Hansard

I should say that I am not a well man. That might explain my momentary lapse.On my left is Gill Troup and on my right is Hugh McAloon. I am sure that they will be happy to help by supplementing what I say.I welcome the opportunity to discuss our higher education tuition fees proposals and the draft Student Fees (Specification) (Scotland) Order 2006, which we intend to lay on 11 May. First, I will run through our proposals, which will probably take a wee bit longer than doing so normally takes. However, I am sure that members will bear with me.The proposals relate to tuition fees for 2006-07. We propose to increase the annual tuition fee for new entrants to full-time degree courses and initial teacher training courses from just under £1,200 to £1,700 and to introduce a separate, higher fee of £2,700 for entrants to full-time medical degree courses. I will explain how doing so will affect the various groups of students that are involved.Students who are already on courses, including students who are transferring from another institution, will not experience the proposed increase—their fee will be set at £1,200. Students articulating with advanced standing from a full-time sub-degree course, such as a higher national certificate or a higher national diploma course, to a full-time degree course will not experience the increase either—their fee will also be set at £1,200. Students who have decided to defer their studies for a year and agreed to do so with their institution before 1 August 2005 will likewise not experience the increase—their fee when they enter the course will be set at £1,200.New and existing Scotland-domiciled students will be unaffected by the changes. Those who are currently eligible for full tuition fee support from the Student Awards Agency for Scotland will continue to be eligible for full support. Self-supporting Scotland-domiciled entrants, including those who have previously received support from SAAS, will have to pay only what they would have paid under the previous fee regime. The difference between the £1,200 that will have to be paid and the higher fee will be paid on their behalf by SAAS. Non-United Kingdom European Union-domiciled students will receive the same support as Scotland-domiciled students receive. The only students who will have to pay the new, higher fee will be entrants to full-time courses that are covered in the order who are domiciled in the rest of the UK. Those students will not have to pay up-front fees, as they can choose to defer their fees by means of a student loan.I will outline the thinking behind our proposals. From 2006-07, a new fee regime will begin to emerge in the rest of the UK with the introduction of variable fees. That regime will allow institutions to charge fees of up to £3,000 a year on the proviso that at least £300 of that fee is spent on student bursaries. As members know, we are not going down that path in Scotland. The Executive is committed to not introducing variable fees in Scotland and to providing full fee support for the majority of Scotland-domiciled students who are studying in Scotland.However, the higher education market is UK-wide—indeed, it is an international market. Students move freely around the UK and more widely within the EU. Many students from around the UK and the EU choose Scottish institutions because of the excellence of teaching that they offer—we can proudly boast of the international research reputations of Scottish institutions. We are immensely proud of our institutions and regard their being able to attract the best students from throughout the UK as a good thing for them and for Scotland more generally. Even with the changes that are taking place elsewhere in the UK, Scottish institutions will remain a good choice for students from throughout the UK.Our overriding interests are in maintaining our institutions' ability to attract the best students from throughout the UK, while protecting the interests of Scottish students. That is a balance that we are keen to strike. Generally speaking, those interests coincide, as Scottish students are best served by institutions that are internationally competitive and capable of attracting the best. That feeds into the teaching input and ensures that Scotland-domiciled students are in receipt of the best possible teaching. However, there must be some equilibrium in cross-border student flows.We have no evidence that suitably qualified Scotland-domiciled students are currently unable to obtain places at Scottish higher education institutions. However, if the current fee regime for students from the rest of the UK who come to Scotland were to be maintained, for a degree course, a gap of up to £5,400 would open up between the cost of tuition at Scottish higher education institutions and the cost at higher education institutions elsewhere in the UK. Therefore, in crude terms, the cost of a degree in Scotland could be 40 per cent of the cost of a degree in the rest of the UK. Of itself, that would not necessarily be a problem because, as I have stated, we will not enter the fee regime that will emerge in the rest of the UK. However, the concern is that that fee differential between Scotland and the rest of the UK could create a temptation for students from the rest of the UK to make decisions on the basis of cost alone. That would be against Scottish students' interests, if they were subsequently displaced from our institutions in significant numbers. On that basis alone, we propose to increase general tuition fees to £1,700 a year. We do not want to exclude students from the rest of the UK; in fact, we welcome them and offer them opportunities to study at some of the best universities anywhere.Even with fees of £1,700 a year, for a degree course, we will still offer an average saving of £1,300 compared with the cost in the rest of the UK. The proposed fee takes account of the cost of an extra year's study and gets us as close as possible to a level playing field on overall study costs with the rest of British higher education. At this early stage, evidence is emerging that our approach has been successful. The earliest indications are from the Universities and Colleges Admissions Service applications data for 2006-07 entry, which show a 1.1 per cent increase in the number of applications to Scottish higher education institutions from students who are domiciled in the rest of the UK. That figure is well within the historic fluctuation for the data, so I am encouraged that we are on our way to achieving the objective of maintaining the equilibrium in cross-border flows. In the coming few years, we will continue to monitor closely data from UCAS and the Higher Education Statistics Authority as changes throughout the UK bed in.We propose a significantly higher fee for medicine than for other subjects, for the simple reason that the situation in our medical schools is significantly different. If I may, I will take some time to explain in detail the rationale behind our proposal for medical fees. Medical degrees generally last for five years, whether they are undertaken at Scottish medical schools or at medical schools elsewhere in the UK. Therefore, an increase in fees in the rest of the UK without a response in Scotland would lead automatically to deeper disparities in the costs of study for medicine than the disparities in other areas of study.Although some other degree courses do not follow the general degree model, we have chosen to leave the fees for them at the same level as those for other courses, but we believe that medicine is different. The ratio of applications to places at Scottish medical schools stands at 10:1. The costs of provision are significant and fall on NHS Scotland and our HEIs. More than 40 per cent of entrants to our medical schools already come from the rest of the UK. Research that was published as part of the Calman review of basic medical education shows that Scotland-domiciled entrants to our medical schools are 2.25 times more likely to be working in NHS Scotland 10 years after graduation. All those factors make medical training an issue of national importance that moves beyond the interests of higher education and into the realm of long-term public health provision in Scotland. That is why we will treat medicine differently.From an early stage in our deliberations on cross-border flows, we knew that medical fees in the rest of the UK were likely to attract the maximum fee possible. That was predictable, given the high demand for places, and our prediction has been borne out by subsequent decisions. Similarly, it was predictable that any bursaries that were made available to attract students from disadvantaged backgrounds to HEIs in the rest of the United Kingdom would not be directed specifically at high-demand subjects such as medicine. From an early stage, it was apparent that the average fee for medical courses in the rest of the UK would tend to be no less than £2,700. A five-year course with a fee of £2,700 a year will cost the student £13,500 in fees over the course of their studies. If fees remained unaltered in Scotland, the cost advantage for students who chose to study in Scotland would be £7,500. Even if medical fees were raised to £1,700 a year, the cost advantage would come to £5,000. The only conceivable outcome of either approach would be more pressure on places at Scottish medical schools, which would be likely to result in a reduction in Scottish entrants to the profession in the short term and a possible shortage of doctors in NHS Scotland in the long term.The consultation on the draft order has been useful for tightening the order up. In the draft order that the Scottish Executive will lay before the Scottish Parliament on 11 May, there will be some significant technical changes. First, we will define the courses to which tuition fees for the 2006-07 academic year relate. Previously, those have been defined as courses that commence before the end of the calendar year 2006. However, as Universities Scotland pointed out in its response, many of our institutions offer flexible start points for their courses throughout the academic year. Therefore, for the purposes of the order, we have defined the academic year as running from 1 August until 31 July.We will also be much clearer on deferring students than in the previous version of the order. Universities Scotland made some useful comments on that matter, and we have acted on them. We also plan to tighten up the definition of the postgraduate courses that will have their fees regulated by order. Those will be only the initial teacher education courses, which have traditionally been charged at the undergraduate rate and are of national significance. Another matter on which we will introduce greater clarity is the distinction between full-time and part-time courses. Fees for part-time courses have never been regulated, and there are no plans to change that. The documentation that accompanies the order will be much clearer on that than it was in the previous draft. Again, Universities Scotland made a valuable contribution to our thinking on that. Apart from making technical comments on the draft order and accompanying documentation, a range of respondents have restated their positions on our proposals. The National Union of Students Scotland and other student representative bodies have restated their principled opposition to tuition fees in general and variable fees in particular. As I stated earlier, the Executive is committed to paying tuition fees for Scotland-domiciled students and will not introduce variable fees in Scotland. That position is similar to that of NUS Scotland, but we differ in our position on fees for students from the rest of the UK. Our position on tuition fees for Scotland-domiciled students is delivered through the student support system and each Administration in the UK is responsible for student support irrespective of where in the UK the students study. We are not in a position to provide fee support for rest-of-the-UK students who study in Scotland and, for the reasons that I have outlined, it would be counter to the interests of Scottish students to do so.The NUS Scotland makes a good case about the cost of an extra year's study in Scotland. If we accept the data that the NUS uses in its consultation response—I have no reason to doubt them—under the current system, the extra cost of studying in Scotland relative to the rest of the UK stands at £3,190. Under our proposals, the gap narrows to £990. Were the Executive to maintain its current fees regime, according to the NUS's figures, it would be £2,210 cheaper for rest-of-the-UK students to study in Scotland than at an institution in the rest of the UK. That would be a turnaround of £5,400 in favour of rest-of-the-UK students on the current situation. That would present clear risks to the interests of Scottish students, and we would rightly be accused of inaction at their expense if we did not respond appropriately—indeed, my former boss, Jim Wallace, said that that was not an alternative.The NUS also made some good points on medical students. The mix of socioeconomic backgrounds of students who enter Scotland's medical schools does not reflect the mix of society. That situation does not benefit our students, medical schools or the national health service. However, it would not be in the interests of Scots applicants to medical schools, whatever their background, if we were inactive in the face of significant change in the rest of the UK. Increases in applications from the rest of the UK if a gap were to open up of up to £7,500 between the cost of studying in Scotland and the cost of studying elsewhere would further reduce opportunities for Scotland-domiciled students from disadvantaged and non-traditional backgrounds to enter our medical schools. We should not undermine the good work that is going on in our medical schools to widen access to medicine by making an illogical decision on fees.The response from Universities Scotland makes many useful points, but we disagree on the timing of the proposed changes. Universities Scotland argues for a year's delay on the ground that there is a need for more evidence and more time to introduce such complex changes. We all agree that the move towards the introduction of variable fees in the rest of the UK is generating uncertainty throughout the British higher education system. Risks will be attached to any change amid such uncertainty but, as I said, doing nothing would carry much greater risk. We have outlined what we believe are moderate proposals and, even at this early stage, UCAS data appear to show that we have maintained historic levels of applications from the rest of the UK. There is a suggestion that there is a drop in the number of applicants from the rest of the UK to our medical schools, but I have not yet seen those data and, as far as I am aware, UCAS has not published them. However, even if there is such a drop in applicants for 2006-07, there will be no shortage of suitably qualified Scotland-domiciled applicants who are desperate to take up medical school places and—dare I say it—are perhaps keener to work in the NHS in Scotland in the long term. There will be no shortage of high-calibre applicants to our medical schools.I have sympathy with the institutions, in that it is impossible to make changes to fees such as we have proposed without additional operational complexity during the transitional phase. However, I am reassured that the Scottish Further and Higher Education Funding Council, SAAS and the Student Loans Company have been working closely with the Executive to minimise disruption to institutions.I thank the committee for its indulgence in giving me the time to explain fully our proposals on fees. I look forward to hearing members' comments and to the debate in the Parliament that will take place when the order is laid. I remind the committee that our overriding motivation is to protect the interests of Scottish students and to ensure that our institutions can continue to attract the best students from throughout the UK. That is a balanced judgment and the measured proposals that I have outlined will achieve both aims.