David Willetts

Let me start by offering my congratulations on your valuable new report. It is a very useful statement of the current barriers limiting universities and business partnership as well as the potential for working more closely together in the future. The report is a useful contribution at a useful moment.The media focussed almost exclusively on your discussion of the number of students: you were seen as suggesting a moratorium on more students. There has been a belief that British employers need more university graduates, so I was surprised by the apparent shift in CBI approach. We need to know how radical a shift in direction this represents. You identify a trade-off between quantity and quality and suggest it may require the sacrifice of some quantity. I would like to start with my response to this.

First, my party has never believed in artificial targets like 50% of young people going to university - and the neatness of this target suggests it did not emerge from careful analysis of the aspirations of young people or the needs of the British economy. I prefer the Robbins principle that ‘courses of higher education should be available to all those who are qualified by ability and attainment to pursue them and who wish to do so.’

And, since Robbins formulated that principle in 1963, both in Britain and across the Western world, more young people are going to university. It is not some eccentric English experiment - it is an OECD phenomenon. According to the latest figures, despite modest growth in student numbers, we slipped from 3rd to 14th in the OECD league table for university graduation between 2000 and 2007. Ahead of us are Australia, Holland and Japan. And my own Party presided over such expansions in the past here - between 1979 and 1997, the number of full-time home undergraduates in higher education grew two-and-a-half times, from 375,000 to 900,000. Growth arises partly because more graduates are needed for a successful modern economy and partly because, as we become more affluent, people wish to consume more of it. So it is partly a contribution to prosperity and partly the fruit of prosperity. And well educated young people out of university are of course not just producers but also informed consumers - that itself contributes to raising economic performance.

I do not believe young people are systematically mistaken when they apply to university in ever increasing numbers. They understand the reality of graduate-only recruitment - I suspect quite a few CBI members have such recruitment practices. One survey referred to in a Cabinet office paper for the Milburn Enquiry showed only one in four of The Times ‘Top 100 Employers’ accepts non-graduate entry routes.
It is also aspirational: going to university means better health and higher levels of happiness. There is even evidence to suggest graduates are more likely to sustain a marriage. And it is a route to adulthood for many people, even a route into the middle class.

In many respects, higher education carries out the role of apprenticeships in the past. You used to leave home to live with the master whose trade you were learning. Now leaving home is often part of going to university but much less associated with apprenticeships. In fact, I have been impressed by the remaining residential apprenticeships I have visited - such as Network Rail’s scheme run by VT at Gosport - and I hope to visit the construction industry’s residential apprenticeships scheme in Norfolk. I would be interested in your thoughts about how residential apprenticeships might expand. I suspect they could be a better alternative to the university route for some people, as they offer some of the same experience of a route to independence.

So there are quite deep reasons why we have this trend for more young people going to university. They do a range of courses. But with limited information we cannot be sure they are all worthwhile. One major anxiety is the problem of so-called Mickey-Mouse courses. This term was term popularised by Margaret Hodge in 2003 when she said: ‘Simply stacking up numbers on Mickey Mouse courses is not acceptable.’

People complain about Mickey Mouse courses without always explaining what they mean. Often, it is used to refer to vocational courses - presumably on the grounds that these are not for university and are what the old polytechnics were for. But universities have always excelled in vocational training, like Law and Medicine. And, today, most advanced countries use the term university to cover a range of different types of institution. That includes universities focussing on vocational courses. We have a long history of agonising over this. The Victorians worried whether Law was a university course. When Birmingham University was set up by Joe Chamberlain just over a century ago, he proudly included brewing and mining among the courses. And my grandfather remembers being taken to the opening ceremony by his father who was a glazier who put the glass in the main window. Chamberlain wanted the craftsmen who had made it to be at the opening. I recently encouraged the Sunday Times to look into some of these so-called Mickey Mouse courses. Their magazine in September showed some really successful and popular examples, such as computer game design at Derby, brewing-and-distilling at Heriot-Watt and golf course management at Birmingham. It showed how valuable such courses can be. It is wrong to describe courses like this as Mickey Mouse. In reality, when employers are involved and a trade or professional body is certifying a course, then this is one of the best guarantees of more rigour. That is actually very useful. If anything the risk is greater with some of the less vocational, more academic courses - especially those which do not have a tradition or a recognised canon behind them. Now, two-thirds of university students are doing a course which is essentially a licence to practice a skill or profession.

Let me set out my case so far - we are pro the Robbins principle of university expansion where it enables more people of the right aptitude and temperament to study at a higher level. And we are pro vocational courses, including those run by universities, because they often are rigorous and reflect the needs of our modern economy. And part of the challenge which you rightly set in the CBI report is to look at how you can raise employability skills across higher education. But, of course, I also recognise the value of studying subjects for their own worth and recognise the value of scholarship. Higher education is not simply utilitarian - academic subjects have a value of their own.

And we are also in favour of providing new opportunities for more students to go to university. There is a particularly strong case for this at the moment when young people are finding it so hard to get a job. The argument was set out most forcefully by Professor Blanchflower and Professor Bell in their powerful paper earlier this year entitled: ‘What should be done about rising unemployment in the UK?’. The lack of alternative job opportunities and the mini baby-boom of the early 1990s together explain the big surge in suitably-qualified applicants for university this year. But, unfortunately, 140,000 applicants were unable to find a place this year, 30,000 more than last year. And it could be even worse next year. So we need once-off emergency measures to tackle this crisis - I cannot believe these young people at bottom of a recession should just be told to go on dole when they are freely applying to study to go to university and many of them have the necessary qualifications.

So we have specifically proposed 10,000 extra places in 2010 to help avoid a repeat of the crisis of 2009, financed by incentivising the early repayment of outstanding student loans. As part of our Get Britain Working package we will also provide more further education colleges places, more apprenticeship places and a new work-pairing scheme.

Something very important is still missing from all this. We need much better information for prospective students to inform their choices. The lifetime return from higher education of £160,000, cited in the CBI report, is an average. We need information that is much more granular and real. Currently, we have a model of access to university which is based on free choices by young people who are increasingly seen as consumers and who are certainly having to incur costs - and large debts. But we are expecting them to make important choices about courses and institutions without enabling them to be as well informed as they could be. That is why my party is working with education researchers, philanthropists, experts - such as John Green of Imperial - and Microsoft to pilot a website with far more information about returns to particular courses at particular types of university.

We already collect quite a lot of data about, for example, employment after 6 months and after 3 years, but it is not currently available in a detailed or usable form that is easily accessible for potential students. This has to change. I know it is imperfect and there is more to university than employability. But releasing the information and then bringing out its implications and flaws is better than secrecy. I am also interested in using the power of social networking so that existing students can share their knowledge much more effectively with prospective students. And that can include judgements on the quality of teaching, with of course suitable protections from the bullying of academics. It can also include much more explicit agreements between students and universities about their mutual rights and responsibilities. The University of Central Lancashire has one very good example.

All this information can improve social mobility because it makes knowledge which is currently available on a very informal basis more widely accessible. The Government’s own student juries said ‘the lack of adequate information, advice and guidance (IAG) before going to university was the most prevalent issue, closely followed by IAG while studying or preparing to leave.’ Our information will reveal that universities differ - and courses differ. It should reveal some hidden and under-valued gems. And it should be good for STEM. It will reveal other evidence too. For example, how the police have become increasingly graduate in intake. Even at sergeant or below, one in five police officers has a degree. About 6% of them have degrees in sports science and about 5% have degrees in criminal law. At inspector level or above, more than a third of police officers have degrees (37%) and of these 40% have degrees in criminal law. Male psychology graduates earn nearly 20% more than male arts graduates. Women with sociology degrees still earn about 7% more than those with arts degrees. If there is one key observation, it is that anything with Maths in it transforms your life chances.

So instead of artificial targets we want better informed choices by prospective students. That must include better information about alternatives to going to university - such as the excellent vocational training you can get on an apprenticeship. And we very much regret the dilution of the concept of apprenticeship so it has been extended beyond A level equivalent to include GCSE level 2 equivalent as well. There is a real need for more pre apprenticeship level 2 training but it does not help redefining it as apprenticeships just to make the figures seem larger. Nobody has proposed renaming GCSEs as A levels. If we have avoided such confusion in our academic qualifications we should also do so with our vocational training route. Coming from a family steeped in the skilled crafts and trades of Birmingham I am keen to enhance the status of apprenticeships.

CBI members have some excellent and fantastic apprenticeships, such as Sam Laidlaw’s at Centrica. But as I study the age old British debate about the status of vocational as against academic education. It appears that one reason for the lower prestige attached to vocational qualifications is the absence of progression onward to higher qualification if that is what the individual is capable of. So paradoxically one way to enhance apprenticeships is to make it easier for apprentices to go on to higher education if that’s what they want to do. That is what some firms already pride themselves on. I think of the excellent programme at BT of which Sir Michael Rake is rightly proud, where some of the apprentices go on to do electrical engineering at university. That is an excellent alternative route to university which we wish to see expand. It is why we have diverted some of the money in Train to Gain to pay for Apprentice scholarships at university. It is also why I have called on UCAS to give greater prominence to information about the points awarded to apprenticeships in their application form. And again this is another way of improving social mobility and broadening access to university.

The valuable CBI report explicitly raises the trade off between quality versus quantity. You vote for quality. I realise that there are people in the university sector who are still sore about the expansion which occurred when my party was in office which was associated with a big fall in the unit of resource per student. It is one reason why our emergency package of extra places for next year was deliberately put in at full public spending cost of £10,000 per student rather than trying to get more places more cheaply which seemed to be the Government’s approach this year. So I do understand that quality matters and comes at a cost. But as we look further ahead there has to be a much more open debate about the productivity of our universities. After all universities in general say that despite the fall in the unit of resource over the past two decades the student experience has not declined.

One obvious issue is to what extent the development of IT is going to transform higher education. Eighteen months ago I urged universities at their annual conference to look to iTunes U and it really is now beginning to have an impact. And there is the continuing and crucial role of the Open University which may make another powerful step forward under its new Vice Chancellor, Martin Bean, who comes from Microsoft. There are educationalists who tell me that learning may take a different pattern in future with students first coming to a topic with some e-learning and then going to academics with questions about what they have been studying. I am not an educationalist and it is absolutely not for government to prescribe on these things. But we need to look at how IT could change patterns of learning. One way this issue might be confronted is by moving to a greater diversity of universities in the future. Certainly BPP will argue that they have harnessed IT in the way they teach law and accountancy. And we must not let regulations on for example need for physical libraries even for subjects where all the material is now on line to stand in their way.

We also need to look to a new deal for part-time students. Here I must pick you up on a statement in your report, which claims that all students have access to tuition and maintenance loans. This is not true for part-time students. The deal they receive is very different from full-time students. Many of them are people in work trying to change the direction of their lives - a society where your future is not determined at the age of eighteen is far more mobile. I have been struck by the number of universities that see their mature and part time students as offering a far wider social mix. This is another issue to be attacked. I have been struck by the inability of part-time students to access fair funding for teaching and maintenance. A recent Policy Exchange report by Professor Claire Callender of Birkbeck rightly described this as ‘One of the greatest and most glossed-over injustices in the English higher education system’. And that’s why we think part-time support should be considered in the student finance review.

I have been trying to set out some of the range of issues the higher education funding review is going to have to look at. In the past, some Vice Chancellors have suggested to me that the review would need take about ten minutes to set a new higher fee cap. But it is not like that. There is a much wider agenda here for change and challenge in higher education and it does need to be looked at properly. Any rebalancing of financial support between businesses, students and their families, philanthropy and exchequer could only be done as part of a wider set of reforms in higher education. As Lord Mandelson himself said earlier today, both further and higher education will be subject to ‘increasingly tight fiscal constraint for the foreseeable future’.

Above all that must include the student experience - what exactly are students getting for the fees they now pay let alone for the higher fees some advocate. If I may say so, one group whose voice was not heard loudly enough in the CBI report was students and their parents. This may be one reason why the main burden of adjustment to a new tougher world seemed to be borne by them. But they are concerned about the educational experience at university. When I visit students unions now, I do not find they want to forment Marxist revolution in some far-flung corner of the world - they instead talk about how long it takes to get their work back with proper academic feedback, or they talk about how crowded the seminars are, or about the difficulty of actually meeting the high profile professor who was prominent in the university prospectus but does not seem to be available to undergraduates on campus.

This is the territory which the Select Committee strayed into and to which the Government has published its response this morning. Some of the Select Committee’s report was too clumsy and too negative. We must never lose sight of the sheer excellence of what goes on in many universities. But universities need to recognise that the quality of the educational experience for students is now a real issue. Raising this cannot simply be dismissed as jeopardising the export drive to win more overseas students for British universities. There has to a real engagement with these issues.

The problem is not the fault of universities. If anything it arises from the decisions of successive governments which have designed sharp and effective rewards and incentives for research but nothing comparable for teaching. I do not want to see clunky initiatives like an OFSTED for universities. But enhancing the quality of the academic experience for students must be the focus of everything from harnessing new technology to new systems of reward and promotion on campus. Without it there would be no public support for the financial changes universities press upon us.

These are just some of the wide range of issues which the higher education funding review must focus on. The CBI’s excellent report was a useful prelude to it. Now the time has come for the review to begin. I very much hope it can be done on a cross party basis. We stand ready to play our part.