A principled approach to Higher Education in England and how it should be paid for

The explosive conflict over higher education demands a rethink across British society about what it should deliver and who should pay for it.
Mike Rustin
13 December 2010

The Coalition’s reforms of the funding of university and further education (the rise in the maximum tuition fee from £3,000 to £9,000 per annum, and the abolition of the Educational Maintenance Allowance for 16-18 year olds) are a major attack on an essential social principle. This is the reason why these changes have provoked enormous resistance, where merely incremental changes in tuition fee levels, made on grounds of a need for budgetary restraint, would not have done. In this respect the reforms are similar to the Poll Tax (Community Charge) of 1990, in that they are widely felt to violate a basic sense of justice and fairness. It is this issue of principle which explains the scale and intensity of the resistance to the changes. (See Alan Finlayson, Greet the Age of Privatised Higher Education)

What is the issue of principle in these changes?  It is the redefinition of higher education by the Coalition as a ‘private’ good. Students in future are asked to conceive of their own education only in terms of their future individual benefit. They are encouraged to calculate this in financial terms, since if graduates achieve a certain modest level of income, they will be required to pay back virtually the full cost of their university education. This displaces the idea that education is at least as much a public as a private good. That is to say, it denies the reality that its benefits flow not only to the individuals to whom it is given, but also to the wider society – one could even say the ‘big society’ – to which all individuals belong. The reforms presuppose that individuals will pursue education largely for their own private benefit, rather than also to make a contribution to the well-being of others besides themselves. This misrepresentation of students’ motivation as wholly self-interested is probably another reason for their  rejection of the higher education  reforms.  Never has  Thatcher’s slogan, “there is no such thing as society, only individuals and families’ been given a clearer political expression.

Education has been previously organised as an intergenerational gift by which one generation contributes to the good of the next, with the purpose of ensuring the future well-being of society and all of its members.  In some ways it is more extraordinary that a Conservative Party would endorse the repudiation of this principle, than that Liberal Democrats would do so, given the latter’s more individualist heritage.  This is because one of the major traditions which contributed to Conservativism is that of Edmund Burke, who famously described society as “a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.”

It signifies the ‘full marketisation’ of  this sector of society – the carrying to its extreme of Thatcherism – to repudiate the principle of one generation taking responsibility for the development of its successors. This is to define university education only as an individual’s personal investment – even a speculation – on his or her personal future. How extraordinary it is that in order to reduce an allegedly insupportable public sector deficit,  the Coalition should decide to finance higher education through imposing long-term debts – deficits by another name – on graduates.  Principles can become modified and eroded imperceptibly over many years – I shall show that this is what has long been happening to university education. But it is salutary to see that a radical ‘tipping point’ can arise in which it becomes suddenly recognised that a real change not of amount, but of kind, has occurred. This change is what has now become apparent, as far as one can see, to an entire generation. This is the significance of the scale of protests described by Guy Aitchison The Significance of Millbank, British protest begins,  and Anthony Barnett, The New Levellers, in the New Statesman.

Antecedents of the Current Reforms

It must be noted that these moves towards a market approach to higher education have been taking place by degrees for more than a decade.  It was only in 1997, at the end of the previous Tory era, that the Dearing Report, with bipartisan support, proposed the abolition of the then-existing means-tested student maintenance grants, and of free tuition. It was decided by the incoming Labour government that a tuition fee of £1,000 be imposed, and student loans be introduced, to meet the costs of the system which were growing substantially because of the increasing numbers of young people going to university. The tuition fee was increased by the New Labour government to a maximum – in fact this immediately became the standard - of £3,000 in 2004.

It was argued, then and now, that this system of graduate contributions is fair, because of the unjust situation whereby those without university education are  having to pay through their taxes for the education of graduates whose degrees bring them differential economic benefits. But the alternative route to greater fairness, of providing universal support for education and training to all young people, and not exclusively to those attending universities, was never seriously considered.

One thing neglected in the current debate is how far the university system has already become a market, in consequence of the changes effected since 1997.  Universities compete for the ‘best’ students, with ‘league tables’ identifying their relative standing, with resources to a considerable extent following competitive success. Universities usually treat the allocations from HEFCE as representing ‘market values’, which are then passed on internally, even though they have the discretion, if they choose to exercise it, to redistribute their funding allocation in accordance with their own priorities. There is a vigorous market in overseas student recruitment, since non-EU students can be charged full-cost fees, which has led to the crowding- out from leading universities of indigenous students whose fees are capped. This overseas market may however now be reduced by the Coalition’s proposed restrictions on immigration, with a serious risk to university budgets.  Anyone who has worked in universities in the last decade will have seen the adoption of ‘internal markets’ and ‘budget centres’ as ways of incentivising and sanctioning staff performance.

Research has also been substantially commodified in recent decades. Core funding is allocated according to performance in a periodic competition (previously the Research Assessment Exercise, now the Research Excellence Framework)  in which publications are ‘rated’ for their quality, with funds allocated in proportion to the ratings. This has led to perverse incentives among academics to give priority to their research publications over their teaching and care for students. This system has also led to a narrowing of the focus of research, to meet the specific criteria of the specialist research competition, and away from work of wider public relevance. 

Students have come to be defined and to see themselves more as consumers, in consequence of tuition fees and changing social attitudes more generally.  In October Lord Mandelson urged students “to adopt a more consumer-led approach to their university education,” showing how far all the main political parties in England share the same assumptions about the sovereignty of consumer markets. (This of course is the same Mandelson who earlier declared that New Labour did not mind if people became ‘filthy rich’.)  But as Stefan Collini argued in The London Review of Books education is not best conceived as a product to be purchased by consumers. It is the nature of good education that its outcomes cannot be fully knowable in advance. Good outcomes can only be arrived if learners can have trust in their educators’ understanding of their needs.

Although the Labour Opposition is now opposing the Coalition’s higher education reforms, it must be noted how complicit it has hitherto been in these larger developments. It was New Labour who introduced the tuition fee and student loan system, and the Labour Government which appointed the Browne Commission to report on university finance. As Aaron Porter, President of the NUS has pointed out, why would one appoint a former chief executive of BP to determine the future of university education, if one was not already committed to the assertion of market principles over public goods?   Although the Coalition’s reforms go much further than Labour would in all probability have done, this is another example of the advance of neo-liberal ideology under all parties, since Margaret Thatcher came to power in 1979. There has been a ‘ratchet-effect’ in operation, in which each concession to the market place  has become the starting place for a new set of market-based reforms, under whichever party is in office.

Finally, it should be noted that in all the years of discussion of the reform of  university  education, there has been no significant investigation of the effectiveness or appropriateness of its existing form of organisation, as it has expanded from its original model of education for a small elite, to its current  pattern of near ‘mass’ education. Although huge resources have been expended on systems of inspection  and audit of university education (as in other spheres of public provision) these methods have done little more than ensure that some mean level of conformity to prescribed ‘standards’ is maintained. They have generated no new knowledge or understanding of the differences between institutions, of the reasons for relative success and failure, or of the quality of student experience or benefit. And although standards of educational provision have inevitably fallen, as the educational resource per student has dropped by nearly half over thirty years,  these systems of quality assurance have sounded no alarms and blown no whistles to alert public opinion to  uncomfortable realities.

There is need for more open-minded reflection and investigation of what has actually been happening in universities, and for redesigned methods of inspection and review which can bring this about.

What should be done?

  • The principle should be insisted on that higher education is a public as well as a private good, and that it should therefore be mainly funded through general taxation. It should be recognised that a wide spectrum of academic fields and subjects – and not only science, technology and mathematics – bring benefit to both economy and society,  and that therefore the full range of educational provision should receive public support.
  • Graduates do gain some individual economic benefits from their degrees. It may therefore have to be accepted that a ‘mixed economy’ in which the costs of education are shared between graduates and the wider society, should continue. It is a matter for debate what proportion of higher education funding should be provided through general taxation, and what proportion through levies on its graduate beneficiaries. However there seems no good reason why these proportions should change significantly from their current levels
  • The most efficient and equitable system of contribution by graduates would be a ‘graduate tax’ which all  graduates, whenever their degree was awarded, would contribute to the present and future costs of higher education. (Subject to their earnings being above a defined threshold.)  Such a measure would restore a significant measure of contribution by each generation to the education of succeeding generations.  As the graduate  population on which this tax would fall would be large (following the  expansion of higher education in recent decades)  this levy would impact  modestly on individuals, much less than the burden which will  fall on the new student generation who are now being asked  to pay the full cost of their own university education. This would be a far-sighted and fair example of ‘hypothecated taxation’ - that is to say a specific tax levied and ring-fenced to pay for a particular social good.
  • The Educational Maintenance Allowance for 16-18 year olds should be restored. This is the highest priority of all, since its abolition must be intended to close off  the means of access of poorer families to further and higher education.
  •  A Commission should be appointed to investigate the future organisation and delivery of post-18 and adult education, from a fundamental and not merely financial point of view. Its members should include the full range of stakeholders, and should be required to take into account claims of equity within each generation of school-leavers.  It should be encouraged to think freely about alternative forms of delivery of education than the full time three-year degree course, since it does not seem that the replication of that model, on an ever-extending scale, can meet the future educational and training needs of the population as a whole. The invention of the Open University in 1969 shows how much scope there may be for developing radically new models of provision, complementary to the traditional universities’ models of delivery.
  • Because of the crucial issue of principle embodied in the Coalition’s further and higher education reforms, resistance to them should continue until the government recognises the necessity to rethink its policy.

Michael Rustin is Professor of Sociology at the University of East London, where he was Dean of the Faculty of Social Sciences between 1991 and 2001. He is a founder-editor of Soundings.

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