Gillian Keegan – 2023 Statement on Higher Education

The statement made by Gillian Keegan, the Secretary of State for Education, in the House of Commons on 17 July 2023.

With permission, Mr Speaker, I would like to announce the publication of the Government’s higher education reform consultation response. This country is one of the best in the world for studying in higher education, boasting four of the world’s top 10 universities. For most, higher education is a sound investment, with graduates expected to earn on average £100,000 more over their lifetime than those who do not go to university.

However, there are still pockets of higher education provision where the promise that university education will be worthwhile does not hold true and where an unacceptable number of students do not finish their studies or find a good job after graduating. That cannot continue. It is not fair to taxpayers who subsidise that education, but most of all it is not fair to those students who are being sold a promise of a better tomorrow, only to be disappointed and end up paying far into the future for a degree that did not offer them good value.

We want to make sure that students are charged a fair price for their studies and that a university education offers a good return. Our reforms are aimed at achieving that objective. That is why the Government launched the consultation in 2022, to seek views on policies based on recommendations made by Sir Philip Augar and his independent panel. The consultation ended in May 2022, and the Department for Education has been considering the responses received. I am now able to set out the programme of reforms that we are taking forward.

I believe that the traditional degree continues to hold great value, but it is not the only higher education pathway. Over the past 13 years, we have made substantial reforms to ensure that the traditional route is not the only pathway to a good career. Higher technical qualifications massively enhance students’ skills and career prospects, and deserve parity of esteem with undergraduate degrees. We have seen a growth in degree-level apprenticeships, with over 188,000 students enrolling since their introduction in 2014. I have asked the Office for Students to establish a £40 million competitive degree apprenticeships fund to drive forward capacity-building projects to broaden access to degree apprenticeships over the next two years.

That drive to encourage skills is why we are also investing up to £115 million to help providers deliver higher technical education. In March, we set out detailed information on how the lifelong learning entitlement will transform the way in which individuals can undertake post-18 education, and we continue to support that transformation through the Lifelong Learning (Higher Education Fee Limits) Bill, which is currently passing through the other place. We anticipate that that funding, coupled with the introduction of the LLE from 2025, will help to incentivise the take-up of higher technical education, filling vital skills gaps across the country.

Each of those reforms has had one simple premise: that we are educating people with the skills that will enable them to have a long and fulfilling career. I believe that we should have the same expectation for higher education: it should prepare students for life by giving them the right skills and knowledge to get well-paid jobs. With the advent of the LLE, it is neither fair nor right for students to use potentially three quarters of their lifelong loan entitlement for a university degree that does not offer them good returns. That would constrain their future ability to learn, earn and retrain. We must shrink the parts of the sector that do not deliver value, and ensure that students and taxpayers are getting value for money given their considerable investment.

Data shows that there were 66 providers from which fewer than 60% of graduates progressed to high-skilled employment or further study fifteen months after graduating. That is not acceptable. I will therefore issue statutory guidance to the OfS setting out that it should impose recruitment limits on provision that does not meet its rigorous quality requirements for positive student outcomes, to help to constrain the size and growth of courses that do not deliver for students. We will also ask the OfS to consider how it can incorporate graduate earnings into its quality regime. We recognise that many factors can influence graduate earnings, but students have a right to expect that their investment in higher education will improve their career prospects, and we should rightly scrutinise courses that appear to offer limited added value to students on the metric that matters most to many.

We will work with the OfS to consider franchising arrangements in the sector. All organisations that deliver higher education must be held to robust standards. I am concerned about some indications that franchising is acting as a potential route for low quality to seep into the higher education system, and I am absolutely clear that lead providers have a responsibility to ensure that franchised provision is of the same quality as directly delivered provision. If we find examples of undesirable practices, we will not hesitate to act further on franchising.

As I have said, we will ensure that students are charged a fair price for their studies. That is why we are also reducing to £5,760 the fees for classroom-based foundation year courses such as business studies and social sciences, in line with the highest standard funding rate for access to HE diplomas. Recently we have seen an explosion in the growth of many such courses, but limited evidence that they are in the best interests of students. We are not reducing the fee limits for high-cost, strategically important subjects such as veterinary sciences and medicine, but we want to ensure that foundation years are not used to add to the bottom line of institutions at the expense of those who study them. We will continue to monitor closely the growth of foundation year provision, and we will not hesitate to introduce further restrictions or reductions. I want providers to consider whether those courses add value for students, and to phase out that provision in favour of a broad range of tertiary options with the advent of the LLE.

Our aim is that everyone who wants to benefit from higher education has the opportunity to do so. That is why we will not proceed at this time with a minimum requirement of academic attainment to access student finance—although we will keep that option under review. I am confident that the sector will respond with the ambition and focused collaboration required to deliver this package of reforms. I extend my wholehearted thanks to those in the sector for their responses to the consultation.

This package of reforms represents the next step in tackling low-quality higher education, but it will not be the last step. The Government will not shy away from further action if required, and will consider all levers available to us if these quality reforms do not result in the improvements we seek. Our higher education system is admired across many countries, and these measures will ensure that it continues to be. I commend this statement to the House.