Lord Johnson of Marylebone (Con)

My Lords, I also have to declare an interest as a visiting professor at King’s. I have other education-related entries on the register, which I will not list here. I welcome the Government’s decision to allow the increase of fees in line with inflation. It is long overdue, and I wish that previous Administrations had had the good sense to crack on with it, as this Government have. The feast-to-famine approach to funding higher education is hugely inefficient and leads universities to make job cuts and programme closures that they might not otherwise do, if there were greater certainty over their funding. I echo what my noble friend Lord Willetts said about the need to put this situation on a more stable footing, ideally, with annual indexation. That would be eminently sensible. Like him, I would be interested to find out from the Minister, when she replies in due course, how much of that fee increase will be left to institutions once they have dealt with the increase in national insurance contributions down the line. The key thing is that inflation is an ongoing cost, and the OBR has made forecasts of near 3% inflation for each of the next three years. If the Government do not allow for further indexation in coming years, universities are going to be looking at another real-terms fall in their income of around 11% or 12% by 2030, so it is really no joke at all. I urge the Government to keep on gripping the nettle and dealing with it. From a political point of view, the sooner in the political cycle they do that, the easier it will be. Making these sorts of decisions should not be difficult, but leaving it to years 2, 3 or 4 of a Parliament means that it becomes much less palatable. I urge the Minister to get on and announce the continuing indexation for the coming few years. Welcome though this funding is, there cannot be something for nothing. As the noble Baroness, Lady Wolf, said, the sector has to continue to demonstrate value for money for students and taxpayers whose loans underpin the funding of higher education. I am very pleased that my noble friend Lord Willetts mentioned the TEF. I was also glad to see that the Office for Students strategy—now out for consultation—gives a prominent role to the TEF in how it plans to ensure quality in the system. The TEF plays a valuable role in driving excellence and good student outcomes above the baseline ensured by the B3 metrics. It has a really useful role to play in that respect, so I am pleased to see that it is going to be part of the future quality arrangements.