Enterprise and Culture Committee, 07 Oct 2003

Meeting date: Tuesday, October 7, 2003

Official Report 223KB pdf

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Scottish Solutions Inquiry

As the majority of members are here, we will make a start. We have received apologies from Murdo Fraser, but I think that Brian Monteith will substitute for him at some stage. I ask members to ensure that their mobile phones are turned off.

The first agenda item is the Scottish solutions inquiry. We have circulated to members a résumé of the evidence that we have taken to date in the inquiry. It was felt at a previous meeting that this meeting might be a useful opportunity to stop and take stock of the evidence we have received in order to inform our future evidence-taking sessions. More evidence sessions are scheduled, but no definite names are slotted in as yet, with the exception of Professor Hills, who is the former principal of the University of Strathclyde. We also have the brainstorming event to consider potential solutions, which is to be sponsored by the Scottish Council Foundation.

Do members have any observations on the evidence gathered thus far or on where we should go in the rest of our inquiry?

The résumé gives a pretty good reflection of what we have heard. However, I have a question about page 5, which mentions the "perception of lower quality". Forgive me, but from which piece of evidence did that comment come? I do not recall hearing it and I could not find the answer in the document.

The comment came from Universities Scotland and referred to the fact that the research ratings for universities in England go up to grades 6 and 6*, whereas in Scotland they go up to grade 5*. The group that is even smaller than the Russell group of universities uses that system to rate research quality but, in Scotland, a decision has been made not to use that system. The point is that the different systems will create the perception that our research that is of international standing is not as good as that in England because it is not level 6 but level 5.

The comment also related to the conscious decision south of the border to concentrate Government funding for research on an even smaller number of universities than is the case at present, whereas the Scottish Higher Education Funding Council has taken the policy decision not to go down that route. That decision might also create the perception that our universities are of lower quality.

I am informed that the specific source of the comment was the Association of University Teachers Scotland.

That is correct—I cannot find the comment in Universities Scotland's submission.

Are there any other comments?

One point that struck me was the emphasis on greater collaboration between institutions as part of the solution. That point was highlighted to the greatest effect by the Scottish Council for Development and Industry, but the conclusion was reached by a number of universities and by Universities Scotland. We should stress that because, although there is not complete agreement on how greater collaboration might be achieved, there is a fair amount of agreement that the collaboration that takes place at present is important.

One of the issues we are discussing is what further evidence we should take. If we can identify people who might have something useful to offer by telling us precisely what collaboration would mean in practice, whether more money would be required or whether it might save money—I jest—your suggestion might be a useful line of inquiry.

We need more evidence on the economies of scale and the increase in effectiveness, but we should avoid as much as possible duplication of work that has already been undertaken.

I have a wider point, if that is appropriate.

Is it on the Scottish solutions inquiry?

Yes. I want to raise the wider point about the so-called English white paper and Scottish policy, which was explored in depth by a number of witnesses in the previous meeting. I wonder whether we ought to pass comment on it. I say "so-called" because the case is not so clear cut: although the white paper relates directly to higher education in England, there are implications for Scotland in a number of areas. Several of our witnesses mentioned that that was not referred to in the white paper. Perhaps, at some point in the process, we ought to make some observations on that.

I feel that there is increasingly a need to devolution proof policy papers—to pinch a phrase. A conscious effort should be made to consider their implications for devolved areas. The white paper is a good example of that not happening. Perhaps we could make that observation retrospectively in the appropriate terms. There are also issues about where we go from here and how we feed back our thoughts into the decision-making process in another place.

I have a concern about paragraph 5 of the paper. What it says is perfectly right, but I question whether it goes far enough. The difficulty, as far as I understand it from what I have read, is that, because the additional moneys that English and Welsh institutions will receive are essentially private, they will not feed into a Barnett consequential and therefore the Executive will receive no equivalent sum that it might or might not pass on to higher education—it would still be for the Executive to make that choice. Had Charles Clarke decided to increase universities' funding, Barnett funding would have been available and the Executive would have been able to decide how to use it. Might the committee wish to tease that out? It is a crucial part of the process.

One witness—I cannot remember who—suggested that, in the long term, there might not be a funding gain for English universities if, at the same time as top-up fee income increased, Government support decreased. That too would have consequences for Scotland. There would be a negative Barnett consequential if that were to happen.

I think that Arthur Midwinter said that a Barnett consequential would come from increased participation. The Government is aiming for 50 per cent participation in English universities, and the funding for those students would mean a Barnett consequential. However, I agree with Brian Monteith that it would be good to tease that out. We could find out what negotiations there have been with the Department for Education and Skills to find out what the consequential might be. Perhaps the Scottish Executive knows what it would be. That information will be important to our recommendations.

The fact that we do not yet know any details of the funding proposals highlights the uncertainty of the matter.

The paper discusses resources on page 6. It states that the current positive differential in Scotland's favour is 3.6 per cent more per head of student population. However, it does not go into the fact that the financial plans that have already been published north and south of the border would guarantee erosion of that differential. Arthur Midwinter went to great lengths to explain to us that the growth in the equivalent budget for the DFES south of the border is considerably larger than that in the enterprise and lifelong learning budget in Scotland and that, in spite of higher education being a priority, its share of the budget will diminish over the next few years.

The paper says that in paragraph 25.

Perhaps I missed that.

I do not mean that I disagree, but the matter is referred to in the paper.

I am concerned about the resources. I may be wrong, but members will have seen that the only specific figures—or certainly the most specific figures—that we received were those given in the Universities Scotland submission, which said that something like a £59 million increase would be needed to bring the proportion of spending on higher education within the Scottish block to 2002 levels. Another upgrading of 5 per cent would then be required at a cost of—from memory—£45 million a year. It is important to note those fairly specific figures.

A more specific point is that those who made submissions were asked to propose solutions as well as comment on the proposals. It is notable that quite a few of them—probably the majority—did not do that. Specific solutions were certainly not proposed and certainly not by the universities. Perhaps the universities were just a bit guarded. Some of them said simply, "We agree with what Universities Scotland says, but we would make these additional points." For the record, it should be noted that four of the 13 universities—14 if we include the Open University—did not respond. That was rather odd, given the importance of the issue.

For future inquiries, we should find a way of asking more specific questions so that we get suggestions for solutions. The inquiry is entitled Scottish solutions, but probably 60 per cent of those who made submissions ducked the issue. Perhaps they did so for political reasons—whether that is political with a small p or with a large p—but, nonetheless, the outcome is that we will be restricted by the fact that many of the respondents did not suggest a solution.

You are right about that, but the brief that was sent out to potential witnesses was fairly clear about why we are having the inquiry and what we were looking for. The fact that many of those who responded chose to address the current situation is perhaps unfortunate. However, we can understand why that was so, given the uncertainties about what the future situation will be and the imprecise nature of the proposals.

I concur strongly with the point that Mike Watson made. There are wider issues of process to do with how we get to a place where people explore solutions rather than just talk up problems.

Having said that, I would also say that, however critical many of the witnesses were of the proposals down south and of the impact that those may have on Scotland, some witnesses still identified areas that were worth pursuing in their own right. In a sense, they were turning the threat into an opportunity. If there were a need to do so, those areas could be explored further.

However, I am not sure that that has quite been captured in the summary that has been presented to us. For example, the summary has a section on business contribution and on endowment income. To varying degrees, witnesses recognised that there was a potential to look at how income from those sources might be increased, although they were also clear that, as the summary states, such things

"could not be used as a replacement for core funding."

In other words, the choice should not be either/or. We should capture some of the more imaginative suggestions that were made.

Forgive me if I have missed anything, but the other issue that came through time and again was collaboration. In a similar vein—I do not think that the two things cancel each other out and in no sense do I wish to detract from the real concerns and criticisms that were made—I think that the summary should be a wee bit more balanced on that issue.

I certainly agree that the purpose of our inquiry is not just to moan about the existing situation. I suspect that some people would have been happy to do that, but we want to go beyond that.

I want to pick up and reinforce Susan Deacon's earlier point about the wider policy issue. One bit of it is about the committee's role in saying what things the UK Government might have done better when it brought out the consultation document. The second bit is about what we should recommend to the Parliament as a result of our inquiry and what the Parliament should recommend to Scottish ministers, or even directly to Westminster, as a result of the consultation exercise. We perhaps also need to set a framework for that for the future. I certainly feel that, across the range of the committee's work, we probably need to grasp that issue and take it forward.

There might be some difficulty in taking those views to the Westminster Government, if that is what you mean. We should, as a matter of course, send a copy of our recommendations to all Scottish MPs. I do not know where that will fit into the Westminster parliamentary process in relation to the development of the policy on top-up fees, but Scottish MPs should be clear about what we are saying on the basis of the evidence that we have received.

I assume that they read our reports avidly.

On the figures that Mike Watson mentioned earlier, I think that he meant pounds per year as opposed to percentage increases. There were two elements to the figures, which came to between £90 million and £100 million between them. My recollection is that those figures were broadly agreed between the National Union of Students Scotland, the AUT and Universities Scotland.

The exact figures are on page 6 of the submission from Universities Scotland.

As I understand it, the figures were agreed jointly between those three bodies. Perhaps they did not go into detail about how they might apply the additional money—if they received it. I presume that the minister will appear before the committee at some point, so it might be worth hearing the Executive's view on whether that potential shortfall of between £90 million and £100 million is real and on whether such a shortfall can be bridged by anything other than a reallocation of funds in the Executive budget. I suspect that that is where the additional money would have to come from.

The committee has heard that greater efficiencies might be achieved through collaboration. That would be fine—it might happen and let us hope that it does. We have also been pointed in the direction of increases in endowment funds and increased funds from partnerships with business. However, I suspect that we will end up considering whether the policy decision on priorities in budget allocation, which we will consider shortly when we meet the minister, adequately addresses the difficulty. Universities Scotland has probably given us an objective analysis of the situation—I hope that it has—but the Executive might have a different view.

If we are considering taking further evidence, it might be worth hearing an independent view on the potential shortfall. I do not for a minute suggest that the Executive—or university students, teachers and employers—will not be objective, but it might be interesting to have an objective analysis of the situation, before we debate from where a financial shortfall might best be funded.

Before we move on, I will bring in another Brian.

My point is on a separate issue.

Universities Scotland provided step-by-step calculations to show how it reached a figure for unit funding that is 3.6 per cent higher in Scotland than it is in England. However, it has not given the same explanation of how the figures in the submission were reached. It would be useful to have that breakdown. It is difficult to be precise, of course, because we do not know whether top-up fees will be introduced at all: we do not know how many universities will charge the fees or at what level they might be set. I understand that the figures are based on informed guesswork. Nonetheless, Universities Scotland produced a specific figure, so it would be interesting to know how that was reached.

I want to clarify a small point that arises from paragraphs 18 and 19 of the paper and which is perhaps really just about the form of words that might be found. Although tuition fees might rise to £3,000, according to the paper, I understand that means-tested support of up to £1,100 will still be available. In effect, the top-up variation is in the region of £1,900. I wonder whether we need to draw attention to that. A Scottish student at an English university would be able to apply for means-tested support and have the fees waived but would still have to pay the difference. There is an element that is not compulsory. Perhaps the clerk will find a way of working that in.

Perhaps it would be useful to ask questions of the UK ministers in writing to clarify points that have come up. However, they might say that their plans are not sufficiently advanced to allow them to give us specific answers.

Would the last point that Brian Monteith raised not be covered by the fact that the top-up proposals oblige institutions to make allowances for students from poorer backgrounds? The institutions would have to build that consideration into what they were charging.

That is an interesting question. If a student qualifies for relief on the element of £1,100, which is already there, would they automatically qualify, through the institution, for additional relief? I do not know. I suspect that people in England are not sure about such points of detail.

It is significant detail. If we are arguing that £3,000 might be an incentive or disincentive to move up and down the board, it clearly matters whether students are to be charged it.

That is why I mentioned paragraph 19 of the paper, because it extrapolates the amount into three years and takes the figure up to £9,000. It might not be on such a large scale.

Is there a sense of what has been said in response to the English document? Some of that must be in the public domain, so can we get hold of it?

The English document is a white paper. Were comments on it sought?

I cannot remember.

I am not sure either. Regardless of whether comments were sought, I am sure that there have been plenty. We can certainly check what has been said and at what level. Susan Deacon is looking puzzled.

Is it possible to clarify the time scale for decision making in Westminster, because that is germane to where we go from here? I do not take issue with our trying to glean further information about thinking among UK ministers. However, it would not be an illegitimate response on their part to say that the matter is for consideration and debate within the UK Parliament. Therefore I am not sure of the value of our trying to extract information from a somewhat moving target.

However, we are probably already in a position to reach broad-brush conclusions about the impact on Scotland if the policy measure is taken. I come back to the point that Christine May and others have made about feeding in broad views to try to shape the decision-making process. We should be trying to do that rather than simply extracting bits of information to shape our decision-making process. There will come a point further down the track where our scope to influence—if indeed it exists—is no longer there. I understand that careful consideration was given to the timing of our inquiry. Will you clarify the relative time scales of our work and Westminster's decision-making process?

I do not have definite information on the Westminster time scale. The clerk might be able to assist me.

There is no definite information. The working assumption was that the important stages of the Westminster legislation would take place next spring. If we report in January, that would at least be in advance of that.

There is never any certainty about these things. We find it difficult enough to influence our Parliament's time scale, let alone that south of the border.

We have kicked the matter around a fair bit and got most people's comments and we have certainly taken careful note of what has been said. We have two events timetabled. The Scottish Council Foundation event is on 12 November and we have one witness identified for an evidence session. We will consider what has been said today to see whether it brings other witnesses to mind. We will consider more closely the evidence to see whether there are any points in the written evidence from people from whom we have not heard that are crying out to be exposed more in public.

We have to continue to consider the matter. There is no point in our having more and more meetings if we do not feel that we are adding anything significant to the sum total of our knowledge.

I am afraid that the Minister for Enterprise and Lifelong Learning is not coming to discuss the budget until 4 o'clock, so I am sorry to disappoint the vast masses who have turned out to listen to our deliberations, but we are going to have to suspend the meeting until 4 o'clock and await the minister. I ask that all members come back at 4 o'clock so that we can start promptly.

I must give my apologies, because I have to attend the Conveners Group meeting at 4 o'clock.

I should be there too, but I am going to take a rain check.

Meeting suspended.

On resuming—