Yesterday was Black Tuesday for England’s universities. In 1988 they agreed to surrender their autonomy in favour of more students and, supposedly, more money. They got the students but not the money. They sold their souls to sup with the government Devil. Now they are covered in his vomit.
The top-up fee legislation that squeaked through Parliament last night will give English universities roughly an extra £2,000 a year per student. That is agreed to be insufficient to stop declining standards, if not bankruptcy. There is nothing the universities can do about it. They are stuck with a cash-limited fee income for five years and will then have to beg for more direct grant. This is crazy. Yet the debate that preceded yesterday’s events was crazier still.
Tony Blair’s state education monolith is like a Victorian board school, awash in statistics, diktats and league tables. The Education Secretary, Charles Clarke, is a perfect Gradgrind, “with a pair of scales and a multiplication table always in his pocket, ready to weigh and measure any parcel of human nature”.
Let us therefore start with facts. Every family with students will this morning have the calculator on the breakfast table to work out what the new law means for them. The answer is good news. Parents and students are to be relieved of paying any fees at all. The present £1,125 a year fee is abolished from 2006, saving wealthier parents £3,375 over three years. Poorer parents will save nothing because they pay no fees anyway. This change is a total waste of public money.
Universities will instead be allowed to levy an additional £1,875, making a maximum of £3,000 per student a year, after approval by a political monstrosity called an Office for Fair Access. This fee will be paid not by parents but by taxpayers via the Student Loans Company. It will cost some £500 million a year in the short term, until repaid by students after graduating, whenever their earnings top £15,000 a year.
Repayments would be low, some £250 a year, and will be excused after 25 years or if earnings fall below the £15,000 threshold. But there are various special deals for the poor. While their families will get off free, on graduating they will be relieved of £1,200, or at least 40 per cent, of the gross repayment.
This means that while a middle-class student may repay a maximum of £9,000 for a three-year course, a poor one need repay only £5,400. But for the poor, Mr Clarke offers even more, a new £1,500 maintenance grant. Add the relief and the grant together and poor-family graduates (who may be stinking rich) would be only £900 worse off than now over three years. And there is still more. Universities have been told to offer “the poor” special bursaries to reduce the so-called fee burden. As Nicholas Barr and Iain Crawford, the LSE economists monitoring the scheme, never cease to cry,“What burden?”
This is absurd. The new graduate tax will be the only one in history based not on a taxpayer’s earnings but on his parents’ earnings at a fixed point in the past. Yet the mere suggestion that such a tax might be levied and then relieved on formerly working-class graduates has Labour, Liberal and Tory MPs alike howling “disincentive”. There is allegedly even a new concession to help what the leading rebel, Nick Brown, calls “the next poorest students” above the really poor.
The opponents would rather increase general taxation for universities than ask the most privileged group in society, graduates, to contribute one penny from future earnings to pay for that privilege. The Institute of Fiscal Studies calculates that funding universities entirely from taxation would leave the poorest tenth of households 1.5 per cent worse off and the top tenth 0.4 per cent. I can see why the Tories might support that, but the Labour Left! Clearly some primitive political nerve had been touched.
Opponents of last night’s measure also disliked unpopular universities charging below the £3,000 cap to attract more students. Their reasoning is a total mystery. Since the new scheme effectively removes any fee burden on poor families, there is no cause other than blind egalitarianism why some universities should not compete with others on albeit modest price differentials. Yet the opponents are content to leave popular universities recruiting full-fee foreign students. Last night’s measure will do little to curtail this trend “offshore”, which is reducing places at good universities for all British students, rich or poor.
Debt is nothing new. Students already incur debts for living expenses averaging £10,000 on graduation. This does not deter 90 per cent of A-level qualifiers from going to university. Any school-leaver who cannot see a college place as good value for money should not get one.
Students this week were cheekily saying that they might now “think twice” before going to university. I would hope so. A medical student shouted at Mr Blair that a plumber should consider himself lucky to be paying his taxes for her to go to university. Why? Three quarters of women medical students never become career doctors. I doubt if one of these has repaid the nation’s plumbers the £60,000-plus cost.
The student fees argument has become a bundle of nonsense wrapped in humbug enveloped in class prejudice. Yet in its obsession with control the Government has humiliated itself. It has lost millions of pounds in up-front fees and half a billion pounds in short term cost to no advantage, not even political. A minor uprating of university income has come close to toppling the Prime Minister from office. That is the price of meddling.
Universities remain taboo education. For most of the 20th century they were a private welfare state for the middle class. They have fended off government control and refused to change. Students still reckon to study collegially and expensively away from home. Terms are short and courses in most subjects absurdly long. Holidays reflect ecclesiastical seasons. Until the coming of state control in 1988 measures of productivity and output were all but non-existent. Much teaching is rotten and rottenly paid. Economists continue undecided whether universities really are an investment good rather than a consumer service. I incline to the latter view.
As long as the club catered to just 7 per cent of the age group, aversion to reform was stable. As access rose towards 40 per cent in the 1980s and 90s it became unstable. In his book, University to Uni, Robert Stevens gives a devastating account of the turbulence that accompanied this growth. Autonomy vanished. Universities changed overnight from city states to government departments. The bean-counters arrived and never left.
The outcome has been seismic. Universities have been forced to halve their teaching costs per student. Last year 50 per cent of all research money went to just five institutions, Oxford, Cambridge, Imperial, UCL and King’s London. Government has reformed universities by force. Most look and feel like down-at-heel nationalised industries, working part time and facing obsolescence.
This was predictable. At the time of the 1988 Education Reform Act the universities should have rejected Margaret Thatcher’s takeover bid and gone down the American route. They should have charged proper fees to those who could afford them, as with graduate students. They should have called the Government’s bluff to continue research grants and give state bursaries to poor students. Instead they took the German and French route of state control and declining standards. Supremacy will now steadily pass to the great institutions of North America.
Had last night’s vote been lost, there was a chance that necessity might lead the top British universities to find the courage to go independent. Both Oxford and Cambridge are trading at a loss and drawing down on their endowments. This could not last. Instead, the extra £2,000 per student will enable universities to stagger on a few more years, before facing further destitution and recourse to government.
The present generation of university vice-chancellors has grown used to the quiet life. They have no stomach for a fight to regain their lost autonomy, which would be painful, risky and hard work. It is easier by far to don a pretty gown, whinge and blame failure on the Government. That will be the outcome of last night’s vote. An opportunity for revolution has been lost.
simon.jenkins@thetimes.co.uk
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