Today, the government's minister for higher education, David Willetts, has announced a delay to the publication of its Higher Education White Paper. This was originally scheduled for publication next month. The reason for the delay is that the minister wanted to wait and see what fees universities planned to charge students for 2012-13. Further details are here.
This makes a bad situation worse. Let me explain why. Universities were first subjected to genuinely massive cuts of about 80%. They were told not to become too fearful as lost revenues could be retrieved via raising the cap on university tuition fees. This cap was then raised to a maximum of £9,000.
Several things have gone badly wrong for the government since. First, they seem to have got the maths wrong. They had assumed that universities would not have to charge £9,000 per student to make up monies lost, but perhaps need only £6,000. Universities put their figure much higher at roughly £7,500 or higher.
There is the further issue of perhaps University A need only £6,000 to keep the doors open, but that it could charge students £9,000 with this added investment put into improving and expanding facilities and hiring new staff. If it is not unlawful to charge the even higher amount and it is expected student recruitment will be sufficient strong, then why not charge more given the additional benefits?
There is another issue of perceived quality. Reputation is everything. Universities may have a disincentive to charge less than competitors where (a) student recruitment would be unaffected by higher fees and (b) those that charge more may be perceived as offering a better service and degree. Only a handful of universities did not raise fees to the maximum last time around -- when the cap was set at £3000 -- and promptly did so shortly afterwards.
So how were the maths done wrong? First, the government seems to have got wrong how expensive it is to teach students: this cost appears much higher than predicted. Secondly, the government has got wrong the weight of perceived quality in relation to fees: no one will want to be known as the best place for a cheap degree, or at least not yet.
Most importantly, the government wants to see a "free market" emerge where degrees vary in cost by subject and institution while ensuring a top-down management structure that will make impossible such a market. Let me explain this crucial point. Nick Clegg recently claimed that ministers, not universities, will give final approval on the costs of degrees. Therefore, there cannot be a free market because institutions cannot charge the cost of the relative worth of their degrees given such fundamental potential interference from the government. Not only might ministers control what fees are charged, but they continue to control how many students may be admitted (at least home/EU students). This makes the desire for an emergent free market sound like an empty dream. If ministers genuinely wanted such a market, then less interference in price and student numbers is required rather than more -- and more is precisely what this government has proposed.
This is all further complicated by three additional factors:
1. First, the government has said that if too many universities charge £9,000 fees per year then there will be cuts elsewhere. The government proposes that students need not pay fees up front: they only pay fees after graduation. Thus, the government will need to pay the cost of fees before being reimbursed by students. The government has a budget of only so much to cover these costs. The more universities might want in fee income, the less money will remain in the budget: additional cuts in research income or student recruitment numbers may be a result.
This is an unnecessary mess. This could mean that universities that require x to fund the teaching and learning of students may not receive this amount despite having sufficient student interest -- and even students willing (and able) to pay up front. Furthermore, what would then be the point of the competition for research funding? Acceptance rates are already notoriously low for ever dwindling amounts. The situation may only get worse if those that do get accepted begin receiving far less than they require: experiments on the cheap anyone?
2. Secondly, we have yet to see any thought on students who drop out. We know the government will be looking closely at retention rates and that penalties may follow rates that are too low. So that's the university-side, but what of the student-side? There may be an incentive for some students to sit their undergraduate course, but not sit exams. They could have a transcript showing marks short of graduation and earn valuable skills -- but would not pay back anything because they are not graduates. What would the government have them pay, if anything? We require an answer.
3. Finally, Willetts now says that private firms will have access to the public funding for higher education as well. This means that ministers have planned a budget for 2012 on false assumptions on what universities might charge. There is already the worry (noted above) that they might charge more than the Treasury thinks it can afford. This is all further complicated now with the fact that private bidders can tap into this cash as well. This makes all the more likely the possibility of further cuts to research grants, etc. as it makes all the more likely -- with so many hands in the pot scrapping for loose change -- that all available monies will be drained fast and perhaps spread too thinly.
The outcome? Clearly, this is a time of immense change in how higher education is funded in the United Kingdom. My own view is that I have never before witnessed an education policy so poorly thought out and defended. The effects could genuinely be disastrous.