Secretary of State
for Business, Vince Cable, today said that the Government endorsed
the key points from Lord Browne’s recommendations for the future
funding of Higher Education.
In a statement to the House of Commons, Mr Cable said:
1. With permission Mr Speaker, I would like to make a statement
on the future funding of higher education and student finance, in
the light of the report published today of Lord Browne’s
independent inquiry.
2. Lord Browne was asked to undertake his review in November last
year. The review was set up by Labour on a cross-party basis, and
that is how we want to proceed.
3. I and my colleague the Rt Hon Member for Havant want to thank
Lord Browne and his Review Panel. The Government endorses the main
thrust of the report. But we are open to suggestions from inside
and outside the House over the next few weeks before making
specific recommendations to Parliament, with a view to
implementing the changes for students entering higher education in
Autumn 2012. More detail will be contained in next week’s Spending
Review on the funding implications. But as a strategic direction
the Government believes the report is on the right lines.
4. Browne acknowledges that “the current funding and finance
systems for higher education are unsustainable and need urgent
reform”. The issue is how. And that question has to be framed in
terms of how the higher education sector contributes to the
deficit reduction programme.
5. There is also, I think, consensus around the idea that there
should be no upfront tuition fees for students. That would
seriously deter students from low and middle income families. This
Government is strongly opposed to upfront tuition fees. Indeed it
shares Lord Browne’s conclusion that we should extend exemption
from upfront tuition fees to part-time students, currently 40% of
the student population, who have been unfairly discriminated
against hitherto.
6. The question, then, is how much the graduate contributions for
tuition should be.
7. We are considering a level of £7,000. Many universities and
colleges may well decide to charge less than that, since there is
clearly scope for greater efficiency and innovation in the way
universities operate. Two year ordinary degrees are one approach.
Exceptionally, Lord Browne suggests there should be circumstances
under which universities can price their courses above this point.
But, he suggests, this would be conditional on demonstrating that
funds would be invested in securing a good social mix with fair
access for students with less privileged backgrounds, and in
raising the quality of teaching and learning. We will consider
this carefully.
8. We believe it is essential that if the graduate contribution
is to rise it should be linked to graduates’ ability to pay. On
average, graduates earn comfortably more than £100,000 over their
lifetimes compared with non graduates. But not all graduates
benefit in this way. Some choose socially useful but modestly paid
or unpaid work which may include time spent bringing up a family.
At present the graduate contribution acts like a poll tax, and is
not fair.
9. Lord Browne has come up with persuasive proposals to deal with
this issue. He suggests a £21,000 graduate income threshold before
any payment is made, as against £15,000 at present, and to be
linked to average earnings. And he suggests that a real rate of
interest should be paid but only over that threshold. The effect
is striking: 20% of graduates could pay less than they do now. The
top third of graduate earners would pay more than twice as much as
the lowest third. That is fair and progressive: the Government
broadly endorses this approach and will examine the details of
implementation. The principle of needs blind admission to
universities must remain central.
10. The cost of university education to individuals and the state
reflects living costs as well as tuition costs. The Browne Report
makes some constructive suggestions. We shall come forward with
detailed proposals which will make it attractive for students from
families of modest means to go to university and will be fair and
affordable including exempting the poorest students from graduate
contributions for some (or all) of their studies.
11. Lord Browne considered alternatives, including a graduate
tax. There are some key features in the current proposal for
progressive graduate contributions which incorporate the best
features of a graduate tax. It would be collected through the pay
packet at a rate of 9p in the pound above the £21,000 threshold;
combined with a real interest rate as Browne recommends, it would
be progressive and related to ability to pay.
12. But Browne identifies serious problems with a ‘pure’ graduate
tax. The proposal is unworkable; [does not produce sufficient
revenue to finance higher education until 30 years from now;
weakens university independence; and is unfair to British
graduates as opposed to graduates living overseas.]
13. I do believe, moreover, that we need to look beyond the
graduate population. 55% of young people do not go to University.
We must not perpetuate the idea encouraged by the pursuit of a
misguided 50% participation target, that the only valued option
for an 18 year old is a three year academic course at a
University. An Apprenticeship can be just as valuable as a degree,
if not more.
14. Finally, there is a challenge to all of us to promote a long
term sustainable future for higher education.
15. But in this current economic climate that policy is simply no
longer feasible. That is why I intend on behalf of the coalition
to put specific proposals to the House to implement radical and
progressive reforms to HE based on the Browne report.
Notes to Editors
1. The Independent Review of Higher Education Funding and Student
Finance was launched on the 9th November 2009. It fulfils a
commitment made during the Commons stages of the Higher Education
Act 2004 to review the operation of variable tuition fees after
these had been in force for three years. The Review was
established on a cross-party basis, following consultation on
appointments and its terms of reference.
2. The review was chaired Lord Browne of Madingley. The other
members of the Review Group are Sir Michael Barber, Diana Coyle,
Professor David Eastwood, Julia King, Peter Sands and Rajay Naik.
Members’ biographies are available at: http://hereview.independent.gov.uk/hereview/members-biographies/
3. Terms of reference for the Review are available at: http://hereview.independent.gov.uk/hereview/written-ministerial-statement/.
The Review called for two rounds of evidence (in December/January
and March/May) and held public hearings in London, Manchester,
Bristol and Leicester. An Advisory Forum was also established to
enable groups that represent all those with an interest in higher
education the opportunity for formal, structured engagement with
the Review’s work.
Published evidence is available to view at: http://hereview.independent.gov.uk/hereview/2010/03/submissions-to-the-first-call-for-evidence/
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