Across the world, more people aspire to higher education. It is a growth sector in mature economies and developing countries. The evidence on the benefits of higher education is overwhelming: it is good for individuals, good for the economy and good for society.
That list helps answer the question of how to pay for it. It has to be a mixed model in which the direct beneficiaries contribute but others do too. Here in the UK the Dearing report and the Browne report both recommended this sort of approach and all three main political parties have accepted it when in office. Our recent reforms tilt the system so that there will be greater contributions from graduates in reasonablypaid employment and less from the generality of taxpayers. But, according to the OECD, taxpayers will still cover 40% of the costs and, according to the Institute for Fiscal Studies, the system is ‘substantially more progressive’ than the previous system – monthly repayments will be lower and 30% of graduates will pay less over their lifetimes than under the previous system. That’s why, as I discovered on a recent trip to the US, our model is gaining interest in places that have university tuition fees but which lack taxpayer-subsidised and income-contingent loans to pay for them.
It is no accident that our student finance reforms are happening at a time of fiscal restraint but they are not just, or even primarily, about saving money. More public support is delivered via the student rather than via a funding agency. So we can liberate universities from the hidden regulation that comes with the power of the purse and instead have more limited but explicit regulations. According to the European University Association, English universities are already more autonomous than those in the rest of Europe, which explains their relative success. Our duty is to strengthen rather than trample upon that institutional freedom.
That is why we are liberalising student number controls. In 2012-13, universities can recruit as many students as they wish with AAB or higher in their A-Levels. The following year the threshold will be ABB – that is one-third of all full-time entrants. The end of central control for these places will enable the best possible match between students and institutions.
The overarching objective of all the changes is to deliver a better student experience. Our world-class research base has long been characterised by intense competition (sometimes so much so that is has come at the cost of collaboration), but on the teaching side we need much sharper incentives. That is why people filling in their UCAS forms this year will have access to a new Key Information Set (KIS) covering 17 pieces of core information, often at course level. We will publish the data ourselves but also make it freely available for others to crunch and present in their own accessible ways.
We are serious about supply-side reform too. Our universities nearly all started as alternative providers offering something different from existing provision. University College London was denounced when it was set up as a ‘mere lecture-bazaar’; now it is one of the world’s great universities. Many of our newer institutions are already world-class. The Times Higher league table of the world’s best 100 universities that are under 50 years old includes three UK institutions in the top 10 and 20 overall. That’s six more than Australia, 11 more than the United States and more than and other country. So it makes sense to open up our system once more to a wider range of providers, while ensuring the right safeguards are in place.
There are many ways an alternative provider can enter our system. We welcome new start ups, and international institutions with experience abroad. Or an existing university might set up a commercial subsidiary aimed for example at the overseas market or at more flexible provision. I envisage a wider range of providers with a particular focus on teaching, or on the efficient delivery of licences to practise or on distance learning.
Higher education is at the early stages of globalisation. Educating citizens to a higher level is the crucial challenge for all nations wishing to modernise. And demographic change is bringing new challenges and new opportunities too: middle income nations such as Indonesia, Turkey or Brazil are witnessing a surge in the number of young people. British higher education providers can work with them to help achieve a rapid expansion of higher education. This is an opportunity we must take. It is already a great British export industry. We have excellent universities. We have a regulatory system which gives confidence in our academic standards. And of course there is the advantage of teaching in English.
There is no cap on the number of genuine students who can come here to study but overseas students travelling to the UK to study is just one way to grow. Last year, over 425,000 overseas students came to the UK to study but even more – over 500,000 people – benefitted from British higher education whilst living abroad. This happens in many ways. They might study at an overseas campus of a British university or follow a British degree course taught in a local college.
In the US, they are at a tipping point in distance learning. On the East Coast, there is EdX, a new not-for-profit set up jointly by Harvard and MIT. On the West Coast, Coursera – which has links to Stanford – is similarly ambitious. So we may be entering a new era in distance learning as technology offers more efficient and more effective ways of learning than ever before.
British higher education must not be left behind.
Rt Hon David Willetts MP is Minister for Universities and Science within the UK Department for Business, Innovation and Skills (BIS). He is also the Conservative Member of Parliament for Havant and author of The Pinch.
The Department for Business, Innovation and Skills (BIS) supports sustained growth and higher skills across the UK economy.