Minutes of Evidence 5 September 2000
Committee for Employment and Learning
Tuesday 5 September 2000
MINUTES OF EVIDENCE
Student Finance
Members present:
Dr E Birnie (Chairperson)
Mr M Carrick (Deputy Chairperson)
Mr R Beggs
Mr J Dallat
Mr W Hay
Mr R Hutchinson
Mr J Kelly
Ms M McWilliams
Ms M Nelis
Witness:
Mr A Cubie
The Chairperson: Good afternoon, especially to our friends in Scotland. As Chairperson of the Northern Ireland Assembly's Higher and Further Education, Training and Employment Committee I would like to thank Mr Andrew Cubie in Edinburgh for making time available to us. We are very much looking forward to hearing what he has to say. I have heard a little bit of that already through the radio interview, which we did for Radio Foyle at lunch time today. We are delighted that he can assist us, though there is a time constraint and we will have to finish at 3.30pm.
Mr Cubie: I greatly welcome the opportunity of giving evidence to you. I am here without the other thirteen members of my committee, and I am sorry that my arrangements could not have allowed me to get to Belfast today, hence our rather constrained circumstances. Unless you wish me to make some opening remarks about some of the themes of my report, I will be very happy to take questions.
The Chairperson: Perhaps we should start into questions.
Mr Kelly: What have been the implications for Scottish students whose preferred courses are not provided for in the Scottish Universities, and what financial provision is available to Scottish students who choose, or are obliged, to study outside Scotland?
Mr Cubie: My committee's recommendations did not draw a distinction between Scottish-domiciled students studying in Scotland or studying elsewhere in the United Kingdom. In the very limited time that we had available we considered the European Union implications of our recommendations, and, as you may be aware, the Law Officer's advice in Scotland to Ministers was that it was not risk free to introduce our recommendations. Therefore, a distinction was drawn between Scottish-domiciled students studying in Scotland and not having to pay tuition fees and those studying elsewhere in the United Kingdom who had to do so. Ministers would not regard that as the optimal conclusion in their response to the report but they of course were constrained by the advice they had received.
If I may just extend that point a little by saying that in my personal further submission - obviously this was made as an individual and not as the former Chairperson or convenor of the committee - made to Ministers last week, I urged that the European Union aspects be explored further. Indeed, there are aspects of student finance which in the context of the European Union might well find their way to an inter-governmental conference.
Ms McWilliams: Until that happens, and it will be the case, are you concerned with the increase in places in Scotland given the arrangements that are particular to Scotland? Will it be sustainable in the long term? That will be a question for us in Northern Ireland as we also address the issue.
Mr Cubie: I do not know a lot about the Northern Ireland experience, but we in Scotland are net importers of students. My understanding is that, at least in the past, Northern Ireland has been an exporter of students. A thread which ran through our report was that the diversity of the student experience was much enhanced by the mixture of students both from elsewhere in the United Kingdom coming to Scotland and from further afield. At present it is unclear to what extent there may be a collision between a larger number of students wishing to stay in Scotland and those who wish to travel elsewhere in the United Kingdom for course reasons.
Mr Kelly: Further to what Ms McWilliams has said, we do export students to Scotland and to parts of England. How far do you think the European dimension can assist the financing of that situation because it is not being financed domestically?
Mr Cubie: I am doubtful about the prospect of European funding. It was not an area that we considered in our terms of reference. One of the anxieties of the DFEE in London was that had our recommendations been sustained, turbulence would have been created in terms of the way that EU students chose to come to the United Kingdom. The options in Scotland might have been regarded as preferable to those that would prevail south of the border. The issue between the Scottish Executive and DFEE became one of finance - who would be paying for any such turbulence.
Mr Carrick: What are your views on the social consequences of the proposals that are in your name? Have you addressed what the social implications might be? Are we going to widen the opportunities, or are those opportunities going to be restricted in some way?
Mr Cubie: I will try to be brief because I get into something akin to crusading mode in this area. Our terms of reference obliged us to look very closely at excluded groups or groups which were represented in a limited way in the Scottish context. We now have 47% of our cohort between the ages of 18 and 22 progressing to higher education. The English equivalent is 36%. But what has happened is that the widening access opportunities that have flown from the "massivication" of Higher Education have not developed in the way that many in society feel they should have.
It was for that reason that we had some very specific proposals - to introduce a bursary structure in Higher Education, formerly known as a grant, which would have been administered by individual institutions, and to identify what we described as equity groups, for instance, young adults on low income, mature students, lone parents and students with disability. The Scottish Executive has picked up elements of these recommendations, particularly with regard to the targeting of equity groups. Owing to financial constraints they have not felt able to follow the recommendation with regard to the wider access bursary. In my further submission to Ministers I have urged them to look at that again and perhaps to look at some form of piloting with relation to it. Finance is one aspect which many people consider when entering Higher Education, and if these measures had been implemented, the social implications would have been more advantageous.
Mr Carrick: You mentioned the financial implications of widening access. How might the widening of access be financed if student fees were abolished?
Mr Cubie: I hesitate because I am sure that there are those in your Committee who will be knowledgeable about resource accounting. Our proposals would have cost £62 million in cash in the first year and £71 million in resource accounting. They were predicated on the ability of the Government to make allowance for commitments to pay in the future being introduced at current value, and that made our wider access bursary proposals quite expensive.
My colleagues and I were in a very indulged position: we had only one issue to consider, and we did not have to balance other budgetary constraints. I must stress the importance of the wider access bursary arrangement. We took extensive evidence throughout Scotland, and all members of the committee were influenced by people we met who were seeking to better themselves through Further and Higher Education and who were caught in financial traps. That was substantiated by representative evidence.
Mr Dallat: The threshold of £25,000 was lowered to £10,000. How will that affect young graduates entering employment at around £10,000, or who are setting up in business or starting a family?
Mr Cubie: It will affect them profoundly. My main concern with the Executive's proposals is the £10,000 to £25,000 figure, and I have spoken vehemently on that. There is a difference between a £10,000 threshold to commence a loan repayment and a figure at which a contribution is made on a deferred basis. All graduates, irrespective of their circumstances at the time of study, make a contribution, once they have achieved some financial success. To regard that contribution as one that can commence at £10,000 along with some sort of loan facility to help make it seems to me to miss a major plank of our recommendations.
Although Ministers have accepted the guiding principles of our report, which we regarded as a very important framework, I could not see how that conclusion squared with those guiding principles. Whether the figure be £25,000 or slightly lower - and I will be flexible about it -it most certainly cannot remain at about £10,000.
Mr Beggs: The Scottish Executive has created exemptions for disadvantaged groups such as lone parents, mature students and the disabled. How much will these exemptions cost and how does the Scottish Executive intend to finance them?
Mr Cubie: You will have to forgive me while I look quickly at the response document. I am not certain that I am going to find that immediately, but I will be able to identify it at the end of this evidence, if you wish. I am sorry that I just do not have that in my head.
Mrs Nelis: Our experience of the student loans system here has not been a very happy one. I see that the Scottish Executive has opted to use the current student loan system to collect the post graduation endowment rather than the system that you suggested in your report, 'Student Finance Scotland'. Is this absolutely set in stone? I know that the Executive has stated that its reason for doing so was that tax and revenue is a reserved matter. Can you suggest any alternative arrangements which could be made, certainly locally, for repayment schemes?
Mr Cubie: My colleagues and I were very clear that it was appropriate to have a mixed menu of options so that loans and grants and, indeed, the endowment all sat properly together. Within the recommendations we made regarding eligibility for loan and because means testing has changed, we did suggest that there should be a pilot scheme for commercial arrangements which would allow those who did not fall within the main loan system to have the benefit of commercial loan arrangements. I do have an understanding of why the Executive felt hesitant about creating another body. We suggested the amalgamation of existing bodies to create Student Finance Scotland, though I do appreciate that creating another body to be involved in the area of student finance might have been difficult.
I also have to accept that we as a group probably became quite aspirational in what it was we were trying to recommend, albeit with our feet fairly firmly on the ground, and a new body that would be charged with recovering the graduate endowment would obviously have been a more complex structure than the one that the Executive has chosen to go with. I simply say again that I have some understanding of why it did not go quite as far as we recommended. One of the problems was - and I think that this is one of the interesting aspects of devolution - that having a different structure within Scotland such as we were recommending quite clearly was going to give rise to difficulties within the United Kingdom as a whole, because it would have been quite materially different. That is why I am pleased at the chance to talk to your Committee, because some of what we were recommending fits probably more easily within a UK context than it does within just a Scottish context.
The Chairperson: Within the theme of deferred contributions you have already spoken about the principle that it is only fair that students, after they have graduated and have earned a substantial salary - and you have £25,000 in mind - pay a contribution to study. Many people would accept that principle and I personally find it attractive. However, there will be others who will argue, and no doubt you encountered this, that in principle, Higher and Further Education should be free. How would you respond to that argument?
Mr Cubie: I understand it, and indeed you are correct, Mr Chairperson, that this point was put to us quite vigorously. There were those who asserted that we had had a principle of free education in Scotland as a matter of history. That is not so, and we commissioned research to demonstrate that that was not the case within higher education. The facet of free education when it is then applied to the employer's contributions also becomes difficult with regard to the various sources of funding in tertiary education. On the front cover of our report we boldly put the word "fairness". For the very reason that you referred to, in the Scottish context there were very few who would not accept the fairness of a deterred contribution.
We created a remarkable consensus around some of your recommendations and, indeed, one was around this issue of a deferred contribution. That came not only from university principals and staff associations, from unions, from employers, but also from the student body itself. We felt there was firm ground in recognising that contributions should be made at the appropriate time and when the individual can make the contribution fairly. For some that cannot be at the time of study and for them it should be when they have achieved material financial advantage is there. That is based on 100 years of evidence which shows very clearly that graduates earn more than non-graduates even in societies where the proportion of graduates relative to the rest of the population has been rising significantly.
Mr Beggs: Are you still in talks with the Scottish Executive on this issue or have the Scottish political parties accepted what has been put into place? Is the issue dying or is it still a hot issue where there could be further movement?
Mr Cubie: I do not intend to sound impertinent, but you might ask the Scottish Executive about that. I made a further submission within the consultation period on their paper having finished at the end of last month. I made clear in formal meetings with Ministers that I hope there can be further thought on the level of graduate endowment, the bursary provision, and, indeed, some aspects of the European Union position.
I am now advantaged because I am giving evidence to you this afternoon, and I have already given evidence to the Select Committee in Westminster. I have yet to give evidence to any component or Committee of the Scottish Parliament, but I anticipate that in the months ahead. You will be pleased to know that you are ahead of our own Parliament here! I hope that there will be some opportunity for movement but the Chairperson referred at the outset to the status of the committee. My committee was an independent committee, which was quite out of the political swim. I do not know the coalition politics well enough to know if any movement is possible or not. As you have gathered from my remarks I hope that movement may be possible. It would be to the betterment of Scotland generally and to individual students in particular.
Mr Hay: What evidence did you take from universities before you drew up your conclusions? Your report also proposed that loan payments be abolished for students whose parents earn more than £47,000 a year. How did you collate that?
Mr Cubie: We took extensive written evidence from all component groups in universities and Further Education colleges, from university principals, staff and students. We also arranged a comprehensive series of campus visits to universities and Further Education colleges. During these visits we were at pains to meet the different component groups in the university and college structure. We also held public meetings in 13 locations throughout Scotland when again further university and college representatives came. The greatest satisfaction that my colleagues and I gained was that on the day that we reported to Ministers we held a seminar that afternoon and invited all the groups that had submitted evidence to us to come. We had a fairly major gathering as you might imagine from that. At that point the representatives from university principals, the student bodies and the staff unions from universities all agreed with the major planks of our proposals. We consulted fairly widely.
On the point you make about the threshold of contribution you will be aware that the tension in and around tuition fees in Scotland was enormous. I do not think that as much attention as was appropriate was paid to the fact that we were recommending that middle Scotland, if I can put it that way, would require to contribute more to education. We talked and thought long and hard about this but the conclusion came back to the fairness of contribution from those who could afford it. We knew in the Scottish context that there is a long tradition of valuing education - indeed, many colleagues in the committee had family recollections of finance which had gone into the advancing of the next generation to that generations betterment. It was for these reasons that we felt a contribution was appropriate at a higher level from those above £47,000.
Mr Kelly: That £47,000 capping perhaps does not take into account the number of children that might be in the family. What are your views on that?
Mr Cubie: We almost included it as an alternative set of guiding principles because in the creation of any structure for finance there had to be anomalies. The view we took was that the level was sufficiently materially high to allow for numbers of siblings being involved in the process. I take the point that you can cut that pack another way.
Mr Beggs: The other factor not taken into consideration is the relationship which a student may have with his parents - whether or not the parent would be willing to contribute anything. So I would caution against that.
Mr Cubie: In an ideal world, and bear in mind we had five months to produce this report, we would have liked to have explored further the implications of making students independent of their family relationships because undoubtedly there were many who said to us that that continued dependency created a range of tensions and difficulties which we might not have allowed for fully. It was for that reason that we did encourage some kind of piloting of other loan arrangements. There is no doubt that for those who come, say from the gay community, with families not necessarily approving of that, there were some cogent points put to us that that continued dependency on a family connection could be very impeding as far as progress into Higher Education was concerned.
Mr Kelly: In the consultation, how much interaction did you have with student union bodies, and how much weight would you put on their contribution to the debate about free education?
Mr Cubie: We had really quite substantial interaction both in formal terms with formal evidence sessions and with representatives coming to us. We had a student representative on the committee who had been the students' representative committee president at Aberdeen University. There are two distinct student representation groups in Scotland, one being for the ancient universities and the other the National Union of Students for Scotland. They did not combine to any great extent until our work was well advanced, but I am pleased to say that one of the by-products seems to have been that they are more collaborative. I thought they took a very responsible view of the evidence they gave to us. Indeed, both the NUS's first submission and the second, which has gone to the Executive, are thoughtful and of very high quality. The two groups were very responsive the way we went about that consultation process.
There were also hundreds of students around campuses during our visits, so that those who were not members of formal student bodies had access to us.
Mr Dallat: Is there any international evidence to suggest that free education should mean just that?
Mr Cubie: In the context of the desktop work we undertook on mass Higher Education systems - owing to time constraints it could only be desktop - I am not aware of a free system, short of a communist regime, that is actually coping with current exponential growth. Thank you for raising the point. That too added to our feeling that one had to draw contributions from all those elements able to contribute to Higher Education.
The Chairperson: I should like to return to the question of deferred contributions. It concerns the practicality of the schemes now endorsed by the Scottish Executive. Will the mechanisms be adequate to track graduates, ensuring they actually end up making the contributions? That is a practical question, perhaps one more of equity and fairness, given that salaries vary by subject. Though it is perhaps the case where your original figure of £25,000 is better than the actual figure of £10,000, there may be issues of fairness, given the evidence that some disciplines produce a much greater pay-off in eventual salary increases than other academic subjects studied.
Mr Cubie: Those are indeed two significant points.With the tracking issue, we had to be very clear that our Scottish graduate endowment could not be regarded as a tax, since the devolved settlement for Scotland dictates that it could clearly not be another impost. We were satisfied, as, I believe, the Executive is satisfied in that regard, but in our suggestions for Student Finance (Scotland), we acknowledged that there would require to be a high level of information-sharing with the Inland Revenue when tracking individual graduates.
I make no apology for the fact that we were not a full-time committee. We had access to good resources, but we were not able to get to the bottom of a number of issues with which we wished to deal in detail. Some of the structuring, I readily accept, took place in that context.
You partly answered the point you raised, for many expressed concern that, with incomes in different careers being quite varied, the compulsion under the present structure was to push people towards the better-rewarded careers. Our feeling was that if one takes £25,000 as being the annual income across a range of occupations, at most points, whether in teaching, commerce, or public service, the individual has made some strides towards advancement, and for that reason we felt that it was a relatively neutral figure unlike the £10,000.
The Chairperson: Further to the question of tracking points, how are contributions going to be received from other EU students studying in Scotland, if at all?
Mr Cubie: We recognise that this depends to a fair measure on the integrity of the individual student. You may smile and say that that is a rather forlorn hope. There is a great deal of evidence that, through the alumni bases of universities, they are tracking their constituent group very well. I am not saying that Student Finance (Scotland) would plug in to the alumni base of Edinburgh University or Strathclyde - not least because we propose the establishment of a foundation. Interestingly, on the basis of a voluntary structure many people have said that they would be willing to contribute - on a tax-efficient basis - to a national foundation in preference to contributing to their own individual university. Therefore, the establishment of that foundation combined with individuals recognising the value of contributing in later days - in order to continue the benefits they had received - would make the issue of tracking less severe than it seemed initially. However, I readily accept that this is an issue.
Mr Kelly: Returning students to the benefits system will improve the plight of many outside term-time. In the North of Ireland there are constraints on the hours students can work before losing their benefit entitlements. This implicates the type of work and the number of hours they can work. Do you have any suggestions regarding provisions for these constraints? Should there be constraints at all?
Mr Cubie: Our report went to the Executive and then to the Scottish Parliament. We had three recommendations which we urged the Executive to raise with the Westminster Parliament. They have not done this. A fundamental aspect was that clarification of the present arrangements was necessary to determine whether students would be funded for a 38-week period or a 52-week period in the year. In Northern Ireland you have, as we do, rural communities where the opportunities for part-time student work are very limited, both in the vacation period and, indeed, for many colleges in term-time. We felt that those students who could demonstrate that they had - using other aspects of the main benefit system - been unable to find employment would be entitled to participate in the benefit system on the basis that they were studying full time, which is a 52-week occupation. You would be required to demonstrate fair inability to get work.
In contrast to this, some of the research we undertook showed that for many students in Scotland much of the damage to their studies was done by term-time work which, for some, was extending to 30 to 35 hours a week. These were people who were, at same time, nominally full-time students. Some of the research - which is referred to in our report - is compelling, hence our recommendation that there should be some form of code of conduct limiting term-time work to a minimum of 10 to 15 hours a week.
The Chairperson: We are coming towards the end of the time, but we will have one more question.
Ms McWilliams: I know from experience in Higher Education that one of the difficulties is defining what constitutes a mature student. Clearly - although you do specify exemptions, particularly in relation to lone parents - there is always the issue of married women who have enormous difficulty, particularly where they have husbands employed in a low-income bracket. Did you take this into consideration in relation to exempting them? Was that a consideration when you were looking at exemptions in relation to who constituted a mature student?
Mr Cubie: Considerable reference was made to the circumstances of married women. In the elements of our recommendations for mature students the provisions for married women, in the circumstances you referred to, are, indeed, anticipated.
This it is why we referred to the categories as equity groups. In equity - particularly in the context of mature students - married women should not be at a disadvantage. Similarly, members of the other equity groups should not be held back because of a lack of finance. One of the benefits of a wider-access bursary arrangement operated by individual institutions is that they could indeed have brought focus to that.
Mr Hay: Given the work you have done in Scotland, what implications are there for the rest of the United Kingdom? I do not think the situation is confined to Scotland; it also has implications for England, Wales and Northern Ireland. What are your feelings on that, given the work you have done?
Mr Cubie: I spend much of my life as a lawyer, and the specific evidence we have was substantially Scottish. We undertook desktop research, which is, I hope, available to your Committee - it has been published in separate volumes - and at the end of December, my colleagues and I felt that we could speak with real authority about student finance in Scotland. We had immersed ourselves in the difficulties and the restrictions involved, many of which have been drawn out this afternoon. However, we could not apply that to other areas of the United Kingdom without suggesting similar research be done. That is the canny answer; the honest answer is that I do not see why many of the target group members in Coventry or, indeed, in Belfast do not have the same concerns (particularly in regard to loan aversion) that came across in Scotland. This is reflected by the fact that there are still a number of national bodies campaigning loudly for a wider consideration of our recommendations and, in some cases, their implementation.
The Chairperson: Thank you very much Mr Cubie. What you said was extremely interesting and helpful. We have all been looking at the Cubie Report for some time now, and we are impressed, not only by the final product that your committee produced, but also by the process used. In terms of our own devolved arrangements and the processes of consultation used here in Northern Ireland, much could be learnt from your methods. Because it was an independent committee, you had long enough to commission research and make national comparisons. I understand you had over 900 individual submissions. If you had the chance to do it again, and if the resources were available, would there be anything you would change?
Mr Cubie: There are two aspects to that. I wish that there had not been an intense debate over tuition fees in the background. I hope the report shows this very clearly, because to many in Further and Higher Education, living costs are a much more significant issue than tuition fees, even, dare I say it, elsewhere in the United Kingdom. By the half-way point in our process we managed, with quite active press engagement, quickly to push the issue of living costs further up the agenda. I wish we could have started off in that position, as it might have promoted maturity in the exchanges that we had.
The second issue I wish we could have looked at was funding of institutions as well as the funding of students. It is self-evident that they interlock, and one of our statements was that, insofar as the Executive accepted our recommendation to abolish tuition fees in Scotland, that in itself should not diminish resources to institutions, and the Executive accepted that.
The Chairperson: Thank you, Mr Cubie. You have been extremely helpful, and we hope that at some point you will be able to physically come and talk to the Committee. We will seriously think about what you said, as we have to form a view on student support in Northern Ireland by the end of this month. So the issue is alive here as well. Thank you for your time.
Mr Cubie: Not at all, Mr Chairperson. I have made clear to your Clerk that I would be happy to talk to you face-to-face, but I am happy to make whatever contributions I can.
