Scottish Solutions Inquiry
Welcome to this meeting of the Enterprise and Culture Committee. We have with us two members of the staff of the Official Record of the National Assembly for Wales, Sarita Thompson and Ffion Emyr. I apologise if I did not pronounce those names correctly—the vowels were all correct, even if they were not in the right order. They are here to familiarise themselves with methods that we use in the Scottish Parliament. I hope that they enjoy watching our proceedings.
We expect Brian Monteith to join us as a substitute member, but he appears to have been held up.
Our first agenda item concerns further evidence for our Scottish solutions inquiry. We have with us Dr Andrew Cubie CBE, who is now a senior partner in Fyfe Ireland WS although, as we all know, he has educational connections. He has prepared a paper, which members have before them.
Dr Cubie, would you like to expand on the remarks in the paper?
Dr Andrew Cubie (Fyfe Ireland WS):
I welcome the anticipatory nature of the work that the committee is undertaking and value the opportunity to contribute to it. I should stress that I do so as an individual, hence the rather succinct nature of my written submission. These days, I find myself not representing any group in particular and, at times, feel rather like an amateur among professionals.
The issue that witnesses are being asked to address is whether there is likely to be competitive disadvantage in the event of the implementation of the white paper proposals in England. My view is that, without Scottish action—as opposed to reaction—there is likely to be such disadvantage, which I would break up into three categories: first, funding and investment; secondly, the calibre of staff; and thirdly, the nature of the student community.
On the first category, I remember saying, rather rashly, when I was asked to chair the independent committee on student finance in 1999, that one of my regrets was that my committee did not have terms of reference that would allow us to consider the entire funding mechanism for institutions in Scotland. Now, with hindsight, I am glad that we were not given that task, as it is rather daunting. However, the difficulty in this debate is that it is too easy to consider slices of a lemon rather than the lemon itself, if I may put it that way. That was what we had to do in relation to student funding.
My view is the rather obvious one that no organisation, public or private, can progress without investment. That requires core funding to ensure that there are well-motivated and trained staff, contemporary and fit-for-purpose buildings and clarity of purpose. It is evident, from the submissions that you have been given and the work that the committee has already received, that the general view is that, by 2005-06, England will have a 19 per cent gain in real terms for the higher education sector while Scotland will have a 7 per cent gain. In the Scottish budget, the overall education budget will grow by 24.5 per cent, but that is balanced by an anticipated growth for the higher education sector of 14.9 per cent. We should remember that Scottish universities are autonomous. They require, therefore, to be resourceful and well governed. They cannot—and do not—expect funding issues to be resolved simply from the public purse. There might be an opportunity to talk about other sources as we progress. However, it seems to me that a disadvantage relative to England will arise if Government support in England—both in financial terms and in terms of the Government's priorities—is seen to be higher than it is in Scotland. That could produce adverse consequences.
On the calibre of staff, Scottish universities have some very talented individuals and some excellent leadership at various levels of institutions and representative bodies. If the premise that I talked about is true and a funding gap of substance appears, then, for the reasons that I have touched on—the potential differential in investment and the possibility of more attractive packages of remuneration being offered to individuals and teams—there could be an adverse impact. In such a situation, not only would teaching and research suffer, but the other areas of funding that I mentioned a moment ago—one of which is commercial income arising from spin-outs, consultancy and reputation—would be lost. That would damage the universities' ability to secure income other than governmental income.
On the nature of the student community, I doubt that there is likely to be a major migration of students from England to Scotland. There was little evidence of that after the changes that the Executive brought about in August 2000, although I accept that the resultant difference in cost at that point was rather less stark than that which might arise as a result of the proposals in the white paper. There is a possibility that Scottish students who currently pursue university careers in England might consider that option rather more carefully because of the potential differential due to top-up fees. Again, however, under the present arrangements, the flow from Scotland to England has continued.
I would be anxious that the decisions of overseas students would be affected if a funding gap arose and there were more investment in England, a movement to England of high-calibre staff and an enabling of English universities to put together more attractive packages for overseas students. The overseas student population contributes about £195 million to the Scottish sector and economy. Indeed, in a competitive market we require to be in the overseas student sector, not just for financial purposes, but for the diversity of experience of our students in Scotland.
I spoke of core costs a moment ago. Government is one provider towards core costs. As you will understand, I remain certain that another provider towards the core costs of the university sector has to be the graduate population. It will be no surprise when I say, as I have said many times since 1999, that I judge the £10,000 level at which the Executive implemented the Scottish graduate endowment proposals, as opposed to £25,000, to be an error. I say no more than that, as part of the review process, there requires to be another review of the level at which graduates begin to contribute to the graduate endowment. The amount that they contribute should also be considered.
I appreciate that this is beyond the committee's remit, but the process of looking at what happens in higher education is also about judging outputs. We can be proud of the fact that 51 per cent of our 18 to 30-year-old cohort currently attend higher education, and that we have consistently had a higher level of participation than in England, yet not once in the past 25 years has Scottish gross domestic product growth got above the United Kingdom average. There is an issue for us—and perhaps not just for the committee—to address, because something is afoot. I am passionate in believing that we must allow people to progress in education as far as they can, but in an information society that is becoming a knowledge society, that output is not being reflected in economic contribution. No doubt there are many complicated factors to do with emigration, lack of activity within the small and medium-sized enterprise sector, and perhaps insufficient resources for guidance, but there is an issue.
In summary, if the white paper proposals are implemented in full—and I regard that as quite a major proposition—the Executive will require to increase the budget spend over the next couple of years, and should aspire to increase that spend to at least the average spend on higher education of Organisation for Economic Co-operation and Development countries. The issue is not our playing catch-up but our leading, so that we are seen to have an edge and an advantage because of the way that we regard all aspects of education, but particularly higher education.
There also requires to be a review of the options in regard to the level of contribution to the graduate endowment. Within the sector there is much to be done to encourage collaboration, good practice, commercialisation, fundraising and other areas of income generation, and to attract overseas students.
Finally, I have two areas of particular special interest that are a continuing passion. First, the Executive responded to the committee that I had the privilege to chair in the document "Scotland the Learning Nation". If we aspire to have that as one of our tags, like "A Smart, Successful Scotland", the support of lifelong learning and therefore the Scottish credit and qualifications framework will play a vital part. Secondly, there should be a review of graduate opportunities in the SME sector.
Thank you, Dr Cubie. I will start the questioning. Quite rightly, you said that there is a big "if" over the proposals in the white paper. Given the timing of elections, there is probably an even bigger question mark over the potential implementation date if some of them go ahead. How quickly will the proposals in the white paper, if implemented, begin to have an effect? Clearly, the situation is not one in which we can just turn on a tap and everything will happen at once. If we are considering potential solutions, it is important that we know the time scale within which we are trying to implement them.
I will divide my answer into two. First, from my recollection of the changes after August 2000, with the Executive's abolition of tuition fees, there was much concern about delays in applications by students, who, it was thought, would anticipate a time when they did not have to pay fees. However, such delays did not come about. Therefore, it is likely that the proposals might not have such a swift impact as might at first be thought and that there will be a measure of steadiness.
Secondly, I appreciate the committee's terms of reference but, as I mentioned a moment ago, I believe that we should act rather than react to achieve what we seek in higher education in Scotland. I sincerely welcomed the establishment of the committee's inquiry, but we should also try to raise our sights, in terms of both aspiration and achievement.
You talked about the effect on students. Will the effect on the variable of staff happen more quickly?
As the committee will be aware, teams within the academic community are persuaded to leave one university for another, as happens in commerce. If there is to be an impact on staff, I think that it will come more quickly. If the proposals in the white paper come about, some institutions in the south, given their fuller resources, would—I imagine, because it is self-evident—try to bolster the strength of their staff, probably as one of the first steps.
As I did not catch the percentages that you gave for the likely growth in the education budget, will you review that issue? You have suggested that teams, as well as individuals, are important. What will be the likely impact of transfers of teams of researchers on the stability of our universities? Will you give us a little more information on the actions that you suggest the Executive should take, rather than the reactions that it might make?
I am happy to return to the figures that I gave but, on the general proposition, certain disciplines are well represented in Scotland and we are regarded as having cutting-edge institutions that show undoubted excellence in achievements. The clusters around Dundee are a good example that will be well known to the committee. Members must understand that I am not an academic but a lay member, but from what I see and read, it is clear that research teams move together. That was true 25 or 30 years ago in relation to movement from the UK to the United States and I anticipate a similar movement within the UK.
The proposition was really about what we must fear; I suggest that the fear of teams of researchers moving is legitimate because, in research, groups of people are more likely to move than individuals are. With groupings come clusters, critical mass and funding, so there will be a snowball effect.
The implications will be not just for teaching and research and development, but for consultancy and the general attractiveness of universities for research and teaching.
Precisely. A dynamic is involved. Along with the potential for teams of researchers moving, the other sources of income that universities must develop will be slightly under threat.
Unlike in football, there will be no financial reward when people are transferred, even if they have not fulfilled their contract, which might be for five years. Because people are entitled to move, there is no recompense.
Given the autonomous nature of the sector, I know from my background as a lawyer that, sadly, universities cannot look for transfer fees.
I very much take on board Dr Cubie's point about the need to act rather than react, which in essence could be said to encapsulate the title of our inquiry. That is an important point, but I want to test him a bit on paragraph 3 of his submission, which states:
"there is a risk of migration of both students to Scotland and of staff from Scotland if universities in England are better funded."
That first point was also made by Professor Midwinter in his evidence to us last week. Why would students tend to come north? Would students from south of the border come to Scottish universities simply because they would have less to pay in fees? Would we thereby potentially put Scottish-based students under pressure?
I think so. There might be two buses travelling that pass each other in the road, one of which contains Scottish students going south. I have commented on how, although Scottish-domiciled students are required to pay fees at English universities, there are still Scottish students who go to English universities. It would appear—I stress that this is my understanding—that course choice and a variety of other circumstances come into play along with the fees that must be paid for Scottish-domiciled students who are studying in England. If Scottish students at English universities are required to pay top-up fees, I would have thought that the individual student or family would reflect that little bit harder on whether it was worth getting on that bus going south.
Conversely, English-domiciled students who come to Scotland pay fees for their tuition during their time at Scottish universities. English-domiciled students are not exempt under the graduate endowment arrangement. It will be recalled that that was all part of the complexities of the discussions on European Union students—the Umbria-Cumbria point. Therefore, although at first blush it might seem likely that there would be a migration of English students, I am doubtful that that would necessarily come into play in the way that some have suggested.
That was my point. I think that Scottish universities are about to start the fourth academic year in which tuition fees have not had to be paid, but there has not been a marked increase in migration. Last week, we heard that the net figure was some 16,000: roughly 10,000 Scots go south and about 26,000 or 27,000 students come north. I just wanted to test whether you thought that migration would change markedly, but I think that in the end you gave the answer that it would not.
I note that your submission says that you are more concerned about the brain drain south, which might affect research particularly. What would be the effect on Scottish universities if that happened? Obviously, academic posts will still need to be filled, but will fewer research contracts come to Scottish universities? Given that UK research institutes award contracts on a UK-wide basis, what effect might such a brain drain have on research in Scottish universities?
It could affect a number of areas, but I believe that it begins and ends with the people. Undoubtedly, we currently have some tremendously talented people working in Scottish universities, both in research and in commercialisation. Clearly, all those individuals are looking for career opportunities. If such opportunities are greater elsewhere, the risk has got to be that, given the international mobility of the academic community, which is perhaps greater than that of many others, the lure of better terms and conditions and of better facilities elsewhere will be stronger than it is at the moment. That is all that I am saying. None of this can be in absolutes, but it is self-evident that if there is better provision within a university discipline in Newcastle or Birmingham than in Scotland, that will be a cause of anxiety to us.
Finally, something like 12 per cent of all students in Scotland at the moment are from overseas. If, as you suggest, some of those overseas students were attracted to English universities by the higher standards that were perceived to result from top-up fees, would that not also mean some kind of shift to Scottish universities? The number of students who can be accepted is finite and limited both in Scotland and in England—I understand that the limits are set by the funding councils—but there is also a limit to the number of overseas students who will seek to come to the UK to study, albeit that that number may be capable of expanding.
This may be a crude calculation but, although I accept that some of the higher-achieving students might go to English universities, a similar amount might be displaced from England, so that the places at Scottish universities would still be taken up and we would not be in a position of having vacancies, if I may use that term. Could such a displacement of overseas students take place?
Because all these issues are fairly fluid, my proposition is perhaps even simpler given where we are at the moment. As you have said, the international market for overseas students is enormous. It is hugely competitive, not just between different countries within the United Kingdom but globally. Beyond any financial impact, diversity of experience and influence is important to Scotland, so having a significant representation of overseas students and attracting the highest calibre of overseas students are important both for individual institutions and for the sector.
As to how movement between England and Scotland impacts on movement between Scotland and the rest of the world, I really cannot speculate, but I remain convinced that overseas students make a contribution. The prospectuses of individual institutions lay much stress on the importance of that community. With regard to the national picture, for both undergraduate and postgraduate study, Scotland is less well represented in that area than the rest of the United Kingdom is. The Chevening scholars scheme is an example of that.
When I was president of the National Union of Students Scotland, I gave evidence to your committee on student funding. We were able to make a good input then and I am pleased that you expressed an interest in contributing to today's debate.
I have two questions relating to the paper. First, you say that that there is now a funding gap for Scottish universities. To what extent do you think that that is a gap in current university funding in Scotland? Is there an existing or imminent gap in funding for English universities? This is not my opinion, but the Executive has argued in the past that some of the new funding streams represent funding from Westminster for English institutions to catch up on investment in Scotland. Some people say that the increase in funding for higher education in Scotland has been more than that for English universities in the past. What do you think of that argument?
I have a second question, but we can come to that afterwards.
There are many better qualified than me who will appear before you to talk about the relative issues of public expenditure and comparison. You know from our previous exchanges, when you had different responsibilities, just how complicated and difficult it is to unravel some of the information.
You asked whether there is a gap between Scotland and England and whether there is an absolute gap as far as Scottish universities are concerned. We cannot rewrite the accounts of the past year or two, but as I look forward I am struck by the fact that the real-terms increase to 2006 proposed for England is 19 per cent while in Scotland it is 7 per cent. That is a significant sum of money, which will have an impact on investment. That gap is one to apprehend, but there is also a gap in resource in Scotland with regard to universities realising some of their ambitions both for the built environment and for attracting significant teams. The answer to your question is therefore that there are both types of gap.
My second question is about the graduate endowment scheme, which you also touched on in your evidence. To what extent might Scotland look at gaining additional funding for higher education institutions through its own graduates? When the Cubie committee recommended a scheme, of course, it was said that payments to the endowment fund should be higher than they are currently but should be paid back at a higher level of income. It could be argued that there is justification for graduates paying back more under the future scheme, because repayments will now start when a graduate is earning £15,000, rather than £10,000. Under current legislation, money raised from the endowment is ring fenced and is channelled directly to the student bursary scheme. Is there any room for manoeuvre or flexibility in the endowment fund that could allow us to address some of the difficulties that the white paper is likely to cause?
In Scotland we are significantly ahead of England in achieving access to higher education from poorly represented groups in society. Richard Baker will know that from his days in the NUS. Broader inclusion of our community in higher education is vital to the future of our society. It is about fairness to the individual, to society and, ultimately, to the economy. The ring fencing of moneys to allow the prospect of future participation by a wider group of people in society is vital. If the money contributed by graduates were not there, the responsibility for providing it would fall on Government.
Four years ago we proposed an income of £25,000 as the point at which repayments should start. Our aim was to identify a graduate who had already achieved relative success financially, whatever their background. The argument that it was then reasonable for them to make a contribution to the graduate endowment scheme remains valid. In my view, the figure of £10,000 was far too low. The figure of £15,000 is heading in the right direction, but it does not go far enough.
The level at which contributions are made must be examined. I hope that whatever else we did, my colleagues and I proceeded on the basis of evidence, so I would not like to say at what point repayments should start. Research must be carried out into the impact of changing the figures.
Richard Baker asked about the funding gap that you mention in your submission. Leaving aside the university that you represent, do you think that the gap affects Scottish universities equally? Do some universities, such as the new universities, suffer more than others?
The situation is piebald. Inevitably, some institutions are making more headway in raising income from other sources. I do not carry the figures in my head, but if the committee does not already have them it would be useful for members to see the proportion of income that Scottish universities derive from different sources. The picture is diverse, but I suspect that the post-1992 universities are more affected by the funding gap, as they tend to be more dependent on funding council money.
I return to the issue of the funding gap to which you refer in your submission. You say:
"I believe that gap does require to be filled, but filled by way of support from a range of stakeholders, not by one alone."
You list specifically Government, business, universities and the graduate population.
I want to ask you about two of those stakeholders: business and the graduate population. Would you care to take this opportunity to elaborate on structured ways in which business might help to fill the funding gap, beyond the simple exhortation that it should make a greater contribution?
You divide the contribution from the graduate population into two strands: the graduate endowment scheme and the voluntary alumni contribution. How significant do you believe the voluntary alumni contribution is or could be in future? This may be terribly anecdotal and impressionistic, but I sense that there are severe limits on the extent to which the voluntary alumni contribution can be maximised and the part that it can play. There are four degrees in our house and there is not much room left in our postbox for appeal letters and magazines.
I am also aware of the huge efforts that many institutions have made in the past 10 or 15 years to professionalise their fundraising and development activities. Your comments on the scope for developing that further would be appreciated. I have another question, but I will pause there.
As is clear from my paper and from what I have said, it is hardly startling that a variety of income sources exists, but some of that income must be core funding. Public support and the graduate contribution are core funding and, increasingly, commercial income must become core. Within commercial income lie opportunities for the business community, because some projects require capital funding.
At a time when it has outsourced many of its functions, business can increasingly have some previously in-house functions dealt with out of house. Those functions include not only development work but training. The employer community in the UK and in Scotland contributes substantially to lifelong learning through on-the-job training. Universities can take a much more rigorous approach to the requirements of continuing professional development and additional qualifications. The Scottish credit and qualifications framework provides a marvellous structure within which that arrangement can operate.
That is a two-way activity. Universities must be more resourceful in helping the business community, and conversely, business must be more open to that process. Many good examples of dialogue and participation exist, but still too few in business play a part in the education processes in Scotland, whether at primary, secondary or tertiary level. Much time is contributed, but involvement could be wider. I have always held the prejudice that anyone who is a member of a representative body for business should, as an absolute commitment, be sure that they and their organisation make that contribution. I have got that petty little prejudice off my shoulders, which will make me feel better.
I accept fully the point about your mailbox. If the university for which I have some responsibility plays a part in that, I apologise for the weight of the mail. It is difficult to look to much of the North American example, but your question suggested that the pattern has changed in the past 10 years. That must go further. It is disagreeable to think that your letterbox will still be rattling in 20 or 30 years, but I hope that letterboxes will rattle more relevantly to graduates' contributions.
The contribution that is made through the graduate endowment is not sufficient, so the alumni base must become a source of support. The United States has 47,000 grant-giving foundations that individuals established to support higher education, and they contribute about $35 billion a year to higher education. I do not draw a comparison with that, because the structure is so different, but the comparative income figure in the UK is £120 million a year.
Thank you for that informative answer. I am sure that I should not mention this, but many years ago, my alma mater introduced one of those more innovative schemes, which had a sliding scale. People who donated the amount at the bottom of the scale received a tie, and at the top of the scale, a bust was offered.
Did you say "bust" or "bus"?
I said "bust", as in a statue in a key place in the institution. I will move on swiftly.
Since your report was produced, it has become fashionable to talk about doing a Cubie. I am curious to know what it feels like to become a noun, and I am conscious that people in the sector talk increasingly about doing a Cubie 2. Where should the work of your inquiry be taken, in the light of past and potential developments?
I have a fairly clear view about that and have given it publicly a few times. I do not believe that we should go back to anything in life; we should go forward. As I indicated earlier, four years ago I thought that an opportunity to review the funding of institutions would be welcome. The work that the committee is undertaking plays well in determining what the opportunities and threats are. We can easily resolve issues by creating committees and sometimes good solutions come from them.
However, more work has to be undertaken so that the issues that the committee is addressing can be considered proactively for Scotland. That needs both political will and the will of society so that, in future, one of the things that we can be regarded for because of what we are contributing today—although not out of a sense of history—is the way in which we give people opportunities to develop and learn. It is about facilitating individual learner opportunity, which is fundamental.
I do not suggest the creation of another committee such as my own—it would certainly be inappropriate for me to have anything to do with that. However, there is an opportunity in the work that the Enterprise and Culture Committee is doing to make progress on those issues.
Thank you for that clear and interesting exposition of your thoughts. I have three points; two are relatively minor but one is more substantial.
First, we were not clear last week whether your figures included degree courses in further education institutions as well as those in higher education institutions. We were also not clear whether the figures compared like for like with England and Wales. If you could enlighten us about that, I would be grateful.
Secondly, you suggested that someone might wish to consider whether the increase in the further and higher education populations has led to an increase in the Scottish GDP. Were you propounding that as something that you feel is the case, or as something that should be investigated as to whether it is the case?
If you would like to deal with those two points first, I will come to my more substantive question later.
I will not attempt to search the background papers that have been supplied to the committee, but the 51 per cent that I mentioned earlier covers students in further and higher education. Of that, approximately 12 per cent are within the further education structure. Frankly, I see that as a tremendous opportunity. The articulation that exists in Scotland between further and higher education is developing well. The credit and qualification framework facilitates that. Scotland can be proud of that area because progress has been made. If we did not include the delivery of higher education within the further education structure, the comparisons would look materially different to those that we often see between Scotland and England.
In my comments about outputs, I was really suggesting that it would be of interest to do further work on the contribution of Scottish graduates to Scotland's economy. Many universities are delighted that their prospectuses can advise prospective students of how many of the undergraduate population are in work or further study within six months of leaving university. However, it would be much more interesting to find out what they are doing three or five years on and what their contribution has been. I suggest that that information would be of particular interest in relation to the contribution of graduates to the SME community. Scotland is an SME country in terms of business delivery and I am encouraging a review of the information as I have no answer.
That brings me to my final point about being proactive—which you suggested we ought to be—rather than reactive, and about exploring some of the potential solutions that you envisage. The loss of significant departments or individuals in Scottish institutions would have a disproportionate impact on the Scottish economy. Have you given any thought to possible solutions for such departments or individuals that would differ from what might be regarded as the main stream? What might such a solution be and how would we identify it?
To follow on from Mike Watson's point about overseas students, it has been suggested that one of the best things that we could do for international relations and generating loyalty among alumni is to give overseas students a work permit for a specific time following graduation that would allow them to work in Scotland and pay back through the tax system some of the benefits that they have gained from our academic institutions. Do you see any mileage in doing that? What might be the appropriate period for such a work permit?
The second point that you raised is an interesting question on which I will reflect as I answer the first question—although I am not sure how comprehensively I will answer it. The issue is about creating relevance for people in any workplace, whether in the public sector, the private sector or the university sector. It is important that people's contribution is valued and understood, that there are career opportunities and that economic gains are available to them. It would be too easy to say that there is one thing that we can do within the university context to make it more certain that we retain our best people.
The issue is about reputation and, in the context of this discussion, it is also about Government demonstrating that it truly values higher education in Scotland, which is a key contributing factor. Individual universities can then show clearly that they offer relevance in their course provision and in career opportunities for individuals.
Perhaps for obvious reasons, it is easy to follow the band and be disparaging about some degrees that are offered today—folk ask me whether my university offers a degree in hang-gliding yet. However, we must accept that the community in which we work has changed. For example, the creative industries in Scotland are vital in a way that was not the case previously. The higher education sector must be fleeter of foot in recognising changing patterns.
To allow overseas students to work for a spell in Scotland after graduation could be advantageous in terms of their contributing something and broadening their experience of Scotland. At this point, I will refer to another issue that I might have come to in my concluding remarks. I believe that we need longer-term scenario planning for higher education so that we recognise the demographic changes that affect indigenous Scots and understand how those changes interface with provision in Scotland and how we deal with overseas students.
This is Brian Monteith's first Enterprise and Culture Committee meeting, so I ask whether he has any interests to declare, in relation to both the inquiry and the work of the committee as a whole.
I declare that I am a non-remunerated director of a drama company called 2000 & 3 Estaites Ltd.
The floor is yours.
I was interested in your explanation of how student movement might be affected. I appreciate that there are many caveats built into that, but can I clarify the assumptions that underlie your judgment? From your contacts in the university network, do you expect the majority of—or all—universities in England to adopt a top-up fee? If not, do you expect the top-up to be restricted to the Russell group of universities? On which assumption did you predicate your view on student movement?
That intriguing question clearly adds a further rung of anticipation to a policy that is not yet in place. In the initial phases in January, when the white paper was published, the immediate assumption was that all English universities would charge £3,000. I can remember some rather bad-tempered exchanges about the clear existence of cartels. Because universities live in a slightly strange world that is part commercial and part public, one has to accept that competitive pressures will apply. I can only give members my judgment: I could not begin to expect that all English universities will charge up to the maximum sum, be it £3,000 or, indeed, £4,000, £5,000 or £6,000—members will know that some people argue that the figure should go up to those levels. There could be a differential pattern based on what the market will bear, depending partly on the course offered and the potential economic outputs of taking that course. If that happened, we would be moving into uncharted territory. Scottish students may hesitate longer over a decision to go south, but that decision would obviously—and you raise a good point—be tinged by whether they were going to university places that were fully funded or part funded.
That was the reason for my question.
You have given your view on student migration under the current arrangements and under the previous arrangements before the end of tuition fees and their replacement by graduate endowment in Scotland. The charges faced by English students would, for a four-year degree, be around £4,500—or, if they entered in the second year, as is possible, £3,375. However, if a student were doing a three-year degree in England that charged, for example, a minimum top-up fee of £3,000, the difference would become £9,000. The change is not simply an incremental change because of inflation. It is not just one year at £3,000 but three times that amount and, as you have said, some people argue that the figure should be more than £3,000. Do you think that the scale of that difference will begin to make people think more carefully about choosing their university?
Yes. However, the fee, or the top-up fee, cannot be considered in isolation. At the time of our inquiry in 1999, it was abundantly clear—and has remained abundantly clear in research done since—that living costs are most often the challenge for folk who seek access to higher education. That is particularly true for those from under-represented groups. There was a bit of myth that those from less advantaged backgrounds would be disadvantaged by tuition fees; it was a myth because they were probably going to be exempt from tuition fees. The real imposition of additional tuition fees would be a debt burden, which is a journey too far for many. If you are not anxious about how well represented wider society is in universities, that will not be a problem. It is a problem for me. It would be a move entirely in the wrong direction.
My impression is that, in your inquiry, the initial impetus was wholly on account of the introduction of tuition fees. However, you broadened your inquiry to take account of aspects such as living costs. It is important for students to consider fees and costs together when making their calculations.
Did you detect concern from parents because they were paying tuition fees that had to be paid upfront on matriculation? Living costs, credit cards and overdrafts would incur debt for students, but they could ask their parents for help at a later stage. The burden of living costs built up gradually over the years and the political impetus to deal with that burden never arose. With the introduction of tuition fees, parents suddenly found that they had to pay upfront and that introduced a focus that had not existed before. Was there any differentiation between the two issues?
There was a clear recognition in the proposals that were made and, in part, followed that the burden followed the benefit to the individual graduate. Many parents told me, informally or otherwise, that the burden was in the right place because parental responsibility had been discharged. The subject is far too big for me to go into now, but it raises the interesting issue of whether being a student is a self-contained job. Richard Baker's colleagues in the NUS were distinct in their submissions on that subject. There was some relief from parents that some of the burden that otherwise they would have to face would be paid by their offspring in due course.
I have two questions for you, Dr Cubie. The first is about your paper. You will remember that, as a result of your report, we had to front-load Scottish Executive funding to meet the entire equation. Do you wish to say anything further about the stakeholder that we have not yet talked about—the Government? You said that the committee should consider the graduate endowment scheme and how we might tweak, alter or increase it. However, I am interested to hear anything that you have to say about the Government's input. Do you have any ratios in mind?
I hope that I have answered that already. However, I will underscore what I have said. In answer to your colleague, I referred to relative percentages and the differential between the Executive's overall budget growth, which is at 28.3 per cent, and the budget growth for the sector, which is at 14.9 per cent. There must be a further allocation of resource to the sector for the broad reasons that I have tried to indicate during the past hour.
I accept that. Is it your impression that ministers have taken that on board and that they are considering the matter?
I have no personal knowledge of that. All I can say is that, by the appearance of the figures I have given you, the answer is no. A number of us have been saying outwith the formality of this committee that, if there is to be aspiration for achievement in Scotland, we must go beyond simply trying to hit the mean figures of performance.
My second question is wider and refers to something that you said earlier. Unless the remuneration and working environment of lecturers and university staff are improved, as they should be, there could be a brain drain and we will see our brightest and best going not into academia, but into the City of London or wherever. That is a worry. You have said twice that the interface between industry and academia is not what it should be and that the fault lies on both sides.
From my experience over the years, it seems that, no matter what we do, industry ploughs on. If one goes to a Scottish Council for Development and Industry meeting, one will notice that the academic world is extremely well represented, but that there are precious few captains of industry. Do you think that another arm of the Scottish Executive should address that problem, perhaps via the Enterprise, Transport and Lifelong Learning Department or by working with the Department of Trade and Industry, to offer carrots to industry—tax breaks or grants—that are contingent on its engagement with academia and on the creation of a flow between them? Perhaps bright staff from a company could go to work for an academic institution and vice versa.
Undoubtedly, yes to the carrots and to closer assimilation between the universities and the business community. You will know that the Lambert team, which is considering links between the business community and universities in the south, is due to report next month. From what I have read of the interim report, there might be rich seams of thought about how linkages could be bettered. I hope that it will be possible for us in Scotland to have regard to that.
In a former life, I was chairman of the Confederation of British Industry Scotland and sought to represent the interests of the business community to Government. Business must do more to replicate examples of good practice, which is why I have returned several times to the SME community. To a fair extent, I work in an SME environment. It is easy to say that we are far too busy to become involved in matters that do not relate to us, but we ought to help to change that culture. Carrots will help, but moral persuasion will help, too.
I have a final supplementary question. I mentioned the possibility of a brain drain of people going south of the border. Do you have any thoughts about whether that would be more heavily weighted to the arts or to the sciences?
I do not. However, the sciences and medicine tend to be better funded than the arts. I would have thought that there might be a balance, but I have no knowledge of or statistics on the matter.
My first questions build on what Christine May asked. In Scotland, there seems to be a handful—or, optimistically, two handfuls—of centres of excellence departments. The key seems to be to ensure that those centres of excellence are kept and that we grow them. What do you think about that?
Scotland's strength, compared with that of England, seems to be its close community of academics. In Scotland, it is much easier to create links between academics. Do you have any suggestions about how to build on that strength?
We must aspire to centres of excellence and we must recognise that there is a close linkage in the university sector between good, groundbreaking research and funding. Individual universities must find ways of making such linkages attainable.
The second strand of what you asked relates to collaboration. I have said a couple of times that universities are autonomous bodies, some of which are heavily funded by the funding council, whereas some are perhaps only a third funded. There is more opportunity for collaboration in the sector and a mapping exercise would probably be valuable. There have been mapping exercises, but there should be an exercise to map the links in the sector. Scotland is a small country competing in a big world. There is high participation in higher education but, although we do well proportionately within the United Kingdom in respect of research funding, we could do better. That could result from our understanding better where collaboration currently sits and encouraging it.
How much money from business and commerce should fund research? How much should universities maximise the commercial return from that research? How much should business and commerce direct research and how much should universities direct it and then maximise the potential return from it to ensure that they get all that they can out of it? How can we encourage more of the latter?
That, too, is interesting. We—I and others—became rather fixated with the measure of how successful universities were in terms of commercialisation by spin-outs. One of the issues with spin-out is that, in order to get venture capital funding, people have to be spun out of the university environment. Many of them are not eager to do that, but they are eager to become involved in franchising, consultancy and other aspects of commercialisation. We have to take a broader view of the ways in which business and the university community can relate to each other.
I do not blush when I say this, but there has to be self-interest on both sides. I say that because of my involvement as the chairman of the court of Napier University. Almost a year ago, we launched a £50 million development campaign, which was in part a major indication of the fact that we see ourselves as a modern university that needs to be resourceful. As part of the campaign, I visited businesses in and around Scotland, many of which, I am rather sad to say, the university had not been to before. The discussion that we had was about creating relevance. What could the university do for business? I do not think that that question had been asked in a sufficiently broad or imaginative way before. I mention again the Lambert report, parts of which address in a wider setting the sort of themes that you and I have explored in this exchange.
That point impacts on an issue that I want to raise. In your opening remarks, you spoke about the need for a review of graduate opportunities in the SME sector. You have just asked what universities can do for business, which seems to turn around your earlier point about what business can do for universities in relation to funding. Whatever happens, it is clear that the process has to be a two-way one.
Where do the problems lie in the SME sector in respect of lack of opportunities? Is the problem the lack of opportunity for graduates leaving our universities, some of which, because they have good business schools, have a lot to offer the business community? Are those graduates not being taken up by the SMEs or are graduates not taking the risks that are necessary to start up a business that could grow into a SME? Which end of the scale are we at? Does one follow the other? Graduates could be given experience in the SME sector before they go on to launch their own companies as a result of that experience.
As ever, a bit of each is involved. You rightly say that we have some excellent business schools, but we can develop further some of the existing good practices and initiatives. I am aware of one initiative in which students are paid from a competitive fund to work not in McDonald's or Safeway but on a project in their university that is entrepreneurially based. Richard Baker, from days gone by, might be interested in that example. The students are paid to be active in a form of activity that is probably within their discipline, although it could be in any discipline within the university. That sort of culture and engagement can easily persuade small businesses to take an interest.
Another project in which I am interested is the graduates for growth scheme that operates in Edinburgh. All four higher education institutions in Edinburgh contribute to it, as does the Edinburgh Chamber of Commerce and Scottish Enterprise Edinburgh and Lothian. The City of Edinburgh Council was an original contributor to the scheme. Over the past three and a bit years, the scheme has placed 200 graduates in the SME sector. It offers mentoring to the SME sector and the student community in order for them to see relevance of the scheme. Graduates for growth is now regarded at careers fairs as a legitimate form of recruitment. I declare an interest in it, as I chair a steering group that relates to it. Graduates for growth is an example of the practical outcomes on which we need to focus in what is an SME society.
I want to be absolutely clear about your suggestions for finding the extra money that might be needed to bridge the gap. Significantly, you have suggested that the money should come from the graduates. Do you mean that the graduate endowment, which I understand is ring fenced to provide bursaries, should now be opened up to provide money for universities to allow them to be competitive? Would that mean that the graduates' contribution to the endowment should be increased?
No, I was not suggesting that. Forgive me if I did not make that clear. There are two strands to the issue. First, I believe that the Executive must contribute a larger proportion of its overall expenditure to higher education, which is why I cited those figures a moment ago. I most certainly do not think that the existing graduate endowment scheme should not be ring fenced if it is better funded—that money should continue to be ring fenced. However, as I sought to say earlier, if the graduate endowment fund did not exist, the Government would, in a society that recognises the value of inclusion and widened access, have to find that expenditure from elsewhere.
I think that both things will happen. If an adjustment in the endowment arrangements were judged appropriate, that would help an aspect of policy—widening access—that I think is wholly right. However, that is balanced by other core funding from the wider Exchequer account.
So you are suggesting that the only ways in which graduates should bridge the gap are either directly and voluntarily as alumni or through any business that they might generate in their successful futures.
Without repeating what I have said, I should point out that a graduate endowment contribution addresses the needs of the sector and the community. Over and above that, there are other opportunities for graduates as alumni to make contributions; indeed, there would also be an opportunity to increase such contributions. However, I am in no sense suggesting that that should become core funding.
So the contributions are all voluntary.
Apart from the graduate endowment contribution.
If there are no further questions, I ask Dr Cubie whether he wishes to make any concluding remarks.
I would simply be repeating myself, convener. Perhaps scenario planning is the only issue to which I would wish to return. Closer regard needs to be paid to the 15 to 20-year horizons when planning numbers. Of course, the same is true of primary and secondary education, but such an approach needs to wash through into what we expect the university sector to look like in 2020.
That is quite difficult if one of the variables is education policy south of the border.
Indeed, but population predictions have been rather more clearly scoped for 2020. We must pay regard to the matter, as it will partly determine the whole range of higher education issues, including the number of institutions and how we consider the contribution of overseas students.
I thank you very much for attending the committee this afternoon. Your evidence has been very helpful.