchill College, has carved out a niche as a stronghold of contemporary history. And, here in historic Cambridge, it certainly looks a relatively modern and progressive place. But it is telling to think back to the shape and size of the university sector when the college was founded half a century ago. In 1958, fewer than 20,000 Britons graduated each year and only 5% of young people went to university. Just a quarter of students were female.

Since then, your sector has seen profound change. By 1997:

• there were over three times as many teachers in HE as there had been students in 1960;
• there were more postgraduates than there had been undergraduates in the early 1960s; and
• the proportion of female students had doubled from one-quarter to one-half.

In fact, during the last few decades of the C20th, the university sector probably changed more than any other public service. The entire environment in which you work, including your core mission, was transformed: after centuries of slow evolution, you went very rapidly from educating a small elite to being a mass service for an ever-increasing proportion of the population. No other area of public life, including health and schools, changed to the same degree. I recognise that this transformation has brought about new challenges and that it has often occurred on the cheap, but it has been to the certain benefit of individuals, society, the economy and the country.

As I visit other countries, I see just what you have achieved. In France, less research is done in traditional universities and indeed the intellectual elite may go to the grandes écoles instead of university. When I visited China recently, I saw just how enviously the Chinese look upon the breadth and experience contained within our universities - it is why they are so keen to link up with you and why there are so many Chinese students studying here. In Germany, which had the best universities in the world at the end of the nineteenth century, the HE sector suffered long-term damage at the hands of the Nazis and the Communists and it still does not do as well in those international league tables as one would expect given its historic achievements. And, while no one can doubt the brilliance of the Ivy League, the majority of American universities which are outside of this elite face some very difficult questions about their future, including the impact of the credit crunch. Funding of American students is second only to housing in depending on what some American banks see as sub-prime loans.

So here in the UK we have some great strengths. And, in the 21st century, a dynamic, responsive and expanding HE sector will remain critical to improving the opportunities on offer to people of all ages and all backgrounds and to maintaining our place in the world.

John Denham has taken to claiming that we Conservatives are ‘fully signed up members’ of the ‘more means worse brigade.’ That is nonsense. Our historic record shows that has never been our philosophy.

• it was a Conservative Government that accepted the recommendations of the Robbins Report in 1963, which led to the first big wave of university expansion; and
• it was a Conservative Government that presided over the mass expansion during the 1980s and 1990s.

We continue to stand full-square behind the transformation of our university sector. But the challenges are steeper than ever before. In the decade since 1997, the pace of expansion has slowed. The current Government may have committed to having half of all young people at university, but it is running away from this target very fast. A top DIUS civil servant recently admitted, ‘we will not reach the rate of 50 per cent participation of that age group by 2010, because we never thought we would’. Surely it makes little sense to announce any target without a proper conception of how to get there?

The figures speak for themselves: since the dataset against which success is measured began in 1999/00, the university participation rate for people aged 17 to 30 has risen by just 0.6%, from 39.2% to 39.8%. This headline figure conceals a particular problem for young men: the proportion of young men who become students has actually fallen from 37.1% to 34.8% in recent years. So, while ministers talk of sending half of all young people to university, their policies are - in practice - sending only one-third of young men there.

And other countries have been racing ahead while we have been standing still: figures released by the OECD yesterday show that, since 2000, the UK has slipped from 4th to 12th in the OECD league for young people going to university. Depressingly, the report concludes that ‘more countries are likely to surpass UK graduation rates’ in the near future because our enrolments have been running ‘considerably below the OECD average.’ The research also reveals how badly we are letting young people down before they are old enough to apply for university: we have more young people who are not in education or employment than any other country covered in the survey. That is a dreadful waste.

So the original target of 50% of young people at university by 2010 is evidently not going to be achieved. Gordon Brown and John Denham should admit this and then we could have a serious debate about what should be done to broaden access. We need to start thinking about the future of our universities rather than focussing on a target that was deeply flawed from the outset and which now has zero chance of being achieved.

We believe in expansion and want more people to benefit from our excellent HE sector. In late 80s and early 1990s, we had expansion without properly funding it. Under Labour, we’ve had an ambitious target without proper back-up. What we need to do is to provide a credible plan for university expansion which identifies the money to back it up.

Future challenges

Your minds are rightly focussed on next year’s fees review, and this is reflected in the theme of your conference. We are keen to approach the review in a bipartisan and open-minded way - though, of course, our full reaction must be reserved until we know more about its make-up and terms of reference. Indeed it would be wise and in the interests of universities as a whole for the Government to consult us on this, following the precedent set by Gillian Shephard who consulted David Blunkett, then her Shadow, before setting up the Dearing Review.

Waiting for the review to start is a bit like one of those strange bicycle races where the idea is to go as slowly as you can. There seems to be an endless stream of preludes to the review, pre-reviews and preparatory investigations. These are all very well, and we are co-operating where we can, but ministers are moving so slowly they are in danger of falling off the bike. In contrast, we have consistently urged them to start the review now because the key decisions cannot be put off very much longer, and the evidence needed to make those key decisions is emerging fast.

It is notable that, when the commitment to hold a review was originally made during the 2004 legislation, it was seen as a way to buy off for left-wing Labour rebels opposed to the very principle of top-up fees. The review, it was said at the time, would look again at the very concept of tuition fees. This is no longer how it is perceived by anyone I speak to. I welcome the realism which has led people to accept that co-payment is here to stay and that the review must be more about the shape and level of that co-payment than about whether it is the right idea. My party has shifted its position because we recognise fees are here to stay.

There are rumours that some institutions are planning for the future on the firm assumption that the tuition fees cap will rise. If enough institutions plan on this basis, so the argument runs, then a rise in the cap will become inevitable. But we are not committed to raising the cap and, if we did, a series of other reforms might also prove necessary. Let us think about three in particular.

First, students and their parents are rightly concerned about the educational experience on offer in return for fees. Inevitably, the evidence suggests much of the increase in funding from the first wave of fee income went on areas which only provide indirect benefits to students - on things like staff salaries and higher pension contributions, though - of course - much also went on bursaries. It would be churlish to begrudge this; universities were in a game of catch-up after past under-funding and it is essential our HE sector is attractive to the world’s best academics. But it would be unacceptable for any further increase in fees to produce such modest on-the-ground improvements for students. The sector needs to show more actively that it recognises the advantages of smaller classes, of having undergraduates come into contact with the best researchers in their field and of having world-class libraries and other facilities. No Secretary of State is going to sign off an increase in fee income without clear evidence that students will gain directly from paying higher fees and taking on yet more debt. So a better educational experience for students is an essential quid pro quo for any change to the cap.

Secondly, any reform will also need to do more to widen participation. I recognise that the biggest problem in this area is the high number of people emerging from school with poor or no qualifications. This is the Government’s fault, not yours - and we have developed a range of policies for improving school-aged education. I recognise the work that you already do reaching into schools to heighten aspiration and extend access, but there is probably even more that the sector could do to broaden access as part of a new financial settlement. John Denham will tell you tomorrow how proud he is that the proportion of university entries from lower-socio-economic groups has grown by 0.7%, from 29.1% to 29.8% over the past year. But the gap in university entrance between the top socio-economic groups and those lower down remains a chasm. We must do better and that is why widening participation has to be at the heart of the fees review. The evidence from OFFA rather suggests to me that a review of the bursary system is one thing that is needed.

The third issue is the impact on the public finances. This is even more critical now than when the original top-up fees were introduced because the economic outlook is far less rosy. As the recent HEPI report on the future shape of fees made clear:

The system of higher education finance introduced in England in 2006 is among the most progressive in the world. However, some of the features that make it so progressive - the universal subsidised loan, repayments that are deferred and income contingent, for example - also make it extremely expensive for the taxpayer.

This means that any extension to the current system, such as a simple rise in the fees cap, would make it even more expensive for the taxpayer because of the costs of providing additional loans. So I urge you to think about the costs to taxpayers, including non-graduates with modest incomes, as well as the potential benefits to universities of a higher cap, and to be creative when thinking about a modified system.

So we are committed to further expansion of the university sector and to a thorough review of university finance to enable this to occur. But expansion will not just naturally occur. Success will depend upon other crucial factors too.

Better information

If more people are to go to university and to run up debts while doing so, then there needs to be much better information available on the after effects of a university education.

When people speak of the graduate earnings premium, they tend to think only of the overall average financial return from attending university. But this is a very inadequate measurement. Different courses provide different returns, and the average tells us very little. Prospective students deciding when and where to study need to know more about the employment prospects and the financial returns of different courses. Going to university is not simply a financial decision - we need people to study medieval history and theology irrespective of the financial returns on offer. But people approaching university are surely right to feel entitled to better information about the long-term impact of different decisions.

Currently, it is too hard for them to make informed decisions about their own futures. When I speak to experts on the data, they tell me that one of the barriers in this area is a reluctance on the part of universities to release the data on the outcomes of their own students. But I would urge you to do so. If it helps students make better decisions about studying at your institutions, then it should improve their satisfaction, help to reduce drop-out rates and improve your reputation.

It is not only when young people are on the cusp of a university life that the information is available is so woeful. We also need to tackle the information gap at a much earlier age. I am particularly struck on my visits around the country by the number of young people who tell me they are taking a mix of GCSEs or A-Levels that can only be described as eccentric in terms of university entrance decisions. There is nothing wrong with taking Drama or Business Studies at A-Level but, if these are regarded differently to other A-Levels by certain institutions for certain courses, then people need to know this when deciding what to study.

So I welcome the decision by the LSE and Cambridge to publish on their websites the lists of A-Level subjects which they regard as less good preparation for university - I recently obtained a parliamentary answer which showed that one-third of all A-Level entries are in these subjects. I would urge other institutions to follow their lead because it will improve decision-making by our young people and, closer to home, it will simplify the task of your own admissions officers.

In our skills Green Paper, which is currently open for consultation, we recommend a big improvement in the careers advice available in school. Better information about university entrance must be a key part of this. And, while I welcome the general idea of AimHigher, I think it needs to provide earlier, more integrated and more sustained support and it is clearly not always as effective at the moment as it could and should be.

Part-time and mature students

The £100m cut in funding for second-chance students was first announced a year ago this week. Over the past 12 months, it has caused deep unhappiness and this is one of the reasons why we called a parliamentary debate on this specific subject earlier in the year. It is an injury universities have not forgotten. We want to see more part-time students. We want to see more mature students. And we want to see people given a second chance. So this cut in funding is the wrong policy at the wrong time.

I hope to see more people going to university in the future. That may be more 18 to 21 year olds with good A-Levels - that would be great. In a modern society more and more people expect to go to university. But it is just as likely that in future the growth will be from older and part-time students who missed out first-time round or who did a course that just did not meet their current needs and aspirations. High on the agenda for the finance review must therefore be a fairer deal for them.

Like the 50% target, the ELQ cut reflects the Government’s obsession with young people above all others. This might have played well in the heady days of Cool Britannia but the ELQ policy undermines the campaign to promote lifelong learning. And it also damages important professions, such as Pharmacy, and writes people off when they have more to give. The message ministers are sending out is: ‘If at first you don’t succeed, then you don’t succeed.’

One reason for the anger about the policy is that it was implemented in such a high-handed manner. A future Conservative government would seek to avoid such an approach. But it also opened up one of the worst injustices in our higher education system - the poor treatment of part-time and mature students. We cannot ignore this issue any longer. The current regime is indefensible.

We should not delude ourselves by thinking full equality between part-times students and full-time students is likely in the near future. It is not going to happen at a time of economic squeeze. But we must not let the best be the enemy of the good. There are other, more limited, steps we could take to produce a fairer regime.

This might mean reversing the ELQ cut. It could mean other ways of delivering better HEFCE support for mature and part-time students. It could mean offering some maintenance support to part-timers. This conference is an opportunity for you to tell us how you think this issue can best be tackled. What is the best way ahead? Are there other ideas that should be considered? Would a better part-time regime be cost effective by making part-time study more attractive compared to full-time study? We are looking at affordable ways to tackle this problem and are genuinely open to your ideas and views on this issue.

Standards

People have long bemoaned that the expansion of HE must mean lower standards. Kingsley Amis famously said ‘more will mean worse’. Let me be clear: Kingsley Amis was wrong. He may have been a great novelist but he has never been the author of Conservative Party policy on universities. When you look at the international competition or the under-achievement at school or the declining rate at which men enter university, it is clear there is room for further expansion. In fact, history suggests expansion is the best single way to broaden access. But when we are talking about expansion, we also need to be rigorous about standards.

I was very struck by the concerns expressed so forcefully in the early summer about university standards. I know the manipulation of the National Student Survey does not happen everywhere. I know that international students are generally tested for their level of English before they are accepted. And I recognise it is at least possible that the increase in the number of top degree classifications may be justified.

But it is inconceivable that the huge number of anecdotes on declining standards expressed by university employees on the BBC website, in the THES and elsewhere are entirely without foundation. As I have already said privately to Rick and Diana, it is important the sector itself works to address such concerns, perhaps by re-evaluating the strengths and weaknesses of the external examination system and by proposing better quality-control initiatives for the future. Otherwise, we politicians will interfere in issues that are best left to the sector itself.

Distance learning

Another area of potential improvement is distance learning. Given the short-term demographic challenges and the economic imperative, we all need to consider what else can be done to encourage students from non-traditional backgrounds. The Leitch Review of Skills talked eloquently about the need to upskill and reskill.

Many mature students wish - or need - to study part-time. So improving the part-time regime is very important. But we also need to do more to entice mature students in the first place, and then to make it easier for them to complete their studies. Older people are quite simply not going to move home and give up work in order to study for a three-year, full-time degree. And nor should they be expected to.

One improvement would be to bring university study closer to students. Ministers talk eloquently about a university in every town. But, while this is a worthy concept, we should not pretend that their plans actually achieve that. In the Government’s own consultation paper, it says there is only £150 million available for the initiative, which would not build 20 new schools let alone 20 new universities.

We must, therefore, be more imaginative about how we can hone academic study so that it is more accessible to the people who could most benefit. The Government’s e-University was a terrible flop because it was ill-thought through and failed to capture the popular imagination. In short, it could not do what you can do. The comparison with Harold Wilson’s Open University, now one of our great institutions, could not be starker.

But the e-University did have a kernel of truth behind it. A decade ago, Martin Trow of Berkeley University wrote that:

The rapid development of IT makes possible what was once merely an educator’s dream: that is, lifelong access to education for all, in subjects and at times and places of individual convenience.

We cannot let the failure of the eUniversity hold us back from new developments in eLearning.

When I was in the United States over the summer, I saw how American universities are using the web to reach their existing students - and, even more importantly, how they are using the web to gain a comparative advantage in the competition for the best new students. The other day I watched a brilliantly informative lecture from Berkeley called ‘Physics for Future Presidents’ that is freely available on iTunes U. Many other Berkeley lectures are available on Google Video, as well as the university’s own website, and Stanford and MIT are following the same approach, with the latter striving to have almost its entire curriculum online for free - all 1,800 courses.

I recognise there are some difficult intellectual property issues here. Just who owns the material? Are lecture notes the property of the university or the individual lecturer? Should there be a charge for accessing the material? But, if we put the detail aside for a moment, one thing is clear. The Open University does a fantastic job but other universities are in danger of being left behind in the race for better distance learning. If Stanford does not fear free access to its materials, can others afford not to follow?

Departmental organisation

We recognise that universities are stronger when they are truly independent. We want to leave you to your own devices rather than interfering in areas where you should be the leaders. If there is any sector of public service where existing institutions are large enough and experienced enough to stand on their own two feet, then it is surely the HE sector.

I acknowledge that you like the idea of a dedicated government department that is more focussed on HE issues. But I think we all know that DIUS has not functioned as well as it could have done in its first year. Too much time has been spent on admin and too little time has been spent on the major decisions - which helps to explain the lack of consultation on ELQ.

Ironically, as the proportion of university income which comes from the taxpayer has declined, so ministers have sought to have greater decision-making power over what happens on campus. I want to assure you that a future Conservative Government will aim to approach the sector in a more grown-up manner.

So we will recognise that universities deserve to be consulted properly on their own future funding. We will aim to set out our thinking in advance before making any major changes. And we will avoid surprise announcements with lots of unintended consequences that make it hard for you to plan ahead.

But there are some real challenges that we need to work on together, and by outlining our thinking today I hope we can avoid some of the petty micromanagement that has too often determined your priorities.

Our university sector is full of wonderful, varied and diverse institutions that add enormously to our civic life. Over the past few decades, you have been transformed out of all recognition. So the centre must trust you to get on with what you do best. We want you to flourish because you are the key to dealing with all the problems that the C21st is likely to throw at us.