Thursday, February 10, 2011

A war on British universities?

First, the background. British universities were -- until not that long ago -- free and students were often rewarded with free maintenance grants. They graduated university without debts. This is "the free public university" scenario. This was followed by a "modest private fee university" scenario whereby fees from £1000 and now over £3000 per year were charged to students up front to help contribute to the costs of their higher education.

In the meantime, the government commissioned a report (e.g., The Browne Report) which recommended creating a free market for degrees: the government should spend less on universities and, in turn, universities should be able to address these cuts by charging far higher fees.

So what will the government do? The situation looks like a mess. Call this the "platybus university scenario" as it's neither fish nor fowl. First, they accepted the part about cuting funding to universities. There will be a 100% funding cut to the teaching and learning grant for arts, humanities, and social sciences. This will mean that students for the first time in British history will have to pay the full costs of their degrees in these areas. It is a major change as the majority of students are in these subject areas (and so a majority have had the full grant terminated).

This then led to the problem of funding universities. If the government wasn't picking up the tab, then who would? The answer was that students would pick up the tab. This then should entail that universities go about determinuing the cost of their degrees and charge students accordingly. But this then leads to the problem of "how much?"

One expectation was that most universities might charge no more than about £6000. This figure has been widely criticised since as many VCs have argued that they would require at least £7500 or more to plug the funding shortfall. (Note: this would not mean new funds for new facilities, etc., but just to remain standing.) The problem then is that many students may be put off attending university because of the much larger debts that they would incur.

Well, now the Deputy Prime Minister Nick Clegg has said that ministers -- and not the universities themselves! -- will ultimately decide tuition fees. Speaking on Oxford's and Cambridge's decisions to possiby charge £9,000 per year he said strings would definitely be attached, such as ""dramatically increase" access for poorer students".

One way of looking at it is that Clegg and his government -- after telling universities they could charge £9000 per year -- is now trying to put universities off doing, well, what he told them they could do. They might only charge much more if they try even more to ensure the results of higher fees (namely, fewer students from poorer backgrounds) are not too politically damaging. All in return for an ever decreasing pot of state funding.

Another view might be that this is a policy made from a clash of principles. There cannot be a free market in higher education of any kind if the price charged is determined by government ministers and not the universities themselves. In fact, the market in hgiher education may have real cause to worry. Universities must charge much higher fees in order to plug the hole in their finances directly caused by government funding cuts. And not -- in the name of creating a free market! -- the government is suggesting that they alone and not universities will ultimately determine fees for individual universities from 2012. A clear result will be that some universities may be put in a difficult financial position caused not by a lack of students willing to pay, but a government worried about the poorly thought conclusions from its own haphazard and hastily rolled out policies.

One might be forgiven for thinking the government has all but waged war on its universities. And why? Higher education is an engine of growth and sorely needed at a time of recession as people obtain new skills and retool in rebuilding the economy. Instead, universities are told to work on the cheap and maybe for even less than they require to remain open (notwithstanding eager students wanting to be educated there).

We're now a long way from the "free public university" in any event. And the signs for the future are not good unless something is done swiftly.

UPDATE: Of course, there is the further complication that if too many universities did charge above £8,000 in annual fees, then this would amount to much higher government funding for higher education than planned with the possibility -- as it is regularly claimed the government has no more to spend which is why it has supported deep cuts in public spending -- that universities may receive even less than the current proposals.

The upshot is that if you are a university that needs at least £7,500 to break even and it is the case that if most, if not all, universities charged this annual fee or higher it would amount to more than the planned budget for higher education so that all universities might receive less than they need, then universities may have a further incentive to charge higher fees -- even more than they might require -- to better guarantee they have the funding to stand still. Add to this the fact that ministers may claim the right to set fees for individual universities and, well, what you have is a disaster.

UPDATE 2: It is worth pausing to reflect on two further facts:

1. The Deputy Prime Minister Nick Clegg (Liberal Democrats) actually appears to believe that the new system is more fair than 'what was inherited'. To be clear, he is not saying that the new system is a better deal for students than what he enjoyed when there were no student fees and students could receive free maintenance grants. However, what he is saying is that a system where students might be charged £9,000 per year is a better deal for students than their being charged £3,200 per year at present. This is difficult to comprehend and I am unsurprised to see all poll figures showing record lows in popularity for him and his party.

2. The Liberal Democrats have often paraded themselves as a party of liberty -- after all, they are the liberals. Yet, these many changes in higher education funding policy seem far more draconian and illiberal than perhaps anything seen before in Britain. Instead of reducing interference in how universities are run and maintained, these proposals will increase interference -- perhaps dramatically and to the detriment of some institutions.

This is then a double betrayal of Liberal Democrat Party values: we have the double-speak of it being more fair to possibly treble fees and that a free market in degrees is to be introduced where the government is to interfere as never before on student numbers and the cost of degrees. Free market-minded, small state Conservative Party members should be outraged for these same reasons. This is not to say that all parties should endorse the free public university -- although this is what I would hope for -- but it is to say that the policy we may be stuck with is a policy that betrays the deepest values of all three main parties (including the coalition government parties) and betrays in name and spirit even the Browne Report.

Why then might the government go ahead with these plans? Well, let's hope they don't -- it may not yet be too late!


Clive Barnett said...

Thom, I think you have neatly captured the degree of incoherence involved in current policy-making around higher education in the UK, and this might an important thing to emphasise as debate continues. I wonder if you have seen Nigel Thrift's thread of thoughts on the complexity of issues facing contemporary higher education, which suggests that the incoherence of current policy is indicative of a failure to deal seriously, patiently, with this complexity -

Freeze Markets said...

There's something else that needs mentioning here. And I say this from the perspective of someone who is a firm believer in the moral obligation to treat education as a public good.

In a free market, the supplier can determine (based on information and other variables) how much of a product or service they supply at a given price. Universities will not have this freedom. Under the new regime, the ConDems have given every indication that student quotas will continue (i.e., limits on how many student institutions and degrees can recruit in a given year). So, any ability that institutions might have to position themselves in the 'market' as a particular kind of provider at a particular price point is removed.

But it gets worse. Willets et al have publicly mused that they will determine the overall number of university places on a year by year basis with quotas in particular disciplines also being fluid. So again, capricious government interference is going to combine with the worst excesses of the market.

I guess when people do not receive an appropriate educational foundation in the arts, humanities, and social sciences, they will do silly things like confuse Stalin with Hayek.