Lords call for immediate reform of post-school education system

The Economic Affairs Committee said 2012 reforms to university financing have created a market which allows undergraduate degrees to dominate when this might not be in the student or the country’s best interest. It added that the decision to switch almost all higher education funding to tuition fees financed by student loans had hidden the true cost of public spending on higher education.

Higher education expert Gayle Ditchburn of Pinsent Masons, the law firm behind Out-Law.com, said if adopted the Lords’ recommendations would lead to a significant shake-up of the sector.

“While the review covers all post-school education the impact on universities could be significant if resources - which includes access to student finance for degrees - are moved away from the higher education sector and into other models such as vocational further education or apprenticeships,” Ditchburn said.

The report found flexible and part-time student numbers had decreased over the last six years by 60%. It said England was producing far less people with A-level equivalent qualifications, and not providing the skills employers in the UK need.

The Lords recommended a new system of post-school education funding which promoted all types of learning regardless of where or how it takes place. They recommended the abolition of the Institute for Apprenticeships, increasing the powers of the Office for Students to act as a single regulator for all Level 4 and above qualifications, including for higher and degree apprenticeships, and the introduction of a single regulator for all other post-school qualifications at Level 3 (A-Level) and below.

The report said the level of interest charged on student loans should be reduced to the 10-year gilt rate (currently 1.5%) from the current rate of the retail price index plus 3%. It also recommended reintroducing means-tested maintenance grants for all students studying beyond A-levels.

Committee chair Lord Forsyth of Drumlean said: “The accounting trickery attempted by the government in 2012, in which the high rate of interest on student loans created the fiscal illusion that government borrowing is lower than it actually is, has had a devastating effect on the treatment of students in England. It is unacceptable to expect future taxpayers to bear the brunt of funding today’s students.”

“A review of funding options to stem the decline in part time and flexible degree provision is likely to be welcomed by universities as they seek to digitise their programmes and make them accessible to a wider pool of students, provided that this is not to the detriment of the majority of students who at 18 still want to have a traditional university experience,” Pinsent Masons’ Ditchburn said.

“Lifelong learning with student finance available for credit-bearing short courses would also be a way for the government to encourage innovation and new providers to the market and widen participation,” Ditchburn said.

The previous government passed the Higher Education and Research Act shortly before last year’s general election, introducing the Office for Students as a new market regulator with the power to take regulatory action against providers in the event of failures to provide high quality education.

The Lords said the Office for Students should regulate across the sector, and there should be an equivalent regulator for post-school education at Level 3 and below.

“The suggestion that the Office for Students takes over the regulation of all post school education and in particular, apprenticeships is ambitious. This would create a super regulator at a time when the Office for Students is only just finding its feet as the new regulator of higher education,” Ditchburn said.

In January the Department for Education kicked off an independent review into 'post 18 education' in the UK. That review was also examining funding arrangements in this sector and in particular whether students obtain value for money from universities, as well as whether there are barriers which prevent people from accessing higher education and training.

Ditchburn said it would be interesting to see if the Lords’ report influenced that review’s work.