‘An unenviable inheritance and a challenging start?’ – HEPI Director’s speech on higher education past and present

This speech looking back at the last 14 years of higher education policy and forward to what might come next was delivered yesterday by HEPI Director, Nick Hillman, to staff at the Open University.

Introduction

It is great to be back here at the Open University (OU). As I live in Buckinghamshire, the OU is one my local universities. I have visited this campus many times before and it is always a huge pleasure to return – even if, in what I suspect may be music to Rachel Reeves’s ears, you may soon be vacating this site and letting it be used for other purposes.

The OU hosted my first institutional visit when I started working on higher education policy back in 2007. The topic then was the Gordon Brown Government’s imposition of the Equivalent and Lower Qualifications rule (known as ELQ). This removed people’s right to funding for reskilling and hit the OU especially hard, while prompting the start of a long-term decline in part-time learning. So it was good to see the reversal of ELQ announced as one of the later measures of the outgoing administration – and I hope the new team in charge will see this policy through.

I know you are already familiar with HEPI’s work, our reports, blogs and events. But it might be worthwhile briefly reminding you of some of the output we have completed together with the OU over the years, not least because it remains all too relevant today.

• Almost a decade ago, we jointly produced an essay collection called It’s the finance, stupid! The decline of part-time higher education and what to do about it (2015), in which we tracked the story of how £9,000 fees had picked up where ELQ left off by further reducing demand for part-time study.
• In 2019, we worked together on a Policy Note entitled Student loans for those on long prison sentences, which argued for tweaks to the student loan rules to encourage higher level education among longer serving prisoners with real potential. I am tempted to send a copy to James Timpson, the new Prisons Minister as it is a bold policy we could all get behind.
• And just before the pandemic lockdown, we published a paper entitled Unheard – The voices of part-time adult learners, which was written by the OU’s Dr John Butcher and which powerfully captured some of the barriers to learning experienced by those wanting to study part time in their own voices (2020).

We have also, in the past, published a number of pieces by your Vice-Chancellor, Tim Blackman, including perhaps HEPI’s most interesting paper ever – on the idea of moving away from selective higher education towards The Comprehensive University. Those who oppose any selection before 16 but are happy to defend our highly selective university entry system have – arguably – yet to develop a persuasive response to his critique.

I have been asked to consider what the recent general election and the new UK Government mean for higher education. Although I am a political nerd, I am wary of making political predictions – especially since I told everyone to stand ready for a November election immediately before Rishi Sunak announced a July one. If I had put a bet on, I would have lost a lot of money …

Moreover, although I have led HEPI for 11 years, this is the first time I have led the organisation during a period of Labour Government. It is therefore a novel experience that I am still getting used to.

So let me begin with a brief look back over the past 14 years before considering the new regime.

The last 14 years

The last Government but five – that is the Coalition that came before the Cameron-majority Government and the administrations of Theresa May, Boris Johnson, Liz Truss and Rishi Sunak – implemented a set of bold but, to my mind, sensible higher education reforms.

Most notably, and led in this area by my old boss David Willetts, the Coalition raised income for teaching (via bigger fees and loans) despite austerity, thereby enabling the all-important removal of student number caps at a time of strong and growing demand. At the same time, the science and research budget was protected from the cuts felt over most of Whitehall while new initiatives like the Catapults were launched to encourage translational research.

The subsequent Cameron-majority and Theresa May Governments also had a bold and radical agenda, overseen by Jo Johnson. They implemented the Teaching Excellence Framework, wound up HEFCE and replaced it with the Office for Students – which I see is about to get its third chair – while also establishing UK Research and Innovation as well as Research England within it.

Afterwards, the Boris Johnson Government reversed some of the restrictions that had been imposed on international students, leading to a boom in recruitment and hitting the target in the International Education Strategy 10 years early. The Johnson Government also introduced the Lifelong Learning Entitlement (under its old name the Lifelong Loan Entitlement), which in theory at least could still prove to be a gamechanger. They also founded ARIA (the Advanced Research and Invention Agency) as a way of tackling research bureaucracy – albeit by setting up yet another research funding body.

It largely went downhill from there. After the débâcle of Liz Truss’s period in office, Rishi Sunak’s Government won the tussle for the UK to re-enter Horizon Europe, which was welcomed on all sides, but it also:

• imposed new restrictions and costs on international students;
• launched an absurd campaign aimed at ‘Kicking Woke Ideology out of Science’; and
• repeatedly threatened to shut swathes of higher education courses in favour more higher-level apprenticeships – but the new apprenticeships had not arrived and, thankfully, the higher education course closures had not happened before the voters replaced the Government on 4 July.

Most notably, perhaps, the Sunak administration failed to ease the financial pain caused to both institutions and students by the period of high inflation, as the unit-of-resource for teaching home students and the maximum maintenance package were, in different ways, held down.

In some respects, this is reminiscent of what occurred at the last two watershed elections, in 1997 and 2010, both of which took place when the unit-of-resource was falling. But on both of those occasions, the outgoing Government had established a cross-party review, Dearing and Browne respectively, to grapple with the challenge.

Moreover, the Sunak Government’s failure to see through the increase in research spending that Rishi Sunak had announced while he was Chancellor added to the higher education sector’s woes.

By the time of the 2024 general election, the Conservatives seemed to have disowned the higher education successes since 2010, producing a manifesto that painted the expansion of higher education and the growth in opportunity as negative. If anyone wants to understand why the Conservatives went in to the election with less support than every other major party (Labour, Lib Dems, Green and Reform) among young voters, their education offer for school leavers would be a good place to start.

Good morning, Britain!

This dismal picture has been replaced since last Thursday with a sense of general optimism. Perhaps that will prove in time to be justified. But in my view we need to look for that optimism to crystallise in outcomes before celebrating.

Thus far there is no evidence that students are to reappear at ‘the heart of the system’. Students have been notable by their absence in the many social media posts from the new Secretary of State for Education, Bridget Phillipson.

This oversight may stem in part from the fact that one of the few Shadow Ministers not to have been appointed to the role they had been shadowing is Matt Western, the hard-working Member of Parliament for Warwick and Leamington and the Shadow Minister for Higher Education for the past three plus years.

Matt was clearly well qualified for the job, with a constituency full of students, strong relationships with people across the higher education sector and a good understanding of the current dire financial position that many universities – and students – find themselves in. We always enjoyed working with him and we were looking forward to doing so some more, but it is not to be.

In Matt’s place, we have our 11^th different Universities Minister in 10 years (or 9^th if you discount retreads) in the very experienced politician Jacqui Smith. She will doubtless prove a force to be reckoned with not least because, as a former Home Secretary, she knows how to get Whitehall to bend to her will. She is also, like many of us who work on education policy, a former teacher. (We are living proof of the teacher retention crisis.)

Jacqui Smith has not been known for her views on higher education. Indeed her time in the Home Office will have exposed her to unhelpful views on the role of international students, given that the Home Office has displayed a consistent opposition to sensible student migration rules. We look forward to working with the new Minister as she masters her brief.

It is striking that the other key ministerial role directly affecting universities, the Minister for Science, has also gone to someone unexpected who was outside the pre-election party political bubble in Sir Patrick Vallance. Neither Patrick Vallance nor Jacqui Smith can be grilled by elected MPs on the floor of the House of Commons because they sit in the Upper Chamber.

As with Jacqui Smith’s appointment, Vallance’s appointment may turn out to be a good fit in time. I read one piece this week that claims the appointments show how seriously the new regime takes higher education and science. But there is an alternative plausible explanation too: that higher education and science have been put in the hands of such people because Sir Keir Starmer and his closest allies at the centre of Whitehall, in Number 10 and the Cabinet Office, have themselves a lack of new ideas for these areas of policy.

They’ve certainly dodged one change that it would have made sense to do on day one: bringing higher education and research back together within one Department, so that Whitehall could take a view on university finance – for institutions, students and research – in the round. This is consistent with the Government’s ‘hit the ground running’ approach which doesn’t engage the opportunity costs of machinery-of-government changes.

If the Department for Education is as uninterested in higher education as it sometimes appears to be, then it could have made a lot of sense to put higher education and research alongside one another in the Department for Science, Innovation and Technology. Instead, the new administration have consciously opted to break down the gap between HE and FE rather than the gap between HE and science / research.

The new Government have already followed their predecessors in seeming to rule out proper consideration of the EU Commission’s big and generous offer on youth mobility, which would have allowed young people to work, study and live in other countries for up to four years. If this were to happen, it could right one of the biggest wrongs caused by Brexit and seems especially important when you take into account things like the woeful number of UK young people who are familiar with a second language since the Blair Government’s abolition of a compulsory language GCSE.

Youth mobility across the EU seems like the sort of idea that even some of those who voted Brexit could get behind. Yet we are not even to talk about it in case it looks like reversing Brexit. Try explaining the logic of that position to your own children and, if my experience is any guide, you may find it impossible to do so.

The path ahead

Perhaps, as with Tony Blair’s period in charge, it will take time for the new Government to find its feet. Perhaps they will then deliver big change in higher education, possibly after commissioning a wide-ranging new review like the Australian Labor’s Accord process to help guide them.

If so, there are lots of recent HEPI reports that could help in any such process, including our collection of essays on different funding options and our landmark report on the inadequacy of student maintenance. But the sector needs some support now, given the dire financial state a large minority of universities are in.

Here, some things have changed. A year or two ago, it was seen as eccentric to recommend raising fees in line with inflation. Too difficult, we were told. Since then, the Welsh Labour Government has done it with no real fuss at all.

The new team of Labour Ministers could do well to listen to someone who advised one of the Shadow Higher Education Ministers in Labour’s opposition years, Mark Leach. He has recommended an urgent fee rise to £9,850 as part of ‘an urgent “get to safety” package’. Others have sensibly proposed a transformation fund to aid any institution in serious trouble. That makes sense because we need to avoid the domino effect that could happen if one institution collapses and no one knows how to respond.

Let me make just two more brief points before I stop.

First, we have not – as a sector – yet thought enough about the Labour Party manifesto’s commitment ‘To better integrate further and higher education’ through a new ‘post-16 skills strategy’.

This will, we are told, outline ‘the role for different providers, and how students can move between institutions, as well as strengthening regulation.’ I’ve not yet met anyone who is certain what this means in hard practical terms and it raises a question over universities’ institutional autonomy. Moreover, delivering a single tertiary sector would prove much harder in England than, say, Wales or New Zealand, which are so much smaller in terms of population, though it is doubtless a conversation worth having.

There is, by the way, one very quick change the new administration could make to protect varied pathways into higher education, which is to reverse the attacks on tried-and-tested BTECs and let these qualification flower once more.

As an aside, I point out in passing that this is not the first time a Labour election manifesto has promised to integrate different parts of our education system. Sixty years ago, in 1964, Harold Wilson’s manifesto committed to ‘integrating the [independent] public schools into the state system of education.’ In the past, I wrote various academic articles about this, which show a review was duly set up that spent three years looking at how to deliver the promised integration. By the time the Commission reported, the world had moved on and nothing came of it. (In this case, the challenges of integration help to explain why – six decades on – Labour’s attacks on independent schools are focused on imposing VAT rather than anything more radical, such as integration.)

Secondly, we need to talk more as a sector about the Lifelong Learning Entitlement (LLE). When it was launched, we were told that it could be as significant as the foundation of the NHS. That was clearly overblown rhetoric, but the LLE could nonetheless have real potential in making student finance available to more people, in promoting credit transfer and in boosting reskilling.

Yet whenever I hear people in the sector talk about the LLE, they generally reel off a list of complaints about it. I get that the LLE could be improved, perhaps by extending entitlement to courses with a lower number of credits or by including Level 7 qualifications or treating distance learning more fairly – as discussed in our own Policy Note with the OU on the issue.

But the danger now is that, in the run-up to the Spending Review, civil servants in the Treasury could interpret the negative commentary, and the lack of positive commentary, as dislike of the whole initiative and decide the game is not worth the candle. That would be a great shame. It would be much better to welcome the LLE, accept whatever we can achieve and let it mature over time after initial implementation rather than expecting it to be perfect from day one.

Thank you for listening!