Minutes of Evidence 15 June 2000

Committee for Employment and Learning

Thursday 15 June 2000

MINUTES OF EVIDENCE

Student Finance in Northern Ireland

Members Present:

Dr E Birnie (Chairperson)
Mr M Carrick (Deputy Chairperson)
Mr R Beggs
Mr J Byrne
Rev R Coulter
Mr J Dallat
Mr W Hay
Mr R Hutchinson
Mr J Kelly
Ms M McWilliams
Ms M Nelis

Witnesses:

Dr Robson Davison Department of Higher and Further Education, Training and Employment
Mr Alan McDonald Department of Higher and Further Education, Training and Employment
Mr Ian Houston Department of Higher and Further Education, Training and Employment

The Chairperson: It is my very pleasant task to welcome, I think, seven officials from the Department and, I think, several also from the Department of Education. Those from Department of Higher and Further Education Training and Employment, are Doctor Robson Davison who is the Head of the Further and Higher Education Division and then also Mr Alan McDonald and Mr Ian Houston. Also Tish Hegarty, Denis Hamill, Rosaleen Duffy and Brenda Marson. You are all very welcome. I think that the idea is that Robson, you are going to give an overview, to start with, and then you will be taking questions?

Dr Davison: That would be helpful if that is possible, Chair. Could I say as well that although Ian is on my team today, Ian's normal position is in the North Eastern Education and Library Board. Ian is on secondment to the Department for this specific exercise. We are very grateful to the North Eastern Education and Library Board for releasing Ian to join us in this work.

Chair, thank you very much for the invitation to come along to the Committee today to discuss the progress with the review. I certainly understand from our previous meetings, at the start of the year, the Committee's very deep interest in the topic of student support. I understand that the terms of reference for the session are to inform the Committee's response to our consultation document and we will try to come from that particular direction. I hope that what we have to say is helpful. I hope as well we can have a two way exchange on this. It may be useful if I open on a few points. First of all the process of the review and where we are now. I thought then I would give you some indication of the public costs involved in student support, and in any potential changes to it, and then maybe just to pick up some of the emerging issues from the consultation to prompt the discussion.

To start with we have really been following our terms of reference which were published at the time of the Minister's statement in mid-February. The Minister asked for a thorough review of the current arrangements which would lead to a set of costed proposals for change. He had linked those proposals with promoting access to Further and Higher Education, for those previously under-represented, and also asked the review to take into account changes elsewhere, particularly in Scotland and in England, and to include in it the new policy developments that were then in the pipeline. Our work has really been tied to the Minister's terms of reference. We have divided the work into different stages. The first stage was really scoping the work, planning the review and preparing and publishing the consultation document plus, at the same time, for our own internal purposes, reflecting on the policy considerations and the policy implications against which we were going to be conducting the review. We published the document in March. We issued some 1750 copies of the document which were sent out to educational institutions, to representative bodies in education, to political parties, to district councils, to representative business organisations and to other Government Departments. We sent out 1750 copies, we put copies in each public library and in each job centre and we put it on the web. So we distributed the document fairly widely and in line with the Minister's statement. We invited almost 20 groups to come and make presentations to us of their views and opinions. These were groups who had a particular interest in student support.

The second stage was the research phase, where we looked at what had emerged in Scotland, because, clearly, Cubie was a backdrop for our own work. Not just Cubie, but to pick up from the Scottish Executive exactly how they had viewed Cubie and what they were putting in place in response to Cubie, what was likely to happen subsequently since they had made only an initial response to the document. We wanted as well in this period to get in touch with DFEE to see what was happening in England and Wales. We wanted to look as well at the position in ROI and at the position not just from our own Department but from the other Departments in Northern Ireland. We wanted to look at whatever statistical evidence we could bring to bear and to look at any other documentation around that was related to the set of issues. So the focus was on existing data and existing information. We did not commission any new research in that period.

Where we are now is really what we asked in the consultation document; that people and groups would return their comments on the document to us by 2nd June. We had responses by 2nd June; but certainly, in my experience, they come in in a long tail. So, in effect, we are still receiving documents. At the moment, we have, I think, 50 returns with, I'm led to believe, a few more to come from people who have contacted us.

What we will begin to do now and what we are in the process of doing is analysing the returns; trying to identify any key messages coming through, consistently, in the returns; and trying to identify trends. Then we will pick up the proposals made in the consultation returns and plot those against the policy objectives and against the issues that are coming through. We are trying to use the consultation to develop the major issues which any options that we drew up have got to address. When we have done that and drawn together the analysis from the various returns and from the presentations that were made to us we would, at that stage, move to drawing up a set of options and get those costed. Those would form the basis for an analysis of the implications - how they sit against the policy objectives, how much they cost and what are the likely implications? That would form the basis for the last phase, which would be drawing together the advice and going over that advice to the Minister. At this point in time in the process we are still taking consultation returns but we have already begun the process of analysing those returns and trying to identify the key issues emerging from them.

You had raised, I think, in one of your letters to the Minister the possibility of an interim report. We have not intended to publish an interim report largely because we want to try and complete the review and to have decisions made on the review in time for the spending decisions that will determine public expenditure. If we make recommendations they can, then, be taken into consideration in this round of public expenditure rather than wait for subsequent rounds of public expenditure. It provides, if you like, a fairly tight time frame against which we are trying to work.

The spending review is important because the resource implications in student support are, obviously, a major factor in all of this. In this financial year, the Department will spend circa £90 million on student loans. We will spend circa £20 million on fees. We will spend another £14·5 million on grants and fees under the old system, the one that is being steadily rolled out from the changes that were introduced in 1998/99. We spend approximately £3.4 million on discretionary awards and we spend a total of £3 million, roughly, on access funds. In total student support terms we are talking about expenditure of circa £130 million; it is a fairly sizeable amount of expenditure. By way of parameters we had, for example, in the universities in 1998/1999 some 37,000 full-time under-graduates. That would be in universities throughout the United Kingdom and Republic of Ireland. If we spent an average additional £100 on each of those full-time under-graduates in whatever combination of fee, loan or whatever combination you wish, that would imply an additional £3.7 million expenditure. For every £100 you would add to a full-time under-graduate cost it is a £3.7 million call and the sums flow on from that. To take it to the other extreme, we have roughly 40,000 part-time adult vocational enrolments in Further Education. Again if you were spending an additional £100 on each of those you would be implying an additional

£4 million per annum. We are talking here about sizeable sums which is why the Spending Review point, is important.

I mentioned earlier the policy objectives that we set. The Minister spelled these out in his statement in February. We have to consider the implications for lifelong learning and for increased participation in education and training. I think, particularly from what the Minister said in February, we have to consider support for the widening of access to Higher and Further Education from those groups previously under-represented in both those sectors. I think, as well, we have to consider the relationship between the provision in education and the economy as one of our frames of reference. Of course, we have to consider TSN, although that is closely related to the under-representation point and equality, although there may be some tensions between them, in that if you address one group in particular it may have implications for another group.

So far, in terms of the responses made to us, a number of major issues have begun to emerge. I thought, as I said earlier, it might be useful to share those with you by way of promoting an exchange. None of them, I suspect, is going to come as a surprise to you from our earlier discussions. First of all, would be the principle of free education for all which is clearly espoused by some of the correspondents who would argue that there should be no fees for courses at Further or Higher Education. Some would go further and argue that grants should be re-introduced particularly for University students. Others would take the view, enunciated by Dearing and supported by Cubie and by the Scottish Executive, that those who benefit most from the education they receive at third level should be expected to pay a contribution towards the cost. So there is clearly a debate over principle here which we will have to consider. We have recent research which was sponsored by the Education Department, DENI, published recently by Professor Harman which shows a very close link in Northern Ireland between education and earnings - the higher the level of education you receive by way of qualification, the more likely you are to be earning considerably more than if you had not the qualitication. There is clearly a question of principle here to be considered.

The second main issue would be the disparity in support in the current system between full-time Higher Education under-graduates and those who are over 19 and full-time in Further Education. Further Education is free to 16 to 18 year olds but not free to over 19 year olds. Those over 19 have to compete for a limited number of discretionary awards; therefore there is a big disparity. As well as that, in Further Education there are no loans and there are no allowances. As I say, if you are not successful in getting a discretionary award then you or your employer have to pay the full fee. So disparity exists between support for full-time Higher Education under-graduates and support for a Further Education full-time student.

The third element would be a disparity between the treatment of full-time and part-time students which would apply in both Higher and Further Education. The policy has changed in recent times to be more favourable to a part-timer in Higher Education than was the case previously, but there have not been substantive changes of a similar nature in Further Education. For example, if you are in 50% of a full-time Higher Education course you can qualify for a loan of up to £500. In Further Education there is no such loan available to you. So there is disparity between the full-time students and part-time students, whether they are in Higher or Further Education.

Another issue would be the significant drop in applications from mature students, where we read mature students as those over 25. In real numbers, for example, there were applications in 1997 from 789 such people who were over 25; this year, 2000, it is down to 602. It is a drop of 187, a percentage drop of 23%. There has been a significant drop in applications in Northern Ireland from mature students. This is something that has happened on a UK - wide basis. Indeed the recent changes that have been announced, in income disregard for student support purposes and in the introduction of a school meals grant for dependent children, are a direct response to the fall-off in applications from mature students.

A fifth issue would be access to Higher Education from those from the lower socio-economic groups in society. We are not able to say whether this is the case in Further Education because we don't have the data to draw upon, but certainly in Higher Education if you take social classes IIIM, IV and V, we do better than the rest of the United Kingdom, but we are only marginally better. On IV and V alone, however, we are as good as or as bad as the rest of UK, whichever way you want to see it. Certainly, there is an issue here about access to Higher Education from lower socio-economic groups.

A sixth issue which was covered in the Minister's statement has been the development and the implications of new policies. At the moment, in GB, they are testing Education Maintenance Allowances for 16 to 18 year olds in a series of pilots. These are incentives to stay in full-time education. Those who go into full-time training, 16 to 18 years old, receive a training allowance in GB and in NI. In education, Further Education and school they do not. So the EMAs are testing out the introduction of an allowance; in some areas they are giving it to the parent, in other areas they are giving it to the child and in some areas they are giving it half and half. They are building in, in some areas, bonuses for retention; in other areas bonuses for performance, and in some areas bonuses for both. They are testing a very wide range of possibilities on EMAs. We await the evaluation of those with interest, but the preliminary indications are that they are having a positive effect on staying on rates in England.

The other issue which is of more direct interest on the post-18 side, would be the introduction of Individual Learning Accounts. In their initial form these were intended to be £150 grants which would be given to the first million individuals who participated and who would bring a contribution from either themselves or their employers. The concept is beginning to change to one which is incentivising adult part-time participation in education where the Individual Learning Account is like a fee remission  - 80% off courses in, for example, ICT would be your ILA. The final details are being formulated but, clearly, these have implications for us because they introduce support for part-time students in Further Education almost for the first time. The introduction of those new policies are a major issue for the team, how they fit into the pattern.

The last issue to mention to you is one which comes from Cubie rather than, so far, from the consultation - why his proposals were for Scottish students in Scotland. He did not legislate or seek legislation for Scottish students in England and Wales because of the implications, I suspect, for EU law and also because, I suspect, they were unable to decide unilaterally that institutions in other jurisdictions could not get fees. Now that has an implication for us, on which we will be seeking legal advice. In our review we set off with the aim of looking at all Northern Ireland students, but there are major implications if we are in a position where we can legislate for Northern Ireland domiciled students in Northern Ireland, but for whatever reasons, we cannot legislate for Northern Ireland students in other jurisdictions. We will be seeking advice on that but it is clearly of interest that Cubie avoided that, as did the Scottish Executive.

Chair, I apologise for the time it has taken me to get through what were preliminary remarks. I thought it might be useful to set a pattern. We are at the stage now where that is what we are doing, trying to get messages and pictures, before we start trying to put together detailed options for costing via our economists. We are certainly now more than willing to share in exchange with the Committee.

The Chairperson: Thank you very much, Dr Davison. I will now throw it open to questions from the members. We will take the indications to speak in the usual way. I think John is first.

Mr Kelly: Good afternoon, just give us some idea why you would not be seeking an independent commission?

Dr Davison: I think it was the Minister's view that we were coming in behind the Cubie discussions which had opened up a major debate on student support and which had led to a wide range of information on student support being available. I think, as well there is a timing factor. We are trying to complete our review in a period where we can make recommendations in time for the Spending Review so that change, if change is going to come, can come relatively quickly.

Mr Kelly: I would support the notion of free education. You did mention that people who have received a third level of education seem to do better than most in society. Does that not also indicate that society and industry benefits from those who have received that education, industry putting something back into education?

Dr Davison: Well I cannot quote you chapter and verse, but, instinctively, I would suggest that society gains from a more highly qualified work force which is one of the reasons why we are trying to drive up participation, certainly amongst adults.

Ms McWilliams: I noticed in the Appropriation Bill this week under the student loans which you have rightly said cost about £90 million, that £7 million was down for deferment and £7 million for default, could you say why these figures are so high?

Dr Davison: I need to go back to the detail of that and perhaps write to you subsequently. I suspect it is related to UK wide figures, where we tend to be related, in student loan terms not to the specifics of Northern Ireland students, but to where we stand as a percentage of United Kingdom students who are having their loans funded through the student loan company. Therefore we fall to X% of deferment and default across the United Kingdom. I need to check that out because clearly it is a technical area, but I will come back to you.

Mr Beggs: The estimates for 2000/2001 showed a 40% year on year increase in funding for tuition fees. Can you clarify does that large increase simply reflect the old system going to a new system, is it historical or have you been building in any additional funding for the outcome of any review? If you haven't built in any funding for outcomes from the review, where will extra money come from if tuition fees are abolished? Have you some idea of the amount of monies needed to replace tuition fees.

Have you analysed the drop-out rates from third level education, and what comments would you like to make on whether financial pressures have contributed to an extent?

Dr Davison: On the appropriation account I have not got the figures in front of me. The tuition fee contribution has gone up from £1000 when it was set initially, to £1025 in the second year and, in the third year, it is £1050. There is no increase in tuition fees above that.

The second point would be that there is a roll-out of the old system where we would be in the final year of the old system. What the relationships are to the figures you have, I would need to go away and look at those.

Mr Beggs: £21.5 million for tuition fees on block which was 40% increase on the previous year. I was not talking about individual figures.

Dr Davison: In previous years, there may have been a new line for new tuition fees alongside the old ones, it maybe has something to do with the way the figure work has been laid out. Certainly I will get back to you on that.

Mr Beggs: Secondly the drop out.

Dr Davison: We have had recent data, on the Higher Education side, which was a national study done of retention rates. In our case the two universities in Northern Ireland came out in the averages of their bands by nature of the institution. So, in terms of drop-out rates we would be around the average of universities of their type. The figures are not any more significant in Northern Ireland than they would be elsewhere. That is not to say it is not significant overall because clearly drop - out is a cost.

Mr Beggs: Have you analysed in any way the reason for those drop - outs?

Dr Davison: The data that was presented was numerical rather than analytical and it did not deal with the reasons behind the drop out rates. From my understanding of the system there are a number of factors that come into play, one of which may well be the financial burdens on students. Equally there are things like choosing the wrong course to begin with; not fitting in to the university, et cetera. So there are a range of factors. Determining which of them would be the paramount factor, or rank ordering them, might be very difficult.

Mr Dallat: Mr Chairman, many of the people who would benefit from Higher Education would be people who would qualify for grants. Does that suggest that the public relations exercise needs looking at? That is my first question.

The second one is because there is such a serious shortfall in the number of places in universities in Northern Ireland, clearly a Cubie solution would not work because that would immediately entail a large number of students experiencing inequality of a type that I don't think the Assembly would tolerate.

Thirdly, the present disparity between Further Education and Higher Education in terms of grants and fees is obviously something else that a new fledgling Assembly, that has put equality at the centre of its activities will not accept as an option. May we have your response on those three points.

Dr Davison: On the first question, one of the big messages from the introduction of the changes that has not percolated very deeply is the fact that, in the first year of the introduction of contribution to fee, 49% did not pay anything at all; 22% paid something between zero and £1000 and 29% paid the full £1000. Clearly from the correspondence that we have had so far that is a message that has not percolated through. If the general point is that we have not communicated the outcomes very well, I probably have to accept that.

Mr Dallat: The purpose of asking the question is not to illustrate the fairness of the present system, but to show concern at the number of people who could have benefited from Higher Education, but have not because there is a perception that they wouldn't have been fee free and got grants.

Dr Davison: It is hard to be definitive about that in that our enrolments have continued to increase over the last few years, though the introduction of the changes has had an effect, a small effect overall on the numbers of applications. It has had a major effect as I have pointed out on applications from the over 25s and we have put into place some changes directly related to that. In overall enrolments of full-time under graduates, those have continued to rise. It is extremely difficult to be definitive about would they have risen even further had we not had the system. That is a hard one to answer. We are only two years into the system and statistics tend to run behind.

On your Higher/Further Education point, I simply repeat what I said earlier which is that coming through in the consultation is the disparity between what you get as a full-time under-graduate Higher Education student and what you get as a full-time over 19 student in Further Education. There is quite a significant gap.

Mr Dallat: One supplementary question. Within the Further Education system is there a need to look at the level of importance of the courses offered. For example, does someone undertaking a course in line dancing attract the same amount of support as somebody doing a physics course?

Dr Davison: I am not sure that is the case. Line dancing may well come in under the leisure courses that are funded at a different level from a physics two year A level or GNVQ. I am not so sure that they are funded at the same level.

On the broad point, Further Education is a fairly broad church and provides a community service of leisure and recreational courses, at one end of its spectrum, right up to Level 4 sub degree courses at the other end of the spectrum. Within that there is a fairly wide raft of provision. There would be an argument that says it should operate on a narrower front. One of the issues to consider is that if the broad raft of provision is considered necessary for society it has got to be provided somewhere; at the moment it is all in Further Education.

Mr Hutchinson: There has been a fairly large drop in applications from mature students. In 1997 there were 789 and this year there are 602, that is roughly 22% of a drop. What do you think are the reasons for that and how do you suggest that we can turn that around?

Dr Davison: I think there is a significant drop, and that is right across the four jurisdictions. One must assume that it is to do with the circumstances that have come into play for mature students. It might, however, also be something to do with the state of the economy; that there are more opportunities available outside of education. Again it is hard to call, but I think we accept that there must be some element of financial concerns in it.

We responded to that by picking up on the income disregard and by introducing the school meal support for dependants. So in the review, I think we have identified mature students as one of the key groups affected by the changes and at whom we would have to look carefully. There are other things that may need to be done.

Mr Hutchinson: This group is looked on as important within the education system?

Dr Davison: It goes back to the policy of life long learning and wanting to have the opportunity for those who perhaps missed out first time around to come back in to education. I think it is related to that policy objective that I think we need to think about them.

Mr Carrick: Could I just pick up on your comments during the presentation regarding research, and the decision not to commission any new research. Certainly I don't believe in reinventing the wheel, however, I would have thought that there is scope for some thinking within the Northern Ireland context. In hindsight, do you have any regrets about not commissioning any new research particularly focused on the Northern Ireland situation? That is one issue.

The second issue is the contrast between promoting life long learning, and the drop, over the period, of 23% in mature students. What does that suggest to us? Is there a failure here in promoting the concept of life long learning, when the trend seems to be going in the opposite way?

Thirdly, can I just tease out the other new policies on the mainland, the EMAs and the ILAs. Obviously there is a funding implication here if we were to go down this route. Are those incentives means tested in any way?

Dr Davison: Let me take those one at a time. On the research, I think we were making decisions in the context of the time frame. We wanted to be clear that we could get the review done in a period which would allow the Minister to make decisions that would tie in with the spending review. This would allow a shorter time between getting recommendations and actually implementing them. I could consider a lot of areas where, perhaps, research would have added to the picture but we had significant elements of research to draw upon; under Cubie significant bits of research have been done. I mentioned also the DENI education and earnings research, but within the time period on the commissioning of research, the undertaking of research and getting the findings, I didn't think we could have done that in the time.

Mr Carrick: I understand precisely what you are saying, but it is also vitally important that we get it right, that we get the right solution and the right programme for our students.

Dr Davison: I accept that, but all I am saying to you is that in the time that it takes to commission research, to go through a procedure laid down of going for bids, deciding who wins the bids, setting up the research, getting the findings, evaluating it and reporting it back, it simply would not have fitted within the time. I appreciate the point but on the practical side I do not think we could have done it.

On your other two points, the relationship between mature entrants and Higher Education, I have made the point that I think we do need to look at that as an issue. I would relate it to Further Education as well, because clearly in respect of life long learning, there are many folk who may want to come back in to education at levels below degree level.

Mr Houston: Chairman, just to follow-up on that point of the life long learning and mature students issue, one of the things to bear in mind is that the desire among mature students to go back into education, as reflected in the part-time enrolments, shows no sign of abating. Those figures continue to go up. Clearly there is the desire to get back into education. I don't think we can say absolutely that there is a direct correlation between the finance and the number of applicants but it plays some part.

I think perhaps the other point is the fact that we have so many people who participate in third level education at 18. It is higher than the rest of the United Kingdom, up to 41.2% at the moment, but it does obviously have a knock-on effect in that the numbers that are later available to go into Higher Education does tend to be slightly smaller. For most students the way into Higher Education is not direct, it is through Further Education, which again suggests that Further Education is particularly important; that is the access route, that is how they get in, that is the way they take.

That is the research that was done last year by Professor Field who was at University of Ulster and is now at the University of Warwick; it would support that view.

Your third point was on the means testing in the EMAs. They have made these means tested in the pilot areas. That is an interesting development at 16 to 18 because training allowance isn't means tested as far as I understand.

On ILAs, in their final, final form, I am not sure that they will be means tested but I will certainly check that point.

Mr Hay: I think this is probably one of the most important areas of work this Committee will undertake. It is important that we get it right. No matter what system you come up with somebody somewhere is going to pay for it, and we need to be clear about the potential financial implications before we decide.

Regarding consultation, what sort of response was there from the groups that you have consulted with, and how did you identify individual people to meet? Has there been reasonably good feed back from consultation?

Dr Davison: We had invited a number of groups to talk to us and ten groups picked us up on that and gave us the kind of debate that we are having today, and they made their views pretty strongly. I had better not name names, that is invidious, they gave us a good spread of views and opinions. The 50 replies that we have had have come from a range of bodies from political parties, from educational institutions, from trade unions and so on. In representative terms we have had a reasonable response.

We have not had a massive public response in the sense of lots of individuals writing into us, but we have had the views of the main bodies, the ones with a most direct interest in the process. Your opening point was that we have to get this right and that is what Mr Carrick was saying; we would agree with that, we want to try and get this right.

Mr Hay: I am concerned that there are students undertaking a full-time course of study who work a number of hours during the week to subsidise their studies and that this trend has increased over the years. Do you envisage, when this review is finished and presented, that this area will be addressed?

Dr Davison: I could not sit here and say that the final outcome of this will mean that no student ever has to work during his or her course. I think that is an impossible one for us to say at this point. Obviously the ultimate decisions here will determine whether students are better off than they are now; the end results will determine that. Certainly we were informed by a number of the people who responded to us, that students were working a considerable number of hours. Some of the institutions told us that this had an impact on the teaching week and others told us that the number of hours had increased quite substantially in recent times. Whether you could ever get to a point where students do not have to work, I just do not know.

Mr Hay: I do think that the review should ensure that students are not forced into a situation where they work so many hours everything else suffers and they then end up dropping out.

Dr Davison: It is in nobody's interest for drop out rates to rise because there are major costs involved in having students not completing courses. On that ground, the functional ground alone, you wouldn't want it to happen. Clearly there are a number of different policy objectives and it is a matter for the final outcome which policy objectives you can meet. Do you want to increase participation and widen access to a much greater degree? Or do you want to put more money into the students that are already there or do you want to widen access? There are a number of possible outcomes and when we get to the options end of things I think what we will be trying to do is look at the policy objectives and see what options would produce positive outcomes in terms of those policy objectives.

Mr Byrne: I think all of us on this Committee want to see a speedy resolution of the student support difficulty because the reality is that many students have suffered this year and previous years. I think if one of the policy preambles is to widen access and to meet the equality agenda then we have got to try and make sure that we are not restricting the chance of people who want Further or Higher Education from doing that.

One area, Chairman, that I am very concerned about is the provision of Higher Education across Northern Ireland. We have the two main universities and the seven Further Education colleges, one in Belfast and one in Derry, and the five others; Newry, North Down, Portadown, Ballymena and Enniskillen. I have to say I think it has been unfair the way that the Department has decided in recent times not to allow any further Further Education colleges to run HNDs. I am concerned that the Department is being too restrictive in talking only about a further 100 HND places in software engineering and electronics and that no college can enter the HND business if they haven't been in it before. If we are going to be serious about equality I would see equality of opportunity for all our students across the region and that includes geographic equality. I am not going to pass any judgment on any of the existing courses but I would like to see some sort of evaluation carried out to make sure that some others are afforded the opportunity.

Certainly my own county, Tyrone, is the only county in Northern Ireland that has no full-time Higher Education provision, and I would hope that disparity will change.

The second point, Chairman, I will say as a public representative that one issue that I had to deal with mostly in the last year, is the difficulties relating to student loans. I had a situation where students were ringing me from Birmingham, Liverpool, Dublin, who were basically at their wits end as their student loan cheque was not being processed. I want to know what the Department is going to do about making sure when we get to September/ October this year that they will not have the same shambles as last year.

I had a situation where two students were ringing me and they were contemplating coming home, but they did not have the money to get home. I think that was grossly unfair to our students, especially those that had to go away to get a Higher Education course. They were being doubly disadvantaged. First of all they couldn't get a Higher Education course in Northern Ireland, because of the number we have here, and secondly, whenever they left, our whole student support system is now so difficult for them, that agony was piled on even further in that they couldn't get the loan cheque and indeed some cheques bounced.

Lastly, Chairman, teacher training, I know might be slightly off the subject, but I think it is an issue that some of the Northern Ireland teacher training colleges are concerned that some of the GB colleges are able to advertise here at the moment. They are offering money incentives for taking a place in the English colleges and also in fact they are offering those students the opportunity do their teaching practice here in Northern Ireland. That actually is worrying for the Northern Ireland colleges in that they are worried that they could be crowded out over the next year or two. I would like to know what the Department is considering in that regard.

Dr Davison: Three major ones, maybe if I can deal with them one at a time. On the provision of Higher Education in Further Education, we have a set of criteria in place for Higher Education in Further Education colleges for those which do not currently provide full-time Higher Education. When the college meets those criteria it becomes capable of bidding for places when places are available.

I can certainly think of one college in County Tyrone which has met those criteria and recently bid for the places that were available under the Comprehensive Spending Review. It was unsuccessful because it was not bidding in the areas which were defined as those required for the regional economy.

However, one hundred HNDs have become available outside of the CSR from funding that was available under the 'skills initiative' and have been applied to the growing area of software development. Software development is not an area which colleges can start up very quickly; so we have gone to the existing colleges on the basis of the one hundred places for this year. Those are one hundred additional places. If the spending review delivers any further places in Higher and Further Education these will be opened up to bidding from all the colleges, including at least one in County Tyrone, to bid for in the next round of HND provision.

In talking to that college, I have been saying to the principal that the sort of provision the college ought to be bidding for is recognised within the regional skills needs rather than one that isn't going to fit into that particular category. Depending on the outcomes of the spending review, there may be another bid process with at least one college in Tyrone capable of bidding.

Mr Byrne: Chairman, can I just make a supplementary point to that? I do accept that there are criteria, what I'm worried about is that the criteria are so restrictive only the existing colleges are going to be able to expand their HND provision.

Dr Davison: We have, in fact, two colleges who previously have been unable to provide full-time Higher Education in Further Education, one of which bid into the regional skill needs areas and actually got places and one of which didn't bid into the skill areas and didn't get places. It is a possibility for colleges to move from a position where they currently don't provide full-time places to a position where they can provide full-time places. Then, it is for them to bid into those areas which are identified for HND purposes as urgent skill needs areas. That is what I have been saying to the college leadership in the case in point.

On the second point about student loans, we certainly are aware of difficulties that applied last year. Since then we have visited the Student Loan Company and had the Student Loan Company visit us and, along with the other jurisdictions, we have been putting pressure on the company to make sure that they are addressing some of the problems around communications and around the flow of cheques that occurred last year. We are assured by the company that they have been addressing the issue from their end. We have also been working closely with the boards to try and ensure that, at our end, we are doing our best to meet the needs of students in the coming year as we tried to do last year. I cannot promise you that we aren't going to have difficulties; we have to wait and see. But certainly we have worked at both ends of this chain to try to ensure that the processes work more smoothly.

Mr Byrne: Just on that, I have to say that I'm concerned that the Student Loan Company reacted in a very insensitive way to telephone calls from students or from related families. It took public representatives on the phone to look for people right at the top before there was any movement. I think that has handicapped the students. They should not have to suffer, especially if they are at college in GB, and they don't have the money to use a public phone box. I hope that those difficulties will not occur next year.

Dr Davison: I wouldn't defend insensitivity on any grounds. Officials from my division will be visiting the Student Loan Company at the end of this month and I will make sure that they bring that to the attention of the senior people there because I don't think that is justified on any grounds.

On your final point, which is the teacher training bursary point, both DHFETE and the Department of Education are looking currently at this issue. Some of the salient points are that we do not have the degree of teacher shortage that has driven those bursaries in England. We have a substantial number of applications for all the teacher training places that are available in Northern Ireland. On the teaching practice in Northern Ireland, I will talk to colleagues in DE about that. What you are saying is that the teacher training providers in England are offering students from Northern Ireland the capacity to do their teacher training in Northern Ireland schools and that that could crowd out our traditional providers?

Mr Byrne: Yes.

Dr Davison: I will raise that point with our DE colleagues, but the evidence is that there is currently a huge number of applications for places available in Northern Ireland.

Ms Nelis: Good afternoon Dr Davison and colleagues, you are very welcome. I want to thank you for your presentation first of all. I want to ask you a question in reference to the terms of reference of the review, the last bullet point, which is: "To make recommendations for any changes to the current system which would better target existing financial provision and if appropriate provide costed options". Could you tell me, because we know that the current financial provision is insufficient, that's the problem, would that have any connection with the low level of response to the consultation process so far? You have 50 responses, Cubie had something like 700 - I'm not saying that you are targeting 700 - but I just wondered, particularly in the terms of reference, would that have any connection? That is the first point.

Secondly, I'm just going to quote from the student poverty document which I have in front of me because I do believe that the consultative document in this Review would aspire to many of the things that the Students Unions have flagged up. We would want to alleviate current student hardship through maintenance and benefits, increase and widen access to Further and Higher Education and bridge the equalities, ensure equitable funding for both part-time and full - time- some of the issues you raised yourself - and enhance the quality of education. Those are all very laudable aspirations and I trust the review would be addressing all of those. So can I ask you about the mechanisms that you want to be putting in place to ensure social inclusion in the most unrepresentative groups, especially in terms of the Review. Is the Department monitoring the equality implications of current policies and its effects on the current situation in the student fraternity? How will you prove the equality aspect of any recommendations which are to be implemented?

Dr Davison: If I take the first of those points, the final bullet point in the terms of reference covers the possibility of using existing money to better effect through targeting it better as well as, if necessary, providing costed options for new money. I could not speculate whether that has had an effect on the number of responses but certainly it was to enable us to explore if the current spend is getting close to the kind of policy objectives laid out and, if not, is there a better way of spending that money. That does not prevent us putting forward other options which may require additional resources; so the terms of reference include both.

On the student poverty point, you asked me what mechanisms we were going to put in place. The next stage of the review is to draw up options against the objectives that we have been set and taking into account all the comments that we have got from the consultation and to put together the options which seek to address the policy objectives. Now, whether in the options we can capture all the things you have said or some of the things you have said we will have to wait and see as we shape those options. That is the next stage of our review, to put them together and cost them so that the Minister knows what the option is and what the cost of it is likely to be.

You asked us about the equality effects. Clearly, in terms of monitoring equality effects, like other Departments we will be taking on board the monitoring of the equality effects and TSN effects in line with our stated policies. So we certainly would want, having undertaken a process like this, to evaluate later whether any changes did meet the requirements of TSN and equality. We will be trying to do that as the changes unfold.

Ms Nelis: May I ask a supplementary?

The Chairperson: Yes.

Ms Nelis: Given your response would you agree with me, even trying to put into effect some of the options it is still going to require very large additional finances, I would imagine?

Dr Davison: What I have said to you is that changes may require substantial funds, almost any changes are going to end up with effects which are a considerable cost. I said to you that if we spent an additional £100 on each full-time under-graduate that would cost £3.7 million per year in addition to what we are spending now. So small changes in student support can have fairly costly effects. When we put together the options for the Minister we will have to be absolutely clear as to what the costs of these options are because ultimately Ministers and the Assembly will have to determine the priorities on which money is going to be spent.

Rev Coulter: Thank you Doctor Davison, I must congratulate you on your presentation today. Most of my questions have been answered, but there is one area that hasn't really been touched on yet and that is the situation with post-graduate students who are involved in Research and Development. I would like to know, as there is an economic relevance for the Northern Ireland economy, what is being done in that area? Secondly, the disparity in support for students in Higher and Further Education - I know of a senior student trying to enter Higher Education through a Further Education college last year, who was not able to manage it because of the financial implications. At the same time the management of the Further Education college that this person was wanting to get into had just returned from a trip to Sri Lanka where they were trying to attract students to enroll - they didn't get any by the way. Is there any information on the relative costs of Further Education College management, and numbers of students enrolled?

Dr Davison: I wouldn't have detailed data on that. If that is something you want to write to us about to suggest, we can certainly consider whether it is possible to make judgements from within our existing data.

Rev Coulter: The question really is: after the review, will we put Northern Ireland students first?

Dr Davison: The review terms of reference includes the need to cover Northern Ireland domiciled students. I was saying, however, to you we may have an issue about Northern Ireland domiciled students studying elsewhere, but it is Northern Ireland domiciled students at the heart of the review.

On your second point, we looked at that when we were shaping the terms of reference of the review. There were two reasons why we didn't take post-graduates on board in this review. One was that we had bitten off a lot in the current review and if we included post-graduates, which is a very complicated territory, as well we would not be able to manage it all within the time period. So for practical reasons we didn't add post-graduates to the review. The second reason was that it is a complex area and the reason it is complex is the very reason I think to which you are alluding. It is the direct economic relevance for many specific industries of post-graduate training and funding. It is the kind of issue I think we need to look at out of the student support review. I know that your Committee is going to be looking at the whole relationship between education and training and economic development. It is in that frame that I think you would want to look specifically at post-graduates. So we didn't include it for practical reasons and because we thought it had this sharper, more directly economic focus and we need to look at that in a different context.

Rev Coulter: But it will be looked at?

Dr Davison: I think we need to see the shape of your Committee's study of education and training and the economy because it may well fall within your study and so we would not wish to duplicate the work.

Mr Kelly: Just an observation, Chair, on the Student Loan Company. I attended the meeting to which Doctor Davison referred with the Student Loan Company. I found that their presentation left me very cold indeed. It is only right the relationship between the financial and personal aspects of their work should be kept monitored.

Dr Davison: We will certainly be visiting the Loan Company and I know from colleagues in the other education departments that they have similar interests and concerns and that they will be monitoring it closely as well. So there is significant pressure to ensure that any difficulties are addressed. The point made about treatment of parents and students; there is no defence of that at all.

The Chairperson: Thank you very much, Dr Davison. I wonder if I could make a few points or indeed questions? As you will know we are very keen as a Committee to be involved in your ongoing process and the Minister knows that - and we will be talking more and writing to him about it - ideally we would actually like to see the submissions which you received, but that will be discussed further because I understand there may be certain issues around that in terms of confidentiality.

Dr Davison: If you reflect back on our timing, it came at an awkward moment in the political process and we ended up with the announcement of the review under one set of circumstances and launching it in another. It is in that change that I fear we may not have made too clear to people who were responding that we would be passing on their submissions elsewhere. It is in that area that we have concerns, Chairman.

The Chairperson: I can see that could be a problem, but obviously that's something we will pursue further with the Minister. Robson, you were saying that obviously the Department will be analysing the responses and summarising them. Again we would be very keen to see that analysis when it is complete because that would certainly be a valuable input into our own considerations. Really I think probably two questions strike me, they haven't really arisen in the discussions so far. Can you say something about the impact of the tuition fees on the income of the two universities? Is my understanding correct, that you are saying 29% of students pay the full fees of £1,025, a certain percentage around about one fifth pay something, and then the other half don't pay anything at all? Do the universities get all of that income so raised? If so, how much and what percentage of their total current income is it? Clearly from our point of view, policywise and indeed obviously from the Minister's point of view, if the view is taken that the fees should go, how much income for the two universities has to be replaced?

Dr Davison: On the involvement in the process, Chair, if I could just say that clearly I can't commit my Minister.

The Chairperson: I don't expect you to.

Dr Davison: That is a matter, really, for the Committee and the Minister. On your specific question, the answer is that the universities get the full fee. They get some of it from the private source, which is the parent or the independent student and the rest they get from public monies. In the year coming it is £1,050 so the universities will get the number of students times £1,050, whether that comes from public sources or from private sources. Our calculation last year was that the public cost of the fee was around £650 out of the £1,025. So £650 of that was coming from public sources and the remainder from private sources. As to the percentage of their total income I couldn't give you an off the top of the head figure. I could certainly give you figures as a percentage of the total grant that the Department would give a University. We give them their grant and then, on top of that, they get the fee income and then on top of that would whatever other income they earn through research grant or private foundation or whatever. I can give you certainly the amount of money that they got by way of fee last year and its percentage of the total grant.

The Chairperson: I think just before suspension was lifted the then acting Minister, Ingram, did indicate to me that it was something in the order of £16 million would be the additional Exchequer costs of abolition.

Dr Davison: If we were going to remove the public element of the fee it would be roughly £16 million. If we were going to remove the whole fee - and remember this is from our domestic institutions, as we couldn't remove it from England, Scotland and Wales - it would probably be £20 million to £25 million.

So the public cost at the minute would take £16 million to replace.

The Chairperson: Robson, I found very helpful the indication of types of views coming out of the submissions. One thing you didn't mention was the view being expressed that, per head of population you would have expected a lot more submissions than 50, you might have expected 200 from Northern Ireland, but there may be all sorts of reasons for that. The other question, did the submissions, any of them, deal particularly with the deferred contribution model as has been suggested in Scotland (and indeed as in other parts of the world) whereby graduates, once they pass a certain salary threshold, then a certain amount is deducted from them almost as an additional tax? Admittedly you haven't analysed it fully yet, but your impression, how much support for that was there?

Dr Davison: Please bear in mind that what I'm giving you is a snapshot of our analysis to date, so it is not the total picture. I am making clear to members that this is not an exhaustive view of all the submissions we have had. On the submissions, the 50 received have embraced a good spectrum and have been well put together submissions in terms of analysis. A number of them have put forward the deferred contribution model which was the one that the Scottish Executive chose to run with. The main argument put forward for it is that putting the fee at the front end is a bar to access because people see that as a barrier. Albeit, and I was making the point to Mr Dallat, 49% haven't paid anything and, from our correspondence, it is clear not everybody is aware that a huge number of people don't have to pay the fee contribution. We have to accept that there is an argument that the individual gains quite substantially in earnings over a lifetime from their Higher Education experience. Therefore if you do accept the argument that people ought to contribute something to their Higher Education which is the Dearing and the Cubie argument then it is better deferred. That has had some degree of strength. I'm saying to you that I couldn't, at this point in time, judge its strength across the whole of the consultation because we haven't done the whole analysis yet.

The Chairperson: How long do you think that analysis will take?

Dr Davison: I would hope that we have the analysis complete maybe by early July and that we would begin then to map the analysis against the policy and begin then to start thinking about the kind of options that might be put forward.

The Chairperson: Well thank you very much Robson and indeed to your colleagues. It has been most interesting and useful. I'm sure you will hear more from us and hopefully we will hear more from you in future. Thank you very much for coming along. I think we have all appreciated this immensely and we obviously wish you well in your continued analysis and response to the submissions received so far.

Dr Davison: Thank you very much for the invitation, Chair, and I'm sure we will meet again.

The Chairperson: I expect so and thanks again.