The debate over university funding, which one might expect to be a simple case of measuring up public good against individual benefit arguments turns out to be a good deal more complicated politically. One of the reasons is that universities enjoy a peculiar moral standing as a result of their historical importance (universities returned MPs until the 1948 Parliament Act abolished them) and their symbolic value for the aspirational. There are also a number of different interest groups, including nearly two million students (often concentrated in constituencies around universities, employees and the parents who are forced to support the lifestyle of their offspring if they do not qualify for a grant. Higher Education is a poorly organised sector when one compares it to schools backed by teacher’s unions and local councils, but it carries considerable weight, not least because the Liberal Democrats have a large following in university seats.
One of the recurring problems with the university sector is that, like health, governments are frequently shamed when a smaller portion of our GDP is devoted to it than in other countries. Britain spends about 1.3% of its GDP on higher education, compared to a 1.5% average across the OECD and over 3% in the USA. It is funded less as a proportion (about 50:50 currently) by the public sector than France, Germany or the Netherlands, but more than in South Korea, Australia or the USA, which are amongs the bigger spenders.
Since it became the policy of the British government to expand the participation of school-leavers in higher education (to around 30% under John Major, who famously didn’t go to university) and 50% under New Labour (it has stubbornly stuck at 46%), the university sector has struggled to fund its expansion of places. In 2004, Tony Blair and Charles Clarke made the decision to charge a restricted fee of up to £3,000 per student, per year to fund this expansion, with a system of loans made available so that university remained free at the point of delivery. As Blair later remarked, he came closer to losing his job over the Bill than over Iraq. However, the effects have proved relatively benign. Prospective students have largely not been deterred, and the Browne report found that two-thirds of the extra funding has been spent on staffing, with a further quarter devoted to bursaries and outreach.
In 2009 the dying Labour government launched the Browne report, largely to kick the issue beyond the next election, but with a wide remit to investigate the effects of student funding on the sustainability of the universities and the affordability for students. The terms of reference included;
- The goal of widening participation;
- The affordability for students and their families of studying;
- The best value for taxpayers;
- Simplification of the system.
A Bugger’s Muddle
Since the launch, the austerity agenda has overtaken the fees debate. The government, which floated and then quashed the idea of the graduate tax, can hardly deny that it has had an influence in shaping the report that is now in the public domain. Among the least advertised of Browne’s recommendations is that the public funding of universities, and in particular the element earmarked for teaching resources in those subjects not deemed priorities (most of them), is dramatically pared down. The result is that universities would be forced to charge over £6,000 in order to maintain the same level of funding that they enjoy under the existing system (p. 46).
The government has advanced largely in the dark, afraid to sound radical, but bound to act in the national interest as it sees it. The cap has been removed from tuition fees but the hope is that universities will voluntarily restrict them on the basis that the government will not guarantee unrecovered fees over £6,000 (a noticeable drop from the £7,000 that was briefed). Students will pay back the cost of their own degrees, but only when they earn more than £21,000 and a form of graduate tax may be introduced by stealth in tiered interest rates on the loan.
Whether a market in tuition fees is a good idea remains to be seen. The very best universities seem certain to charge excessive amounts for some of their courses. An MA in History at the London School of Economics currently costs £14,000. The next big development in universities might, therefore, be the Oxford School of Debt Collectors.
Smaller universities and those enjoying less grand reputations are more likely to charge below the unofficial cap, though very few do currently. This will attract more students, but whether demand will improve these universities seems to be uncertain.
The other unspoken truth is that some degrees cost a considerable amount more than others. Fees of £14,000 would buy an impressive history education, probably including the cost of living in the country you were studying. However, they would not buy a first class medical degree. The Browne report does not go into the likely economics of a market in tuition fees, which may push prospective students towards less expensive or more profitable disciplines. That has the potential to do some damage not only to our education system but to our way of life.
Given that today’s students will be the future tomorrow, the National Union of Students (NUS) has been short-sighted and surprisingly inflexible. The NUS opposed tuition fees from the start and is now weighing in against raising the levels of said fees. This is despite the fact that rises in tuition fees were always inevitable, therefore making the organisation seem even more irrelevant than it actually is.
What the NUS should be arguing for is a student’s agenda to go with the increased funding. Too many universities spend their resources on fancy new administration buildings or accommodation for international students. Yesterday, discreetly hidden in the Evening Standard, LSE announced plans to push ahead with a new £21m student’s union, which is hardly a necessity, although of course, these projects can sometimes increase revenue, or be fair in themselves, such as living wage campaigns at UCL.
In fact, like a student who spends all week going out but quietly and discreetly works during the day, the NUS has been more productive than it appears and the Browne report has floated several ideas around making student funding fairer. One has been lobbied for by the Open University, and concerns extending grants to part-time students. The others require universities to expand student places by 10%, to increase laboratory hours and to obtain teaching qualifications for staff. These proposals sound promising, but had the NUS been sharper or more able to cooperate with the Russell Group, it might have been able to achieve increased contact times across the board, a proportion of university budgets set aside for teaching and greater resources, such as podcasts and digitised chapters where demand highest. These are the bread and butter of the debate about what students should be getting out of university.
The Labour Party will find it difficult to contest Vince Cable’s reforms, having introduced the fees originally and despite the two key parts of the reform (the cap and state contributions) that the government is doing away with. They will almost certainly vote against the government, which needs more than half of its Liberal Democrat members to support any measures introduced, but will hope for the Bill to go through so that they don’t have to deal with its sharp edges in the next Parliament. They are also open to the continued claim of ‘deficit denial’. Nonetheless, there are practical suggestions for reform that could also be used to embarrass the government’s apparent lack of rigour. It will be interesting to see how hard Ed Miliband and John Denham lead into the debate, starting with Prime Minister’s Questions.