David Willetts on the case for expansion

Source: Paul Bateman

Increased supply appears to have been matched by increased employer demand, so the graduate premium has remained broadly constant

I start this year with a sense of great optimism. Last month, the chancellor made a historic commitment to remove the artificial cap on student numbers by 2015-16. It is 50 years since the Robbins report set out the crucial principle that “courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so”. This principle remains as important today as it was then: but now, thanks to our reforms, we can make it a reality.

This matters because British higher education institutions turn away 60,000 applicants a year who are so determined to go to university that they keep on applying. It matters because in the poorest parts of this country, young people are still far less likely to go to university than those living in the wealthiest areas. In Wimbledon, for instance, 68 per cent of 18-19-year-olds go to university. In my constituency of Havant in Hampshire, where incomes are lower and there are areas of real disadvantage, the figure drops to a shocking 23 per cent.

This is one of the greatest barriers to social mobility in our country. It is an appalling waste of talent.

When the Robbins report was published in 1963, the tidal wave from the post-war baby boom was about to surge through higher education. Today, demographic pressures are less immediate. But the forces driving increased demand for higher education have not been suddenly turned off in 2014. They have been at work for the past 50 years and they will continue.

Young people today clearly recognise that university is a transformative personal experience and a good lifelong investment. Last year we had the highest ever entry rate for 18-year-olds. They see that university is a critical leg up on to the career ladder. Attendance offers a chance to experience new things, to encounter new ideas. It is an opportunity to make friends you will keep for the rest of your life.

Lionel Robbins painted a compelling picture of the value of going to university. He achieved a perfect equipoise between utilitarian arguments and confident appeals to the underlying value of study. He was not embarrassed about acknowledging the utility of higher education, but at the same time exuded a fundamental belief in its broader value.

The Robbins report did not doubt that study at this level is inherently worthwhile – an argument that remains true today whether the subject is history or particle physics. And it also described higher education as a civilising force. This is also as true today as it was then.

Yet in the 1960s, the economic arguments for expanding the academy lacked a clear evidence base. In particular, it was generally accepted that higher education’s future financial returns were immeasurable. The report noted: “There are some who think that…returns will plunge pretty steeply. Others take the view that this is unlikely. The fact is that no one knows.”

Today, there is much more evidence available – and it proves Robbins right. My department, the Department for Business, Innovation and Skills, recently published a quadrant mapping all the different benefits of higher education (see below). This shows there are economic and non-economic benefits for individual students and for society as a whole. For instance, graduates are more likely to vote or volunteer and to be tolerant of others, and are less likely to suffer depression, to smoke and to be obese. They are also less susceptible to criminal activity.

All four parts of the quadrant contain strong effects. And for each specific statement of the benefits, you can click through and see a substantive piece of economic or social research backing it up.

The case for higher education is sometimes confused by a narrative that keeps cropping up in the media about graduates without jobs – or the wrong jobs. This is a sort of modern variation on the Kingsley Amis “more means worse” theme, and it is hugely frustrating. The evidence shows a degree is still one of the best routes to a good job and a rewarding career.

As shown in latest results of the 2013 Labour Force Survey, a striking 86 per cent of graduates are in employment compared with 65 per cent of non-graduates. The number of the former group in the labour market is rising, but it doesn’t follow that higher education returns are therefore falling. Increased supply appears to have been matched by increased employer demand, so the graduate premium has remained broadly constant – regularly estimated at well over an extra £100,000 in lifetime earnings after tax. The latest independent research for BIS shows that male students with degrees can expect to boost their lifetime earnings by £165,000; for their female peers the figure is an even more striking £250,000.

Even in these tough times, the economic returns from degrees are robust and it is more important than ever that we articulate that. It would be a tragedy if anyone gave up a life-changing chance to go to university because they had read a story that said it wasn’t worthwhile any more. And it is students from poorer backgrounds, with no family history of going to university, who may be particularly susceptible to that sort of scare story.

But this is where we hit a second unhelpful trend. Mention the economic benefits of higher education and you leave yourself open to accusations from some that you are failing to recognise its other less tangible returns to society or individuals. Acknowledge one area of the quadrant and you are accused of ignoring the others. This is exasperating, because it is treating the value of higher education as a sort of multiple choice exam question with only one correct answer.

Such critics tend to argue that our policies rest on the belief that our universities offer only private returns and we do not understand their public value. This is utterly wrong. There is of course a public value to university and that is reflected in the substantial public support we continue to offer. We cover the extra teaching expenses of high-cost subjects. We quite rightly pay for that element of loans that we do not expect to be repaid. And we provide students with maintenance loans and grants. But there are private gains, too, which is why it is fair to expect graduates to pay their share: our reforms rebalance support so that their contribution increases from 40 per cent of the total cost to 60 per cent. But taxpayers still pick up 40 per cent of the cheque.

Of course, this tension between the utilitarian and non-utilitarian is nothing new. In 1241, John of Garland, who taught at the University of Paris, lamented: “The lucrative arts, such as law and medicine, are in vogue and only those things are pursued which have a cash value.”

Fifty years ago, when setting out the aims of higher education at the beginning of his report, Robbins placed “instruction in skills” first, because he felt it was most undervalued. As this debate rumbles on, it is worth quoting him in full: “Confucius said in the Analects that it was not easy to find a man who had studied for three years without aiming at pay. We deceive ourselves if we claim that more than a small fraction of students in institutions of higher education would be where they are if there were no significance for their future careers in what they hear and read; and it is a mistake to suppose that there is anything discreditable in this.”

Yet talk of economic value still sometimes prompts anxieties that there might be some crude model at work in which the wider value of learning is ignored. It also plays into the assumption that science, technology, engineering and mathematics are good and the arts, humanities and social sciences are unaffordable luxuries. This is not the case. We believe that the full range of disciplines are fundamentally worthwhile. They are deep sources of human satisfaction, helping us to understand and navigate the world around us. One-third of the chief executives of our top FTSE 100 companies have humanities degrees. I remember hearing the late Eric Hobsbawm reflect that there was no better preparation for running one of these companies than a degree in history.

The good news is that these disciplines are themselves getting much better at defining their tremendous public value. Helen Small’s book, The Value of the Humanities, is the latest to explore these different sorts of merit, from holding democracy to account to improving our understanding of what makes us happy. And of course, we understand that this value must be measured in wider human as well as purely economic terms.

Universities enrich us in so many ways – and that is precisely why we are removing the cap on aspiration and allowing them to grow. As I look to the future, I expect to see more students in higher education (a greater proportion of them from low-income backgrounds) and a higher-quality teaching experience for all. I hope Robbins would recognise that we are being true to his great vision.