I was pleased to be able to attend Peter Mandelson’s first major Higher Education speech yesterday, in which he highlighted some of the concerns in the field which the recently created Department for Business, Innovation and Skills will take forward. Lord Mandelson began by emphasising the huge changes which the sector has undergone over the last 150 years, and suggesting that it was these changes that shaped the 20th century. Clearly, more changes are needed now for the universities to have a similarly radical effect on the 21st century. Like John Denham before him, Mandelson is keen to point out that although he believes we are already in a position of strength with regard to the status of our universities, there is no doubt that things are going to get more difficult, especially with the current economic crisis. The fees system has been, he considers, “a radical and signal success”, necessary to strengthen university resources, but further changes are needed and we must keep in mind the changing demographics of HE and ask of the universities system, “for what end, for who, and how?” These questions are to provide the backdrop for the HE framework to be published in the Autumn, as well as the fees review which is currently ongoing, and Mandelson was careful not to pre-empt these. The HE framework is to be the “flagship policy statement” for BIS, a suggestion which may have pleased those concerned that BIS are now responsible for HE policy-making; Mandelson said that this puts higher education at the heart of policy-making, and should not be seen as a retrograde step.

The speech concentrated on three main areas, the first of which was the economic role of universities, which, he stated, are not “factories for producing workers”. Certainly he did much to allay some of the more frequent concerns which appear in the pages of the newspapers; universities are not meant to be primarily economic institutions; knowledge is an end in itself, and our universities preserve this, and students gain advantages through their soft skills such as intellectual confidence and critical thinking as much as through anything more specifically commercial, although Mandelson did say that universities do need to think about how to commercialise knowledge. Of course, this is in part about research collaboration (related to the new REF framework, in which “impact” will be highly credited – read about that here). I was especially pleased to hear that a review is being launched around post-graduate education, something which is frequently overlooked. This is to be led by Professor Adrian Smith, and will report back early in 2010.

The second issue considered was that of social mobility, linking in part to Alan Milburn’s recent report, the remit of which was much wider than HE. Mandelson states firmly that “we are doing better, but not well enough”, and, moreover, that he is getting “impatient” with the problems of fair access and widening participation, and intends to “turn the spotlight on” university admissions, particularly in the more selective universities. The journey towards HE needs to begin earlier, a point I strongly agree with. In a quotable phrase, he said he is intending that we reach a point where “the daughter of a Hartlepool shopkeeper has the same chance of being a high court judge as the son of a Surrey stockbroker”. Clearly there is political enthusiasm to support universities which find innovative ways to “identify talent” in young people who might otherwise not enter HE, and also to address the situation of part-time and mature students, especially to demonstrate that BIS is serious about life-long learning. (This prompted a question at the end from Sally Hunt, UCU general secretary, about the possibility of revising the cuts to ELQ funding, which elicited the response that there are difficult choices to be made, and ELQ cuts freed up £100m to support first-time students, but this would be reviewed in the Autumn). It is, Mandelson emphasised, all about “natural talent, not social background”. So far, so good…

The final issue covered was that of funding, of course. “Excellence is not cheap”, as we well know, and sources of funding need to be widened, to include more in the way of endowments, research collaboration and global exports, but the bottom line is the need for state and user funding. I felt Mandelson was woollier here than on any other issue, but basically the implication is that, without pre-empting the forthcoming fees review, fees will need to go up for those who can afford them in order to provide support for those who otherwise could not participate in HE.

By way of conclusion, he wanted to “make it clear what kind of universities secretary he is”: he sees universities’ roles as “passing on existing knowledge, generating new knowledge, and helping ensure that new knowledge underwrites our collective prosperity wherever possible”. Now, the government – and the universities – have to face up to the “challenge of paying for excellence”. The speech was well-received by those present, and made the right noises; now, however, we shall have to wait and see what the Autumn brings.

There are other reports and discussions of the speech available on the internet, including The Times, The Times Higher Education, the BBC and The Guardian. The full text of Lord Mandelson’s speech is available here.