How might Nadhim Zahawi approach higher education reform?

Nadhim Zahawi is now in charge of overseeing major changes to higher education funding. Jim Dickinson and David Kernohan search for clues on his likely approach.

Jim is an Associate Editor at Wonkhe


David Kernohan is an Associate Editor of Wonkhe

In the first half of the last decade, there were plenty of people who complained that universities were looked after by Westminster’s Business, Innovation and Skills department.

“But we’re about education”, they would complain, “and in BIS it all becomes about productivity and employability”.

Be careful what you wish for. If anything, moving universities into DfE (and cleaving science off from the portfolio left in BEIS in the process) made little different in terms of that focus on economic value, saw universities frequently framed as “big schools” in decision making, and has meant that universities have had to fight for attention and funding with significantly more cherubic (and, you can argue, deserving) students.

So the appointment of Nadhim Zahawi as Secretary of State for Education – a UCL science graduate who set up YouGov and a “wheeler-dealer” whose manner is “reminiscent of Arthur Daley” – is in some ways a bit of a return to the BIS days, which is evident in his welcome press statement:

From my own experience, I know what a beacon of opportunity this country can be and I want all children, young people and adults to have access to a brilliant education, the right qualifications and opportunities to secure good jobs. That’s both vital for them and also our economy and is more important now than ever before. I can’t wait to get started, working with the amazing teachers and staff in our nurseries, schools, colleges and universities as well as employers and businesses.

Add to that Michelle Donelan’s minor elevation to “attending Cabinet” – a privilege enjoyed by David Willetts in the 2010 Parliament – and you can see how the “value” debate might be reframed and the flames of the culture wars doused a bit.

But however things are framed and whatever the mood music in speeches, there’s an exceptionally tight spending round coming – the bids for which closed shortly before that reshuffle happened – and almost certainly result in major changes to the way that higher education is funded against a backdrop of having to save a lot of money on the sector.

So it’s helpful to try to work out how those sorts of issues might be approached – and as luck would have it, Nadhim Zahawi was on the Commons’ Business, Innovation and Skills committee in the initial session of the coalition government the last time we made major changes to the higher education funding system in England.

Questions from an MP on a select committee a decade ago do not tell us what is about to happen – but they do illustrate the sort of operator we now have in post and the way in which he might approach some of the important questions to come.

Golden Browne

If you’re about to introduce new funding arrangements for a sector as big as higher education, in an ideal world you’d want to know whether the assumptions baked into any model stand up – and so Zahawi’s opening gambits when questioning Lord Browne (the BP boss who led the review of funding and finance in 2009/10) are interesting:

You mentioned that 36% in the model will be students who will not pay back the loans, and that the model had been done by the BIS Department modelling team as well as the IFS. Can I ask you what the tolerances around that model are—that is where does the model break?

This is a man that was unusually interested in how many students were projected to pay back, and how much – an interest he’ll need in coming weeks – and someone keen to understand the unintended consequences of any changes:

If the Government tinker with the system because of politics, the law of unintended consequences then comes into play. The Government should actually be careful what they wish for when they begin to tinker with what… is a complex system.

Questions raised in the session also suggest an interest in university efficiency, alumni fundraising and questions over the “price sensitivity” of students if variable fees were to be introduced – and a desire to frame fees appropriately:

Nadhim Zahawi: The mission group has described a general failure on the part of the Government and media to explain the new funding system in words that people can understand. I ask you to put yourself in the position of the media or the Government. Can you explain to students in a 20- second sound bite what the new system is about?

Aaron Porter: If I was trying to describe it, it is a graduate contribution based on a percentage of your earnings afterwards. Fortunately I am not in the game of having to describe it; I am in the game of having to critique it.

Nadhim Zahawi: That is very good, I have to say. I might steal that.

First among equals

But this is also someone obviously interested in education and the student experience too. There’s an interesting exchange over the differences between “quality” and “standards” – and a suspicion over the idea that a First from two different universities means the same level of achievement. There are also questions over franchising and validation, how higher education providers might best “strike a balance” between widening participation and maintaining academic standards, and value for money:

Could you take into account broader issues like whether the student wants to move away or live at home, what the university town or city is like, or where the student’s siblings or school friends are going?

And perhaps most importantly, this is someone who at least becak in 2010 was trying to work out how the various bits of the HE funding puzzle fit together:

Do you think it is better for the economy to spend more on higher education and have more graduates or to keep the higher education bill down? What do you recommend as the best balance between investment by Government, students and graduates, and other private sector providers: charities, social enterprises and so on?

They’re questions he himself will have to answer in a few short weeks.

Arguably most interesting of all are the committee’s recommendations – that may not reflect Zahawi’s personal views at the time and are no obvious guide to what he would say now, but nevertheless are the sorts of things you would hope someone is thinking about inside DfE.

Concerned people would see it as a debt rather than a graduate tax; the committee said that government and Student Loans Company should give “serious consideration” to the form of the student loan statement “to avoid causing undue concern to graduates about rising student loan balances.” That’s a live debate now.

Worried that the estimates it was being given were junk, it argued that “should the loan system prove more expensive than planned,” the Government “will need to act to reduce the costs of the system and to reduce the RAB charge.” That’s also a live debate.

It said there was a “clear tension” between accountability to students for how their fees are spent, and institutions’ need to charge fees in excess of the cost of some courses in order to replace the income cut from the T grant and to cover the increased costs of widening participation work required:

The Government explore with the sector how to ensure that students seeking ‘value for money’ from their investment can see a clear relationship between the fees they pay and the cost of their course, while avoiding a fee structure which potentially discourages applications to higher cost courses in science, engineering, technology and medicine.

And on living costs – a bit of Augar’s terms of reference long since forgotten – it recommended that government demonstrated its pledge to “put students at the heart of the system” by committing to improve the student maintenance model to ensure that the minimum non means-tested support available to every student covers at least the average annual cost of accommodation in university accommodation.

Best of luck with that one!

Not a penny more

Zahawi’s pre-parliamentary life is a richer story than is often told. We know – for instance – about his Kurdish family’s escape from Saddam Hussein’s Iraq, a story he’s frequently used in a political context. When he was selected in Stratford-on-Avon in 2010 the Daily Mail reported that he said:

I told the Conservative selection meeting this country gave me my opportunity, my freedom, everything. I said, ‘If you give me the chance I would like to give something back by serving as your MP.”

But he had no real links to Stratford – indeed, in 2004 the ambitious former Wandsworth councillor was up for selection in leafy Surrey Heath. His competitors represented the cream of moneyed young Conservatives at the time. The eventual selectee, Michael Gove, triumphed against Zahawi, Steve Hilton, Charlie Elphick, and Jacob Rees-Mogg.

At YouGov the new Secretary of State was very much the business end, with co-founder Stephen Shakesphere responsible for the innovation. So it is surprising that the famously innovative polling company faced so many business challenges – a failed acquisition (of a mystery firm) in 2008 last the company £1.2m, and later that same year YouGov abandoned plans to launch an in-house hedge fund. As Zahawi told the FT:

the prevailing market conditions are not conducive to the launch of this fund […]iIt is not the greatest moment to launch such an idea”

Not a penny less

Back in the early years of the century if you knew Zahawi at all it was because of his association with disgraced former Conservative MP Jeffery Archer. He was one of two Kurdish aides (nicknamed “Lemon Kurd” and “Bean Kurd” by the infamous novelist and perjurer) who supported the controversial “Simple Truth” campaign that raised several million pounds to alleviate the plight of the Kurdish people and distributed significantly less.

The other Kurd was a chap named Broosk Saib – a man who Zahawi described as a “very decent chap” in the Times shortly before he was questioned by the Department of Trade and Industry as a part of the investigation of Archer’s insider trading of Anglia shares. Nadhim Zahawi became a business partner of Archer’s, purchasing a stake in a company that distributed Teletubbies merchandise. However this venture failed, with Zahawi accused (according to the Times in 1999) of alleged breaches of company law for forging business documents – the much touted £2m valuation of the business was significantly overstated.

Archer campaigned for Zahawi – a friend of his son, James Archer – as early as 1994. The 26 year-old prospective Thamesmead representative was “very, very depressed” about the response on the doorstep, and blamed John Major. Zahawi went on to hold a senior role in Archer’s aborted 1999 mayoral campaign.

The early YouGov (set up with fellow Archer alumnus Stephen Shakespeare in 2000) sold digital services to local government – most notably a platform to pay parking fines in Kidderminster. Which makes a much-repeated 2004 story either ironic or masterfully pitched.

In December 2003 Zahawi was riding his moped down Albert Embankment in Lambeth. He crashed, breaking his leg and requiring ambulance treatment. As he was carried off on the stretcher the last thing he saw was a traffic warden affixing a parking ticket to the remains of his vehicle.

He told the Mail on Sunday in January 2004:

The police were putting me into the ambulance when a man came running up and told them a warden had just ticketed my bike. The police were aghast. They could hardly believe it and nor could I. They told me they’d back me up if I appealed. The warden must have been blind or, more likely, completely untrained.

Either desperately unlucky, or a piece of perfectly pitched promotional activity (an incident in perennially Labour-controlled Lambeth – it was briefly Lib Dem controlled at the time – with parking enforcement run by a business competitor?) topping anything Jeffery Archer has ever done.

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