Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science.
Reorganising Whitehall doesn’t always go smoothly. I was shadowing Alan Johnson when he got the new title of Secretary of State for Productivity, Energy and Industrial Strategy – the acronym for which meant his department’s new name lasted less than a week.
Rishi Sunak’s new structure deserves to last a lot longer. He has rightly corrected some mistakes by predecessors.
David Cameron took media and digital technologies off the Business Department back in 2010. Two undercover Daily Telegraph reporters turned up at Vince Cable’s constituency surgery, and got him to say some very disobliging remarks about Rupert Murdoch while he was acting in a semi-judicial capacity to assess a takeover bid for Sky.
The collective punishment of the department for what Vince said has caused problems ever since. Software has been in one department and hardware in another. This divide between two departments is one reason the Government has failed to come up yet with a semi-conductor strategy. The new department at last puts an end to this.
The new structure also corrects Theresa May’s reorganisation of Whitehall too. Bringing the Department of Energy and Climate Change into the Business Department was diverting BEIS away from many other issues. Energy has a big meaty agenda and merits its own department.
Theresa also created a department to negotiate trade deals. But trade negotiations have to be based on a good understanding of business sectors. So both the Trade and the Business Departments were asking very similar questions of business. It makes life simpler all round if they are brought back into one department.
These changes makes a lot of sense, therefore. There is one further step, however, which really would mean we had a unified approach to the science superpower agenda – bringing universities into the new Science department, too. Universities are where a lot of the crucial research happens. They also train the researchers and technicians we need. They also attract them from abroad. But while the new Science Department will have responsibility for university research, the DfE will continue to responsibility for teaching in universities. This division of responsibility is very dysfunctional.
It may seem obvious that universities should fall under the Education Department – but originally funded they were direct by the Treasury. In his great report on higher education. Lionel Robbins warned against moving universities to the Education Department because he feared that such an interventionist department would not understand or value the autonomy of universities.
His warning has proved accurate. The DfE treats universities like poorly performing secondary schools, and now intervenes in them so much that the Office for National Statistics may well propose bringing universities into the public sector. That would be a massive change for Britain’s research effort since suddenly many of our key researchers would become public sector employees.
Universities earn significant revenue from overseas students which they have used to cross-subsidise research. But the fees for domestic students (which of course students don’t pay up-front – it is a graduate repayment scheme) have remained frozen at about £9,000 for a decade.
So the real resource for educating students has fallen below the cost of educating them. As a result, revenues from overseas students are being diverted instead to subsidise teaching costs for British students. The DfE is therefore in effect driving a cut in research funding because it won’t properly fund British students. This is only possible because nobody in Government has to look at universities as a whole.
The DfE might even be happy to lose universities to the new department because it doesn’t much like them. Its focus is on the 50 per cent of young people who don’t go to university. This is understandable, even admirable – but it means that higher education is the only part of the education system which the DfE appears to want people to avoid if possible. We have just – rightly – celebrated Apprenticeships week, but one can’t imagine the DfE celebrating Universities week.
Ministers always talk of our having four universities in the top ten in the world as evidence of how strong we are at research. You get to the top of those rankings by brilliant research published in prestigious journals. It is not a ranking based on practical application of research. After they laud these top universities, ministers then express their frustration that we aren’t good at commercialising research. But assumption that there is only one way of being a top university is part of the problem.
Successful innovation requires training more technicians. It means not just having great ideas, but working with business on their practical application – and that often involves a local university working with a local company on a project to apply R&D. But the universities which train the technicians and do applied R&D for small businesses are often less prestigious. Some of them even used to be polytechnics!
Instead of recognising how important they are for successful innovation, the critics really wish they weren’t called universities at all because they think a proper university has to look like Oxbridge. The view that only one kind of research is worthwhile, the sort which takes you to the top of the rankings, cripples our capacity to do applied research. A powerful department driving the innovation agenda is an opportunity to break down these hang-ups which do so much damage.
Michelle Donelan had an excellent article in the Sunday Telegraph setting out her agenda for the department. She proudly said that she had increased the grant for the cost of teaching STEM subjects when she was universities minister at the DfE. It is a pity that she won’t have the power to make such decisions in her new department.
The Government says good things about universities as places for research but not much good about them as places where most young people go for education. It has one foot on the accelerator trying to grow research and another on the brake cutting funding for teaching and trying to limit student numbers. Driving a car like that normally causes it to stall. So why not develop a single coherent agenda by putting overall responsibility for these key national institutions in one place? It’s not too late!