13 September 2007

I’m delighted to be here as the first Secretary of State in the new Department of Innovation, Universities and Skills.

As many of you have remarked, the new Department - created as one of the first acts of a new Prime Minister - gives Universities – along with science, innovation, colleges and skills - a new and direct voice in Cabinet.

The formation of DIUS does not mean that past policies, past Ministers, or indeed, Higher Education itself have failed.

If our benchmark was comparing today with a few years ago, this could a very complacent speech; full of mutual congratulation and back-slapping!

Investment has risen. University finance is now more stable and sustainable

Participation in Higher Education has increased. New opportunities for people who in previous generations would not have dreamed of going to University.

Record investment in science has re-established Britain as a world leader in research. Second only to the USA in league tables of research excellence. A position we are committed to build on.

Collaboration between Higher Education and business is improving at an ever-increasing pace. The latest Higher Education – Business and Community Interaction survey showed commercial business spending over £300 million on contract research and a further £115 million on consultancy from Higher Education in 2005 – 06.

You have made this possible, and I want to thank you. Also I want to thank Drummond Bone on behalf of the Government for his leadership of UUK over the past two years.

The problem is that neither the past, nor even the present should be considered as the benchmark for success.

It is what we must achieve in the future. That benchmark is not set just by our own aspirations, but also the ambitions and actions of other countries.

We know the challenges. A globalising economy. Climate change. The accelerating pace of technological development.  A world in which people, businesses, money and knowledge are increasingly mobile. Powerful emerging nations with huge resources and justifiably great ambitions

These challenges can bring a sense of insecurity – to universities, to communities, to businesses and also of course to individuals.  Global change has the harshest impact on those least well-equipped to respond.

We can, though, create new opportunities in a changing world. We can and should ensure that no one gets left behind.

But only if we make the most of the skills and abilities of every single citizen.

Only if we carry out world class research and scholarship.

And only if we translate new knowledge into successful businesses and public services.

That is the reason for a new Department which brings those aims together in a single focus. 

We no longer have one Government Department looking at how science and innovation can lead to successful businesses and public services, and a quite different Department looking at how we can develop the skills to exploit these opportunities.

Responsibilities that had been scattered across Whitehall have now been brought together.  That presents a tremendous opportunity – for all of us.

For the new Department an opportunity to realise the unfulfilled potential of Higher Education. 

In the 1960s, the challenge was to expand and reform Higher Education. So after the Robbins Report, we expanded the university system. But we also created the new polytechnics and the Open University to provide flexible access to Higher Education for thousands more people.
 
In the 1980s, the renewed expansion of Higher Education culminated in the unification of the sector with the abolition of the binary divide.
 
But it was left to the Labour government, after the 1997 Dearing Report, to provide proper funding for that unified system and to renew the ambition that access to Higher Education should be widened to all who could benefit.
 
So today we have a Higher Education system with greater levels of investment to support excellence in teaching and research, and a further expansion of student numbers. Also a dramatic internationalisation of outlook and a significant shift in the direction of greater interaction with business.

We have a Higher Education system that is the envy of much of the world.
 
But what now do we want from - and for - Higher Education in the decades ahead?

I want you to debate the big issues. To work with me on how we can unlock the full potential of Higher Education.  This speech is not a detailed blueprint. I will outline some big issues but I raise more questions than answers.

Over the next two years, I want to work with the Higher Education sector and other stakeholders to address these key questions. 

I want to hear your views. To look to you.

My ministerial colleagues and I want to make our own contributions.

In due course we shall need to set out conclusions.

Politicians, like nature, abhor a vacuum. If we can’t find a consensus, decisions will still need to be made.

But the opportunity, to shape the future together is genuine.

Nothing I say today should be interpreted as giving any signals on the forthcoming independent review of full-time undergraduate fees. There are many significant questions that can and must be tackled aside from the fees issue.

The fees debate is for another time.  When we can see how the new system has bedded down, the impact it has had on university finance, and how improved financial support including bursaries have helped students. 

Tuition fees for full-time students are not a panacea for resource issues.  A preoccupation with fees and funding shouldn’t be what defines the role of HE in shaping our society and economy over the coming decades.

I see seven other key areas that we need to discuss and debate now.

How Government and HE should work together to achieve the shared vision of unlocking potential that I set out earlier.

How we continue to make sure we do not waste talent, or deny opportunity to anyone who could benefit from Higher Education.

How Higher Education responds as the number of potential young students falls, demands from older students increase and the need to educate today’s workforce becomes more urgent.

How universities and business can work more effectively together to their mutual, and the national advantage.

How universities themselves, as well as the nation, can benefit fully from the research and scholarship that they undertake.

How academia and government - you and I - could work more effectively together in the shaping of public policy.

How, in an increasingly diverse Higher Education system we develop a genuine parity of esteem and support each university in their chosen mission.

There will be other issues you will want to raise, but let me start with those.

Firstly, the relationship between Government and Higher Education.

Between 1997-98 and 2005-06, state funding for Higher Education has increased by 23%.  Funding per student, which fell by 36% between 1989 and 1997, has risen.  We are committed to maintaining funding per student in real terms.

We have also honoured our pledge to spend more on UK research.  Since 1997, Government funding for the ringfenced science budget has increased from £1.3 billion to £3.4 billion.

Do not underestimate the difficulty of securing this increase in funding.  It has been won against many other pressures on government spending - elsewhere in education, the health service, pensions and criminal justice. It shows our real commitment to Higher Education. 

None of this is a settled national consensus, of course.  The recent Tory policy launched by John Redwood and David Cameron abandons the aspiration of expanding participation. It restricts HE to students with specific A-levels and opens the door to future cuts in funding. 

There is still a job to be done in winning the case for universities.

As a Government we have not shied away from difficult decisions in the interests of Higher Education. We introduced variable fees to put your finances on a stronger footing.

We recently made another difficult choice: to prioritise taxpayers’ support for students who have never been to university over those wanting to do a second degree. And we, through HEFCE, will work with affected institutions as they adjust.

We expect real value for money from increased public investment.

But while we will take difficult decisions that fall to us to take, we will also respect and nurture your institutional autonomy.  That autonomy makes you much more able to deliver what the nation needs. Each institution must determine the role it develops within the Higher Education system.

At the same time, it is striking how relatively small investments, like the Higher Education Innovation Fund, have brought about wide ranging changes in university support for innovation. The value of improved collaboration with business has vastly outstripped the initial investment. 

The funds HEFCE have ear-marked for employer co-financed places must have as far reaching an impact on the ways universities offer Higher Education to new groups of students and to employers.

I am interested in how, without compromising your independence, we can work with Higher Education Institutions to make the most of future opportunities. 

Participation has broadened and deepened – with a steady increase in students from lower income groups and from communities with no tradition of Higher Education. But there is a long way to go.

It should not need restating, but improving participation is not about political dogma or hitting statistically satisfying targets. It is about ending a huge waste of talent and ability.

No one could seriously argue that the current social bias across Higher Education and in individual institutions - including some of the most sought after – reflects a system that reaches all of our most talented young people.

We are removing the main financial barriers to study. We are recognising the contribution of hard working families who support their children in going to university.

From next year a third of students will receive full maintenance grants. Another third will receive partial grants. 16 and 17 year olds who receive EMA will have their support in Higher Education guaranteed. Students from disadvantaged backgrounds will be mentored by undergraduate peers. The repayment of student loans, which is already linked to earnings not the size of the debt, will be more flexible.

Much has already been done to encourage universities to consider all the factors indicating a student’s ability to succeed.  Much has been done to promote widening participation initiatives that are consistent and effective.

But universities cannot offer places to talented students who do not apply. Even the most talented must be sufficiently well prepared to study and succeed.

So university partnerships with schools will become ever more important: to help schools deliver the high standards we want, and to identify and nurture the young students of the future. 

That is why we are keen for Universities to enter into formal partnerships with schools by means of Academies and Trusts, about which we will have more to say soon. It’s why the PM in his Mansion House speech this year said he would like every secondary school to have a Higher Education partnership.

I am well aware that public debate about Higher Education tends to focus on full-time students in their late teens and early 20s. The undergraduates most of us once were.  The full-time UK based young undergraduate is a minority in our HE system which is why we introduced the first financial support for part-time students in HE and why the funding council provides additional support for part-time provision. 

Two important trends are coming together which will inevitably have consequences for universities.

The first is that the rising tide of 18-year olds will begin to ebb – as UUK’s own analysis this week shows. We estimate that population figures for 18 year olds in England will drop by just over 14% from 675,800 in 2006 to 579,300 in 2020.

Secondly, as a country we simply cannot afford to have a Higher Education sector that is focused only on school and college leavers.  As the Leitch report made clear, 70% of the workforce in 2020 has already left school. Many of them need university level education. 

Both trends push you to change your intake. We cannot meet the country’s needs purely by educating the rising generation.

I want to hear from you whether responsibility for this change should lie solely with institutions that already offer opportunities to many older students. Or should the universities that focus on traditional undergraduates and overseas students take a fresh look at their role.

Important decisions will rest on that answer.

I believe we can make the changes we need. Look how in the last forty years, business schools developed to serve a new market for students and employers. They have become an established and respected part of some of the world’s finest universities.

As we change, so too will students’ expectations and needs. I am determined that DIUS must be a champion for students. We should ensure that students get value for their fees and that the taxpayer gets value for their continuing support of teaching costs.

Meeting the needs of older students, who need to study in new ways, balancing work and family and be financed in new ways, is just one of the areas that must bring Higher Education and employers closer together. I’ve already seen fine examples of this relationship working well on taught courses, fundamental research and the application of new knowledge.

But seeing examples of good practice – an occupational hazard of being a minister – inevitably raises the question of how much more could be done.

Over the coming months we need to develop a shared view of the full potential of collaboration between business, public service and Higher Education and the best ways of encouraging it.

Of course, the responsibility does not just lie with Higher Education. As I told a CBI conference on skills yesterday, there is no point in talking about an employer-led skills system without employers who are prepared to lead. Businesses that assume that Higher Education has nothing to offer are every bit as much of a problem as university departments who fear or avoid the consequences of close engagement.

Both must accept the responsibility to change. My job is to make it easier.

One advantage of leading a new department covering the Research Councils, the Technology Strategy Board, the Intellectual Property Office and employer engagement with higher level skills is that I can look at the many different ways in which collaboration can be enhanced.

My sense is that in the past engagement between business, Government and universities has been disjointed.  There has been one set of questions about knowledge transfer and innovation; and another about workforce skills. 

Ten years ago, Universities were criticised for being ivory towers.  Relationships between universities and business have now changed but we need to agree where and how far the relationship should go.

And how Universities should benefit from their research and scholarship. 
Research and scholarship should benefit your institution as they also benefit individuals, the tax payer and wider society.  Let’s discuss further how we optimise all these benefits and the different approaches, whether long term strategic relationships, one-off collaboration or a focus on intellectual property.  What are the best vehicles for working with multi-national or with small local firms.

Academic staff who work closely with business should not have to compromise their research career or their scholarship, let alone their integrity.  But they need to be supported.

To an extent, the relationship between Higher Education and business is mirrored by the relationship between Higher Education and government policy. Lord Giddens, no stranger to the corridors of power, recently asked why the relationship between politics and academia was much weaker in the UK than in France, Italy or the USA. 

Perhaps you think we don’t listen; perhaps we think you don’t produce research in a form that can inform policy! But it’s a discussion we should have.

One clear and relevant responsibility I do have is to promote greater scientific awareness and influence in public policy.  I want to stimulate a rich debate.

Finally, there are the issues about how we integrate diversity of mission with parity of esteem.

As an incoming Secretary of State, I sense that the sector is not always at ease with its own diversity. 

Too often the tendency is to talk about what others are less good at, rather than to emphasise strengths. There is a need to become more confident and less defensive in telling the story of what universities do for the economy and society.

Sometimes, intentionally or otherwise, how the activity of the so-called mission groups is portrayed works against parity of esteem and a mutual respect for each others’ role.

Institutions who tailor courses to meet local business and community need may not top research assessment tables. But they deserve the same esteem as those who do. 

Institutions that pioneer new admission routes and support students from non-traditional backgrounds are as vital to our social and economic well-being as those who educate the people with a huge array of excellent A-levels.

This is not an abstract discussion. Higher Education must have a collective self-confidence in the role that it and individual institutions play, if government is to support you well and appropriately in your chosen mission.

It is often suggested that some individual posts, some individual departments, and, indeed, some individual universities don’t operate as part of a national Higher Education system but a global system. One in which the competition for talent and resources is truly international.

It’s time to examine this argument in depth and ask how well our current policies support them.

All universities have an international dimension. Research and its practical applications are increasingly collaborative and therefore international.  Spin offs and the recruitment of students and staff are all increasingly international. So is the education that a 21st century student needs. Higher Education is in its own right, a significant element in the UK’s economy.

So the international nature of Higher Education will be a thread running consistently through debates over the next two years.

Many of you will look back at the tuition fees debate and recognise that the issues I’ve raised this morning were left unresolved when the fees policy was finally decided. The fees issue will not be considered again for another two years. These same issues cannot be left unresolved again.

I began by thanking Drummond Bone for his contribution over the past two years.  I also want to welcome Rick Trainor as his successor.  I want UUK to play a leading role in the debate we’re launching. I look forward very much to working with Rick, and all of you.

Last of all, could I end on a personal note.

Discussion of Higher Education policy often sounds very utilitarian.

It is 30 years since I left postgraduate research at Southampton, putting aside dreams of being a professional scientist to pursue other interests.

But there have been countless times in my working and political life where I have been grateful for Higher Education. A knowledge of scientific concepts; the collection and use of evidence, a knowledge of statistics, probability and risk. And, in the wider student experience, the chance to test whatever talents I had in leadership, communications and decision-making.

My experience taught me to appreciate the intrinsic value of learning. A highly educated society has a strength and resilience in a rapidly changing world that goes far deeper than the particular jobs that individuals are doing at any one time.   A university system which lost sight of this central reality would not be a good one.

As we work together I want to make sure that my Department does not lose sight of that truth.