"Over the next three months I want to be challenged by vigorous debate… At the heart of the review remains the question I set a year ago. ‘How can our HE system remain world class 10-15 years from now?"
One Whitehall Place, London
24 February 2009
Good morning.
Last week we heard the sad news that Ron Dearing passed away. Ron’s hugely important 1998 report casts a long shadow. It established higher education as multi-faceted sector central to society and the economy. His legacy will be his wise advice that higher education is a key area of policy and that it needs appropriate levels of investment. Advice that has supported the sector to achieved its world class status over the last ten years.
Now this summer I will publish a new framework for higher education. That’s a promise which the Vice Chancellor of Central Lancashire has said ‘made what is left of the hair on my head stand on end’.
The framework will provide the backdrop to the independent review of fees promised to Parliament in 2004. Then Parliament – at that time- managed to agree a fees and grants policy without being wholly clear about what it wanted to fund or why.
The fact that variable fees have been seen, broadly, to work since is a tribute to English pragmatism. But many would prefer greater certainty for the future.
This time I hope we can look at higher education funding against a broadly agreed vision of the future role of Higher Education. I started a debate on that theme last year. And the reason for today’s speech and conference is to share some emerging conclusions.
I have drawn extensively on contributions to the review which have been commissioned or volunteered over the past year. And on the wider and healthy discussion about our university and higher education system that has followed. I apologise to the people who I asked to think about these issues – though not to today’s audience – for not detailing every source and reference today.
But it’s perhaps most accurate to give my remarks the status of ‘I am minded to conclude’.
They reflect the way the debate seems to be moving but are not set in stone. And over the next three months I want to be challenged by vigorous debate. I plan to draw conclusions in time to publish our framework in the Summer.
So as David (Lammy) has said, the next few months are particularly important. At the heart of the review remains the question I set a year ago. ‘How can our HE system remain world class 10-15 years from now?’
We have a world class system of higher education in this country, with rising student numbers – 22% more than in 1997. High levels of student satisfaction and graduate employability – the recent NUS student experience survey shows that 85% of students rate the quality of their teaching and learning as good or excellent and 71% feel that their studies have improved their career prospects. The UK is second in the world in research, with 12% of all citations despite having only 1% of the world’s population. We are the most productive research nation in the G8, measured by citations per researcher.
Those are sound measures of success. But all are challenged.
Other countries are increasing their investment in research, making it harder for us to keep such a disproportionate share of the world’s best research. The market for international students will grow, but will become ever more competitive. Even our in-built advantage in the English language is being eroded by foreign institutions teaching in English.
In some areas we have not historically been world leaders: in the translation of research into new products and services, or the effective exploitation of intellectual property. Or in the quality and depth of collaboration between universities and public and private sector employers.
These are all areas which have seen real and sustained improvements in recent years. But we will need to go further before we can say we are amongst the best, and even further to stay ahead of other countries.
We are seen as innovators in higher education. 40 years ago the Labour Government established the Open University setting the standard for distance learning. And today, I believe we have a chance to become the global leader in global online learning.
We have a proud record for the quality of our teaching. The very concept of a ‘British degree’ means, around the world, something about the style of its teaching and the quality of assessment as well as the knowledge learned. It is a hard won reputation, but one that could easily be lost - so it needs to be carefully nurtured.
In a competitive world, one of our great strengths – and sources of real advantage – is in the quality of collaboration and cooperation on research and on teaching between our universities and those around the world.
It is in all of these areas, not just a few, that we will find ourselves measured against the best in the world.
Of course, it is possible to want to be the best in many things – like, say, the Eurovision Song Contest – without thinking that they really matter.
But higher education does matter. In all its manifestations, it is now more critical to the success of societies like ours than it has ever been. And success is more critical to our future prosperity, well-being, and ability to tackle the great global challenges than ever before.
Higher education is a huge strategic asset. In purely financial terms, the sector contributes at least £45bn to the UK economy. The countries which fail to invest in HE will fall behind as global demand for HE continues to rise quickly.
By attracting talent and research to the UK, universities also attract additional investment from large companies.
Universities and colleges themselves are successful businesses locally and globally and are often large employers. They generate wealth by taking projects from an idea through to creating successful spin-out companies. They are working globally, in collaborative research, in marketing and promoting UK education. Indeed, other sectors might learn from the success of higher education as a business.
Money isn’t everything, but to some extent a society will get what it pays for. And I think it is pretty clear that, as a society, we will need to put more of our national resources into higher education.
The recent paper on financial sustainability prepared for the funding council illustrates the damage done in the past through underinvestment; and the progress we’ve made. But it underlines the fact that financial issues are going to be critical in meeting our ambitions in the next 10 – 15 years.
Public finance is obviously important. It is now around 24% higher in real terms than in 1997. In Britain, public spending on higher education as a proportion of GDP is twice that of both Korea and Japan, higher than that of Germany and Australia, and only just below that of the USA.
But most HE systems attract both public and private finance. Measured in this way, we put less of our national resources into HE than some key competitors.
Of course, we are currently in challenging times. As some of you may realise, I am not the kind of Minister to try to bounce the Chancellor into a spending commitment, so don’t read too much into my remarks about immediate public spending plans. But over a 10-15 year period we as a society will need to find ways of increasing the real levels of investment in HE. I think your long-term plans should be based on investment and growth because that is what the country will need.
But don’t take it for granted. If we want to persuade our society to invest in higher education, (whether through taxes, or donations, or fees, or business investment – people have different views on that), then together, we will need to make a compelling argument that extra investment was well spent in the past and will be in the future.
Universities and colleges are critical for the future, but they cannot expect the funds they want as of right.
No one should believe for one moment that the sustained investment in higher education of the past ten years can be taken for granted.
In return for increased investment, public or private, wider society will demand that higher education meets the personal, educational and training needs of individuals and of our economy. But employers and students will certainly become more discerning, more demanding and more willing to exercise choice.
A distinguished higher education audience like this one does not need persuading that more resource is needed, but we have not yet fully won that argument. The initial resistance to variable fees has waned somewhat, and their introduction has not had the dire consequences some predicted. But we have yet to establish a popular culture which accepts investment in higher education as a personal good underpinned by high and privileged levels of public investment.
So to justify and win support for higher investment, we will need to transform the relationship between academia and government to ensure the most effective interchange between research and public policy.
And responses to the review from outside the sector are pretty consistent in the priorities they set for change.
The Higher Education system needs to play a fuller and more organised role in meeting the national needs for strategic skills. In developing our national competitive strengths we have to ensure that the labour market has the right people with the right skills at the right time.
At DIUS we have seen for some time that individual learner demand or employer demand alone is not sufficient to shape the education and training system, to deliver the necessary numbers of people with the right qualifications. Their individual influence is too weak to shape the system.
Rightly no one has called for a return to strict central planning, so we will need to find other ways of Higher Education responding to these strategic needs.
This will mean intensifying employer engagement with the design, development and delivery of courses, and expanding work-related or work-based study. There are many excellent examples of employers working with HE to support workforce development, notably on Foundation Degrees, and the recent ‘Stepping Higher’ report from UUK and the CBI illustrated how responsive the sector can be.
Universities are working harder than before with businesses and their communities. Last year UK HEIs received £2.64 billion for all types of interaction – a 17% rise from the year before. But given the sheer amount of training by business across all levels that HE could compete for – perhaps £5.5 billion – the scope for more such collaborative HE activity remains huge.
In response to the downturn, many universities are developing more flexible opportunities to re-skill and retrain, with further initiatives to be supported by HEFCE’s Economic Challenges Investment Fund. And it will be interesting to see which of these flexible initiatives become permanent parts of the system when the upturn comes.
We have seen a major expansion of Higher Education over the past decade, with 349,000 additional students enrolled now than in 1997. The range of courses and patterns of learning has become ever more diverse.
Despite this, it is not clear that our publicly funded degrees offer the range and balance of qualifications which students and the wider economy require. Increasing numbers of young and older people will reach the threshold of university education through almost exclusively vocational routes. It’s fair to ask whether these students have sufficient chance to gain higher levels of skills and qualifications in our education system. If not, then higher education will need to meet these needs in future.
That fact that I do not believe that all institutions will meet this need in equal proportion does not mean that I am calling, as you may have read, for the re-establishment of the polytechnic divide.
Any emphasis on employability and economic relevance worries some in higher education, who fear the loss of liberal education, and with it personal enrichment, enlightenment and development. But how real is this fear? Look at what Marjorie Scardino defined as the employer need from HE:
"Universities should and do teach specific skills and trades, be it molecular physics or computer systems. But the overarching purpose of a university is to teach students to be excited by ideas, and to develop the skills of observation and critical thinking to enable them to develop new skills, fresh knowledge and sound judgement throughout their lives, by themselves and for their own sakes."
Surely that is as robust a defence of a liberal education as one could wish to see.
The future higher education system will need to ensure greater diversity of methods of study, as well as of qualifications. Long-term trends suggest that part-time study will continue to rise, and it’s difficult to see how we can increase the supply of graduates as we must without an increase in part-time study.
But we will surely need to move decisively away from the assumption that a part-time degree is simply a full time degree done in bits. I don’t have any doubt that the degree will remain the core outcome. But the trend to more flexible ways of learning will bring irresistible pressures for the development of credits which carry value in their own right, for the acceptance of credits by other institutions, and for the ability to complete a degree through study at more than one institution.
In other words, higher education itself will develop a more flexible and adaptable range of qualifications, meeting changing needs. Some learners want these kinds of flexibility, some want more concentrated, traditional full-time study in a single institution. The system needs to value and support this kind of diversity.
Learners will also become more demanding of support and on the quality of education. They will have a wide choice of ways of studying both at home and abroad. Institutions and the higher education system will need to be sure that both quality assurance systems and the information provided for students are capable of meeting this demand. The resources we need must be for quality as well as for expansion.
Over the next ten years, we will need to establish the higher levels of participation we have aimed for since 1999. We have made good and steady progress, which I’m confident will continue in the years to come with the measures now in place or coming into place.
At the moment, the demographic boom runs ahead of us - we are expanding university places faster than we can increase the percentage of those going to university. But in the quite near future, the trend will go into reverse. Achieving 50% of participation by young people will not only become more attainable; it will also become necessary if universities are not to shrink in size and if we are to meet the demand for graduate skills.
Once we have higher levels of participation it will be as hard to reduce them as it would be to cut our current levels of participation today.
And, in terms of who goes to university, while the arithmetical majority of widening participation may take place in the more recent universities – as it has to date – the more research intensive universities must address fair access effectively, or their student population will remain skewed. Failing to attract the best talent from all parts of our society is bad for those institutions and bad for the students who miss out on studying there. The recent commitment by many selective universities to make new efforts to seek out and nurture talent are particularly significant and welcome.
Now, as you will have noticed, up until this point I have talked almost entirely about undergraduate education. For a long time, government tended to equate undergraduate policy with higher education policy.
The formation of DIUS has helped us see universities and colleges as integrated institutions and inevitably, the review has highlighted issues which have not been tackled coherently in the past. And it has been brought home that we lack clear public policy in taught and research postgraduate studies.
I don’t believe in making policy for policy’s sake. The expansion of taught masters courses for both home and overseas students has been one of the great recent success stories of the sector. It has developed without any discernable government intervention other than keeping the broader environment attractive to overseas students.
But as taught masters increasingly become an additional pre-employment qualification, there is concern that the gap we are closing as we widen participation for first degrees may open again if the best employment is only open to those who can fund their MSC or MA. And students are now raising the same concerns about information, quality and value for money that they once raised about their undergraduate degrees.
In postgraduate research the challenges are even more pressing. Our universities must not only be able to attract the world’s best postgraduate researchers but also ensure that research careers are attractive and attainable for a substantial number of home students. Funding can be ad hoc and un-strategic, and it is not clear where responsibility lies.
The HE framework will not provide answers to all these issues but it will set out how we move forward. It should give us, for the first time, the way to a clear strategy on postgraduate research, shared across HEFCE and the Research Councils, aimed at ensuring the adequacy of British research numbers and the attraction of the world’s best students and the appropriate spread and concentration of effort.
The volume of research submitted at the most recent RAE has increased by 12% from 2001. And this exercise identified the anticipated wider range of excellence. In the recent funding letter to HEFCE, we set out our current priorities for research funding. My sense is – and I might find out later today - that the sector anticipates a fair settlement all round. But over a longer period of time, we will need to be clear about how we expect investment in research to evolve.
Should the HE system expect a gradual dilution of research concentration as more and more institutions demonstrate, as many have done recently, that they can nurture pockets and pools of excellence?
While recognising and celebrating the real achievements of everyone who has achieved world or international class research, I have expressed the view that the current levels of research concentration are about right. (I have never incidentally, expressed the view – to a friend or anyone else, whatever you heard – that we should be seeking to concentrate on just four or five institutions).
World research leadership in the future is going to require excellence across a range of disciplines and the capacity to offer the complex research required by complex problems. We need institutions which can support the critical mass of leading researchers, and expensive facilities, which in turn can attract the very best amongst the global research and business community.
I think we should firmly reject any idea of creating an artificial, strict separation between research institutions and non-research institutions. Quite the opposite. So, in parallel with sustaining research intensity, we need to explore collaboration arrangements to link institutions. And we, together with RDAs, will need to find more explicit ways of acknowledging and nurturing the vital regional research and knowledge transfer roles of many universities.
Last week, at the Royal Academy of Engineering, I described the long term relationship between our research base and the UK’s economic future. I did reject the idea that we should cut fundamental research to provide extra support for applied research. We should however be far more conscious of the links between research funding decisions and the long term national economic interest. I won’t repeat all those arguments today but they will of course have implications – largely positive - for the organisation and funding of research in universities.
It is tempting to rest easy with our position – second in the world on research excellence and widely respected. But changes around the world threaten that position – we are all well aware of the massive investment in China. The United States and our largest European partners have already announced major increases in research funding as part of their economic stimulus packages. At last week’s meeting I heard a number of calls for a greater sense of purpose and more focus in the distribution of research funding.
It is clear that our investment in fundamental research has a direct impact on the quality and supply of the highly skilled researchers who attract mobile R and D investment to this country from some of the world’s best companies.
In turn, our universities will increasingly seek a global presence, Gordon Brown and Tony Blair before him have given strong personal support to the overseas work of our universities. Higher education is now one of the most visible, tangible and important expressions of our country around the world. This importance will grow further in the coming years, in particular, as a positive expression of our values and ways of working, and of our contribution to tackling great global challenges.
Now it is striking how many of the challenges of the next few years centre on the partnerships and relationships between universities themselves, and between universities and other bodies. The development of credits and flexible courses demands developed relationships between institutions with different missions.
We need further development of these links. Research collaboration will grow and knowledge transfer will become more important as universities and funding bodies drive up the economic impact of their investments across the full range of disciplines – including humanities and social sciences. Both efficiency and effectiveness will add pressure for shared common and specialist services.
This isn’t incidentally a one-way responsibility. Several review contributions argued that the wider society needed to be better at understanding what universities have to offer. Employers and business in particular need to be better informed, not just more demanding.
John Griffith-Jones states in his contribution that employers in turn need to articulate both what they want from HE, and what they are, and are not, willing to fund. And John Chisholm argues that companies who stand to gain from scientific developments in universities should seek to understand and work with researchers to support that transition.
An effective presence in global higher education will require the development of stronger partnerships - between institutions here and with other international institutions, both bilateral and multi-lateral. And the sheer scale of the finance involved will encourage partnerships with private organisations, whether these provide education itself or support the infrastructure. So we need to ensure those partnerships are on our terms and serve our educational interests.
I have already mentioned the importance of understanding the whole contribution of universities. Universities and other HE institutions are highly valued for the whole package of opportunity, teaching, research, knowledge transfer, cultural enhancement, economic development and regeneration. It’s significant that the bids for new university centres are backed as strongly by local authorities and regional development agencies as by educational institutions. Government policy needs to be joined up across these various roles, and, universities will need to explicitly recognise their wider responsibilities to local, regional, national and international communities.
But the multiple pressures to work together in new ways is bound to raise the question of whether our current pattern of institutional arrangements will look the same in fifteen years time as they do today. Will it be the same number of institutions in the same places? Will developing collaborations meet the challenge or will they be a step towards further reorganisation?
Which brings me directly to the crucial question which must now be at the heart of the HE debate, and which will be crucial in setting out the future framework for Higher Education.
If we can develop a common vision of Higher Education in the future - how do we bring it about?
Because the strength of current system, and a prime reason why we can call it world class, lies in the autonomy of the universities and colleges themselves.
A state imposed ‘plan for the universities’ would threaten the very thing we need to nurture, which is leadership within universities themselves. That is why I have today so clearly rejected the idea of central determination of the mission of either individual or groups of universities.
Government should not attempt to run individual institutions, yet it does need to have a reasonable assurance that, overall, the higher educational system offers our society the very diverse range of functions and provision which I have described.
The challenge is of ensuring that the national interest can be maintained within a largely autonomous system of self-interested institutions with diverse missions.
At times, government or national challenges will ask universities to respond to short-term issues in the recent response to the downturn.
But, in general, the strategic development of universities needs to unfold over time. The sector needs some consistency of framework and incentives, not necessarily fixed rigidly but one which itself evolves over time without sharp discontinuities.
And I think in developing the future framework, we should concentrate on the ways in which Government finances Higher Education, and the crucial role played by Funding Council, the REF and the Research Councils, send consistent broad financial signals to institutions. We will need to ensure that desired activities are supported. And that we do not have financial incentives which work against the national outcomes we wish to see.
Not everything can be determined by the financial framework of course and regulation of activity or process will play a part, I’m sure.
The independent commission will, of course, look at fees policy. We have already said it will need to look at part-time as well as full time students in an increasing flexible system.
But any conclusions it reaches must be set against the broader financial framework for universities. The way we pay for university, and the way institutions generate income, must help us retain the world class status we all desire.
I will not break my self-denying ordinance of not discussing fees policy before the HE debate is complete. But perhaps I would say that anyone who thinks that the question is simply one of whether fees go up and ,if so, by how much, may not have grasped the complexities of these issues.
