Education and Culture Committee

Meeting date: Tuesday, November 29, 2011

Official Report 516KB pdf

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Subordinate Legislation

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Student Fees (Specification) (Scotland) Order 2011 [Draft]

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Education (Fees) (Scotland) Regulations 2011 (SSI 2011/389)

Good morning. I welcome members to the 13th meeting of the Education and Culture Committee of session 4. As usual, I remind members and those in the public gallery to switch off all mobile phones and other electronic devices. They must be switched off at all times and not put to silent, because they interfere with the sound system. We have no apologies for the meeting, and there is a full turnout.

Item 1 is oral evidence on the draft Student Fees (Specification) (Scotland) Order 2011 and the Education (Fees) (Scotland) Regulations 2011. We will take evidence from NUS Scotland and Universities Scotland, then from the Cabinet Secretary for Education and Lifelong Learning.

I welcome Robin Parker, president of NUS Scotland, and Alastair Sim, director of Universities Scotland. I thank you both for giving up your time to come along this morning to give us evidence on the subordinate legislation. I invite questions from the committee.

Good morning, gentlemen, and thank you for coming. My question for both of you in your respective areas is this: what discussions have taken place with universities and students in England about the intended implications of the policies?

We are a constituent part of Universities UK, and the regime that is proposed in the Scottish statutory instruments has been discussed and supported at Universities UK level. Having looked through the responses to the Scottish Government’s consultation, I am aware that the small number of English universities that responded on the proposals did so supportively. With the discussions that we have had at United Kingdom level, the evidence that we have seen at UK level and the Higher Education Funding Council for England paper that was referred to in the press over recent days, our counterparts in the rest of the UK are fully cognisant of what is being proposed and have not raised objections.

You have given some estimates on an arithmetical basis in your written submission about likely trends. Have your discussions included universities in the UK, or were they done on a Scottish basis?

Do you mean our estimates of bursaries?

Yes.

Those are estimates that we developed at Universities Scotland level on the basis of the information available to us. As we are part of Universities UK, we shared that with our colleagues at UK level. I think that what we are doing is recognised as a fair and reasonable way of appraising what is going on.

Can I ask about the students?

I have not spoken directly to any English students about the matter, but I know that Edinburgh University Students Association, which has done quite a lot of work on the matter and many of whose members are present here today, spoke in particular to students at further education colleges in England as part of its RUKidding? campaign, who expressed concern and said that they were not sure whether they would decide to come to university in Scotland if they were faced with a £36,000 degree.

Another thing that I would bring into this discussion is the Universities and Colleges Admissions Service figures that have come out recently. It is too early to say with complete certainty what those statistics mean, but there is a great deal of concern across the board about fees from the Westminster Government in the first place and about having the most expensive university in the UK for rest-of-UK students in Scotland. We have in fact got the three most expensive in the University of St Andrews, the University of Edinburgh and the University of the West of Scotland. There is a worry that that will bring down the number of applications across the board and that the reputation of Scottish education has been damaged because of the decisions that have been made on fee levels—that is particularly concerning.

Your organisations have provided substantial and helpful submissions, for which I thank you. They set out suggested likely outcomes of the legislation, but the reality is that those outcomes will depend greatly on the uptake among different types of students who want to study in Scotland. How convinced are you that you have worked through the likely trends? I know that that is exceedingly difficult, given that, as you say in your submission, the applications will not be ready before 15 January. How satisfied are you that you have a good awareness of what the likely trends will be among students from other parts of the UK and the European Union who come to study in Scotland?

As was done last winter in the expert group that examined sustainable funding for universities and the contribution that rest-of-UK fees might make to that, we genuinely have to assume that there will be a range of variability. That was the assumption that the expert group made. Individual universities have provisionally set rest-of-UK fees at a level that they think will allow them to sustain a reasonable flow of rest-of-UK students.

I take slight issue with one of Robin Parker’s points on a statistical matter. One surprising thing about the UCAS figures when we delve in below the headlines is that the number of English applications to Scotland is holding up better than the number of English applications to English universities. It is hard to interpret the UCAS statistics, but they do not appear to sustain an interpretation that demand from students who are domiciled in England for a Scottish university education is declining relative to demand for university education in England.

I totally accept that. It was hard to take anything from yesterday’s figures, for a variety of reasons. One of the worrying statistics yesterday was that the number of Scottish students who have applied for Scottish universities is down, which is a concern for obvious reasons.

I want to probe a little further on the level of demand that you expect from the various categories of students who are domiciled elsewhere and who are likely to come to Scotland. If the rest-of-UK fees are seen to be pretty high, as Mr Parker said earlier and in his submission, does that give rise to concern about the possible effect on universities because of the reduction in the money that might be brought in?

The key point is the amount of uncertainty about the system that we are going into. I do not want to misquote Tim O’Shea, but I think that, when he gave evidence to the committee, he said that he would not place bets on what might happen to student numbers at his institution. The danger is that there could be a big decrease in the overall amount of money that comes to institutions. That would be bad not only for the institutions, but for students, wherever they are domiciled, if it leads to course closures or cuts because of a lack of income.

There is a parallel to be drawn with the changes to the UK Border Agency that affect international students. We have come together collectively on that. That situation is creating uncertainty about the number of students who will come in, which is a concern for the same reason: it could lead to an overall decrease in the amount of funds that come into institutions, which is bad for all students.

As we both acknowledge, we cannot be absolutely certain about what will happen. Institutions have made their decisions in setting provisional rest-of-UK fees on the basis that they think that those fees will maintain or possibly even promote demand. We just will not know whether the fees have been pitched exactly right until we see the final UCAS figures. We need to be careful to ensure that students from across the UK get an idea of what is on offer in Scotland and do not simply see the headline fee. The evidence on which we have been working with NUS Scotland shows that there is a good offer through bursaries and other forms of support. I do not want the myth to take root that degrees here are the most expensive in the UK. Many universities are ensuring that, even though students study for four years, they will pay a fee that is commensurate with that for three years of study in England.

When you look at the pattern of study in England, you will see that 31 per cent of students are studying for degrees of more than three years. For example, most students at Imperial College London are on four or potentially five-year degree courses and many of those doing chemistry, engineering, classics or whatever at Oxford and Cambridge are on four-year degree courses. I would, in Scotland’s interests, be wary of the idea that our degrees are more expensive gaining traction because, once you compare the financial support and very substantial fee waivers available in Scotland with the picture in England, which is much more diverse than is sometimes understood, that story does not stand up.

Despite the fact that Scotland has had a tradition of a four-year degree, some universities might for educational—never mind financial—reasons want greater flexibility and ask students to take on a three-year degree or enter a course at year 2 rather than year 1. Have you factored likely changes in flexibility into your calculations?

Picking up Alastair Sim’s comments, I think that, notwithstanding the question of three and four-year degrees, it is quite clear from the evidence that Universities Scotland has helpfully shared with us that, before and after bursaries are taken into account, the average cost of a degree will be higher for students taking a four-year degree in Scotland that would normally be a three-year degree in England.

Alastair Sim’s point about the importance of transparency and clarity for prospective students extends beyond the level of fees to bursaries and admissions. It is important to have an independent body or organisation with a role in communicating with students and providing transparency about bursary offers. However, that must happen at institutional level rather than at the sectoral level for which Universities Scotland has helpfully submitted figures to the committee. It is important to ask the sector and the cabinet secretary about individual institutions’ bursary arrangements.

Students from the rest of the UK with appropriate A-levels or other qualifications are already given the opportunity to enter a course in the second year. An inherent benefit of the four-year degree in Scotland is that it offers such flexibility and anything that can be done to offer more opportunity and choice—the key words for any student from the rest of the UK deciding whether they want to do a three or four-year degree in Scotland—would be very welcome. More pressure needs to be put on institutions to increase such flexibility and make more such opportunities accessible to students.

I support those comments. The pattern of support and options that institutions are typically offering suggests that students are being encouraged to do the four-year degree often for the price of three years or with very generous means-tested bursary support. We believe in the value of what we are offering, but the universities also recognise that, because of cost pressures and indeed other pressures, some students will decide that a three-year degree is the right choice, so provision is being made for those people. It is a good diverse economy that meets different students’ different needs.

Mr Parker suggested both this morning and in his submission that we should raise with the cabinet secretary the fact that we are discussing average figures instead of figures for individual institutions. However, before we do so, I wonder whether Mr Sim will respond to that point. After all, although you have provided some helpful figures in your submission, NUS Scotland quite rightly points out that it would particularly help

“if data was made available for individual institutions in regards to what they expect their net fee to be.”

If we gave you data on that at the moment, it would have only a very spurious accuracy. We are aggregating a series of assumptions to arrive at our figures, recognising the very substantial uncertainties about the number of students who will come to universities at an income level that means that they qualify for the bursaries. We have given figures that we think are a reasonable aggregated approximation. If you started to drill down below that, you would probably find that any figures that we gave you were not of value because their accuracy would be dependent on a series of things that one can make assumptions about but about which one cannot know with any certainty at the moment.

10:15

I am slightly concerned by your use of the word “spurious”. What does it say about the collective average figure if the individual level is “spurious”?

I am essentially saying that we have made a series of reasonable assumptions based on the size and income profile of the rest-of-UK population at individual institutions, based on the available information about the bursary schemes that are being proposed by institutions. On that series of assumptions, on which we worked closely with the NUS, we have come up with what we think, between us, is a reasonable approximation. However, given the uncertainties that have already been expressed, trying to tie that down into a more detailed set of figures—Robin Parker has been very clear that all these figures have to be approached with certain caveats—would be to lead you to a level of accuracy that would have to be treated with so many caveats that it would not be of immense value.

I am equally concerned. English institutions have been expected to make assumptions about their student intake and the financial background of those students. For their own budgeting processes, individual institutions would want to make estimates that are as accurate as possible in order to provide bursary packages, so I am concerned about the financial estimates and budgeting expectations of individual institutions. The expectation has been on English institutions to do that and the answer here only reinforces the need for someone independent to make it clear not only to students but to the wider public what access arrangements are on offer. I see no reason why the same expectation should not be placed on Scottish institutions. The question is whose responsibility it should be.

Mr Sim, if your figures at the moment are full of caveats—and I understand why that would be the case—at what point will that no longer be the case? At what point will you have accurate figures? Is it a reasonable expectation that individual institution figures will be published at that point?

As institutions see who is actually applying in 2012-13, and where they fit into bursary schemes, that will generate the accurate figures as to how students are being treated and it is entirely reasonable to expect transparency about that.

For absolute transparency then, are you saying that Universities Scotland supports that? Can you commit individual institutions to publish these figures and say when that will be?

I refer to the minister’s letter of grant, which clearly states that outcome agreements, including on widening access, will be developed with each individual institution, and to the Scottish Government’s response to the consultation, which clearly says that that will include widening access for rest-of-UK students. There will be a means, through the Scottish funding council, for universities’ achievements in that regard to be kept under specific statistical scrutiny.

That was a more positive interpretation of what we expect from the cabinet secretary in the widening access outcome agreements. We would be delighted if rest-of-UK students were included in those, but the committee needs to seek greater clarity on that. It would be welcome if it is the case.

I point out that we are faced with a market. None of us particularly likes that, but it is important that there be independent regulation of that market to provide students with transparency about the access arrangements. Alastair Sim’s answer does not necessarily show that institutions approach widening access with the intention of maintaining a student body with a diverse socioeconomic background, which is what the access agreements should be about. However, institutions should expect to maintain such a student population.

The Universities Scotland submission says:

“universities have exhibited responsible autonomy”

in light of the fee increases. Does that really reflect the decisions that the University of Edinburgh, the University of St Andrews and the University of the West of Scotland have made? Is there not a case for some independent regulation? Alastair Sim said that students were entitled to have a fair idea of what was on offer, but is the present situation not piecemeal and confusing for rest-of-UK students who are thinking about coming to Scotland?

We did not know until early August what planning assumptions the Scottish Further and Higher Education Funding Council was making and, therefore, what the remaining funding might be for teaching rest-of-UK students, so the development of the rest-of-UK fees and the bursary and financial support schemes that surround them has been an extraordinarily quick process and the institutions have done extraordinarily well to come up with such a wide range of financial support for students. However, that timescale made it an uncertain environment for learners because institutions had only a short number of weeks from the starting point of the funding council’s communication to them to think about where to pitch their rest-of-UK fees levels and what financial support to put in place.

This year, learners have not had as much advance clarity about support regimes as one would ideally have wished. That will stabilise for future years.

You say that it will stabilise, but do you expect there to be changes in future years? Is it just that next year is so unpredictable that universities’ decisions, particularly on the bursary support that they offer, have not been based on much factual evidence of which students go to each institution?

Universities will seek to ensure that the financial support has worked this year and that they have attracted the right diversity of able students from all sorts of backgrounds. What has been put in place is remarkable given the time that was available, but I am sure that universities will examine it in the light of experience to ensure that they have got it absolutely right.

The NUS submission says:

“We are particularly concerned about the threat the new RUK fees regime poses to widening access, not just among RUK students themselves but also for Scottish students.”

I ask Robin Parker to be a bit more specific about the NUS’s concerns about the impact of rest-of-UK fees on Scottish students.

To go back to the previous question, I fail to see how anyone could describe the decisions of the University of Edinburgh and the University of St Andrews as anything other than irresponsible. The principals there have let themselves down because, although they were given more free rein than their counterparts down south, they have acted irresponsibly and failed to show any restraint in their fee decisions and the way that they have reported what they are doing on widening access.

To answer your question to me, we have some concerns about the impact that rest-of-UK fees might have on admissions criteria. If there is higher demand from Scottish and EU students for a capped number of places, that could push up entry requirements, whereas demand for places from rest-of-UK students may decline because high fees are being set and numbers are uncapped, so admissions criteria might be loosened. We would be concerned if that fear was to be backed up in practice and the admissions criteria for Scottish students ended up being quite different from the criteria for rest-of-UK students.

Mr Sim, forgive me if I have picked this up incorrectly, but did you say in speaking about bursary support that the universities would decide on the levels of bursary that would be available to rest-of-UK students once they have seen the applications? Will they take an average figure, decide how much money is available and then split it proportionately between those students? Is that the type of model that will be used?

No, sorry—that is certainly not what I was trying to say. I was trying to say that universities, in very short order, came up in the early autumn with what they believed were the right financial support arrangements to encourage rest-of-UK students from all sorts of backgrounds to continue to apply to Scottish universities.

Those arrangements are quite defined. If one looks at them in detail, one sees that there are certain universally available benefits at certain universities, such as the waiver of fees for a year, and certain benefits that are specifically means tested according to household income. The rules have been defined pretty clearly for 2012-13, but it remains to be seen in detail—recognising the uncertainty of the environment—who ends up applying, who falls into which income brackets and who is entitled to what level of means-tested support, according to the rules that have already been established.

But if those criteria have still to be established or are not transparent, how will students decide? You said to Claire Baker that it was important that the universities attract the right diversity of able students. Most students decide where to apply before they submit their UCAS application. If the arrangements—for which bracket students will fall into for a bursary, for example—are not transparent and students cannot sit down with their parents or guardians and work out exactly how much it will cost them and how much of a loan allocation they will have to apply for, they cannot predict how much money they will have to pay or will get in support. How are you confident, therefore, that you will attract the diversity that you said was important?

I do not accept the contention that the arrangements are not transparent. Every university, in coming up with its financial support package, has—either at the time of announcing its rest-of-UK fees or subsequently—defined in detail what the entitlement for students will be. You will find that information on the universities’ websites, and students will find it there when they are considering whether to apply to a particular university.

There has been quite a compressed timescale for everything this year, but I do not believe that there is a lack of clarity in the information that universities are putting on their websites and communicating to students about the level of entitlement that they might have depending on their particular income bracket.

I disagree on that. Each institution has decided on a different way in which to report its bursary arrangements, so I do not see how there is any form of clarity or transparency for any of us—for you or for the students sitting behind me, whose successors will be choosing which institution to go to.

It is problematic when Universities Scotland can report only a figure for the whole sector. None of us in the room has any idea whether that might mask massive differences between institutions that are doing the right thing in putting in place stringent measures to widen access, and those that might be doing very little or nothing, and potentially not even meeting the requirements that they might face south of the border.

Is it possible for students to sit down when they are considering their UCAS applications and budget for exactly how much money they will have and need for the four years?

I think that they would have to wade through about 18 different websites and figure out about 18 different methodologies in order to do that. That is not straightforward when we are talking about trying to attract talented people from less well-off financial backgrounds.

I see the students behind you nodding, Mr Parker. I ask Mr Sim the same question.

10:30

You would have to look at each individual institution’s scheme. If I was going to apply to Edinburgh Napier University I would go to its website and see specifically that I was entitled to a £2,000 bursary if I came from a household with an income of less than £25,000. If I went to Glasgow Caledonian University’s website, I would know that if I fell into a certain income bracket I would be entitled to pay no more than £12,000 for an honours degree. Because the schemes have been developed by individual institutions, you have to look at what each institution is offering. What they are putting up there is transparent. Learners should be able to make a reasonable assumption about what financial support they are entitled to at the individual institution to which they are thinking of applying.

Thank you. It seems that there are a variety of methods of working out this information across universities. Given that the cap of £9,000 is standard across universities in Scotland, would it be useful to have a standardised widening access and bursary support arrangement?

That would be incredibly helpful. That is one of the suggestions that we made to the committee in our submission. We have tried to approach the issue as constructively as possible and have offered lots of ideas for ways in which we could improve the system. Having a national scheme or a minimum standard across the board for what institutions have to do on access would allow us to say, “Come to Scotland. This is what we’ll do to protect access.” We are left with a difficult system thanks to the wrong decisions of the Westminster Government, but we could say that we as a Scottish nation have decided to do something better.

I am honestly not sure. Given that Scottish universities are very different places in terms of demand from rest-of-UK students and the rest-of-UK fees that they have set, we would have reservations about a one-size-fits-all model, which might be less well tailored to meeting the diverse needs of students at diverse universities than the models that each university has tailored to ensure that it has the best possible offering to attract the widest possible range of talent.

Thank you. Effectively, I think you both accept that it is possible to work out the figures, but that people have to work them out individually, depending on which institution they wish to go to. Is that correct?

Yes.

Mr Parker, I am not absolutely sure that it is realistic to say that a student thinking of coming to Scotland would be thinking of coming to all the institutions. I looked at no more than three or four before I applied to maybe three. Surely you exaggerate when you say that somebody would have to work out the figures for all 18 institutions.

An individual would presumably also be looking at numerous institutions south of the border, too, or in Northern Ireland or Wales, so they would still have to wade through numerous different systems. There is a great deal more clarity in England, because the Office for Fair Access is producing what is essentially a league table that shows what different institutions are doing to protect access. We would all find it incredibly problematic if different banks each reported their interest rates in a different way. We are in a market and, therefore, it would be infinitely better to have some form of independent transparency and a guarantee for prospective students on how access measures are reported.

I have a supplementary question for Mr Sim on the point that Mr Parker made earlier about the emergence of different admissions criteria for Scottish and rest-of-UK students. Is that in any way likely to happen?

I would find that very surprising, given that we are under both a moral and a legal obligation to treat people equally. I would be astonished if we were to end up in a situation in which students within the UK were being treated differentially for admissions purposes. Universities want to get the best students from the widest variety of backgrounds and to apply fair admissions criteria, in the perfect knowledge that if those criteria were not fair, they would quite rightly be the subject of legal challenge. I do not think that I entirely recognise that risk.

I want to clarify that, because the issue is important. I am not sure that that is what Mr Parker said. I think he hinted that the overall admissions criteria in different universities—it does not matter whether they are for different types of student—could be affected.

No. I was thinking more along the lines that we could end up with a situation for students from the rest of the UK that is different from the situation for students from Scotland because the pressures of supply and demand are quite different.

I have a question for Alastair Sim. Rest-of-UK students are taken out of the teaching grant so universities can choose to recruit as many of those students as they wish. I think that that is the point that Robin Parker is making in relation to pressure on admissions.

There is a certain allocation for Scottish and EU students, which universities can go above by a small percentage. However, the concern is that when it comes to rest-of-UK students, they can—in the much-used phrase in university education—be used as a cash cow to bring finances into the university. There is no limit on the number of students that can be recruited.

I think that they are a bit too intelligent to allow themselves to be used in that way.

But that is what the UCAS admissions figures this week suggest.

There are real reasons why that will not happen to an unacceptable degree. Frankly, someone who is teaching a laboratory-based course will find that their scope for expansion is pretty much constrained by the facility as well as by the human resource of teaching.

Also, every university is utterly conscious that at the heart of its values is its reputation. That value is incredibly important to people who have graduated from that university. If a university was to dent that reputation by pursuing expansion at the cost of lowering standards, to be blunt it would be sawing off the branch that it was sitting on.

This question is probably more for Alastair Sim than it is for Robin Parker. In the written evidence and the early part of the oral evidence, I have been struck by the amount of collaboration between NUS Scotland and Universities Scotland on hacking through the detail and coming up with some agreed figures, and yet we are still struggling to reach that point.

I do not think that there is any threat to the diversity of universities and their ability to take decisions that are appropriate to the needs of their students and staff and so on. What I am struggling to understand is the resistance in the university sector to having a degree of independence in relation to arbitration, which would give reputational reassurance to those institutions, and clarity, transparency and reassurance to students about what is on offer throughout the sector as well as in individual institutions.

Why is the sector resisting something that could safeguard it from the accusations that have been made previously and in evidence today, and from the lingering suspicion that universities will not necessarily always act in the interests of students?

If I have any disagreement with Robin Parker on that issue it is one of mechanics rather than of principle. The NUS argument has been that there should be a particular regulator for a particular category of student—in other words, rest-of-UK students, who make up about 15 per cent of the student population.

What I was trying to say earlier is that we should consider the issue more holistically. In fact, the minister’s letter of guidance to the SFC and the Scottish Government’s comments on the consultation on the instruments point towards that more holistic solution, which is that we should look to the funding council, in its interactions with each individual institution, to set reasonable benchmarks for widening access and for other activities and attainment across the board. That would ensure that there is a proper holistic system of incentive and accountability for universities and that we have the diverse student body that is right for universities’ role as providers of opportunity for people from all sorts of backgrounds.

Robin Parker and I work extremely closely on many things, and we recognise that there are some differences of opinion between us on this particular issue. However, on the arrangements for ensuring that universities are securing widening access, our disagreement is on the mechanics rather than on the principle.

The only way in which we can walk away happy from this meeting today is if we have a cast-iron guarantee from the cabinet secretary that there will be specific measures on protecting widening access for rest-of-UK students. That is not to say that there would not be a great deal of merit in an holistic system that looked at all forms of students together, but it would be naive to suggest that we could treat the different groups of students separately within such a system. Indeed, we would not want to do so.

The Scottish Government’s laudable ambition is to improve rates of access for students from Scotland. That is entirely welcome. It is entirely the right thing to do, and we support it. Instead of muddying that system with rest-of-UK students, a much more realistic ambition would be to hold ground on widening access. Muddying the two aspects would just make the process complicated. Perhaps the answer is to have an holistic system that takes account of the two quite different situations, in which we try to improve access for Scottish students and to stay where we are on having students from widely diverse backgrounds outside Scotland.

There is clearly a common approach to some of the principles involved, but the mechanics are not unimportant. Before the individual institutions announced their fee levels, the cabinet secretary gave a pretty clear steer that he expected universities to act responsibly. Since then, a number of institutions that have been mentioned today have not acted in accordance with that firm steer from ministers—even by the cabinet secretary’s own yardstick, judging by hints that he has made. It is difficult to see how ministers’ aspirations can be secured through the universities on behalf of the students without a formalised sanctions mechanism.

We were concerned that the approach being adopted resembled a 19th century gentlemen’s agreement, but we went ahead with it anyway. I do not think that it has really come through with a result, however, and some principals have acted without restraint. There are two ways of approaching the mechanics of this. The first, in relation to access, could involve a proportion of rest-of-UK fee income going back into bursaries and into protecting access. A second approach could involve consideration of the outcomes of the widening access agreements, examining Scottish and rest-of-UK students separately and imposing financial penalties for any decline in access for rest-of-UK students.

I think that some explanation is needed on the mechanics. I should also like to say, on behalf of my members, which have made a diverse range of decisions on setting rest-of-UK fees, that those that decided to set the fees at the upper end have also made a serious commitment to financial support. Edinburgh, for example, has committed to spending at least 50 per cent of its new income on financial support for students. St Andrews has likewise committed 40 per cent. We also have to remember that this is largely substitutional income, because universities are losing substantial amounts of teaching grant for rest-of-UK students. The bulk of what is being done in raising fees from rest-of-UK students is to substitute for that loss of teaching funding.

Presumably the cabinet secretary is aware of the details of how the individual institutions’ systems work, yet he has still expressed disappointment with the actions of certain principals in certain institutions. Clearly, the actions taken by certain universities are not in accordance with what he thought was a firm steer as to what he expected to happen, given the latitude that he gave the universities.

10:45

That is a judgment for him.

I want to pick up on two points that Alastair Sim made. First, it is true that most of this is substitutional income, but it would be useful if the cabinet secretary provided clarity with regard to the Government’s consultation response on the action that it will take if the situation persists and certain institutions gain disproportionately from the system. We think that reducing the fee cap and putting more pressure on institutions with regard to bursary arrangements will stop them benefiting disproportionately.

Secondly, with regard to the commitment made by St Andrews and Edinburgh to spend 40 per cent and 50 per cent respectively of new income on financial support, no one I have asked can give me a straight answer to the question, “Forty and 50 per cent of what, exactly?”

I have been very lenient with members in their questioning but I must remind the committee that we are discussing the order and the regulations, not bursaries and student support. It is, of course, important to get the wider context and we have managed to do that to some extent.

What are the implications of the proposed changes to the domicile arrangements?

In our initial response to the consultation, we expressed concern about students falling into the domicile-test gap—for want of a better phrase—between Scotland and England. We felt that it was unfortunate that students who had moved over the border within the three-year period and therefore qualified under neither system would simply be left behind. We welcome the fact that the Scottish Government has listened to us on that issue and has made adjustments.

It is a sensible adjustment that stops people falling between the cracks. I give all credit to the NUS for pressing the issue.

The instruments would allow higher education institutions to charge students higher fees up to the £9,000 cap in the 2012-13 academic year. How stable is that figure, and will there be any pressure for it to be uplifted?

Because it is dynamically responsive to what is happening south of the border, I would regard it as unstable only if the regime in England changed significantly. I regard the cap to be pretty stable and would be pretty surprised if, in the foreseeable future, things in England went beyond it.

In its response to the consultation, the Scottish Government suggests that it will review the situation in the new year and, if certain institutions appear to be benefiting disproportionately under the current regime, it will look again at the arrangements. That is the right decision; indeed, it is what the Government should be doing anyway. Given that the most expensive degrees in the UK have been introduced in Scotland, I think that there will be pressure to reduce the cap. Certainly, I would be concerned if any institution were to be benefiting disproportionately. The issue needs to be constantly reviewed.

Given the lack of restraint that you said has been shown, I can understand why the NUS would be looking to have the cap reduced. However, is Mr Sim’s evidence really that Scotland is being led by what is happening in England, that we are unable to create our own position and that everything very much depends on whether there are inflationary rises down south?

Yes, we are trying to make sure that we manage cross-border flow and that Scottish institutions are able to compete fairly with English institutions to attract students from the widest possible variety of backgrounds. I stand by what I said before: the system is dynamically responsive to what is happening in England, but having gone through the immense pain of creating a particular system south of the border, I do not foresee radical change to that system that would increase the fees beyond £9,000, except in relation to inflation.

In approaching the issue, our biggest concern was to protect access for Scottish students to Scottish universities. Therefore, the key thing that has happened is that rest-of-UK students are being taken out of Scottish and EU-funded places. We think that that effectively creates a quota or a cap on Scottish and EU students that protects access for Scottish and EU students. Therefore, whatever you do on the other side, it is really just a budgetary decision and is separate from the issue of protecting access for Scottish students.

I will move on to the issue of medical students. I am not sure that there is a link, but you will recall the rationale for setting a slightly higher level of fee for medical students four or five years ago. That was done in response to an earlier report by Calman that identified particular pressures on medical courses in Scotland and the specific need to manage cross-border flow.

Within the proposals before us is a suggestion that no increase beyond that £9,000 cap should apply to medical students, which, while welcome, begs the question whether there is a degree of cross-subsidy of students on medical courses from rest-of-UK fees paid by students doing other courses. Can you give me the rationale for why a single cap can apply now to medical courses, which are obviously longer and more costly than other courses?

The cap of £2,895, or however much it was, is no longer necessary for rest-of-UK students because the fees are set by the universities themselves on a basis that is competitive with universities around the United Kingdom—hence, the regulations. Obviously, nowhere in the UK does a £9,000 fee for a medical student cover the full costs of that extremely expensive education, so all the funding councils across the UK still offer an element of additional teaching funding to make sure that students, wherever their domicile in the UK, can study medicine at the destination of their choice. There is an element of remnant Scottish funding council teaching funding going into the very high cost subjects to make sure that they can still be provided at a fee that is competitive. The Higher Education Funding Council for England does exactly the same thing in relation to medicine in England.

I do not dispute the fact that there was always going to be a level of continuity needed for those more expensive courses, but going back to our earlier discussion, do you agree that there may well be a suspicion that Edinburgh, for example, has taken its fee right up to the cap because it sees an opportunity to cover more of the cost of courses such as medicine by securing higher fees from rest-of-UK students studying other courses?

Where I have a lot of sympathy with the decisions the institutions have had to take is that there has been little clarity so far about what amount of teaching grant will be left for higher-cost subjects. In terms of the timescale, it would have been desirable to have that knowledge available earlier, when institutions were taking the decisions. That might have helped them to make less irresponsible decisions, which would have been a good thing.

From the British Medical Association’s submission, I think that it would agree that the only way in which we can walk away from the committee with a successful conclusion is if there is a strong commitment from the cabinet secretary to protect widening access through primary legislation later on.

I have a brief supplementary. Looking through the documentation, I noticed that although those who defer courses up until April next year will be eligible for the existing cap, medical students who defer will not be—they will move to the £9,000 cap immediately. I am struggling to understand the rationale—

Is that right?

Reference is made to the fact that students who defer will be able to enter university on the basis of the current arrangements, but that stipulation does not apply to medical students.

I did not reach that inference when I read the regulations, so you had better pursue that with the Scottish Government.

I think that that is a question for the cabinet secretary.

As the convener said, the areas that we are looking at are quite narrow. Universities will be allowed to increase fees. In addition, variability will be allowed in the fees that are set, which is a change from the previous arrangement, under which, as Liam McArthur described, there was a flat cap.

There are variable fees down south. That was the case when the cap down there was £3,000. Is our moving down the road of having variable fees in Scotland for rest-of-UK students unavoidable?

Our position is that we would have preferred a flat fee. We think that a flat fee is better, in principle, as it does not create a market in education, which we think is damaging as regards students’ decisions about where to go to study. Our preference would have been to have a lower cap and not to have variability.

Universities Scotland’s response seemed to be that it would be too expensive to have a flat cap. I do not quite understand that, as it depends on the level at which the flat fee is set. The decision whether to have variability or to have a flat fee is a matter of principle; the level at which the variable fee or the cap is set is the budgetary decision.

There is a wide range of courses at Scottish institutions, which are diverse in nature as regards whether they are extensive and mature players in the rest-of-UK market, with some offerings being the same length as equivalent offerings at English universities and others being a different length. Those factors added to the need, which I think we have all recognised, to have a sustainable funding package for Scottish universities that is partially reliant on realising rest-of-UK fee income. We have certainly taken the view that having variable fees set by universities that are, on the one hand, reading the market and, on the other, making financial provision with a view to continuing to attract the widest possible range of students is the best way of ensuring that the regime works for the benefit of universities and for the benefit of Scotland.

In recent years, we have had a flat fee for rest-of-UK students in Scotland. Has that been detrimental to Scottish universities?

It was a flat fee that corresponded closely to what, in effect, was a flat fee in England.

Is it not still, in effect, a flat fee in England? Is there now so much variability in England that we have to go down the road of having variable fees?

If we follow that argument, given that the flat fee in England is bumping up pretty close to the £9,000 level, that is the level at which it would have been set here. However, we are seeing a much more diverse picture in Scotland—universities are offering a diversity of fee that goes all the way from £5,000 up to £9,000, as they have made quite subtle decisions about how they can best expand their ability to attract talented individuals from all walks of life from the rest of the UK.

I want to pursue that. If a flat fee was set, as Mr Parker has suggested, at what level do you suggest that it should be set?

I do not think that it is our position to suggest what that flat fee might be.

If it was set at £9,000, would that be—

A flat fee was suggested by the technical working group that looked at the funding gap between England and Scotland.

So, a level of £9,000 would be acceptable.

11:00

Fundamentally, our organisation does not believe in tuition fees. We should try to avoid the worst excesses of the system. It is a bit surprising to hear Alastair Sim describe those as “subtle decisions”. I do not think that anyone could describe as subtle the decisions of Edinburgh and St Andrews, where 40 per cent of the students are rest-of-UK students who have chosen to study there.

What would the impact be if a flat fee was set at a level that was considerably lower than some of the fees that are being set in England? Would that not take us back to the problems with cross-border flow, which is one of the reasons why we have been forced into this situation in the first place?

No, I do not think that it would. There would still be strong protection in place to enable Scotland-domiciled students to go to Scottish universities. That should be our most important concern, because there is still a clear cap in terms of the number of Scottish and EU students. What happens to rest-of-UK students over there, as it were, is a separate decision. There is still strong protection for Scottish students.

If a relatively low flat fee was set, as the NUS would probably have preferred, there would be obvious knock-on effects. Going back to the arithmetic of the technical expert group, let me give one example of a knock-on effect. We are trying to put together a sustainable funding package that protects the quality, competitiveness and accessibility of Scottish universities, and a lower flat fee would mean that it would be necessary to find significantly more public money for universities to come out at the same bottom line.

Such an approach would also end up leading to different perversions of competition, because if you were to set an artificially low flat fee in Scotland, you would end up with a lot more rest-of-UK applicants, so you would end up being able to choose only the very best qualified of those, which would not necessarily be good for widening access. To be blunt, a lot of the people who get the very highest qualifications are those who have been very well coached at schools that are used to having a very high proportion of their population going to university. Choosing a low flat fee might have perverse effects on widening access.

Does Mr Parker want to respond?

I have said my bit.

As there are no other questions, I thank the witnesses for their evidence, which has been very useful. We have covered a wide range of issues, some of which fall within the scope of the regulations and the draft order and some of which do not, but they have all been discussed in the context of the change that they bring about. Many of us share the concerns that have been expressed and wish that we were not in this situation, although it is perhaps inevitable, given the changes made by the UK Government.

11:03 Meeting suspended.

11:12 On resuming—