Faith in Vince's two-step

Yes it’s complex, but the graduate tax is the least of all evils, says Kevin Fong

July 29, 2010

I watched a film called 2012 the other night. It’s one of those global catastrophe movies, featuring John Cusack dodging bits of skyscraper as the world crumbles about him. It works well as a metaphor for British higher education at this juncture. Disaster is imminent and lots of stuff is going to get reduced to rubble, but hard decisions now might avoid still harder decisions later.

How have we arrived at this point? Recession, recession and recession are the top three answers of course, but it is hard to avoid the argument that the 50 per cent participation target has acted as a catalyst in this implosion event. With the benefit of hindsight, the expansion was a laudable but ultimately unsustainable goal - and one that now threatens all of higher education. By accelerating the possible arrival of uncapped tuition fees, what began as an attempt to broaden access to university education runs the risk of having the opposite effect.

Who can save us from this Armageddon? Where is our John Cusack hero character? Funny you should ask. Nearly three months after the country voted resoundingly for “none of the above”, we find ourselves watching Vince Cable, the secretary of state for business, innovation and skills, defender of the coalition faith, breaking cover and out flying higher education policy kites.

His speech, proposing a graduate tax as the solution to higher education financing, received only a ripple of approving applause. And precisely how this might save the day is entirely unclear, but then that’s how films work - in 2012 John Cusack steals the company limousine and triggers a chain of events that contribute to the salvation of all humanity. And so I still have faith that Vince’s two-step at the Department for Business, Innovation and Skills the other day might do the same for higher education.

So where does that leave us? Caught between the Scylla of uncapped tuition fees and Charybdis of graduate tax. None of this is either pretty or particularly fair, but there is no easy way out.

There is one other escape manoeuvre: a reduction in the total student number to something more manageable, at least in the medium term. There is at least some evidence that a significant fraction of students are not benefiting from the undergraduate education they receive. And while broadening participation in higher education is a worthwhile goal, obliging young people to go to university, saddling them with debt but then leaving them without any real advantage in terms of their employability is clearly not in their interests.

Sadly, reducing student numbers is unlikely to be quick, simple, pleasant or enough on its own. So we’re back to the rock and hard place of tuition fees and the graduate tax.

Vice-chancellors worry that all they have worked so hard to build will be lost if they fail to act. They need fast and loose cash that will flow in their direction. But it is worth remembering that what they have so painstakingly created is more than just a string of institutions that crank out high-impact-score research and the occasional Nobel prizewinner. They have, over the years, crafted institutions whose function it is to find individuals of sufficient academic ability and to allow them to achieve their potential. So there is far more to this than simply balancing the books.

Uncapped tuition fees, the favoured solution of the Russell Group’s vice-chancellors, have the benefit that they offer a definitive financial fix and are relatively immediate. They also have the added advantage, from the elite’s perspective, of linking popularity to income. But there are hazards here. A recent survey by the Sutton Trust demonstrates that a large fraction of students will be substantially deterred by tuition fees in excess of £5,000 per year. It’s not exactly rocket science; the more expensive you make a thing the fewer the number of people who can afford it. And we talk of bursaries and outreach programmes, but in truth these will only work at the margins. So if the uncapping of tuition fees is to be the way forward, our universities must find a way to avoid becoming places accessible only to the very rich and the very poor - with nothing in support of the majority who lie in between.

That’s a tough trick; impossible some might say. But if you take the best universities and develop a system of tuition fees that makes them accessible principally only to the very wealthy, then you will create a higher education system that is as excellent as it is unequal in societal terms.

And then there’s the graduate tax: in principle less likely to deter prospective students, arguably more unfair in the long run and requiring some sophisticated financial engineering to make it work. But none of this is going to be fair or simple, it’s just a question of choosing the lesser of several great evils.

The complexities of the graduate tax and government’s historically poor record of administering and preserving the ring-fence around hypothecated taxes give pause for thought. But they are not in and of themselves reasons to dismiss this option out of hand. Neither are they absolutely insurmountable. The graduate tax, if it can be made to work, is the least of all evils.

With so much at stake, the complexities and subtleties of that system should be examined exhaustively and its virtues properly championed. It’s a tall order, with formidable forces ranged in opposition. But for the hero of our piece, Vince, whose wit is reputed to be as quick as his feet, surely nothing is impossible.


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