STATUTORY COMMITTEE FOR HIGHER AND FURTHER EDUCATION,
TRAINING AND EMPLOYMENT

Student Finance
in Northern Ireland

The Committee for Higher and Further Education, Training and Employment is a Statutory Committee of the Northern Ireland Assembly, established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement, under Section 29(a) of the Northern Ireland Act 1998 and under Assembly Standing Order No. 46. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Higher and Further Education, Training and Employment and has a role in the initiation of legislation. The Committee has 11 members, including a Chairperson and Deputy Chairperson, and a quorum of 5.

The Committee has power:

• To consider and advise on Departmental budgets and annual plans in the context of the overall budget allocation.
• To approve relevant secondary legislation and take the Committee stage of relevant primary legislation.
• To call for persons and papers.
• To initiate enquiries and make reports.
• To consider and advise on matters brought to the Committee by the Minister for Higher and Further Education, Training and Employment.

The Committee is appointed at the start of every Assembly. The membership of the Committee since its establishment on 29 November 1999 has been as follows:

Dr Esmond Birnie (Chairperson)
Mr Mervyn Carrick (Deputy Chairperson)
Mr Roy Beggs (Jnr)
Mr Roger Hutchinson
Mr Joe Byrne
Mr John Kelly
Mrs Joan Carson*
Mrs Monica McWilliams
Mr John Dallat
Mrs Mary Nelis
Mr William Hay

*Mrs Joan Carson replaced Rev Robert Coulter on 11 September 2000.

Reports to the Assembly and evidence taken by the Committee are published by the Stationery Office by order of the Committee. Minutes of Committee proceedings and reports of the Committee to the Minister are posted on the Assembly website (archive.niassembly.gov.uk).

All correspondence should be addressed to:

The Clerk to the Higher and Further Education,
Training and Employment Committee,
Committee Office,
Northern Ireland Assembly,
Room 283, Parliament Buildings,
Stormont, Belfast BT4 3XX.

This report details the considerations of the Committee for Higher and Further Education, Training and Employment, and its response, in respect of the Review of Student Finance announced in February 2000 by the Department for Higher and Further Education, Training and Employment.

We are fully independent of the Department, and we have the power to consider and advise on matters brought to the Committee by the Minister. As a statutory Committee, our wide-ranging duties include a policy development and consultation role with respect to the Department. We believe our recommendations will bring real improvements, through increasing and widening access to further and higher education, giving real financial help to students, extending the capacity of universities and colleges, better targeting finite resources, and simplifying complex systems.

The Committee, whose remit extends to higher and further education, but not to the schools sector, takes considerable pride in Northern Ireland's further and higher education systems. This, our first full-length report submitted to the Assembl^y, examines the fairness and effectiveness of financial support for full-time and part-time students undertaking further and higher education courses in further education colleges, and through university studies. In the report, we have conscientiously balanced what we believe is affordable, against our desire to maximise opportunity for all to access high quality lifelong learning. We call on the Department to provide the Minister with fully costed options, where these may require additional financial resources.

Our recommendations are as follows:

We recommend:

1. Abolishing the parental/spouse contribution towards full-time undergraduate tuition costs in Northern Ireland. We regret that we cannot extend this recommendation to Northern Ireland students following courses outside Northern Ireland, because of the possible implications under European Union law.

2. Any resulting shortfall in income to the higher education sector in Northern Ireland should be met by the Northern Ireland government.

3. Additional financial support to full-time Northern Ireland students, including by way of means-tested, non repayable grants.

4. External aid should be sought, including international and EU funding, to establish a new, charitable fund, the Northern Ireland Student Endowment Fund (Charitable Trust) - "the NISEF". Existing access funds should be redirected to the NISEF, and the government should also contribute by way of tapered transitional payments, in advance of the establishing the graduate contribution stream. Resources should be ring-fenced to promote social inclusion, and to increase and widen access to further and higher education, by way of grants to assist disadvantaged students .

5. Business and industry should be encouraged, through a co-ordinated approach by all Government Departments and Agencies, to contribute to the Northern Ireland Student Endowment Fund (Charitable Trust), in line with best practice elsewhere. Proposals should be made to the Chancellor of the Exchequer that business contributions should attract tax incentives, especially for small and medium sized enterprises.

6. Northern Ireland graduates who enjoy clear personal earnings benefits, should make a set contribution totalling no more than £3,150 to the NISEF. This recommendation of the Committee depends critically on the threshold for liability for this contribution being set at an annual salary of at least £25,000. Some Members considered that, to promote social inclusion and wider access, HNC/HND students, mature students, lone parents and disabled students should be exempt from any such contribution.

7. The residual value of the NISEF contribution should be index linked so that it remains constant in real terms.

8. NISEF contributions from Northern Ireland-domiciled students attending Northern Ireland universities, and from business and industry, should be collected and administered in Northern Ireland.

9. All students whose parental/spouse income is less than £23,000 (index linked) should be entitled at least to the maximum student loan.

10. The current system of student loans should be better focused on the needs of Northern Ireland students and graduates. Establishment of local, "one stop shop" arrangements for allocating student maintenance grants, supplemented by low interest loans.

11. Help for students to plan their finances, and improved information on costs and financial support, to be made available to prospective degree and sub degree students (e.g. by means of straightforward pamphlets, well- designed websites, and including through schools).

12. The Minister to obtain, and secure agreement to make public, the findings of the United Kingdom interdepartmental working group which is examining the relationship between the benefits system and student support, so that major disincentives to prospective students may be identified and addressed.

13. No graduate should be required to repay the student loan until he or she is earning at least £20,000. The student loan to be repayable at a rate of 9% per annum of earnings over £20,000.

14. Government should ensure a properly funded higher and further education system. Higher and further education are essential components of social inclusion and economic prosperity, and should have a high priority in this Executive's Programme for Government and associated funding decisions. Any decisions on funding should ensure equitable provision for the further education sector.

15. A single, independent and accountable, integrated higher and further education funding body, operating at arms length from government, should be established for Northern Ireland. With a similar status to similar bodies elsewhere in the United Kingdom (and in the Republic of Ireland), this body would decide on priorities for funding, and bid for additional funding from the Department, both current and capital, across the sectors.

16. The scope of the Department's review should include recommendations on how the principle of parity of funding should apply to all courses of higher and further education and post-16 funding.

17. In the first instance, and additional to the further 4,20⁰ new places already planned, funding should be provided for at least an additional 2,000 progressing to 4,000 full-time undergraduate places over the next 5 years, to be distributed at sub-degree and degree level, with a focus on skills to support the knowledge economy. This will help ensure that most if not all new students will have a chance to find a place in Northern Ireland and avail of the new arrangements if they wish.

18. The maximum aggregate students numbers cap (on numbers of undergraduate places which universities may offer), is currently set at a level which is too restrictive. When these extra places (Recommendation 17 above) are in place, consideration should be given to lifting it.

At our first meeting on 16 December 2000, the Higher and Further Education, Training and Employment Committee identified student finance as a priority for action. Over succeeding sessions, we considered research evidence on student flows, drop out, and the emerging findings of the Scottish Executive. We unanimously decided that we urgently needed to consider the whole question of student finance for Northern Ireland. We were pleased that, on taking up office, the Minister of Higher and Further Education, Training and Employment, Dr Sean Farren, had indicated that he wanted the issue to be reviewed. When asked whether his recommendations would be referred to us, the Minister said^: "The Committee . is at liberty to debate, discuss and, indeed, investigate these issues. I certainly would welcome any views that the Committee has."

We asked representatives of the Association of University Teachers, and of the National Union of Students/Union of Students in Ireland, to brief us on the issues on 3 February 2000. These groups told us about student poverty and scarce institutional resources. We discussed with them a wide range of issues, including tuition fees, drop out (reasons and incidence), student poverty, students and paid employment, participation and access, and social and private gains from education.

Soon afterwards, the suspension of devolved government in Northern Ireland, from midnight on 11 February to 30 May 2000, meant that Assembly Committees were prohibited from meeting or conducting any business for a period of almost 3 months. Our work on Student Finance was halted during this time.

However, in February 2000, under direct rule arrangements, the Department launched the Review of Student Finance, with the following terms of reference:

• To review tuition fees and financial support for students normally resident in Northern Ireland participating, part-time or full-time, in further and higher education courses in Northern Ireland and elsewhere, taking account of affordability and value for money.
• To have regard to the desirability of promoting access to further and higher education, particularly for those groups currently under-represented, while taking account of the need to maintain and develop quality and standards, and the position of Northern Ireland's further and higher education in the wider United Kingdom system.
• To have regard to changes in student financial support arrangements elsewhere in the United Kingdom.
• To make recommendations for any changes to the current system, which would better target existing financial provision and, if appropriate, to provide costed options where these may require additional financial resources.

Public consultation on the Department's review was set to close on 2 June 2000.

On 1 June 2000, the day after devolved government was resumed, the Committee returned to considering the question of student finance. Members unanimously determined that, although the consultation on the Department's Review was closing the next day, the Committee would be failing its duty if it did not play its full part. We felt strongly that we needed to make our advice available to the Minister before he reached his decisions on the Review. We also decided that we would scrutinise any changes which the Minister set in place, in order to ensure that student support in Northern Ireland was geared to local students' needs, and grounded in adequate strategic thinking about the future of higher and further education in Northern Ireland as a whole. We re-emphasised our concern that Northern Ireland's student finance system should put the interests of Northern Ireland students first.

On 15 June 2000, the Committee took evidence from Dr Robson Davison, a senior official with the Department of Higher and Further Education, Training and Employment, on:

• Whether an independent enquiry had been considered.
• The scale of response to the review - at that stage there had been some 50 responses.
• Public perceptions of the current system of student finance, and its administration.
• Private and social returns of higher education.
• The effects of student fees on participation, and what impact their removal in whole or in part would have (including on institutional funding).
• How the Department would proof the proposals emerging from the Review, for equality considerations.
• Information on, and reasons for, drop out.

We were concerned that suspension had foreshortened Committee consultation, and that we needed further information and, preferably, proper consultation, to fully understand the complexities and problems facing interested parties, including Northern Ireland students. The Department agreed to share with us the responses to their consultation, and we are grateful for this, and for some assistance from the Department with information requested by the Committee. However we consider that consultation in Northern Ireland on student finance proposals has been rather limited - particularly when we compare this to the process which the Cubie Committee undertook in Scotland^, which surely succeeded in its intent of listening to all the voices in the debate, particularly those which usually went unheard. We regretted also the lack of readily available information on the current system in Northern Ireland, to inform our deliberations.

We believed we should look at what we could learn from other, international model^s of student finance. Northern Ireland shares tradition and culture with both the United Kingdom and the Republic of Ireland, and we considered it pertinent to evaluate their recent policy reviews in the areas of student finance and institutional funding. In common with our objectives, these reviews sought to remove barriers to participation, increase access and maintain quality. At the same time, we recognised that Northern Ireland has its own problems, which could not simply be solved by lifting the Scottish or the English or the Republic of Ireland models.

Even so, we regret that the Department's consultation document failed to cost the application to Northern Ireland of the most obvious policy options - those of the Scottish Executive, and of the Blunkett decisions for England and Wales. Although the Committee has explicitly raised this issue with the department on a number of occasions, the information has not been provided. It is difficult to make good decisions about policy options in the absence of information about the costs of such policies.

We have also reviewed the evidence and research gathered over the past few years by the Dearing and Cubie Committees. We took evidence from Andrew Cubie, and commissioned research from Dr Nuala Bryce-Gormley, who had co-ordinated the research programme in support of the Cubie Inquiry. In addition, we appointed Professor Bob Osborne, and his colleagues Helen Leith and Roisin Thanki, of the Centre for Research on Higher Education (at the University of Ulster and The Queen's University of Belfast), to advise the Committee and conduct research on:

• The Department's Review of Student Finance in Northern Ireland: consultation mechanisms, and their effectiveness.
• How the Committee could provide meaningful input into the Department's policy decisions.
• Principles which might underpin a student support system tailored to Northern Ireland's needs.
• Parallels with the Scottish experience under devolution; also relevant international examples.
• Student flows between Northern Ireland, the Republic of Ireland and Great Britain.
• The effect on students of paid employment (including links to non-completion).
• Premier League (Russell Group⁾ proposals for "top up fees", and their likely impact, including on the composition of the student cohort.
• Grants; loans; fees; deferred contributions. The impact of various financing models (including the current system) on participation.
• Evidence on the salary premium to graduates.
• Possibilities (and dangers) of a two-tier system: direct entry to Higher Education as compared with entry through the Further Education route.

This research was completed during July and August 2000, and the main research reports are included in Volume 2 of this report. The research, together with articles prepared by Assembly Research (see Appendices), provided a wide range of contextual material within which the Committee referenced its more specific concerns, and which has informed the Committee's approach to its response to the Department.

Having considered the context within which our examination was taking place, our deliberations were essentially based around a core set of principles, which we formulated into a specific set of objectives.

The Committee agreed that its response to the Department should be consistent with a set of objectives, which take account of Northern Ireland's circumstances.

We believe that Northern Ireland's student finance system should:

• Provide adequate support for individual students.
• Promote and encourage lifelong learning.
• Increase participation in higher education to 50% plus (taking account of United Kingdom targets) of the age cohort at school leaver entry level - subject to avoiding over qualification, and to the provision of balanced further and higher education and training capabilities.
• Widen access, particularly for under-represented groups, so that all individuals have an equal opportunity to access and complete a full course of higher or further education (subject to ability).
• Provide, locally, further and higher education which will best meet the strategic needs of Northern Ireland's economy and society.
• Entail affordable costs to government, groups, and the individual. The distribution of the cost of further and higher education should be equitable and in some manner related to the gains (private and social) from study. Institutions should receive adequate funding to provide relevant, high quality, forward- looking education services. Innovative sources and means of funding should be explored.
• Where appropriate, lessons will be learnt from policy developments in other parts of the United Kingdom, Ireland, and other countries.

Given this background we agreed on a system which would satisfy our core principles, as follows:

• The parent/spouse contribution to full time undergraduate fees should be abolished.
• Some graduates, when they reach a certain salary threshold, should make a contribution towards the cost of education.
• That contribution should be less than the total cost of tuition.
• Contribution should only be made after completing their studies, and once their salary has crossed some threshold value.
• The residual value of the contribution should be index linked over time.

We considered models of student funding internationally, within the United Kingdom, and in the Republic of Ireland^. We found considerable and substantial evidence, particularly in relation to support for full-time degree and sub-degree students. We decided that more needed to be done, by way of financial support for students, and in terms of encouraging students from under-represented groups to undertake and succeed in courses of further and higher education.

We noted that most economic experts conclude that increases in the number of further and higher education students contribute powerful general benefits to society as a whole. A more highly educated and trained work force may well lead to faster economic growth. This is the social benefit. Such a benefit or return represents a sound argument for providing a substantial, publicly funded contribution towards the total costs of tuition. Thus the Committee accepted and recommend that much of tuition costs should continue to be covered by the state. We accept there are also considerable private returns to the individual from university education. The indications are that this premium varies according to academic discipline studied and by sex (women gaining more from being graduates, but still earning considerably less than their male counterparts^). Since the United Kindgom tax system has ceased to be progressive once the 40% tax band is reached (tax paid as a percentage of gross income does not increase as that gross income increases) it cannot be claimed that graduates necessarily pay proportionally more income tax^.

Both the Cubie Report "Fairness for the Future", and subsequent policy review by the Scottish Executive in its proposals "Scotland, the Learning Nation: Helping Students" offered considerable and substantial evidence on the problems of student support, particularly for full-time students, and those on sub-degree courses. We concluded that the abolition of tuition fees, and the introduction of the Scottish Graduate Endowment, offered a model, subject to the threshold for graduate contribution to the endowment being set at no lower than £25,000, index-linked, in order to reflect the private gain from education.

The Committee believe that if this Executive is to promote social inclusion and achieve economic progress in Northern Ireland, we must invest in forward looking indigenous education and training provision, as deprivation is inextricably linked to low levels of education, in a pattern often repeated from generation to generation. We believe the individual and public gains are well worth the further investment we are proposing, and we strongly urge the Executive and the Assembly to accept our recommendations and give them high priority in the forthcoming Programme for Government.

Our colleges and universities have continued to enrich the social and economic life of Northern Ireland over thirty years of unrest. During the last decade, more and more students of all ages and from all social classes in Northern Ireland have successfully completed higher and further education courses. However we consider it a priority to encourage wider access to sub-degree and degree courses - recent trends indicate that the level of participation of less privileged students in degree and sub degree courses is holding constant rather than increasing.

Convincing arguments were put to the Committee about the failings of the current student support system, particularly in the context of Northern Ireland's particular circumstances. We recognised that many students and their families struggle to pay fees and living costs, perhaps where the student is from a large famil^y, where parental support is denied, or less than the assessed level, or where a mature student with dependants faces a 'benefits trap'.

We believe that high costs, and fear of debt, deter many people of all ages from entering higher education. For example, the shift over the last five to ten years from means tested grants to student support loans for full-time undergraduates in particular, together with changes to the social security benefits system, and the introduction of up-front tuition fees, has meant that many university students are rendered financially dependent on their families, or on part-time employment, in order to complete their studies. These dependencies often are detrimental to the student's study and academic performance. Our Advisers gathered information which indicated high incidence of part-time working among full time undergraduates her^e and we received evidence from NUS/US^I on the increase in students' working hours (to meet basic, not recreational living costs) and how this is now a critical factor in increased rates of student drop-outs from courses. We also noted, with concern, recent media reports highlighting the plight of many young students in Northern Ireland, who were forced to live in sub-standard accommodation. There are clear indications that hardship is a grim fact of life for many students.

We believe that there may be, in Northern Ireland, as was identified in Scotland^, some traditional aversion to debt, particularly among less affluent students. The abolition of the non-repayable grant and the introduction of the student loans system has created a situation of student debt that is still evolving and which is relatively new to Northern Ireland. The research undertaken by the Independent Committee of Inquiry into Student Finance in Scotland indicated that students now consider debt as an unavoidable consequence of being a student, but it was noted that the prospect of student debt was feared most amongst potential students and their parents from less affluent areas. High levels of debt, both current and anticipated, were reported by students participating in the Scottish research, although students chose to avoid debt in various ways, usually at some other cost. While most participating students opposed student loans in principle, these were identified as the preferred source of borrowing. The Committee debated at length the 'wall of debt' which some students face on graduation, often including loans at commercial interest rates - the level of the student loan was sometimes seen as inadequate and certain students had to rely on other forms of borrowing, such as overdrafts and credit cards. NUS/USI also drew to our attention a number of difficulties faced by students whose religious beliefs forbid the borrowing or lending of money, and concerns that many such students may withdraw from, or not enter courses because of financial obstacle^s.

In the light of all these considerations, it was clear that we were opposed, in principle, to the current finance support system and its dependence on student loans. Members agreed that previous systems offering non-repayable grants were only possible when delivering to the 'lucky few' who proceeded to university. Some Members pointed out that such a high level of provision is simply not affordable at current levels of participation. Some Members felt that an equitable, lasting solution would be to fund universal student grants by way of a progressive taxation system - a solution discussed with us by NUS/USI representatives. However, we decided that, since taxation is not a transferred function, our report should propose solutions which could be implemented in the short to medium term.

There was unanimous support for much more generous, consistent and timely arrangements for grants to help widen access. There was also agreement that the government needed to recognise - and act to reduce - the costs and financial burdens, (and accompanying hardship or loss of independence), for students who would not qualify for access grants. We recognised that, taking account of the immediate financial constraints mentioned above, and within which our Executive operates, a number of radical improvements were needed to make the student loans system much more beneficial for individual students. Compared to commercial loans, the rate of interest of the current student loan (in real terms, the loan is interest free) gives a benefit to the borrower. We felt that this benefit should be extended, to help prevent the accumulation of further, expensive debts in the early stages of a graduate's career. The Committee also examined the varying data presented by Cubie and NUS-USI on student expenditure^. We noted that Cubie recommended an increase in the support for students living away from home (but not in London) from £3635 to £4100. While our own research indicated that more information is needed on the spending levels and patterns of local students, we are satisfied with the robustness of the recommendation. We concluded that the maximum loan should be increased, in line with Scottish Executive proposals; and that the current earnings threshold of £10,000, above which graduates currently pay 9% per annum of their residual earnings, towards repayment of the student loan, was too low, and should be set at a level which more accurately reflected an earnings premium from education.

As outlined above, these conclusions arose from a recognition that, despite our fundamental opposition to a universal, loans-based system, a system of universal grants was unlikely to be affordable. However we all considered that more financial assistance needed to be made readily available to less privileged students, if we are ever to realise our ambitions of opening up the benefits of higher and further education to all groups in our society. We therefore looked at the various packages of proposals to enhance access which have been announced for England and Wales^. We support the introduction in Northern Ireland of new measures, particularly targeted at disadvantaged young people and full-time mature students, including a non-repayable grant of up to £2,000 from the NISEF, available at the start of the academic year. We also recommend the introduction of means-tested assistance towards childcare.

Another issue which concerned us is unique to Northern Ireland - the continuing exodus of significant numbers of young school leavers, to study and work elsewhere (which is not balanced by an equivalent inflow of students from elsewhere, although many students from the Republic of Ireland still chose to study in Northern Ireland, despite the fee-free regime ther^e). Many only leave Northern Ireland because they must, in order to find a university place, or a well-paid job with good prospects. (There is the problem of disciplines such as veterinary science which are simply not represented in Northern Ireland universities.) We would like to see more of our students deciding to study, and later work, in and for Northern Ireland - this outflow of young students robs Northern Ireland of an irreplaceable and valuable energy and resource. Currently some 35% of our school leavers, who wish to study a full-time undergraduate course, leave to study at universities outside Northern Ireland. Perhaps two thirds of these are "unwilling leavers", who are unable to secure appropriate higher education places in Northern Ireland institutions. The research indicates that some of the "willing leavers" do so because they strongly wish to leave Northern Ireland. The Committee discussed at length whether and how the higher education system, and wider society, was failing both these groups of young people. We discussed why there were such large numbers of seemingly "willing" leavers, and we concluded that no young person should have to leave unwillingly because there was no university place for him or her in Northern Ireland.

We also considered the implications for higher education funding and student finance of the challenge posed by the Russell Group proposals. Twenty leading universities in Great Britain (e.g. London, Oxford, Cambridge, Warwick and Nottingham) now self-style themselves as a premier league within the United Kingdom system. Their intention seems to be to replicate the USA's Ivy League. In order that such elite universities can obtain the cash resources to maintain their position they want a free market with regard to their entrance fees (perhaps rising to £5,000-10,000, though with the possibility of financial assistance for students from low-income backgrounds).

It will be a central government decision whether the Russell Group is allowed to go down this route. There are indications that the Blair Government may be minded so to do. If this does happen then the authorities in Belfast will be powerless to stop the process and the challenge will be to ensure that QUB and UU compete effectively in an American-style higher education market in the United Kingdom. In these developments, there is a danger that students resident in Northern Ireland, as elsewhere, may experience considerable financial barriers to accessing world class teaching and education.

The maximum current level of private contribution to tuition fees (£1,050 per full year) represents only a fraction of actual costs. Depending on the course of study, the private contribution ranges from 6% to18% of estimated annual, full time fee costs for an undergraduate place at the two local universities^. Parent/spouse contributions to full time higher education fees have proved unpopular in many quarters in Northern Ireland as in other parts of the United Kingdom, even though the payment of undergraduate tuition fees is means tested and almost one-half of all students in Northern Ireland are exempted. We noted that the state now fully funds undergraduate fees in Republic of Ireland universities, and that parent/spouse contributions to full time undergraduate fees have been abolished in Scotland. We recognised that private contributions to higher education tuition fees in Northern Ireland higher education institutions, currently some £12.5m each year, represent a considerable source of income, which would have to be found elsewhere.

We concluded that the up-front tuition fees for full time further and higher education courses should be abolished. We believe that we can be more specific, and recommend that the fees of all full-time undergraduate students at Northern Ireland universities and colleges should be paid in the first instance by the Northern Ireland government. We would wish, but are unable, to recommend extending this payment of fees to Northern Ireland-domiciled undergraduates studying outside Northern Ireland, as a result of our obligations under European Union law. We understand that, if a Northern Ireland-domiciled student studying in England were to be given more favourable treatment than other EU students, then there would be a danger that EU students in England could seek the same treatment. We may be able to help in some way by providing improved maintenance support, but we believe we cannot assist them to pay fees unless they qualify through the same means test as local students.

In addition, our recommendations regarding additional places, and continuing efforts by universities and colleges to maintain and improve quality and relevance of provision, should ensure that, as far as possible, no Northern Ireland-domiciled student suffers disadvantage by being obliged to study elsewhere.

We considered the Scottish Executive's proposals for the introduction of a graduate endowment which will come into effect in academic year 2001/02. The Scottish Executive saw the payment of the graduate endowment as recognition of the benefits students enjoy from higher education. The graduate endowment in Scotland is expected to be set at £2,000, with all funds being used to provide maintenance for future generations of disadvantaged students.

We considered very seriously the representations which had been made concerning the difficulties and hardships facing numbers of students under the current system. The Committee also took account of the enquiries conducted by the Cubie Committee. We noted that attitudinal research conducted for the Cubie Committee had concluded that socially excluded groups (such as the unemployed, people with disabilities and people on low incomes) were thought to be discouraged by the current funding system for further and higher education, because they received a higher, non-repayable income on benefits.

Our Committee, in its deliberations, questioned departmental officials closely about the position on financial help for students who needed help towards living costs. We learned that additional help was already available, through hardship funds and through access funding to the universities, and discretionary awards distributed by the education and library boards. The boards can make discretionary awards to individual students on the basis of published criteria - in 2000/01 to the extent of some £3.3m - while access funds of about £1.8m are allocated to Northern Ireland universities for discretionary distribution to help students who are in financial difficulty. We were concerned to learn that discretionary awards had halved from £6m to just over £3m over a 3 year period. (We note that there are some modest institutional incentives to promote access, and funding to schools, to help disadvantaged young people progress to further and higher educatio^n).

We concluded however that there was overwhelming evidence to indicate that the current, very real financial problems of students were unlikely to reduce without additional financial support being made available. We also agreed that, in order to give greater access to groups which have previously been underrepresented in further and higher education, there needs to be a greater element of assistance, by way of maintenance grants, than there is at present. We recognised the need for additional funds from government, as part of a mixed economy of funding from public, private and other sources, to provide non-repayable grants for disadvantaged students. We supported the introduction of a Northern Ireland Student Endowment Fund (Charitable Trust) - NISEF - whose funds would be ringfenced to provide non-repayable grants to students most in need of financial assistance.

We did not consider that a universal graduate contribution to NISEF would be appropriate. The Scottish Executive, which set a low graduate earnings contribution threshold of £10,000, has proposed exemptions in order to promote lifelong learning and ensure social justice - HND/HNC students, mature students, lone parents, and disabled students. We considered whether this approach supported our own concerns at how the present system of private, up-front contribution to fees, had impacted on access and participation in Northern Ireland. (We had, at an early stage, expressed concerns at the implications for participation, particularly regarding mature student^s, and, potentially, students from the Republic of Ireland). Some of us expressed concern that an earnings threshold of £10,000 was so low that the graduate contribution would have the effect of a universal graduate tax. We unanimously agreed that it would be fair and equitable to raise the earnings threshold to reflect the principle that society should look to graduates who enjoy a substantial salary premium, for help to generations of future students. We considered regional variations which might indicate a higher or lower threshold in Northern Ireland (such as family size, household expenditure, average graduate earning^s etc) but concluded that our unanimous support for the graduate contribution to the NISEF should be predicated on acceptance of the £25,000 earnings threshold recommended by the Independent Commission of Enquiry into Student Finance. In so deciding, there were a number of us who considered that, at this threshold, there should be no exemptions.

In principle, we agree that graduates who enjoy clear personal earnings benefits, should make a set contribution to the NISEF. This recommendation of the Committee depends critically on the threshold for liability for this contribution being set at an annual salary of at least £25,000^.

The commitment to pay the graduate endowment in Scotland, by those who are not exempt, will be made when the student applies for their maintenance support and fees to be paid - on the form they would also undertake to pay the graduate endowment. The body which administers schemes of support for eligible Scottish domiciled students undertaking courses of higher education throughout the United Kingdom, the Student Awards Agency for Scotland, will be informed by the student's college or university when they have graduated. The individual student may then either pay back the endowment immediately, or 1 year after graduation. (The Scottish Executive believes that when graduates become liable for the Endowment, the majority will take out a fresh student loan to cover the £2,000 cost. This fresh sum will be added to the existing income-contingent loans so there is one lump sum to pay off. Because the two sets of loans would be tied together, repayment would be under the existing arrangements - currently at the rate of 9% per annum of any income over £10,000 per annum).

We consider that these arrangements offer a useful model for broadly similar arrangements to be introduced in Northern Ireland.

Payment would be at 9% of residual income above £25,000, until full contribution is made.

We considered that the purpose of the NISEF is closely allied to social and economic development, and that the Minister should seek to attract international as well as local contributions. Contributors might include the United States and the European Union, and funds such as the International Fund for Ireland, as part of their wider contribution to regenerating society and the economy in Northern Ireland. We recognise too that local business and industry have a major stake in indigenous further and higher education, and we recognised the continuing mutual efforts of the education, business and industry sectors to identify and meet skills needs. (We hope to address this issue in more depth in our enquiry into education and training for industry). We also discussed with our advisers whether, given the large numbers of small and medium enterprises involved in the Northern Ireland economy, there was scope for significant financial contributions to the Northern Ireland Student Endowment Fund (Charitable Trust) from business and industry, perhaps encouraged by tax incentives, while charitable status provided the potential to maximise such contributions.

We thought that the Department, acting in concert with other government departments and bodies, could set in place mechanisms to encourage contributions from business and industry to the Northern Ireland Student Endowment Fund (Charitable Trust). The Committee also thought that there was scope for better co-ordination of such effort between government departments and agencies, so that for example established companies or new investors were encouraged to contribute to the Fund, and to inform them of its aims and achievements.

Business and industry should also be encouraged, through a concerted approach by Government Departments and agencies, to make contributions to the NISEF, in line with best practice elsewhere.

The Committee noted that mature students with families could be financially significantly worse off as students, than when on training programmes, (e.g. New Deal, where childcare support was available) or working. Several members cited examples of constituents who had experienced particular problems, and we were concerned at the lack of readily available information on interactions between the social security system and student finance, including not only monetary entitlements, but also entitlements to free services (such as dental treatment). We believe that these interactions are extremely complex, and we note that the relationship between the benefits system and student support is currently being examined by an interdepartmental working group on a United Kingdom basis.

We call for the Minister to obtain, and secure agreement to make public, the findings of the United Kingdom interdepartmental working group which is examining the relationship between the benefits system and student support, so that major disincentives to prospective students may be identified and addressed.

All members have concerns about the administration of student loans, while some members objected to the use of loans on principl^e.

We heard and read substantial evidence that students accumulated debt from many sources, including costly commercial sources such as credit cards. To reduce recourse by students to costly borrowing, we considered that the present assumed level of support, and the level of maximum student loan entitlements, should be increase^d to £4,100 for students living away from home, to £3,240 for students living at home, and to £5,050 for students living in London. We strongly advise that ongoing review of loan entitlements, taking account of information on income and expenditure of students (only limited recent information is availabl^e), is required.

The Committee also debated whether parental/spouse threshold for entitlement should be revised, or adjusted to make allowance, for example, for large families with dependent children. We concluded that the current threshold of some £17,000 residual income should be revised upwards, in line with proposals of the Independent Committee of Inquir^y.

While recommending increases to the maximum student loan available, we recognised, as outlined above, the problems of principle which loans present for some students, and we know that many students dread the wall of debt which may face them on graduation. Even those on very modest incomes will, under current arrangements, have to start paying back the student loan. Income contingent repayment, at 9% of residual income over £10,000, can mean a smaller repayment over a longer repayment period, which many find easier to budget for than the previous, mortgage style loans (usually repayable over a 5-year term). However a repayment threshold of £10,000 p.a. engages many more, low-earning graduates in immediate repayments - which they often find difficult to meet. The Committee considered that the loan repayment threshold should be set at £20,000, well above average Northern Ireland earning^s.

Members have already raised, in the Assembly and at Committee, constituents' problems (which have not diminished this year despite assurances last year) about lack of responsiveness and problems in contacting the Student Loans Company.

There are also considerable concerns over levels of loan default.

We felt that, particularly in view of the increasing numbers of students, the Minister should speedily investigate the feasibility of separate Northern Ireland arrangements for administering student finance.

We believe there are high levels of dissatisfaction with the current system (many students and their families remain bewildered by the process, despite the efforts by institutions, Education and Library Boards, and the Student Loans Company). We felt that any future scheme should be as simple as possible, while getting the message across clearly should be an aim of all involved in introducing changes.

Members felt there should be a one-stop shop for students, with decisions on loans and grant assistance quickly available. Information and advice should be readily available. Entitlements should be simply communicated by pamphlets and via the internet, and staff involved in administering any new system should be well trained, with special programmes for specialist staff, including those who would be dealing directly with student queries.

The setting up of such local arrangements would be co-terminus with the introduction of the other new student finance arrangements.

We call on the Department to consider the feasibility of establishing simpler, local arrangements for allocating and administering student grants and loans made to all Northern Ireland degree and sub degree level students. This would provide a fresh start, which would commence with the introduction of the other new student finance arrangements we are recommending.

In the course of our enquiries, we learned of anomalies in costs, and financial support available to students, depending on whether they decided to pursue their studies through further or higher education routes. We discussed the question of equity of treatment between the higher and further education sectors. The Dearing Report rightly recommended equity of treatment, and the Committee believes it is hard to justify any inequity of treatment between students in the further and higher education sectors. Unfortunately, further education students have often hitherto been treated less favourably than those in higher education. Further education students (not studying higher education courses) are not eligible for student loans. Discretionary awards do not cover the full costs of fees, and although applications for discretionary awards continue to outstrip their availability, the total discretionary awards budget in Northern Ireland declined from £6m in 1997/98 to only £3.3m in 1999/2000.

We were concerned that the Department should fully address the whole range of possible anomalies e.g. as regards payment of fees by full-time HND students in further education colleges, by part-time students, etc. We consider that a proper examination of the arrangements for all fees, and student support arrangements, for post 16 education, further and higher education courses is required, in order to secure the principles of equitable treatment, and of contribution by those who benefit. The Committee will take into account the implications for our ongoing enquiry into education and training for industry, and thereafter will return to consideration of these questions with the Department.

We are also aware of the need to follow up on the question of support for postgraduate study.

We noted that the Dearing Report in 1997 suggested that higher and further education funding structures 'should enable distinctive issues and problems within the tertiary sector in Northern Ireland to be addressed (and) should locate outside the Department of Education for Northern Ireland the responsibility for channelling public funds to the institutions, thereby paralleling the position in Great Britain'. We sought advice on how funding arrangements worked elsewhere in the United Kingdom and the Republic of Irelan^d.

The three other British Councils (for Scotland, and for England and Wales) are non departmental public bodies, responsible to their elected parliament and/or executive, through their parent Department and Minister. They bid for, and are allocated funds, through their parent department. Their status gives them autonomy in operating on a day to day basis, within broad strategic and business plans agreed with the Minister. Members of the funding councils in Great Britain are appointed by Ministers on the basis of their personal contribution to the Councils' work. They have collective responsibility for the affairs of their respective Councils, which include deciding funding criteria, and providing financial support for teaching, research and associated activities in higher education institutions; securing quality of provision, and advising Ministers on development and funding of the sector.

In the Republic of Ireland, the Higher Education Authority has a role in overseeing university education and the activities of the colleges of technology. It has a statutory role in assisting the universities, in furthering the development of higher education, and in promoting equality of opportunity in higher education.

We recognised the good work which had been done over a number of years by NIHEC, but we considered that it lacked both the freedom, and the accountability, of a more 'arms length' body. We concluded that there was a clear need for a body in Northern Ireland, with similar status to those bodies elsewhere in Great Britain, and in the Republic of Ireland, which would have a wide range of specific responsibilities in relation to development and funding of provision in further and higher educarion.

In 1997, the Dearing Repor^t suggested an increase in HE places in Northern Ireland of 12,000. Research indicates that over a fifth of the age cohort of school leavers entering university each year, still leaves Northern Ireland unwillingly to study elsewhere. We are pleased to note that there has been a partial response to these pressures, and that an additional 4,200 additional full-time higher education places are planned for Northern Ireland over the period from 1999 to 2004. We concluded, for the reasons outlined below, that an additional 4,000 places was needed over the next 5 years. We noted that, in this regard, an equitable distribution of additional places across Northern Ireland is important.

We debated the extent to which we could advise on distribution of additional places across higher and further education. We note that there is some recent labour market information which indicates that in Northern Ireland there is a high demand for graduates, and that employers do not seek to fill vacancies with those having HND qualifications. We regret these indications that employers do not recognise and value sub-degree qualifications which have been aimed at their specific skill requirements. (A main aim of such courses was to introduce a style of teaching and learning which prepared individuals for the needs of the labour market, without the necessity of a degree). The shortage of sub degree places in the United Kingdom as a whole has been well documented, although the demand for graduate recruits, from employers, belies this evidence. We agreed that the additional places should include both sub degree level and graduate places^.

Cross-border issues are also relevant in this context, since the Republic of Ireland has recently targeted considerable investment in higher education, towards skills areas such as technology and engineering which will contribute towards modernising the economy. We applaud the economic growth which the Republic of Ireland has achieved, and we recognise the potential for Northern Ireland similarly to move confidently into the forefront of the knowledge economy. However we firmly believe that, in order to do so, we must invest further in developing working partnerships between our business/industrial sectors, and our further and higher education sectors, as a means of supporting any programme for economic growth. (There are wider issues which we will pursue in our current enquiry into education and training for industry). We do not believe that this is possible without a significant increase in the number of further and higher education places, accompanied by an appropriate investment in skills and infrastructure which comprise that provision.

We believe that the removal of fees will make Northern Ireland universities an increasingly attractive place to study, particularly in subjects where quality ratings are high. We are dismayed that there are no plans to remove the funding cap which constrains the number of full-time undergraduate places our local higher education institutions may provide.

Finally, we believe that a strategic overview of the higher and further education, training and schools sectors is needed whereby Departments plan on an integrated basis, which is consistent with policies on social inclusion, and economic strategy. Planning should include equitable provision for the further education sector, and co-ordinated measures to promote participation in further and higher education by disadvantaged groups and individuals. Progress can only be made on these issues with a concerted effort to tackle early disadvantage, including early years provision, preparation for learning and pre-primary and primary levels, and quality of provision at primary and secondary levels. Our enquiry into education and training for industry is likely to touch on these interrelations further, and we look to the Programme for Government to support such a co-ordinated approach.

Higher and further education are essential components of social inclusion and economic prosperity, and should have priority in this Executive's Programme for Government and associated funding decisions. Funding should ensure equitable provision for the further education sector.

Our call for additional full-time degree and sub degree places arises from the equity concerns implicit in only offering our proposed new system of student finance to NI students studying in NI. Our aim is to reduce the numbers of those who leave NI to study because they cannot gain a place in an appropriate course here.

In the first instance, and on top of the additional 4,200 additional places already planned, funding should be provided for at least an additional 2,000 progressing to 4,000 higher education places. These places should be phased in as soon as possible, over the next 5 years, to be distributed at both sub degree and degree level courses, with a focus on skills to support the knowledge economy.

Statutory non-repayable grants, which traditionally played a major part in the United Kingdom student finance system, were phased out in 1998, although various discretionary awards were maintained and others introduced. The recently announced changes in Scotland, England and Wales imply that such grants are returning, to an extent, in the other parts of the United Kingdom. Scotland will be providing income dependent "bursaries" (i.e. non-repayable grants) for students of £500 up to £2,000 where annual parental income is between £20,000 and £10,00^0, and childcare allowances are also part of the Scottish Executive proposals. In England and Wales there will be non-repayable grants of £1,000 (mainly for mature students), and means tested childcare grants for students who are parents^.

We recommend the introduction in Northern Ireland of new measures targeted at disadvantaged young people and full-time mature students, including a non-repayable grant, depending on need, of up to £2,000 from the NISEF, available at the start of the academic year. (We advise that, although Hardship Loans will still be the first port of call for younger students in financial difficulties - they could also apply to the non-repayable Northern Ireland Student Endowment Fund - mature students should not have to take out such a loan before receiving non-repayable NISEF assistance.) We also recommend the introduction of those measures which are proposed in England and Wales to help needy students, including means-tested assistance towards childcare; and an income-assessed grant to meet children's school meal costs, which will help lone parents who lose income support when they enter higher education. In addition, income assessment should be eased substantially for mature students, as they have financial commitments which younger students do not. They should have £7500 of their income disregarded without losing their student support entitlement, instead of the current minimum of £820.

Our recommendations regarding student finance only cover one (albeit major) segment of the continuum of lifelong learning, and we would emphasise the importance of the work in schools, which provides the foundation for progression to further and higher education.

We know that the United Kingdom and the Republic of Irelan^d are striving to dismantle barriers to access for groups which have traditionally been underrepresented in further and higher education. We acknowledge too the excellent work taking place in our local institutions, and with local and community groups, to widen access and extend participation. Much of this work involves supporting pupils in schools, and working with schools (including through careers advice and guidance) to raise expectations and engage pupils at an early stage. However we strongly emphasise that much more could and should be done, to encourage prospective students from those groups which are currently not engaging in further and higher education. We will take a particular interest in the outcomes of funding which the Department has provided to schools which have traditionally not had students progressing to higher education. In this respect, it is of note that working class Protestants are less well represented in higher education than working class Catholics, while educational underachievement among young working class Protestant males also gives rise to continuing concern^. These concerns are integral to the agenda for widening access, to be addressed with vigour, in the pursuit of social inclusion, and to ensure that further and higher education is fully representative of Northern Ireland's people

Measures such as those introduced throughout the United Kingdom and the Republic of Ireland, to promote wider access, should be examined and adapted to Northern Ireland circumstances. Appropriate additional resources are needed to fund such initiatives.

We regret that the department declined this opportunity to engage in a timely and necessary dialogue with us on the costing implications of the main options, and that they remained of the view that this could not be made available for public debate.

It is also disappointing that more local information was not available, through the Department, to inform our response to the review. In particular, the lack of accurate and meaningful information on further education must be addressed by the Department. In addressing this need, the Department should ensure that the value of such information is recognised and understood by further education colleges (since they are likely to be providing the basic information).

The Committee is grateful to its own advisers both for drawing out the context, and for assisting its deliberations on the issues. We are also indebted to those who took the trouble to speak to us, and to return with additional information in some cases - we regret that suspension curtailed our consultation in this important issue. We hope our views on student finance, and related issues, will open up a healthy debate which will engage those interests we have not yet heard from, and which will help inform the policy decisions that the Minister intends, we understand, to take shortly.

Our deliberations have strengthened our convictions that student finance is in need of reform. We welcome this opportunity to initiate a programme of reform, which will need to be more fully developed into the future. As NI and its neighbouring economies are changing, the society and the workforce we develop must change and adapt too. Our higher and further education sectors are no longer for the elite few, but engage an increasing proportion of our people within a broader reach of lifelong learning, The student finance system of the past catered for those "lucky few", and can no longer be sustained at current levels of participation. However the evidence of real student hardship, fear of debt and of financial impediment to participation amongst the most disadvantaged demands that the current student finance system now steers forward on a new course.

The Committee has aimed, in its deliberations, to achieve a student finance system based on equity and inclusion. We believe additional support is required to increase the participation of under-represented groups, to promote lifelong learning, and to alleviate student hardship. We are proposing a financial package with will remove tuition fees, with a more generous, client-focused student loans system, and a fund which will provide grants to help widen access for future generations of students - to which only some graduates (and no one earning less than £25,000) contribute, by no more than £3,150^.

Although our recommendations are mainly focused on the needs of full-time students, this is not to overlook the importance of part-time students, or the need for further review of the financial support afforded to postgraduate students. We highlight the issue of equity of treatment for all those undertaking post-16 education.

Our recommendations do no more than map the preliminary and priority steps on a path towards a better system. These are the first steps, targeted at those students currently disadvantaged most, and which also take account of those who benefit most from our investment. We have worked to move forward in a practical and prudent way, upon a foundation of principles grounded in the needs of Northern Ireland, its students and its future.

Present: Dr E Birnie (Chairman)
Mr M Carrick (Deputy Chairman)
Mr R Beggs Jnr.
Mr J Byrne
Mr J Dallat
Mr R Hutchinson
Mrs M McWilliams
Mrs M Nelis

Apologies: Mrs Joan Carson
Mr William Hay
Mr John Kelly

In Attendance: Mrs E Sung (Committee Clerk)
Mr Colin Jones (Assistant Clerk)
Ms A Colville (Administrative Support)

The Committee deliberated.

1.1. The draft report on Student Finance, proposed by the Chairman, was brought up and read, paragraph by paragraph.

1.2. Agreed as amended. Amendments are detailed below.

1.3. Page 2 - at Recommendation 5, add "the Chancellor should give consideration to tax incentives, especially to SMEs."

Recommendations 6 and 7 to be amalgamated and the maximum amount of the set contribution to the NISEF (£3150) to be added.

1.4. Page 3 - Recommendation 18 to be revised in the light of the Minister's statement on 9 October in the Assembly on additional places.

1.5. Page 8 - Final paragraph to be removed and inserted as the third paragraph at Page 10.

1.6. Page 11 - Second paragraph - include comparison between the average family size in Northern Ireland and Great Britain.

1.7. Page 13 - First paragraph - insert details of the Committee's grant proposals.

1.8. Page 16 - Figures on mature students to be included as a footnote.

1.9. Page 19 - Fourth paragraph - insert: "All Members have concerns about the administration of student loans. Some Members objected to the use of debt in principle."

Include footnote regarding NUS/USI concerns in respect of Islamic students.

1.10. Page 22 - Delete second paragraph.
Third paragraph to be reworded to address the disparity with GB.
Add footnote on concerns re Foundation Degrees.

1.11. Page 24 - Insert further three paragraphs as agreed.

1.12. Page 28 - Second paragraph to be reworded as agreed.

1.13. It was agreed that the Report, agreed as amended, should be printed and laid as the First Report of the Committee to the House. The Committee agreed a motion for debate, to be forwarded for consideration by the Business Committee.

1.14. Members recognised the urgency of presenting the Report to the Assembly as soon as possible, in order to fulfil its statutory remit of advising the Minister on the issue of Student Finance in Northern Ireland.

1.15. Minutes of today's meeting would be approved and included as an Annex to the Report.

1.16. Members asked for their thanks to Committee staff, Assembly Researchers and to their Advisers to be recorded in the minutes.

The Committee further deliberated.

ESMOND BIRNIE
Chairman

Dr E Birnie (Chairperson)
Mr M Carrick (Deputy Chairperson)
Mr R Beggs Jnr.
Mr J Byrne
Rev R Coulter
Mr J Dallat
Mr W Hay
Mr R Hutchinson
Mr J Kelly
Ms M McWilliams
Ms M Nelis

Dr Robson Davison } Department of Higher

Mr Alan McDonald } and Further Education,

Mr Ian Houston } Training and Employment

1. The Chairperson: It is my very pleasant task to welcome, I think, seven officials from the Department and, I think, several also from the Department of Education. Those from Department of Higher and Further Education Training and Employment, are Doctor Robson Davison who is the Head of the Further and Higher Education Division and then also Mr Alan McDonald and Mr Ian Houston. Also Tish Hegarty, Denis Hamill, Rosaleen Duffy and Brenda Marson. You are all very welcome. I think that the idea is that Robson, you are going to give an overview, to start with, and then you will be taking questions?

2. Dr Davison: That would be helpful if that is possible, Chair. Could I say as well that although Ian is on my team today, Ian's normal position is in the North Eastern Education and Library Board. Ian is on secondment to the Department for this specific exercise. We are very grateful to the North Eastern Education and Library Board for releasing Ian to join us in this work.

3. Chair, thank you very much for the invitation to come along to the Committee today to discuss the progress with the review. I certainly understand from our previous meetings, at the start of the year, the Committee's very deep interest in the topic of student support. I understand that the terms of reference for the session are to inform the Committee's response to our consultation document and we will try to come from that particular direction. I hope that what we have to say is helpful. I hope as well we can have a two way exchange on this. It may be useful if I open on a few points. First of all the process of the review and where we are now. I thought then I would give you some indication of the public costs involved in student support, and in any potential changes to it, and then maybe just to pick up some of the emerging issues from the consultation to prompt the discussion.

4. To start with we have really been following our terms of reference which were published at the time of the Minister's statement in mid-February. The Minister asked for a thorough review of the current arrangements which would lead to a set of costed proposals for change. He had linked those proposals with promoting access to Further and Higher Education, for those previously under-represented, and also asked the review to take into account changes elsewhere, particularly in Scotland and in England, and to include in it the new policy developments that were then in the pipeline. Our work has really been tied to the Minister's terms of reference. We have divided the work into different stages. The first stage was really scoping the work, planning the review and preparing and publishing the consultation document plus, at the same time, for our own internal purposes, reflecting on the policy considerations and the policy implications against which we were going to be conducting the review. We published the document in March. We issued some 1750 copies of the document which were sent out to educational institutions, to representative bodies in education, to political parties, to district councils, to representative business organisations and to other Government Departments. We sent out 1750 copies, we put copies in each public library and in each job centre and we put it on the web. So we distributed the document fairly widely and in line with the Minister's statement. We invited almost 20 groups to come and make presentations to us of their views and opinions. These were groups who had a particular interest in student support.

5. The second stage was the research phase, where we looked at what had emerged in Scotland, because, clearly, Cubie was a backdrop for our own work. Not just Cubie, but to pick up from the Scottish Executive exactly how they had viewed Cubie and what they were putting in place in response to Cubie, what was likely to happen subsequently since they had made only an initial response to the document. We wanted as well in this period to get in touch with DFEE to see what was happening in England and Wales. We wanted to look as well at the position in ROI and at the position not just from our own Department but from the other Departments in Northern Ireland. We wanted to look at whatever statistical evidence we could bring to bear and to look at any other documentation around that was related to the set of issues. So the focus was on existing data and existing information. We did not commission any new research in that period.

6. Where we are now is really what we asked in the consultation document; that people and groups would return their comments on the document to us by 2nd June. We had responses by 2nd June; but certainly, in my experience, they come in in a long tail. So, in effect, we are still receiving documents. At the moment, we have, I think, 50 returns with, I'm led to believe, a few more to come from people who have contacted us.

7. What we will begin to do now and what we are in the process of doing is analysing the returns; trying to identify any key messages coming through, consistently, in the returns; and trying to identify trends. Then we will pick up the proposals made in the consultation returns and plot those against the policy objectives and against the issues that are coming through. We are trying to use the consultation to develop the major issues which any options that we drew up have got to address. When we have done that and drawn together the analysis from the various returns and from the presentations that were made to us we would, at that stage, move to drawing up a set of options and get those costed. Those would form the basis for an analysis of the implications - how they sit against the policy objectives, how much they cost and what are the likely implications? That would form the basis for the last phase, which would be drawing together the advice and going over that advice to the Minister. At this point in time in the process we are still taking consultation returns but we have already begun the process of analysing those returns and trying to identify the key issues emerging from them.

8. You had raised, I think, in one of your letters to the Minister the possibility of an interim report. We have not intended to publish an interim report largely because we want to try and complete the review and to have decisions made on the review in time for the spending decisions that will determine public expenditure. If we make recommendations they can, then, be taken into consideration in this round of public expenditure rather than wait for subsequent rounds of public expenditure. It provides, if you like, a fairly tight time frame against which we are trying to work.

9. The spending review is important because the resource implications in student support are, obviously, a major factor in all of this. In this financial year, the Department will spend circa £90 million on student loans. We will spend circa £20 million on fees. We will spend another £14·5 million on grants and fees under the old system, the one that is being steadily rolled out from the changes that were introduced in 1998/99. We spend approximately £3.4 million on discretionary awards and we spend a total of £3 million, roughly, on access funds. In total student support terms we are talking about expenditure of circa £130 million; it is a fairly sizeable amount of expenditure. By way of parameters we had, for example, in the universities in 1998/1999 some 37,000 full-time under-graduates. That would be in universities throughout the United Kingdom and Republic of Ireland. If we spent an average additional £100 on each of those full-time under-graduates in whatever combination of fee, loan or whatever combination you wish, that would imply an additional £3.7 million expenditure. For every £100 you would add to a full-time under-graduate cost it is a £3.7 million call and the sums flow on from that. To take it to the other extreme, we have roughly 40,000 part-time adult vocational enrolments in Further Education. Again if you were spending an additional £100 on each of those you would be implying an additional £4 million per annum. We are talking here about sizeable sums which is why the Spending Review point, is important.

10. I mentioned earlier the policy objectives that we set. The Minister spelled these out in his statement in February. We have to consider the implications for lifelong learning and for increased participation in education and training. I think, particularly from what the Minister said in February, we have to consider support for the widening of access to Higher and Further Education from those groups previously under-represented in both those sectors. I think, as well, we have to consider the relationship between the provision in education and the economy as one of our frames of reference. Of course, we have to consider TSN, although that is closely related to the under- representation point and equality, although there may be some tensions between them, in that if you address one group in particular it may have implications for another group.

11. So far, in terms of the responses made to us, a number of major issues have begun to emerge. I thought, as I said earlier, it might be useful to share those with you by way of promoting an exchange. None of them, I suspect, is going to come as a surprise to you from our earlier discussions. First of all, would be the principle of free education for all which is clearly espoused by some of the correspondents who would argue that there should be no fees for courses at Further or Higher Education. Some would go further and argue that grants should be re-introduced particularly for University students. Others would take the view, enunciated by Dearing and supported by Cubie and by the Scottish Executive, that those who benefit most from the education they receive at third level should be expected to pay a contribution towards the cost. So there is clearly a debate over principle here which we will have to consider. We have recent research which was sponsored by the Education Department, DENI, published recently by Professor Harman which shows a very close link in Northern Ireland between education and earnings - the higher the level of education you receive by way of qualification, the more likely you are to be earning considerably more than if you had not the qualification. There is clearly a question of principle here to be considered.

12. The second main issue would be the disparity in support in the current system between full-time Higher Education under-graduates and those who are over 19 and full-time in Further Education. Further Education is free to 16 to 18 year olds but not free to over 19 year olds. Those over 19 have to compete for a limited number of discretionary awards; therefore there is a big disparity. As well as that, in Further Education there are no loans and there are no allowances. As I say, if you are not successful in getting a discretionary award then you or your employer have to pay the full fee. So disparity exists between support for full-time Higher Education under-graduates and support for a Further Education full-time student.

13. The third element would be a disparity between the treatment of full-time and part-time students which would apply in both Higher and Further Education. The policy has changed in recent times to be more favourable to a part-timer in Higher Education than was the case previously, but there have not been substantive changes of a similar nature in Further Education. For example, if you are in 50% of a full- time Higher Education course you can qualify for a loan of up to £500. In Further Education there is no such loan available to you. So there is disparity between the full-time students and part-time students, whether they are in Higher or Further Education.

14. Another issue would be the significant drop in applications from mature students, where we read mature students as those over 25. In real numbers, for example, there were applications in 1997 from 789 such people who were over 25; this year, 2000, it is down to 602. It is a drop of 187, a percentage drop of 23%. There has been a significant drop in applications in Northern Ireland from mature students. This is something that has happened on a UK-wide basis. Indeed the recent changes that have been announced, in income disregard for student support purposes and in the introduction of a school meals grant for dependent children, are a direct response to the fall-off in applications from mature students.

15. A fifth issue would be access to Higher Education from those from the lower socio-economic groups in society. We are not able to say whether this is the case in Further Education because we don't have the data to draw upon, but certainly in Higher Education if you take social classes IIIM, IV and V, we do better than the rest of the United Kingdom, but we are only marginally better. On IV and V alone, however, we are as good as or as bad as the rest of UK, whichever way you want to see it. Certainly, there is an issue here about access to Higher Education from lower socio- economic groups.

16. A sixth issue which was covered in the Minister's statement has been the development and the implications of new policies. At the moment, in GB, they are testing Education Maintenance Allowances for 16 to 18 year olds in a series of pilots. These are incentives to stay in full-time education. Those who go into full-time training, 16 to 18 years old, receive a training allowance in GB and in NI. In education, Further Education and school they do not. So the EMAs are testing out the introduction of an allowance; in some areas they are giving it to the parent, in other areas they are giving it to the child and in some areas they are giving it half and half. They are building in, in some areas, bonuses for retention; in other areas bonuses for performance, and in some areas bonuses for both. They are testing a very wide range of possibilities on EMAs. We await the evaluation of those with interest, but the preliminary indications are that they are having a positive effect on staying on rates in England.

17. The other issue which is of more direct interest on the post-18 side, would be the introduction of Individual Learning Accounts. In their initial form these were intended to be £150 grants which would be given to the first million individuals who participated and who would bring a contribution from either themselves or their employers. The concept is beginning to change to one which is incentivising adult part-time participation in education where the Individual Learning Account is like a fee remission - 80% off courses in, for example, ICT would be your ILA. The final details are being formulated but, clearly, these have implications for us because they introduce support for part-time students in Further Education almost for the first time. The introduction of those new policies are a major issue for the team, how they fit into the pattern.

18. The last issue to mention to you is one which comes from Cubie rather than, so far, from the consultation - why his proposals were for Scottish students in Scotland. He did not legislate or seek legislation for Scottish students in England and Wales because of the implications, I suspect, for EU law and also because, I suspect, they were unable to decide unilaterally that institutions in other jurisdictions could not get fees. Now that has an implication for us, on which we will be seeking legal advice. In our review we set off with the aim of looking at all Northern Ireland students, but there are major implications if we are in a position where we can legislate for Northern Ireland domiciled students in Northern Ireland, but for whatever reasons, we cannot legislate for Northern Ireland students in other jurisdictions. We will be seeking advice on that but it is clearly of interest that Cubie avoided that, as did the Scottish Executive.

19. Chair, I apologise for the time it has taken me to get through what were preliminary remarks. I thought it might be useful to set a pattern. We are at the stage now where that is what we are doing, trying to get messages and pictures, before we start trying to put together detailed options for costing via our economists. We are certainly now more than willing to share in exchange with the Committee.

20. The Chairperson: Thank you very much, Dr Davison. I will now throw it open to questions from the members. We will take the indications to speak in the usual way. I think John is first.

21. Mr Kelly: Good afternoon, just give us some idea why you would not be seeking an independent commission?

22. Dr Davison: I think it was the Minister's view that we were coming in behind the Cubie discussions which had opened up a major debate on student support and which had led to a wide range of information on student support being available. I think, as well there is a timing factor. We are trying to complete our review in a period where we can make recommendations in time for the Spending Review so that change, if change is going to come, can come relatively quickly.

23. Mr Kelly: I would support the notion of free education. You did mention that people who have received a third level of education seem to do better than most in society. Does that not also indicate that society and industry benefits from those who have received that education, industry putting something back into education?

24. Dr Davison: Well I cannot quote you chapter and verse, but, instinctively, I would suggest that society gains from a more highly qualified work force which is one of the reasons why we are trying to drive up participation, certainly amongst adults.

25. Ms McWilliams: I noticed in the Appropriation Bill this week under the student loans which you have rightly said cost about £90 million, that £7 million was down for deferment and £7 million for default, could you say why these figures are so high?

26. Dr Davison: I need to go back to the detail of that and perhaps write to you subsequently. I suspect it is related to UK wide figures, where we tend to be related, in student loan terms not to the specifics of Northern Ireland students, but to where we stand as a percentage of United Kingdom students who are having their loans funded through the student loan company. Therefore we fall to X% of deferment and default across the United Kingdom. I need to check that out because clearly it is a technical area, but I will come back to you.

27. Mr Beggs: The estimates for 2000/2001 showed a 40% year on year increase in funding for tuition fees. Can you clarify does that large increase simply reflect the old system going to a new system, is it historical or have you been building in any additional funding for the outcome of any review? If you haven't built in any funding for outcomes from the review, where will extra money come from if tuition fees are abolished? Have you some idea of the amount of monies needed to replace tuition fees.

28. Have you analysed the drop-out rates from third level education, and what comments would you like to make on whether financial pressures have contributed to an extent?

29. Dr Davison: On the appropriation account I have not got the figures in front of me. The tuition fee contribution has gone up from £1000 when it was set initially, to £1025 in the second year and, in the third year, it is £1050. There is no increase in tuition fees above that.

30. The second point would be that there is a roll- out of the old system where we would be in the final year of the old system. What the relationships are to the figures you have, I would need to go away and look at those.

31. Mr Beggs: £21.5 million for tuition fees on block which was 40% increase on the previous year. I was not talking about individual figures.

32. Dr Davison: In previous years, there may have been a new line for new tuition fees alongside the old ones, it maybe has something to do with the way the figure work has been laid out. Certainly I will get back to you on that.

33. Mr Beggs: Secondly the drop out.

34. Dr Davison: We have had recent data, on the Higher Education side, which was a national study done of retention rates. In our case the two universities in Northern Ireland came out in the averages of their bands by nature of the institution. So, in terms of drop-out rates we would be around the average of universities of their type. The figures are not any more significant in Northern Ireland than they would be elsewhere. That is not to say it is not significant overall because clearly drop - out is a cost.

35. Mr Beggs: Have you analysed in any way the reason for those drop - outs?

36. Dr Davison: The data that was presented was numerical rather than analytical and it did not deal with the reasons behind the drop out rates. From my understanding of the system there are a number of factors that come into play, one of which may well be the financial burdens on students. Equally there are things like choosing the wrong course to begin with; not fitting in to the university, et cetera. So there are a range of factors. Determining which of them would be the paramount factor, or rank ordering them, might be very difficult.

37. Mr Dallat: Mr Chairman, many of the people who would benefit from Higher Education would be people who would qualify for grants. Does that suggest that the public relations exercise needs looking at? That is my first question.

38. The second one is because there is such a serious shortfall in the number of places in universities in Northern Ireland, clearly a Cubie solution would not work because that would immediately entail a large number of students experiencing inequality of a type that I don't think the Assembly would tolerate.

39. Thirdly, the present disparity between Further Education and Higher Education in terms of grants and fees is obviously something else that a new fledgling Assembly, that has put equality at the centre of its activities will not accept as an option. May we have your response on those three points.

40. Dr Davison: On the first question, one of the big messages from the introduction of the changes that has not percolated very deeply is the fact that, in the first year of the introduction of contribution to fee, 49% did not pay anything at all; 22% paid something between zero and £1000 and 29% paid the full £1000. Clearly from the correspondence that we have had so far that is a message that has not percolated through. If the general point is that we have not communicated the outcomes very well, I probably have to accept that.

41. Mr Dallat: The purpose of asking the question is not to illustrate the fairness of the present system, but to show concern at the number of people who could have benefited from Higher Education, but have not because there is a perception that they wouldn't have been fee free and got grants.

42. Dr Davison: It is hard to be definitive about that in that our enrolments have continued to increase over the last few years, though the introduction of the changes has had an effect, a small effect overall on the numbers of applications. It has had a major effect as I have pointed out on applications from the over 25s and we have put into place some changes directly related to that. In overall enrolments of full-time under graduates, those have continued to rise. It is extremely difficult to be definitive about would they have risen even further had we not had the system. That is a hard one to answer. We are only two years into the system and statistics tend to run behind.

43. On your Higher/Further Education point, I simply repeat what I said earlier which is that coming through in the consultation is the disparity between what you get as a full-time under-graduate Higher Education student and what you get as a full-time over 19 student in Further Education. There is quite a significant gap.

44. Mr Dallat: One supplementary question. Within the Further Education system is there a need to look at the level of importance of the courses offered. For example, does someone undertaking a course in line dancing attract the same amount of support as somebody doing a physics course?

45. Dr Davison: I am not sure that is the case. Line dancing may well come in under the leisure courses that are funded at a different level from a physics two year A level or GNVQ. I am not so sure that they are funded at the same level.

46. On the broad point, Further Education is a fairly broad church and provides a community service of leisure and recreational courses, at one end of its spectrum, right up to Level 4 sub degree courses at the other end of the spectrum. Within that there is a fairly wide raft of provision. There would be an argument that says it should operate on a narrower front. One of the issues to consider is that if the broad raft of provision is considered necessary for society it has got to be provided somewhere; at the moment it is all in Further Education.

47. Mr Hutchinson: There has been a fairly large drop in applications from mature students. In 1997 there were 789 and this year there are 602, that is roughly 22% of a drop. What do you think are the reasons for that and how do you suggest that we can turn that around?

48. Dr Davison: I think there is a significant drop, and that is right across the four jurisdictions. One must assume that it is to do with the circumstances that have come into play for mature students. It might, however, also be something to do with the state of the economy; that there are more opportunities available outside of education. Again it is hard to call, but I think we accept that there must be some element of financial concerns in it.

49. We responded to that by picking up on the income disregard and by introducing the school meal support for dependants. So in the review, I think we have identified mature students as one of the key groups affected by the changes and at whom we would have to look carefully. There are other things that may need to be done.

50. Mr Hutchinson: This group is looked on as important within the education system?

51. Dr Davison: It goes back to the policy of life long learning and wanting to have the opportunity for those who perhaps missed out first time around to come back in to education. I think it is related to that policy objective that I think we need to think about them.

52. Mr Carrick: Could I just pick up on your comments during the presentation regarding research, and the decision not to commission any new research. Certainly I don't believe in reinventing the wheel, however, I would have thought that there is scope for some thinking within the Northern Ireland context. In hindsight, do you have any regrets about not commissioning any new research particularly focused on the Northern Ireland situation? That is one issue.

53. The second issue is the contrast between promoting life long learning, and the drop, over the period, of 23% in mature students. What does that suggest to us? Is there a failure here in promoting the concept of life long learning, when the trend seems to be going in the opposite way?

54. Thirdly, can I just tease out the other new policies on the mainland, the EMAs and the ILAs. Obviously there is a funding implication here if we were to go down this route. Are those incentives means tested in any way?

55. Dr Davison: Let me take those one at a time. On the research, I think we were making decisions in the context of the time frame. We wanted to be clear that we could get the review done in a period which would allow the Minister to make decisions that would tie in with the spending review. This would allow a shorter time between getting recommendations and actually implementing them. I could consider a lot of areas where, perhaps, research would have added to the picture but we had significant elements of research to draw upon; under Cubie significant bits of research have been done. I mentioned also the DENI education and earnings research, but within the time period on the commissioning of research, the undertaking of research and getting the findings, I didn't think we could have done that in the time.

56. Mr Carrick: I understand precisely what you are saying, but it is also vitally important that we get it right, that we get the right solution and the right programme for our students.

57. Dr Davison: I accept that, but all I am saying to you is that in the time that it takes to commission research, to go through a procedure laid down of going for bids, deciding who wins the bids, setting up the research, getting the findings, evaluating it and reporting it back, it simply would not have fitted within the time. I appreciate the point but on the practical side I do not think we could have done it.

58. On your other two points, the relationship between mature entrants and Higher Education, I have made the point that I think we do need to look at that as an issue. I would relate it to Further Education as well, because clearly in respect of life long learning, there are many folk who may want to come back in to education at levels below degree level.

59. Mr Houston: Chairman, just to follow-up on that point of the life long learning and mature students issue, one of the things to bear in mind is that the desire among mature students to go back into education, as reflected in the part-time enrolments, shows no sign of abating. Those figures continue to go up. Clearly there is the desire to get back into education. I don't think we can say absolutely that there is a direct correlation between the finance and the number of applicants but it plays some part.

60. I think perhaps the other point is the fact that we have so many people who participate in third level education at 18. It is higher than the rest of the United Kingdom, up to 41.2% at the moment, but it does obviously have a knock-on effect in that the numbers that are later available to go into Higher Education does tend to be slightly smaller. For most students the way into Higher Education is not direct, it is through Further Education, which again suggests that Further Education is particularly important; that is the access route, that is how they get in, that is the way they take.

61. That is the research that was done last year by Professor Field who was at University of Ulster and is now at the University of Warwick; it would support that view.

62. Your third point was on the means testing in the EMAs. They have made these means tested in the pilot areas. That is an interesting development at 16 to 18 because training allowance isn't means tested as far as I understand.

63. On ILAs, in their final, final form, I am not sure that they will be means tested but I will certainly check that point.

64. Mr Hay: I think this is probably one of the most important areas of work this Committee will undertake. It is important that we get it right. No matter what system you come up with somebody somewhere is going to pay for it, and we need to be clear about the potential financial implications before we decide.

65. Regarding consultation, what sort of response was there from the groups that you have consulted with, and how did you identify individual people to meet? Has there been reasonably good feed back from consultation?

66. Dr Davison: We had invited a number of groups to talk to us and ten groups picked us up on that and gave us the kind of debate that we are having today, and they made their views pretty strongly. I had better not name names, that is invidious, they gave us a good spread of views and opinions. The 50 replies that we have had have come from a range of bodies from political parties, from educational institutions, from trade unions and so on. In representative terms we have had a reasonable response.

67. We have not had a massive public response in the sense of lots of individuals writing into us, but we have had the views of the main bodies, the ones with a most direct interest in the process. Your opening point was that we have to get this right and that is what Mr Carrick was saying; we would agree with that, we want to try and get this right.

68. Mr Hay: I am concerned that there are students undertaking a full-time course of study who work a number of hours during the week to subsidise their studies and that this trend has increased over the years. Do you envisage, when this review is finished and presented, that this area will be addressed?

69. Dr Davison: I could not sit here and say that the final outcome of this will mean that no student ever has to work during his or her course. I think that is an impossible one for us to say at this point. Obviously the ultimate decisions here will determine whether students are better off than they are now; the end results will determine that. Certainly we were informed by a number of the people who responded to us, that students were working a considerable number of hours. Some of the institutions told us that this had an impact on the teaching week and others told us that the number of hours had increased quite substantially in recent times. Whether you could ever get to a point where students do not have to work, I just do not know.

70. Mr Hay: I do think that the review should ensure that students are not forced into a situation where they work so many hours everything else suffers and they then end up dropping out.

71. Dr Davison: It is in nobody's interest for drop out rates to rise because there are major costs involved in having students not completing courses. On that ground, the functional ground alone, you wouldn't want it to happen. Clearly there are a number of different policy objectives and it is a matter for the final outcome which policy objectives you can meet. Do you want to increase participation and widen access to a much greater degree? Or do you want to put more money into the students that are already there or do you want to widen access? There are a number of possible outcomes and when we get to the options end of things I think what we will be trying to do is look at the policy objectives and see what options would produce positive outcomes in terms of those policy objectives.

72. Mr Byrne: I think all of us on this Committee want to see a speedy resolution of the student support difficulty because the reality is that many students have suffered this year and previous years. I think if one of the policy preambles is to widen access and to meet the equality agenda then we have got to try and make sure that we are not restricting the chance of people who want Further or Higher Education from doing that.

73. One area, Chairman, that I am very concerned about is the provision of Higher Education across Northern Ireland. We have the two main universities and the seven Further Education colleges, one in Belfast and one in Derry, and the five others; Newry, North Down, Portadown, Ballymena and Enniskillen. I have to say I think it has been unfair the way that the Department has decided in recent times not to allow any further Further Education colleges to run HNDs. I am concerned that the Department is being too restrictive in talking only about a further 100 HND places in software engineering and electronics and that no college can enter the HND business if they haven't been in it before. If we are going to be serious about equality I would see equality of opportunity for all our students across the region and that includes geographic equality. I am not going to pass any judgment on any of the existing courses but I would like to see some sort of evaluation carried out to make sure that some others are afforded the opportunity.

74. Certainly my own county, Tyrone, is the only county in Northern Ireland that has no full-time Higher Education provision, and I would hope that disparity will change.

75. The second point, Chairman, I will say as a public representative that one issue that I had to deal with mostly in the last year, is the difficulties relating to student loans. I had a situation where students were ringing me from Birmingham, Liverpool, Dublin, who were basically at their wits end as their student loan cheque was not being processed. I want to know what the Department is going to do about making sure when we get to September/ October this year that they will not have the same shambles as last year.

76. I had a situation where two students were ringing me and they were contemplating coming home, but they did not have the money to get home. I think that was grossly unfair to our students, especially those that had to go away to get a Higher Education course. They were being doubly disadvantaged. First of all they couldn't get a Higher Education course in Northern Ireland, because of the number we have here, and secondly, whenever they left, our whole student support system is now so difficult for them, that agony was piled on even further in that they couldn't get the loan cheque and indeed some cheques bounced.

77. Lastly, Chairman, teacher training, I know might be slightly off the subject, but I think it is an issue that some of the Northern Ireland teacher training colleges are concerned that some of the GB colleges are able to advertise here at the moment. They are offering money incentives for taking a place in the English colleges and also in fact they are offering those students the opportunity do their teaching practice here in Northern Ireland. That actually is worrying for the Northern Ireland colleges in that they are worried that they could be crowded out over the next year or two. I would like to know what the Department is considering in that regard.

78. Dr Davison: Three major ones, maybe if I can deal with them one at a time. On the provision of Higher Education in Further Education, we have a set of criteria in place for Higher Education in Further Education colleges for those which do not currently provide full-time Higher Education. When the college meets those criteria it becomes capable of bidding for places when places are available.

79. I can certainly think of one college in County Tyrone which has met those criteria and recently bid for the places that were available under the Comprehensive Spending Review. It was unsuccessful because it was not bidding in the areas which were defined as those required for the regional economy.

80. However, one hundred HNDs have become available outside of the CSR from funding that was available under the 'skills initiative' and have been applied to the growing area of software development. Software development is not an area which colleges can start up very quickly; so we have gone to the existing colleges on the basis of the one hundred places for this year. Those are one hundred additional places. If the spending review delivers any further places in Higher and Further Education these will be opened up to bidding from all the colleges, including at least one in County Tyrone, to bid for in the next round of HND provision.

81. In talking to that college, I have been saying to the principal that the sort of provision the college ought to be bidding for is recognised within the regional skills needs rather than one that isn't going to fit into that particular category. Depending on the outcomes of the spending review, there may be another bid process with at least one college in Tyrone capable of bidding.

82. Mr Byrne: Chairman, can I just make a supplementary point to that? I do accept that there are criteria, what I'm worried about is that the criteria are so restrictive only the existing colleges are going to be able to expand their HND provision.

83. Dr Davison: We have, in fact, two colleges who previously have been unable to provide full-time Higher Education in Further Education, one of which bid into the regional skill needs areas and actually got places and one of which didn't bid into the skill areas and didn't get places. It is a possibility for colleges to move from a position where they currently don't provide full-time places to a position where they can provide full-time places. Then, it is for them to bid into those areas which are identified for HND purposes as urgent skill needs areas. That is what I have been saying to the college leadership in the case in point.

84. On the second point about student loans, we certainly are aware of difficulties that applied last year. Since then we have visited the Student Loan Company and had the Student Loan Company visit us and, along with the other jurisdictions, we have been putting pressure on the company to make sure that they are addressing some of the problems around communications and around the flow of cheques that occurred last year. We are assured by the company that they have been addressing the issue from their end. We have also been working closely with the boards to try and ensure that, at our end, we are doing our best to meet the needs of students in the coming year as we tried to do last year. I cannot promise you that we aren't going to have difficulties; we have to wait and see. But certainly we have worked at both ends of this chain to try to ensure that the processes work more smoothly.

85. Mr Byrne: Just on that, I have to say that I'm concerned that the Student Loan Company reacted in a very insensitive way to telephone calls from students or from related families. It took public representatives on the phone to look for people right at the top before there was any movement. I think that has handicapped the students. They should not have to suffer, especially if they are at college in GB, and they don't have the money to use a public phone box. I hope that those difficulties will not occur next year.

86. Dr Davison: I wouldn't defend insensitivity on any grounds. Officials from my division will be visiting the Student Loan Company at the end of this month and I will make sure that they bring that to the attention of the senior people there because I don't think that is justified on any grounds.

87. On your final point, which is the teacher training bursary point, both DHFETE and the Department of Education are looking currently at this issue. Some of the salient points are that we do not have the degree of teacher shortage that has driven those bursaries in England. We have a substantial number of applications for all the teacher training places that are available in Northern Ireland. On the teaching practice in Northern Ireland, I will talk to colleagues in DE about that. What you are saying is that the teacher training providers in England are offering students from Northern Ireland the capacity to do their teacher training in Northern Ireland schools and that that could crowd out our traditional providers?

88. Mr Byrne: Yes.

89. Dr Davison: I will raise that point with our DE colleagues, but the evidence is that there is currently a huge number of applications for places available in Northern Ireland.

90. Ms Nelis: Good afternoon Dr Davison and colleagues, you are very welcome. I want to thank you for your presentation first of all. I want to ask you a question in reference to the terms of reference of the review, the last bullet point, which is: "To make recommendations for any changes to the current system which would better target existing financial provision and if appropriate provide costed options". Could you tell me, because we know that the current financial provision is insufficient, that's the problem, would that have any connection with the low level of response to the consultation process so far? You have 50 responses, Cubie had something like 700 - I'm not saying that you are targeting 700 - but I just wondered, particularly in the terms of reference, would that have any connection? That is the first point.

91. Secondly, I'm just going to quote from the student poverty document which I have in front of me because I do believe that the consultative document in this Review would aspire to many of the things that the Students Unions have flagged up. We would want to alleviate current student hardship through maintenance and benefits, increase and widen access to Further and Higher Education and bridge the equalities, ensure equitable funding for both part-time and full-time some of the issues you raised yourself - and enhance the quality of education. Those are all very laudable aspirations and I trust the review would be addressing all of those. So can I ask you about the mechanisms that you want to be putting in place to ensure social inclusion in the most unrepresentative groups, especially in terms of the Review. Is the Department monitoring the equality implications of current policies and its effects on the current situation in the student fraternity? How will you prove the equality aspect of any recommendations which are to be implemented?

92. Dr Davison: If I take the first of those points, the final bullet point in the terms of reference covers the possibility of using existing money to better effect through targeting it better as well as, if necessary, providing costed options for new money. I could not speculate whether that has had an effect on the number of responses but certainly it was to enable us to explore if the current spend is getting close to the kind of policy objectives laid out and, if not, is there a better way of spending that money. That does not prevent us putting forward other options which may require additional resources; so the terms of reference include both.

93. On the student poverty point, you asked me what mechanisms we were going to put in place. The next stage of the review is to draw up options against the objectives that we have been set and taking into account all the comments that we have got from the consultation and to put together the options which seek to address the policy objectives. Now, whether in the options we can capture all the things you have said or some of the things you have said we will have to wait and see as we shape those options. That is the next stage of our review, to put them together and cost them so that the Minister knows what the option is and what the cost of it is likely to be.

94. You asked us about the equality effects. Clearly, in terms of monitoring equality effects, like other Departments we will be taking on board the monitoring of the equality effects and TSN effects in line with our stated policies. So we certainly would want, having under- taken a process like this, to evaluate later whether any changes did meet the requirements of TSN and equality. We will be trying to do that as the changes unfold.

95. Ms Nelis: May I ask a supplementary?

96. The Chairperson: Yes.

97. Ms Nelis: Given your response would you agree with me, even trying to put into effect some of the options it is still going to require very large additional finances, I would imagine?

98. Dr Davison: What I have said to you is that changes may require substantial funds, almost any changes are going to end up with effects which are a considerable cost. I said to you that if we spent an additional £100 on each full-time under-graduate that would cost £3.7 million per year in addition to what we are spending now. So small changes in student support can have fairly costly effects. When we put together the options for the Minister we will have to be absolutely clear as to what the costs of these options are because ultimately Ministers and the Assembly will have to determine the priorities on which money is going to be spent.

99. Rev Coulter: Thank you Doctor Davison, I must congratulate you on your presentation today. Most of my questions have been answered, but there is one area that hasn't really been touched on yet and that is the situation with post-graduate students who are involved in Research and Development. I would like to know, as there is an economic relevance for the Northern Ireland economy, what is being done in that area? Secondly, the disparity in support for students in Higher and Further Education - I know of a senior student trying to enter Higher Education through a Further Education college last year, who was not able to manage it because of the financial implications. At the same time the management of the Further Education college that this person was wanting to get into had just returned from a trip to Sri Lanka where they were trying to attract students to enroll - they didn't get any by the way. Is there any information on the relative costs of Further Education College management, and numbers of students enrolled?

100. Dr Davison: I wouldn't have detailed data on that. If that is something you want to write to us about to suggest, we can certainly consider whether it is possible to make judgements from within our existing data.

101. Rev Coulter: The question really is: after the review, will we put Northern Ireland students first?

102. Dr Davison: The review terms of reference includes the need to cover Northern Ireland domiciled students. I was saying, however, to you we may have an issue about Northern Ireland domiciled students studying elsewhere, but it is Northern Ireland domiciled students at the heart of the review.

103. On your second point, we looked at that when we were shaping the terms of reference of the review. There were two reasons why we didn't take post- graduates on board in this review. One was that we had bitten off a lot in the current review and if we included post-graduates, which is a very complicated territory, as well we would not be able to manage it all within the time period. So for practical reasons we didn't add post-graduates to the review. The second reason was that it is a complex area and the reason it is complex is the very reason I think to which you are alluding. It is the direct economic relevance for many specific industries of post-graduate training and funding. It is the kind of issue I think we need to look at out of the student support review. I know that your Committee is going to be looking at the whole relationship between education and training and economic development. It is in that frame that I think you would want to look specifically at post-graduates. So we didn't include it for practical reasons and because we thought it had this sharper, more directly economic focus and we need to look at that in a different context.

104. Rev Coulter: But it will be looked at?

105. Dr Davison: I think we need to see the shape of your Committee's study of education and training and the economy because it may well fall within your study and so we would not wish to duplicate the work.

106. Mr Kelly: Just an observation, Chair, on the Student Loan Company. I attended the meeting to which Doctor Davison referred with the Student Loan Company. I found that their presentation left me very cold indeed. It is only right the relationship between the financial and personal aspects of their work should be kept monitored.

107. Dr Davison: We will certainly be visiting the Loan Company and I know from colleagues in the other education departments that they have similar interests and concerns and that they will be monitoring it closely as well. So there is significant pressure to ensure that any difficulties are addressed. The point made about treatment of parents and students; there is no defence of that at all.

108. The Chairperson: Thank you very much, Dr Davison. I wonder if I could make a few points or indeed questions? As you will know we are very keen as a Committee to be involved in your ongoing process and the Minister knows that - and we will be talking more and writing to him about it - ideally we would actually like to see the submissions which you received, but that will be discussed further because I understand there may be certain issues around that in terms of confidentiality.

109. Dr Davison: If you reflect back on our timing, it came at an awkward moment in the political process and we ended up with the announcement of the review under one set of circumstances and launching it in another. It is in that change that I fear we may not have made too clear to people who were responding that we would be passing on their submissions elsewhere. It is in that area that we have concerns, Chairman.

110. The Chairperson: I can see that could be a problem, but obviously that's something we will pursue further with the Minister. Robson, you were saying that obviously the Department will be analysing the responses and summarising them. Again we would be very keen to see that analysis when it is complete because that would certainly be a valuable input into our own considerations. Really I think probably two questions strike me, they haven't really arisen in the discussions so far. Can you say something about the impact of the tuition fees on the income of the two universities? Is my understanding correct, that you are saying 29% of students pay the full fees of £1,025, a certain percentage around about one fifth pay something, and then the other half don't pay anything at all? Do the universities get all of that income so raised? If so, how much and what percentage of their total current income is it? Clearly from our point of view, policywise and indeed obviously from the Minister's point of view, if the view is taken that the fees should go, how much income for the two universities has to be replaced?

111. Dr Davison: On the involvement in the process, Chair, if I could just say that clearly I can't commit my Minister.

112. The Chairperson: I don't expect you to.

113. Dr Davison: That is a matter, really, for the Committee and the Minister. On your specific question, the answer is that the universities get the full fee. They get some of it from the private source, which is the parent or the independent student and the rest they get from public monies. In the year coming it is £1,050 so the universities will get the number of students times £1,050, whether that comes from public sources or from private sources. Our calculation last year was that the public cost of the fee was around £650 out of the £1,025. So £650 of that was coming from public sources and the remainder from private sources. As to the percentage of their total income I couldn't give you an off the top of the head figure. I could certainly give you figures as a percentage of the total grant that the Department would give a University. We give them their grant and then, on top of that, they get the fee income and then on top of that would whatever other income they earn through research grant or private foundation or whatever. I can give you certainly the amount of money that they got by way of fee last year and its percentage of the total grant.

114. The Chairperson: I think just before suspension was lifted the then acting Minister, Ingram, did indicate to me that it was something in the order of £16 million would be the additional Exchequer costs of abolition.

115. Dr Davison: If we were going to remove the public element of the fee it would be roughly £16 million. If we were going to remove the whole fee - and remember this is from our domestic institutions, as we couldn't remove it from England, Scotland and Wales - it would probably be £20 million to £25 million.

116. So the public cost at the minute would take £16 million to replace.

117. The Chairperson: Robson, I found very helpful the indication of types of views coming out of the submissions. One thing you didn't mention was the view being expressed that, per head of population you would have expected a lot more submissions than 50, you might have expected 200 from Northern Ireland, but there may be all sorts of reasons for that. The other question, did the submissions, any of them, deal particularly with the deferred contribution model as has been suggested in Scotland (and indeed as in other parts of the world) whereby graduates, once they pass a certain salary threshold, then a certain amount is deducted from them almost as an additional tax? Admittedly you haven't analysed it fully yet, but your impression, how much support for that was there?

118. Dr Davison: Please bear in mind that what I'm giving you is a snapshot of our analysis to date, so it is not the total picture. I am making clear to members that this is not an exhaustive view of all the submissions we have had. On the submissions, the 50 received have embraced a good spectrum and have been well put together submissions in terms of analysis. A number of them have put forward the deferred contribution model which was the one that the Scottish Executive chose to run with. The main argument put forward for it is that putting the fee at the front end is a bar to access because people see that as a barrier. Albeit, and I was making the point to Mr Dallat, 49% haven't paid anything and, from our correspondence, it is clear not everybody is aware that a huge number of people don't have to pay the fee contribution. We have to accept that there is an argument that the individual gains quite substantially in earnings over a lifetime from their Higher Education experience. Therefore if you do accept the argument that people ought to contribute something to their Higher Education which is the Dearing and the Cubie argument then it is better deferred. That has had some degree of strength. I'm saying to you that I couldn't, at this point in time, judge its strength across the whole of the consultation because we haven't done the whole analysis yet.

119. The Chairperson: How long do you think that analysis will take?

120. Dr Davison: I would hope that we have the analysis complete maybe by early July and that we would begin then to map the analysis against the policy and begin then to start thinking about the kind of options that might be put forward.

121. The Chairperson: Well thank you very much Robson and indeed to your colleagues. It has been most interesting and useful. I'm sure you will hear more from us and hopefully we will hear more from you in future. Thank you very much for coming along. I think we have all appreciated this immensely and we obviously wish you well in your continued analysis and response to the submissions received so far.

122. Dr Davison: Thank you very much for the invitation, Chair, and I'm sure we will meet again.

123. The Chairperson: I expect so and thanks again.

Dr E Birnie (Chairperson)

Mr M Carrick (Deputy Chairperson)

Mr R Beggs Jnr.

Mr J Dallat

Mr W Hay

Mr R Hutchinson

Mr J Kelly

Ms M McWilliams

Ms M Nelis

Mr A Cubie

124. The Chairperson: Good afternoon, especially to our friends in Scotland. As Chairperson of the Northern Ireland Assembly's Higher and Further Education, Training and Employment Committee I would like to thank Mr Andrew Cubie in Edinburgh for making time available to us. We are very much looking forward to hearing what he has to say. I have heard a little bit of that already through the radio interview, which we did for Radio Foyle at lunch time today. We are delighted that he can assist us, though there is a time constraint and we will have to finish at 3.30 pm.

125. Mr Cubie: I greatly welcome the opportunity of giving evidence to you. I am here without the other thirteen members of my committee, and I am sorry that my arrangements could not have allowed me to get to Belfast today, hence our rather constrained circumstances. Unless you wish me to make some opening remarks about some of the themes of my report, I will be very happy to take questions.

126. The Chairperson: Perhaps we should start into questions.

127. Mr Kelly: What have been the implications for Scottish students whose preferred courses are not provided for in the Scottish Universities, and what financial provision is available to Scottish students who choose, or are obliged, to study outside Scotland?

128. Mr Cubie: My committee's recommendations did not draw a distinction between Scottish-domiciled students studying in Scotland or studying elsewhere in the United Kingdom. In the very limited time that we had available we considered the European Union implications of our recommendations, and, as you may be aware, the Law Officer's advice in Scotland to Ministers was that it was not risk free to introduce our recommendations. Therefore, a distinction was drawn between Scottish-domiciled students studying in Scotland and not having to pay tuition fees and those studying elsewhere in the United Kingdom who had to do so. Ministers would not regard that as the optimal conclusion in their response to the report but they of course were constrained by the advice they had received.

129. If I may just extend that point a little by saying that in my personal further submission - obviously this was made as an individual and not as the former Chairperson or convenor of the committee - made to Ministers last week, I urged that the European Union aspects be explored further. Indeed, there are aspects of student finance which in the context of the European Union might well find their way to an inter- governmental conference.

130. Ms McWilliams: Until that happens, and it will be the case, are you concerned with the increase in places in Scotland given the arrangements that are particular to Scotland? Will it be sustainable in the long term? That will be a question for us in Northern Ireland as we also address the issue.

131. Mr Cubie: I do not know a lot about the Northern Ireland experience, but we in Scotland are net importers of students. My understanding is that, at least in the past, Northern Ireland has been an exporter of students. A thread which ran through our report was that the diversity of the student experience was much enhanced by the mixture of students both from elsewhere in the United Kingdom coming to Scotland and from further afield. At present it is unclear to what extent there may be a collision between a larger number of students wishing to stay in Scotland and those who wish to travel elsewhere in the United Kingdom for course reasons.

132. Mr Kelly: Further to what Ms McWilliams has said, we do export students to Scotland and to parts of England. How far do you think the European dimension can assist the financing of that situation because it is not being financed domestically?

133. Mr Cubie: I am doubtful about the prospect of European funding. It was not an area that we considered in our terms of reference. One of the anxieties of the DFEE in London was that had our recommendations been sustained, turbulence would have been created in terms of the way that EU students chose to come to the United Kingdom. The options in Scotland might have been regarded as preferable to those that would prevail south of the border. The issue between the Scottish Executive and DFEE became one of finance - who would be paying for any such turbulence.

134. Mr Carrick: What are your views on the social consequences of the proposals that are in your name? Have you addressed what the social implications might be? Are we going to widen the opportunities, or are those opportunities going to be restricted in some way?

135. Mr Cubie: I will try to be brief because I get into something akin to crusading mode in this area. Our terms of reference obliged us to look very closely at excluded groups or groups which were represented in a limited way in the Scottish context. We now have 47% of our cohort between the ages of 18 and 22 progressing to higher education. The English equivalent is 36%. But what has happened is that the widening access opportunities that have flown from the "massivication" of Higher Education have not developed in the way that many in society feel they should have.

136. It was for that reason that we had some very specific proposals - to introduce a bursary structure in Higher Education, formerly known as a grant, which would have been administered by individual institutions, and to identify what we described as equity groups, for instance, young adults on low income, mature students, lone parents and students with disability. The Scottish Executive has picked up elements of these recommendations, particularly with regard to the targeting of equity groups. Owing to financial constraints they have not felt able to follow the recommendation with regard to the wider access bursary. In my further submission to Ministers I have urged them to look at that again and perhaps to look at some form of piloting with relation to it. Finance is one aspect which many people consider when entering Higher Education, and if these measures had been implemented, the social implications would have been more advantageous.

137. Mr Carrick: You mentioned the financial implications of widening access. How might the widening of access be financed if student fees were abolished?

138. Mr Cubie: I hesitate because I am sure that there are those in your Committee who will be knowledgeable about resource accounting. Our proposals would have cost £62 million in cash in the first year and £71 million in resource accounting. They were predicated on the ability of the Government to make allowance for commitments to pay in the future being introduced at current value, and that made our wider access bursary proposals quite expensive.

139. My colleagues and I were in a very indulged position: we had only one issue to consider, and we did not have to balance other budgetary constraints. I must stress the importance of the wider access bursary arrangement. We took extensive evidence throughout Scotland, and all members of the committee were influenced by people we met who were seeking to better themselves through Further and Higher Education and who were caught in financial traps. That was substantiated by representative evidence.

140. Mr Dallat: The threshold of £25,000 was lowered to £10,000. How will that affect young graduates entering employment at around £10,000, or who are setting up in business or starting a family?

141. Mr Cubie: It will affect them profoundly. My main concern with the Executive's proposals is the £10,000 to £25,000 figure, and I have spoken vehemently on that. There is a difference between a £10,000 threshold to commence a loan repayment and a figure at which a contribution is made on a deferred basis. All graduates, irrespective of their circumstances at the time of study, make a contribution, once they have achieved some financial success. To regard that contribution as one that can commence at £10,000 along with some sort of loan facility to help make it seems to me to miss a major plank of our recommendations.

142. Although Ministers have accepted the guiding principles of our report, which we regarded as a very important framework, I could not see how that conclusion squared with those guiding principles. Whether the figure be £25,000 or slightly lower - and I will be flexible about it -it most certainly cannot remain at about £10,000.

143. Mr Beggs: The Scottish Executive has created exemptions for disadvantaged groups such as lone parents, mature students and the disabled. How much will these exemptions cost and how does the Scottish Executive intend to finance them?

144. Mr Cubie: You will have to forgive me while I look quickly at the response document. I am not certain that I am going to find that immediately, but I will be able to identify it at the end of this evidence, if you wish. I am sorry that I just do not have that in my head.

145. Mrs Nelis: Our experience of the student loans system here has not been a very happy one. I see that the Scottish Executive has opted to use the current student loan system to collect the post graduation endowment rather than the system that you suggested in your report, 'Student Finance Scotland'. Is this absolutely set in stone? I know that the Executive has stated that its reason for doing so was that tax and revenue is a reserved matter. Can you suggest any alternative arrangements which could be made, certainly locally, for repayment schemes?

146. Mr Cubie: My colleagues and I were very clear that it was appropriate to have a mixed menu of options so that loans and grants and, indeed, the endowment all sat properly together. Within the recommendations we made regarding eligibility for loan and because means testing has changed, we did suggest that there should be a pilot scheme for commercial arrangements which would allow those who did not fall within the main loan system to have the benefit of commercial loan arrangements. I do have an understanding of why the Executive felt hesitant about creating another body. We suggested the amalgamation of existing bodies to create Student Finance Scotland, though I do appreciate that creating another body to be involved in the area of student finance might have been difficult.

147. I also have to accept that we as a group probably became quite aspirational in what it was we were trying to recommend, albeit with our feet fairly firmly on the ground, and a new body that would be charged with recovering the graduate endowment would obviously have been a more complex structure than the one that the Executive has chosen to go with. I simply say again that I have some understanding of why it did not go quite as far as we recommended. One of the problems was - and I think that this is one of the interesting aspects of devolution - that having a different structure within Scotland such as we were recommending quite clearly was going to give rise to difficulties within the United Kingdom as a whole, because it would have been quite materially different. That is why I am pleased at the chance to talk to your Committee, because some of what we were recommending fits probably more easily within a UK context than it does within just a Scottish context.

148. The Chairperson: Within the theme of deferred contributions you have already spoken about the principle that it is only fair that students, after they have graduated and have earned a substantial salary - and you have £25,000 in mind - pay a contribution to study. Many people would accept that principle and I personally find it attractive. However, there will be others who will argue, and no doubt you encountered this, that in principle, Higher and Further Education should be free. How would you respond to that argument?

149. Mr Cubie: I understand it, and indeed you are correct, Mr Chairperson, that this point was put to us quite vigorously. There were those who asserted that we had had a principle of free education in Scotland as a matter of history. That is not so, and we commissioned research to demonstrate that that was not the case within higher education. The facet of free education when it is then applied to the employer's contributions also becomes difficult with regard to the various sources of funding in tertiary education. On the front cover of our report we boldly put the word "fairness". For the very reason that you referred to, in the Scottish context there were very few who would not accept the fairness of a deferred contribution.

150. We created a remarkable consensus around some of your recommendations and, indeed, one was around this issue of a deferred contribution. That came not only from university principals and staff associations, from unions, from employers, but also from the student body itself. We felt there was firm ground in recognising that contributions should be made at the appropriate time and when the individual can make the contribution fairly. For some that cannot be at the time of study and for them it should be when they have achieved material financial advantage is there. That is based on 100 years of evidence which shows very clearly that graduates earn more than non-graduates even in societies where the proportion of graduates relative to the rest of the population has been rising significantly.

151. Mr Beggs: Are you still in talks with the Scottish Executive on this issue or have the Scottish political parties accepted what has been put into place? Is the issue dying or is it still a hot issue where there could be further movement?

152. Mr Cubie: I do not intend to sound impertinent, but you might ask the Scottish Executive about that. I made a further submission within the consultation period on their paper having finished at the end of last month. I made clear in formal meetings with Ministers that I hope there can be further thought on the level of graduate endowment, the bursary provision, and, indeed, some aspects of the European Union position.

153. I am now advantaged because I am giving evidence to you this afternoon, and I have already given evidence to the Select Committee in Westminster. I have yet to give evidence to any component or Committee of the Scottish Parliament, but I anticipate that in the months ahead. You will be pleased to know that you are ahead of our own Parliament here! I hope that there will be some opportunity for movement but the Chairperson referred at the outset to the status of the committee. My committee was an independent committee, which was quite out of the political swim. I do not know the coalition politics well enough to know if any movement is possible or not. As you have gathered from my remarks I hope that movement may be possible. It would be to the betterment of Scotland generally and to individual students in particular.

154. Mr Hay: What evidence did you take from universities before you drew up your conclusions? Your report also proposed that loan payments be abolished for students whose parents earn more than £47,000 a year. How did you collate that?

155. Mr Cubie: We took extensive written evidence from all component groups in universities and Further Education colleges, from university principals, staff and students. We also arranged a comprehensive series of campus visits to universities and Further Education colleges. During these visits we were at pains to meet the different component groups in the university and college structure. We also held public meetings in 13 locations throughout Scotland when again further university and college representatives came. The greatest satisfaction that my colleagues and I gained was that on the day that we reported to Ministers we held a seminar that afternoon and invited all the groups that had submitted evidence to us to come. We had a fairly major gathering as you might imagine from that. At that point the representatives from university principals, the student bodies and the staff unions from universities all agreed with the major planks of our proposals. We consulted fairly widely.

156. On the point you make about the threshold of contribution you will be aware that the tension in and around tuition fees in Scotland was enormous. I do not think that as much attention as was appropriate was paid to the fact that we were recommending that middle Scotland, if I can put it that way, would require to contribute more to education. We talked and thought long and hard about this but the conclusion came back to the fairness of contribution from those who could afford it. We knew in the Scottish context that there is a long tradition of valuing education - indeed, many colleagues in the committee had family recollections of finance which had gone into the advancing of the next generation to that generations betterment. It was for these reasons that we felt a contribution was appropriate at a higher level from those above £47,000.

157. Mr Kelly: That £47,000 capping perhaps does not take into account the number of children that might be in the family. What are your views on that?

158. Mr Cubie: We almost included it as an alternative set of guiding principles because in the creation of any structure for finance there had to be anomalies. The view we took was that the level was sufficiently materially high to allow for numbers of siblings being involved in the process. I take the point that you can cut that pack another way.

159. Mr Beggs: The other factor not taken into consideration is the relationship which a student may have with his parents - whether or not the parent would be willing to contribute anything. So I would caution against that.

160. Mr Cubie: In an ideal world, and bear in mind we had five months to produce this report, we would have liked to have explored further the implications of making students independent of their family relationships because undoubtedly there were many who said to us that that continued dependency created a range of tensions and difficulties which we might not have allowed for fully. It was for that reason that we did encourage some kind of piloting of other loan arrangements. There is no doubt that for those who come, say from the gay community, with families not necessarily approving of that, there were some cogent points put to us that that continued dependency on a family connection could be very impeding as far as progress into Higher Education was concerned.

161. Mr Kelly: In the consultation, how much interaction did you have with student union bodies, and how much weight would you put on their contribution to the debate about free education?

162. Mr Cubie: We had really quite substantial interaction both in formal terms with formal evidence sessions and with representatives coming to us. We had a student representative on the committee who had been the students' representative committee president at Aberdeen University. There are two distinct student representation groups in Scotland, one being for the ancient universities and the other the National Union of Students for Scotland. They did not combine to any great extent until our work was well advanced, but I am pleased to say that one of the by-products seems to have been that they are more collaborative. I thought they took a very responsible view of the evidence they gave to us. Indeed, both the NUS's first submission and the second, which has gone to the Executive, are thoughtful and of very high quality. The two groups were very responsive to the way we went about that consultation process.

163. There were also hundreds of students around campuses during our visits, so that those who were not members of formal student bodies had access to us.

164. Mr Dallat: Is there any international evidence to suggest that free education should mean just that?

165. Mr Cubie: In the context of the desktop work we undertook on mass Higher Education systems - owing to time constraints it could only be desktop - I am not aware of a free system, short of a communist regime, that is actually coping with current exponential growth. Thank you for raising the point. That too added to our feeling that one had to draw contributions from all those elements able to contribute to Higher Education.

166. The Chairperson: I should like to return to the question of deferred contributions. It concerns the practicality of the schemes now endorsed by the Scottish Executive. Will the mechanisms be adequate to track graduates, ensuring they actually end up making the contributions? That is a practical question, perhaps one more of equity and fairness, given that salaries vary by subject. Though it is perhaps the case where your original figure of £25,000 is better than the actual figure of £10,000, there may be issues of fairness, given the evidence that some disciplines produce a much greater pay-off in eventual salary increases than other academic subjects studied.

167. Mr Cubie: Those are indeed two significant points. With the tracking issue, we had to be very clear that our Scottish graduate endowment could not be regarded as a tax, since the devolved settlement for Scotland dictates that it could clearly not be another impost. We were satisfied, as, I believe, the Executive is satisfied in that regard, but in our suggestions for Student Finance (Scotland), we acknowledged that there would require to be a high level of information- sharing with the Inland Revenue when tracking individual graduates.

168. I make no apology for the fact that we were not a full-time committee. We had access to good resources, but we were not able to get to the bottom of a number of issues with which we wished to deal in detail. Some of the structuring, I readily accept, took place in that context.

169. You partly answered the point you raised, for many expressed concern that, with incomes in different careers being quite varied, the compulsion under the present structure was to push people towards the better-rewarded careers. Our feeling was that if one takes £25,000 as being the annual income across a range of occupations, at most points, whether in teaching, commerce, or public service, the individual has made some strides towards advancement, and for that reason we felt that it was a relatively neutral figure unlike the £10,000.

170. The Chairperson: Further to the question of tracking points, how are contributions going to be received from other EU students studying in Scotland, if at all?

171. Mr Cubie: We recognise that this depends to a fair measure on the integrity of the individual student. You may smile and say that that is a rather forlorn hope. There is a great deal of evidence that, through the alumni bases of universities, they are tracking their constituent group very well. I am not saying that Student Finance (Scotland) would plug in to the alumni base of Edinburgh University or Strathclyde - not least because we propose the establishment of a foundation. Interestingly, on the basis of a voluntary structure many people have said that they would be willing to contribute - on a tax-efficient basis - to a national foundation in preference to contributing to their own individual university. Therefore, the establishment of that foundation combined with individuals recognising the value of contributing in later days - in order to continue the benefits they had received - would make the issue of tracking less severe than it seemed initially. However, I readily accept that this is an issue.

172. Mr Kelly: Returning students to the benefits system will improve the plight of many outside term-time. In the North of Ireland there are constraints on the hours students can work before losing their benefit entitlements. This implicates the type of work and the number of hours they can work. Do you have any suggestions regarding provisions for these constraints? Should there be constraints at all?

173. Mr Cubie: Our report went to the Executive and then to the Scottish Parliament. We had three recommendations which we urged the Executive to raise with the Westminster Parliament. They have not done this. A fundamental aspect was that clarification of the present arrangements was necessary to determine whether students would be funded for a 38-week period or a 52-week period in the year. In Northern Ireland you have, as we do, rural communities where the opportunities for part-time student work are very limited, both in the vacation period and, indeed, for many colleges in term-time. We felt that those students who could demonstrate that they had - using other aspects of the main benefit system - been unable to find employment would be entitled to participate in the benefit system on the basis that they were studying full time, which is a 52-week occupation. You would be required to demonstrate fair inability to get work.

174. In contrast to this, some of the research we undertook showed that for many students in Scotland much of the damage to their studies was done by term- time work which, for some, was extending to 30 to 35 hours a week. These were people who were, at the same time, nominally full-time students. Some of the research - which is referred to in our report - is compelling, hence our recommendation that there should be some form of code of conduct limiting term- time work to a minimum of 10 to 15 hours a week.

175. The Chairperson: We are coming towards the end of the time, but we will have one more question.

176. Ms McWilliams: I know from experience in Higher Education that one of the difficulties is defining what constitutes a mature student. Clearly - although you do specify exemptions, particularly in relation to lone parents - there is always the issue of married women who have enormous difficulty, particularly where they have husbands employed in a low-income bracket. Did you take this into consideration in relation to exempting them? Was that a consideration when you were looking at exemptions in relation to who constituted a mature student?

177. Mr Cubie: Considerable reference was made to the circumstances of married women. In the elements of our recommendations for mature students the provisions for married women, in the circumstances you referred to, are, indeed, anticipated.

178. This it is why we referred to the categories as equity groups. In equity - particularly in the context of mature students - married women should not be at a disadvantage. Similarly, members of the other equity groups should not be held back because of a lack of finance. One of the benefits of a wider-access bursary arrangement operated by individual institutions is that they could indeed have brought focus to that.

179. Mr Hay: Given the work you have done in Scotland, what implications are there for the rest of the United Kingdom? I do not think the situation is confined to Scotland; it also has implications for England, Wales and Northern Ireland. What are your feelings on that, given the work you have done?

180. Mr Cubie: I spend much of my life as a lawyer, and the specific evidence we have was substantially Scottish. We undertook desktop research, which is, I hope, available to your Committee - it has been published in separate volumes - and at the end of December, my colleagues and I felt that we could speak with real authority about student finance in Scotland. We had immersed ourselves in the difficulties and the restrictions involved, many of which have been drawn out this afternoon. However, we could not apply that to other areas of the United Kingdom without suggesting similar research be done. That is the canny answer; the honest answer is that I do not see why many of the target group members in Coventry or, indeed, in Belfast do not have the same concerns (particularly in regard to loan aversion) that came across in Scotland. This is reflected by the fact that there are still a number of national bodies campaigning loudly for a wider consideration of our recommendations and, in some cases, their implementation.

181. The Chairperson: Thank you very much Mr Cubie. What you said was extremely interesting and helpful. We have all been looking at the Cubie Report for some time now, and we are impressed, not only by the final product that your committee produced, but also by the process used. In terms of our own devolved arrangements and the processes of consultation used here in Northern Ireland, much could be learnt from your methods. Because it was an independent committee, you had long enough to commission research and make national comparisons. I understand you had over 900 individual submissions. If you had the chance to do it again, and if the resources were available, would there be anything you would change?

182. Mr Cubie: There are two aspects to that. I wish that there had not been an intense debate over tuition fees in the background. I hope the report shows this very clearly, because to many in Further and Higher Education, living costs are a much more significant issue than tuition fees, even, dare I say it, elsewhere in the United Kingdom. By the half-way point in our process we managed, with quite active press engagement, quickly to push the issue of living costs further up the agenda. I wish we could have started off in that position, as it might have promoted maturity in the exchanges that we had.

183. The second issue I wish we could have looked at was funding of institutions as well as the funding of students. It is self-evident that they interlock, and one of our statements was that, insofar as the Executive accepted our recommendation to abolish tuition fees in Scotland, that in itself should not diminish resources to institutions, and the Executive accepted that.

184. The Chairperson: Thank you, Mr Cubie. You have been extremely helpful, and we hope that at some point you will be able to physically come and talk to the Committee. We will seriously think about what you said, as we have to form a view on student support in Northern Ireland by the end of this month. So the issue is alive here as well. Thank you for your time.

185. Mr Cubie: Not at all, Mr Chairperson. I have made clear to your Clerk that I would be happy to talk to you face-to-face, but I am happy to make whatever contributions I can.

• Alliance Party of Northern Ireland
• Ards Borough Council
• Association of Northern Ireland Colleges
• Association of University Teachers (AUT)
• Belfast City Council
• Causeway Institute of Further & Higher Education
• Collegiate Grammar School, Enniskillen
• Confederation of British Industry for Northern Ireland (CBI)
• Craigavon Borough Council
• Department of Agriculture & Rural Development
• Department for Education & Employment (DfEE)
• Educational Guidance Service for Adults
• Equality Commission for NI
• Fermanagh District Council
• First Trust Bank
• General Consumer Council
• Governing Bodies Association (NI)
• Lisburn Borough Council
• Lisburn Institute of Further & Higher Education
• MENCAP
• NASUWT - The Career Teachers' Organisation
• NATFHE - The University & College Lecturers' Union
• Newry and Mourne District Council
• Newtownabbey Community High School
• North Down & Ards Institute of Further & Higher Education
• North Eastern Education and Library Board
• Northern Ireland Women's Coalition
• North West Institute of Further & Higher Education
• NUS - USI National Union of Students - University of Students in Ireland
• Omagh District Council
• Open University
• Queen's University, Belfast
• Rev DR I M Ellis
• Scottish Executive - Minister for Enterprise & Lifelong Learning, Henry McLeish
• Sinn Fein
• SKILL (National Bureau for Students with Disabilities)
• Social Democratic and Labour Party
• South Eastern Education and Library Board
• Southern Education and Library Board
• St Franchea's College, Enniskillen
• St Louise's Comprehensive College, Belfast
• St Mary's University College, Belfast
• Stranmillis University College
• Students Union of Queen's University, Belfast
• Transferor Representatives Council
• Ulster People's College
• Ulster Teachers' Union
• Ulster Unionist Party
• University of Ulster
• University of Ulster Students' Union
• Upper Bann Institute of Further & Higher Education
• Western Education and Library Board
• Whiterock Children's Centre
• Youth Council For NI