Statement by: Lord Mandelson Venue: House of Lords

With your Lordships’ permission I should like to make a statement about Higher Ambitions – The future of universities in a knowledge economy, which we are publishing today and placing in the House libraries.

My Lords, the last ten years have been a decade of outstanding achievement for higher education in this country. Talented people and enterprising institutions, backed by public investment and reform, have delivered the twin objectives of widening access and creating excellence.

When the Government reformed university fees, we were told that students, and especially poorer students, would be put off applying. The exact opposite has occurred. A record number of students now attend university, and the gap between socio-economic groups has narrowed, not widened.

For the first time a million people will start their studies this year. And the quality of student academic achievement is high – drop-out rates have fallen by a fifth and the number of Firsts has doubled. This demonstrates that wider opportunity isn’t the enemy of excellence, as opponents of change allege.

We have a disproportionate share of the world’s leading research universities. With just 1 per cent of the world’s population, we achieve 12 per cent of the world’s scientific citations.

Institutions across the sector have contributed to the success: the newer universities alongside the older universities.

Public funding for both research and teaching has increased by over 50 percent in real terms since 1997. Universities have developed new sources of income. And tuition fees are bringing 1.3 billion pounds a year to boost the quality of a student’s education.

We should thank universities, their teaching staffs, administrators and students for this outstanding record for these very real achievements.

My Lords, the strategy we are publishing today aims to set a course for an equally successful decade ahead. But new times and new conditions require some fresh policy choices and judgements.

The coming decade will see public expenditure inevitably more constrained. Attracting the best students and researchers will become more competitive. Above all it will be a decade when our top priority is to restore economic growth and our universities need to make an even stronger contribution to this goal.

Able people and bright ideas are the foundation stones of a thriving knowledge economy. Producing both are what good universities are all about.

So in the next ten years we will want more not fewer people in higher education, and more not less quality research.

Our first objective, therefore, is that all who have the ability to benefit, can access higher education.

There should be no artificial caps on talent. Our goal remains for at least 50 percent of 18 to 30 year olds to enter university. We have made great progress in the numbers of people beginning a three year degree at 18 or 19. But the challenge for the next decade is to offer a wider range of study opportunities – part-time, work-based, foundation degrees and studying whilst at home – to a greater range of people.

So we will encourage the expansion of routes from apprenticeships and vocational qualifications to higher education. And offer more higher education in Further Education Colleges.

Inadequate information, advice and guidance at school still bars too many young people from fulfilling their potential. We will work with the Department for Children, Schools and Families to rectify this. To meet the social mobility goals in Alan Milburn’s report, all young people must be encouraged to strive for challenging goals, by teachers with ambitious expectations for them.

Universities should also to do more to reach out to all young people with a high potential. I want to be clear that this Government will not dictate universities’ admissions procedures nor undermine excellence. All students must continue to enter higher education on merit. But I believe merit means taking account of academic attainment, aptitude and potential. Many universities are already developing their use of contextual data. And we hope that all universities will consider incorporating contextual data into their admissions processes better to assess the aptitude and potential of those from disadvantaged backgrounds.

I am also asking Sir Martin Harris, who heads the Office for Fair Access, to consult Vice-Chancellors on improving access to the most selective universities, and he will report back in the Spring.

The Government’s second objective is for universities to make a bigger contribution to economic recovery and future growth.

Knowledge generation and stewardship in all subjects has public value and are important in their own right.

They are vital in particular to creating wealth, through the commercial application of knowledge and preparing our people for employment. We have therefore decided to give greater priority than now to programmes that meet the need for high level skills, especially in key areas such as science, technology, engineering and maths. A new contestable fund will provide universities with the incentive to fulfil this priority. Areas where the supply of graduates is not meeting demand for key skills will be identified. And we will seek to re-balance this, by asking HEFCE to prioritise courses which match these skills needs.

We will look to business to be more active partners with our universities. Employers should fully engage in the funding and design of university programmes, the sponsorship of students, and offering work placements. We believe this is possible without compromising universities’ autonomy and educational mission.

Our third objective is to strengthen the research capacity of our universities, and its commercialisation.

The investment of the past decade has greatly strengthened the public science base. We will continue to protect its excellence. This will require a greater concentration of world-class research, especially in the high cost scientific disciplines. Research excellence is, of course, spread across a wide number of institutions and subjects. The challenge now is to develop new models of collaboration between universities and research institutions, so that the best researchers, wherever they are located, cooperate rather than compete for available funds.

The Government’s fourth objective is to promote quality teaching .

The quality of education provided by our universities is generally good but needs to be higher. I welcome the action universities are taking to raise standards in teaching and to strengthen the external examiner system. Students deserve nothing less. They will rightly expect to be better informed about how they will be taught, and their career prospects.

We want the Quality Assurance Agency to provide more and clearer information to students about standards in our universities. Students expectations and actual experience should be central to the quality assurance process.

Our fifth objective is to strengthen the role of universities in their communities and regions and in the wider world.

Universities provide employment, enhance cultural life and offer many amenities to their surrounding communities. They shape and communicate our shared values, including tolerance, freedom of expression and civic engagement. We will support universities in safeguarding these values.

We will ask universities to continue developing their role in local economic development with the Regional Development Agencies and with business.

The Government will also do more to champion the international standing of our universities as world leaders in the growing market for higher education across borders and continents, including by e-learning.

My Lords, in the decade ahead we will expect more from our universities than ever before. They will need to use their resources more effectively, reach out to a wider range of potential students and devise new income sources, whilst maintaining excellence.

And as we look to our universities to do more, we will also need to look afresh at securing the funding that excellence requires and how all who benefit from higher education – taxpayers, students, and the private sector – should contribute. It was agreed in 2004 that the new fees structure in England should be reviewed at this stage, and the Government will make an announcement about this shortly. But I should stress that we will seek a properly and fairly balanced approach, without placing an unreasonable or counter-productive burden on any single source of funding.

My Lords, at the heart of the framework published today is a strong and creative vision of higher education.

• About strong, autonomous institutions with diverse missions, and a common commitment to excellence.
• About a shared framework for extending opportunity to all who can benefit.
• About our universities as a cornerstone of our country’s cultural and social vitality and our future economic prosperity.

I commend this statement to the House.