Cut student support and raise fees to preserve quality, says CBI

Business leaders have called on the Government to raise tuition fees and slash student support so as to preserve the quality of teaching and research in UK universities during the recession.

In a move labelled “offensive” by the National Union of Students, the Confederation of British Industry is also lobbying for the target of 50 per cent participation among young people to be dropped until it becomes affordable.

The final report of the CBI’s year-long higher education task force, Stronger Together – Business and Universities in Turbulent Times, says current public funding levels for higher education are unsustainable. However, it argues, spending on teaching and research should be preserved, with a focus on “quality not quantity”.

The controversial document, drafted by a panel made up of 13 industry leaders and three vice-chancellors, says that an increase in tuition fees now appears “inevitable”. It also calls for an overhaul of student finance.

Richard Lambert, director-general of the CBI, said: “If we have got to make choices that are not comfortable, the starting point is to look at what, by international standards, are very generous student-support systems.”

The CBI thinks that means tests should be made more stringent and that tuition-fee loans should be provided at the cost of borrowing, removing the interest-rate subsidy for “all but those most in need”. It also believes that income thresholds for maintenance grants should return to 2006-07 levels.

Wes Streeting, president of the NUS, condemned the task force’s proposals.

“When the fat cats at the CBI recommend that we abandon targets for widening participation from poorer students, they are talking about restricting the opportunities of other people’s children rather than their own. This is gross hypocrisy,” he said.

“Students are already leaving university with record levels of debt, while graduate job prospects are at an all-time low. Instead of recommending that students be fleeced even more than they already are, the CBI should start looking at how it might put something back into the system.”

Mr Lambert agreed that industry needed to improve its relationship with universities.

The CBI task force concludes that businesses want universities to provide more employable young people, more science, technology, engineering and maths (STEM) graduates and more workforce training.

Businesses should view collaborations with universities as part of their core activity, the report says. The private sector should sponsor students and pay for their courses, provide financial support for new graduates, and offer internships and work experience opportunities.

“If business wants more out of the sector, it is going to have to do more. If business wants certain outcomes, it is going to have to find ways to pay for them,” Mr Lambert commented.

“Businesses should engage more with universities, both financially and intellectually. More firms should help design and pay for courses for the benefit of the current and future workforce.”

He admitted that persuading employers to do this would be difficult. “Some businesses will feel that this is not for them. They may say that they pay their taxes, which they expect to deliver these outcomes,” he said. “We’re in a great big recession. We’re not expecting people to throw their hands in the air and agree immediately.”

To foster more interaction, he said, the CBI would act as an intermediary, convincing businesses of the benefits of engagement with universities and persuading them to get involved. In return, universities should give more emphasis to disciplines critical to UK business, such as STEM subjects and languages.

The report also says that universities must become more adept at delivering workforce training and must initiate more joint ventures with the private sector. Mr Lambert cited the University of Hertfordshire’s work as a good example of business engagement.

The task force’s report was not well received by the University and College Union, which criticised the proposals.

Sally Hunt, the union’s general secretary, said: “The silence on the future of higher education from the main political parties is allowing tired business rhetoric to be viewed as a real contribution to the debate.

“The proposals in the CBI report offer absolutely nothing new and merely list the obvious ways to increase student debt. To suggest that a rise in tuition fees is inevitable because the CBI favours that approach is quite incredible, particularly with the country in recession.”

The task force’s 13 business members made firm commitments to improve relations with universities. Centrica said it would sponsor ten students in STEM disciplines and provide a sign-on bonus to help meet the cost of tuition fees. Network Rail promised to double its number of graduate vacancies by 2010.

hannah.fearn@tsleducation.com