Leader: Tories' bold ideas still need to show some substance

January 26, 2001

The Conservative Party's new higher education policy is a bold and decisive one, and its decision to make it a visible plank of its election platform is welcome. Alongside David Blunkett's Greenwich speech of a year ago, it puts the sector in the political mainstream. This is in contrast to 1997, when both parties ducked behind the soon-to-be-published Dearing report to sideline higher education.

The cautious welcome the Tory plans have received from academic staff and even students suggests that they tackle the important issues, even if the solutions they suggest are not complete. And the promise that their plans might mean higher academic pay suggests that the Tories may have both political nous and a sense of humour that have been hidden in recent years.

The Conservative plans are light on university expansion, which is still Labour's big idea. Instead, they major on money. In the Tory view, the principal problem with British universities is their dependence on the state, which saps their independence and undermines their economic ambitions. Sceptics might argue that the speed with which universities have taken market forces on board has been rapid enough already. But the Tories plan to force the pace still further with one-off cash gifts designed to replace central government funding.

This idea is to create a US-style university system in the United Kingdom in a period of a few years. But implementing it will be complicated. At a 5 per cent rate of return, it would cost just under £100 billion to match the cash paid out by the funding councils in the current financial year. Despite the noises it is making, would this be a future Conservative government's top priority for such a massive sum of money? In any case, the current funding allocations are too small to provide proper pay rises for academics or to meet other urgent demands on the sector. Changing to a new system without a substantial incentive to do so will not be attractive to university managers. And the magic mountain of money earmarked for the endowments, which the sale of telecommunications frequencies is meant to yield, may prove harder to bank than current thinking implies.

In recent years, one new group of funders has been added to the university finance picture: students. Their payments will continue to be vital under Tory plans, although top-up fees have been ruled out. But the most untested - or to its supporters, adventurous - part of the Conservative proposals is the hope that new backers will emerge for universities once they are free of the state. Sources other than the research and funding councils already spend about £1.5 billion a year on research in British universities, a sum that has risen healthily in recent years. But getting big spenders to pay for less directly self-interested academic activity will be tough. After all, most British universities lack the big endowments the Tories are offering precisely because people and companies have been reluctant in the past to hand over money to create them. The present government is solving some of the tax disincentives to such giving, but the mindset will take longer to change.

Instead, it may turn out that the universities that win the biggest endowments will be those with the biggest state funds to replace - and with the richest alumni and the densest industrial linkages. So endowing universities may simply make the already competitive stronger still. Both Conservatives and Labour stress the need for the UK to have world-class universities. But amid the comparisons to Harvard and Berkeley, nobody should forget that almost all US states fund universities in which ill-paid staff with insecure employment conditions and large classes have to work just as hard as their opposite numbers in Britain.

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