Will Labour let universities go bust?

Baroness Jacqui Smith is the new Minister for Higher Education.  We spoke to her and asked if the record number of disadvantaged students getting a university place this year are actually getting value for money.

Baroness Jacqui Smith: First of all, it’s a very good thing that there are more students getting their first choice offers and that there are more, for example, disadvantaged students who are having that opportunity. The problem is that there still are too many inequalities with the way in which people are getting into university. You stand much more of a chance from some geographic regions, from some backgrounds, than you do from others. And that’s something that we’ve really committed to challenging and to making improvements in. As to whether or not they’re getting value for money, I think there is an enormous benefit to be had from going to university in terms of your lifelong earnings. But obviously, of course, all the other things that you get from university as well. The problem is that we make sure that option is open to people, regardless of their backgrounds.

Cathy Newman: You talk about lifelong earnings. Fewer than two thirds of university graduates are in full time jobs at 15 months after graduating. Is that really worth the £9,000 a year in fees that they’re paying?

Baroness Jacqui Smith: Let’s not forget, Cathy. We’ve got world leading universities in this country. We’ve got four out of the top ten universities in the world. We’ve got 15 out of the top 100 universities in the world. So this is something that we should be proud of, and it’s an enormously important opportunity.

Cathy Newman: You say you’re proud of Britain’s universities, but they’re facing an unprecedented financial struggle. Some of these students could be going to universities that are on the point of going bust. Are you in talks with some of those institutions that are on the point of collapse?

Baroness Jacqui Smith: Universities are independent organisations. They’ve got to make decisions themselves about how they run themselves as effectively as possible, but they also need a bit of understanding and security about what’s coming in the future in terms of their finances.

Cathy Newman: And yet your boss keeps on ruling out options. She has made very clear, for example, in recent days, you won’t be increasing tuition fees to give universities more funding. Neither will you overturn the visa restrictions, which the last government introduced, which have led to a decrease in international students, which universities depended on for their finances. So how are you going to address this black hole in their funding?

Baroness Jacqui Smith: When it comes to overseas students, we have actually taken a much more open and welcoming approach to overseas students than was the case of the last government.

Cathy Newman: If you’re so welcoming of them, why not lift some of those restrictions?

Baroness Jacqui Smith: It doesn’t require us to change the current immigration position for students. What people hear is very important to them in terms of whether or not it’s worthwhile coming to the UK to study. In actual fact, what we’ve seen today with the UCAS figures is for undergraduate students, there’s about a flat level of overseas students. But I take your point that people may well have been put off coming to this country, not so much by policy changes, but by the sort of rhetoric that the last government used against them. Well, we’re setting a different tone, and we think that will be heard across the world. You are welcome to come and study at the UK’s world class universities, alongside actually the increased number of UK 18 year olds who are going into receiving their offers and going into university this year as well.

Cathy Newman: But it’s the post graduate international students who have declined – and just sort of saying they’re welcome might not be enough. They want to bring their family members with them. You’re not going to overturn those restrictions. So is it really going to change?

Baroness Jacqui Smith: I think we need to wait and see because the postgraduate numbers for international students come later on down the track.

Cathy Newman: You’re saying wait and see, but these universities are facing massive funding problems right now. Are you willing to see a university go bust? Because there are some institutions – you’ll know where they are – that are at that point now?

Baroness Jacqui Smith: Yes. If it were necessary. Yes, that would have to be the situation. But I don’t want that to be necessary. I want us to find a way for there to be financial stability for universities, and most importantly, for the students that they are serving into the future. And that is what we are working on.