Higher Education Funding
It is a pleasure to serve with you in the Chair, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this timely debate. My constituency does not have a university, but many of my constituents study and work at the two nearby universities in Bournemouth. However, my interest in this subject comes from the fact that when I was a regional official for Unison, I was head of the HE section in the south-east. That experience taught me a lot about the way in which the sector is financed. Today, a growing number of institutions are forecasting deficits, and many have introduced or will soon be introducing the cost-cutting measures that hon. Members have mentioned, including redundancies among academic and support staff. For years, there has been a financial over-reliance on international students. We saw that decline greatly during covid, when I was working as a trade union official, and it has not yet been able to come back. Coupled with changes to visa restrictions, international students are being put off from coming to the UK. There are also rising operational costs—energy costs, pensions and national insurance rises; those have all had an impact on large campuses—and a tuition fee funding model that has failed to keep pace with those rising costs, but the real reason for the state of HE funding is the marketisation of the sector. Pitching one university against another to compete for students has driven an arms race to build the shiniest buildings they can, often at the expense of the teaching and student experience. At any time, many of our campuses look more like a building site than a university. The financial risks, however, are not evenly spread across the sector. Institutions with smaller reserves, limited international recruitment and weaker balance sheets are particularly exposed. The most invidious result of these financial pressures is the move to make staff pay for the failure of the system. At a number of universities, including those with whom I used to negotiate, we are seeing the creation of subsidiary companies to transfer staff out of direct university employment. That removes them from either the local government pension scheme or the teachers’ pension scheme. Staff who refuse to transfer often face the threat of redundancy. Despite the Government’s best efforts, this looks remarkably to me like fire and rehire. The Government cannot secure the future of the HE sector simply through further fee increases for students. I believe we need an immediate cap on student numbers for each institution, rather than allowing the larger institutions to hoover up all the available students in an area. We need financial support for those universities facing immediate financial pressure, and we need to put a halt to the redundancies and wholesale course closures that are taking place across many of those institutions. The Prime Minister has made it clear that his growth agenda is based on a triple helix model of business, Government and universities working together. For that to succeed, we need a healthy HE sector, and to achieve that, we need greater Government intervention and support.