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Debate on the Address

My Lords, it is a pleasure to speak on this Queen's Speech debate on education, health and social affairs and to congratulate my noble friend Lord Darzi on an authoritative and convincing opening speech. Noble Lords will be interested to know that at least eight Bills mentioned in the loyal Address have the potential to affect the higher education sector in one way or another. They range from the Climate Change Bill, through Bills on employment and healthcare, to the Pensions Bill. To me, that is a clear indication of the centrality of universities to our economic, social and political welfare and of their scope and diversity in today's world. Apart from their vital role as institutes of learning, they are employers of 1.2 per cent of the whole UK workforce and generated £43 billion of output in the economy. They are key suppliers of employees to every other sector, including business, industry in general, creative industries and the health service. Today I shall speak on just two Bills mentioned in the loyal Address—the Education and Skills Bill and the Sale of Student Loans Bill, and briefly to touch on health-training matters in conclusion. I declare my interest as chief executive of Universities UK. The Education and Skills Bill will see the age for compulsory participation in education and training raised to 18. As the Secretary of State for Children, Schools and Families has said, this is one of the biggest changes to the education system in more than 50 years, and I agree with him. There is an economic imperative to raise the level of skills in our young people. We need to increase participation in higher education to levels that match our international competitors. China and India are racing ahead in the globalised economy and highly qualified young people are either graduating in those countries or coming over to the UK to complete their studies in ever-increasing numbers. If we are to remain globally competitive, we cannot afford to waste the talent that we have in this country. There is also a moral imperative, which says that each young person should have the opportunity that enables them to unlock their potential. These moral and economic drivers are, of course, entwined. This is exemplified in the new diplomas, which will come on-stream in 2008 and have been developed explicitly to help to maintain interest in education by expanding the range of opportunities available to the post-16 generation and to marry the theoretical and practical worlds. Raising the participation age to 18 is not the full story, however. From 2011, there will be a demographic downturn, whereby the number of 18 year-olds will decrease quite substantially. There is even more to be done in training and retraining the existing workforce, as highlighted by the noble Lord, Lord Leitch, in his report on skills. It is salutary to note that 70 per cent of the 2020 workforce is already working; much of the upskilling and reskilling will take place in part-time or bite-sized courses, from HND or foundation degrees to first, second or even third-degree level. Those will be delivered in responsive and flexible fashion by our colleges and universities, even as they too continue to raise awareness of opportunities offered by higher education. Our universities have an increasingly important role to play in this agenda, offering courses that students want to study in the way they want to study them. While more members of the population are reaching the level of higher education qualifications—that is, level 4 and above—we cannot ignore the rapidly changing needs of our workforce. The higher education sector is committed to further growth and will respond to these changing patterns of demand. In addition, universities and colleges will continue to sow the seeds of interest in higher education as widely as possible. They already work with schools to raise awareness among their students to the opportunities available to them, and I can give your Lordships an amusing example. At Liverpool University, a Professor Fluffy—a cuddly character who is indeed fluffy, as she is a fluffy ball topped by a mortar board—visits primary schools in greater Merseyside to teach the very youngest children about student life and the possibilities ahead for them through higher education. In fact, so successful has she been that the then DfES used this as part of its wider Aimhigher campaign. Of course, more needs to be done by schools themselves. Improved school performance needs to be combined with high quality comprehensive information, advice and guidance to young people on the range of options that they can choose. Better careers education is required, which will grow into future university applications. The second piece of legislation to which I wish briefly to refer is the Sale of Student Loans Bill, in which the Government hope to realise around £6 billion from the sale of the student loans debt. Perhaps as an aside, I could urge my noble friend to spell out how safe and indeed circumscribed this sale is. While it has been done previously—in 1995 and 1997—I suspect that the current turbulence in the money markets might raise unnecessary anxieties about this approach. It seems a sensible and prudent approach but it leads me to ask wider questions about the financing of the higher education sector. I commend the Government on committing themselves to maintaining the unit of public funding for teaching in the recent spending review. I welcome their continuing commitment to university research, as well as the additional funding for the higher education innovation fund. However, the financial climate is increasingly volatile and an investment backlog still remains; the higher education sector needs stability to plan for the future. It would be heartening if the Minister could assure me and other noble Lords, as well as the higher education sector, that at least some proportion of the money raised by the Sale of Student Loans Bill, when enacted, could be reinvested in higher education. Finally, this is a debate on health as well as education and social affairs, and it would be remiss of me not to highlight the higher education contribution to the health service. The noble Lord, Lord Darzi, will be aware of this great contribution from his work at Imperial College. The higher education sector trains the vast majority of doctors, dentists, nurses and other allied health professionals in this country. However, the past financial year has not been easy; universities are still feeling the pinch from strategic health authorities cutting their education and training budgets, which has placed further training places in jeopardy. Can the Minister offer assurances to the higher education sector that the Government will look at returning to the situation in which the education and training budgets for nursing and allied health professions are ring-fenced and properly protected, and perhaps even look at placing these budgets with the funding council? That is already the case with medical and dental training and would prevent a recurrence of the boom and bust approach to workforce planning in our health service. To conclude, it is clear that the higher education sector continues to be integral to the fabric of this country and to its social, economic and cultural success, as well as making a vital contribution to the personal lives of all our citizens. I look forward to the passage of the Bills mentioned in the loyal Address to ensure that that success is taken forward.