What I wrote at Lib Dem Voice

May 09, 2006

Setting our universities free

The liberal think-tank, Centre Forum, today publishes a thoughtful report I hope all Liberal Democrats will take the time to read. It argues for an end to a party touchstone: our popular (but wholly wrong) opposition to student tuition and top-up fees.

My day job is as an educational fund-raiser, has been for eight years now. I spend my professional life surrounded by students, many of whom come from poor backgrounds and whose lives will be utterly transformed - in ways they cannot possibly predict - by their university experience. I am a passionate advocate for the value of higher education, both in its own terms, and as a route to a better life: ‘through learning one learns to live well’.

It is because university education is so important that I believe it deserves proper funding: enough money not only to ensure that students from poorer backgrounds can continue to access its opportunities, but also to enable universities to invest in their human and physical capital. It is only through that meritocracy and that investment that we can ensure those opportunities in a century’s time will be far, far greater than they are today.

That investment can only come through the lifting of the fee cap on universities, and the ability for our universities to charge market tuition fees. There is simply no way this Government, or a future government (regardless of its political complexion), will be able to levy sufficient new taxation to fund our universities’ aspirations if they are to be able to continue to compete with the world's best. The billions of pounds of new money needed each year would prove politically unacceptable.

This leaves higher education institutions trapped in a vice. They are not sexy enough to compete with schools or hospitals for serious cash from the Treasury; yet they are prevented by the Government from charging those students who can afford it the true cost of the education they provide.

We have a simple choice in the UK.

We can provide a just-about-functioning higher education system, free for all, in which universities are stifled by government interference, tutors are under-paid and over-worked, and our currently respected institutions decline relative to their peers in North America (and, increasingly, the Far East).

Or we can set universities free, allow them to charge variable fees, provide generous bursaries to the least well-off so that means-blind admissions are guaranteed, pay tutors a living wage and reward them for their research, and ensure our universities continue to rank among the world’s best.

I know which future I prefer.

The first article I wrote for my stephentall.org.uk website urged the introduction of market tuition fees for higher education. I concluded saying:

The Liberal Democrats can, and (I am sure) will, continue to campaign to scrap tuition and 'top-up' fees; and will gain popular support for doing so. But it is a policy which fails to address how British universities can remain world class institutions. Market tuition fees are the only way to generate enough cash to ensure the retention of this country's teaching talent, and the continuation of popular but uneconomic subjects. The longer we pretend the government alone can pull the rabbit out of the hat, the more likely it is we will one day find the lady has been sawn in half while we were looking the other way.


The Cat said...

"There is simply no way this Government, or a future government (regardless of its political complexion), will be able to levy sufficient new taxation to fund our universities’ aspirations if they are to be able to continue to compete with the world's best. The billions of pounds of new money needed each year would prove politically unacceptable"

Can you expand on this, please? I think this is the weak link in your argument.

The sums involved (even at the truly bloated level) are actually a pretty small proportion of overall Govt spending.

When we have a Treasury who are consistently at least £10bn out in their forecasts of tax revenue, the Lib Dem 50p income tax band was a drop in the ocean (in relative terms). I suspect you dismiss the scope for funding through general taxation all too readily.

To start with, how much additional money do you thing the HE sector really *needs*?

Tristan said...

I've been increasingly thinking in a similar way for a while now.

Universities are strapped for cash (to the extent that Cambridge sent out a letter to all alumni for the first time ever to try and express this). There is increasing government interference in HE with this government believing it knows what courses will benefit the economy in the future (when all evidence points to nobody being able to predict this).

People who decry the need for corporate funding in universities tend to be the same people opposed to tuition fees, I'm not sure where people think the money will come from...

There's also the little asked question of whether government should be paying for HE. Unlike education at a lower level, the greatest benefit is the individual, so why should the government pay for that?

I am partial to Milton Friedman's scheme for loans to students at reasonable interest rates (would have to be slightly above inflation I suppose) where the graduate pays back a propotion of the difference between their income and the average income for someone their age without a degree.
This avoids the horrendous situation in the US where the student must start paying back immediately upon graduation, and can remove, what I view as the distinctly unfair, means testing based upon parental income (my parents were apparently rich enough to help fund me through university, but in reality couldn't afford to help me beyond somewhere to live during holidays).

I feel this is a liberal solution. It avoids state funding and interference, but doesn't discriminate against the poorest. When you graduate you aren't lumbered with debts you can't pay off, but which you pay off out of the added value you get from attending university. If you work for an NGO or in a low paid job, you aren't saddled with insurmountable debt you can't pay off.

Anonymous said...

Supporting tuition fees would be nuts, politically speaking, given the electoral progress the Lib Dems have been making over the last few elections with students, young people and their parents. But it would also be profoundly illiberal.

Anyone who believes in more than the arid, negative libertarian version of freedom, believes that it is vital that people are able to determine and pursue their own life goals, unless they want to be become a murderer or whatever. I would argue that people have the intrinsic right to do this. The choice of career is an incredibly important part of this process, one of the things that really defines us as people, and for many their choices require university education. That creates a right to that education, and it creates an obligation on government - on society - to provide it. The fairest way to do this is some form of progressive taxation, not by setting up a setting up a system that discriminates against people who dare to have life goals that require some sort of higher education, saddling them with debt which keeps them out of the house market and discourages risk-taking (eg setting up their own business) in favour of taking the highest paid and most secure job they can get till they pay off their loan, even it's not exactly what they wish to do with their lives.

All the doom and gloom stuff about higher education is nonsense. On internationally surveys the United Kingdom consistently come second behind the USA on the standard of its universities, which isn't bad really, and international students flock from all over to study in the UK for that reason. There are is no crisis as long as the government makes higher education a priority, as I've argued they should. The stuff about government interference is a red herring, as certain governments will interfere in any organisation that isn't completely private, and many organisations that are.

- Ranald

Liberal Neil said...

If the intake to Universities fully reflected merit rather than background, how high would fees be for the better off have to be if they were to provide enough money to subsidise those from less well off backgrounds?

I can see how your approach could work for a University like oxford on the basis of the current intake - ie when those from well off backgrounds are hugely over-represented and those from ordinary backgrounds hugely under-represented - but not if the intake fully reflected society.

Stephen Tall said...

Cat - Harvard currently has an endowment, c.£12bn, double that of every single British university (including Oxford and Cambridge) combined. IIRC, the 50% tax rate would bring in an extra £5bn, and not all of it was to be spent on scrapping tuiton fees (it also paid for free personal care). Frankly even if you could raise enough cash I would question if it's the best use of taxpayers' money for the reasons set out by Tristan.

Ranald - the idea that this situation is sustainable is plain wrong. Yes, the top British universities are competitive at the minute. But North American universities are beginning to pull away from the pack, and the reason is simple: money.

Neil - with variable fees, the market will decide what an institution can afford to charge. It's unlikely that the non-Russell Group universities would charge as much as those c.20 which are in the RG: therefore the amount needed in bursary/hardship support would be correspondingly smaller. (Centre Forum also advocate a phased introduction of variable fees, recognising that too much too soon could act as a serious disincentive.)

The Cat said...

But returning to my question, what is your answer? Are you saying that each uni in the UK should have the same as Harvard (clearly a nonsense) or if not, how much?

Once you establish that, we can talk about how to fund it, but at the moment this argument has the cart before the horse.

Stephen Tall said...

Cat - I don't have a precise figure, nor would I want to: my article argues universities should be set free, not that government should prescribe exactly what amount of cash each and every university should have.

Looking at the OECD figures in the Centre Forum report, UK funding is currently just 40% of the USA's (c.1% of GDP cf c.2.5% - though a lot of this in the USA is private sources, fees and fundraising).

We would also need to see what funding per student is - this has remained largely static in the UK since 1997, despite the introduction of tuition fees, largely becasue of the expansion of student numbers.

My point, which fundamentally differs from yours (and most Lib Dems!), is this: even if the state can afford to increase taxation enough to keep HE free (highly doubtful during lean years for the conomy), and to keep pace with competitor nations, this would be undesirable. If the state were to invest as much as is needed in HE of taxpayers' money it would do it only with strings attached (how could it justify it to the public otherwise?) - and it is those strings which would strangle HE.

Anonymous said...

I don't think this precise relationship between sources of funding and number of strings attached is real. There is no contradiction between increasing funding and decreasing meddling, the route I would hope a Lib Dem government would take. There is certainly no causal relation between bringing in private funding and decreasing meddling. Look at the health system under the current Labour government for a counter-example.

- Ranald

Liberal Neil said...

Stephen - clearly in a market based system the fees at the 'top' Universities would end up much higher than at the rest. That doesn't change my point. If Oxford, for example, is to acheive an intake which fairly reflects society, then the fees charged on the better off will still have to rise to a very high level if they are to contribute enough to subsidise the large number of students coming from poorer backgrounds.

The only way this market driven approach will work financially is if the 'top' universities continue to fail to attract a balanced intake.