Got value, or taken for a ride?

A shrinking unit of resource will make it harder for institutions to turn around perceptions of ‘value for money’

March 20, 2014

The old politicians’ trick of asking a cab driver for his or her view on an issue isn’t restricted to the streets of Westminster.

Company chief executives, journalists and even vice-chancellors have all been known to use the same one-person focus group.

But the answers are generally repeated only when it serves the purpose of the person in the back seat.

Higher education has a problem when it comes to the cabbie test, because for much of the population tuition fees still blot out everything else.

On a recent cab journey in London, the driver told me with great pride about his two children who were studying at university.

The cab driver’s view was clear: his children were paying more, deserved to be getting more and, as far as he could see, they weren’t

When the fee hike came up in conversation, as it inevitably did, I explained at length the ins and outs of the funding system, the relatively benign terms of student loans and the problems the government faces in sustaining its financial model.

“That’s all very well, but all I care about is value for money. If I charged you three times more for this journey than I would have done last week, you’d want to know what extra you were getting,” he replied.

There are a hundred and one responses to this, but his view was clear: his two children were paying more, deserved to be getting more and, as far as he could see, they weren’t.

It’s important to acknowledge that, cab drivers’ views notwithstanding, university applications have held up, with the potential for student numbers to grow further still in the coming years.

But with the doubt that lingers about “value” in the high-fee era, it’s a matter of considerable concern to see the continuing erosion of universities’ budgets, which cannot fail to have an impact in the seminar room and the lecture hall.

Last week, it was revealed that most teaching budgets are to fall by just under 6 per cent as what remains of the teaching grant is stretched to cover the 30,000 additional students expected in 2014-15.

This will directly hit the once-untouchable unit of resource, and comes on top of the year-by-year erosion of tuition fee income, which yet again will not increase with inflation.

The latter of these two issues could easily have been addressed had the coalition linked the fee to inflation when the £9,000 cap was announced.

It is hard to see how this would have significantly affected the level of opposition the government faced, and if, as it says, it believes that £9,000 at 2012 prices is the cost of delivering a UK-standard higher education, then surely it would have made sense.

However, it may be glad that it did not because a higher fee would only add to the large proportion of fees that won’t be repaid – a figure that, as we report this week, is now approaching the level at which the new system will cost more than the old.

The government has been bold in lifting the student numbers cap and embracing Lord Robbins’ view that more need not mean worse. Universities will worry that the erosion of funding could yet undermine that principle, and add weight to the cabbie’s hunch about “value for money”.

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