The Committee calls on both universities and the Government to ensure better outcomes for students, expand degree apprenticeships, make university more accessible to a more diverse range of students and tackle excessive Vice-Chancellor pay.
Rt Hon Robert Halfon MP, Chair of the Committee, said:
"We know our universities are among the best in the world and global leaders in teaching and research, but to maintain standards and to deliver for students it is vital we ask the question of whether our higher education system is fit for the 21st century.
The blunt reality is that too many universities are not providing value for money and that students are not getting good outcomes from the degrees for which so many of them rack up debt. Too many institutions are neither meeting our skills needs or providing the means for the disadvantaged to climb the ladder of opportunity.
Our higher education system needs to have a much sharper focus on developing skills. This could make an important contribution to filling the nation's skills gaps and solving the UK's productivity puzzle. Russell Group universities, including Oxford and Cambridge, should rise to this challenge, up their game and rocket boost degree apprenticeships.
Too many institutions exist where Vice-Chancellors and senior management earn excessive amounts that does not represent value for either the student or the tax payer. Self-regulation should be out of the question and the Office for Students must enforce strict criteria on acceptable levels of pay that could be linked to average staff pay, performance and other measures".
The report calls for universities to be more transparent about graduate prospects, in terms of both earnings and destinations. ONS statistics for 2017 show that 49% of recent graduates were working in non-graduate roles across the UK. The Committee believes that an increase in graduate outcomes information can support more informed choices for students and make institutions more accountable.
Skills and degree apprenticeships
Higher education must play a more significant role in meeting the country's skills needs and preparing students for the Fourth Industrial Revolution, the report says. According to the Government's recent Employer Skills Survey, two thirds of hard-to-fill vacancies are caused, at least in part, by a lack of skills, qualifications and experience among applicants. The Committee calls for all institutions to offer degree apprenticeships which are 'crucial' to boosting the country's productivity.
Social justice and flexible learning – reintroducing maintenance grants
The Committee is 'deeply concerned' by the fall in both part time and mature learners, and the impact on the socially disadvantaged going into higher education. Universities must offer more flexible learning including credit transfer, work placements and pauses in study and move away from the 'rigid' traditional three-year undergraduate approach.
Research by the Institute for Fiscal Studies (IFS) found that the raising of tuition fees in 2012 and the introduction of maintenance loans has led to students from the poorest backgrounds accruing debts over a three-year degree of £57,000. The Government should reinstate the means tested system of loans and maintenance grants.
Vice-Chancellor and senior management pay
The report finds that the 'unjustifiably' excessive salaries of Vice-Chancellors have become the norm rather than the exception and do not represent value for money for students or the taxpayer. The Times Higher Education's survey of Vice-Chancellors' pay in 2016-17 showed that Vice-Chancellors were paid an average of £268,103 in salary, bonuses and benefits.
The Office for Students should take a firmer stance on senior management remuneration and not be afraid to intervene, especially when institutions pay their Vice-Chancellor more than eight times the average staff salary. The Committee calls on the OfS to publish criteria on acceptable levels of pay that could be linked to average staff pay, performance and other measures.
The report also notes the steep increase in unconditional offers made to students and calls for the Office for Students to clamp down on their use, warning that their practice threatens to be detrimental to the interests of students and to undermine the higher education system.