Coherent higher education policy? Far from it

Despite the introduction of postgraduate loans, the government’s education funding aims remain a puzzle, says Nigel Carrington

December 11, 2014

The fees regime is the sort of burden on future taxpayers that has recently become so unpopular in public sector pensions

Should we be grateful for the postgraduate loans system announced in the chancellor’s Autumn Statement? Well, yes – but only up to a point.

The withdrawal of postgraduate funding has been catastrophic for aspiring postgraduates from the UK and elsewhere in the European Union. It is good to have something in its place. The new measure explicitly recognises the impact of postgraduate qualifications on employability and lifetime earnings.

But by restricting postgraduate loans to the under-30s, the government continues its puzzling, piecemeal approach to education funding. Many postgraduate subjects require people to demonstrate some experience. For example, about half of postgraduates in the art and design sector are aged over 30. So, once again, we have a policy that does not respond to the sector’s needs. It is probably just a crude way to cap postgraduate funding. It is also an incentive for young people to stay in education until the labour market picks up. And that appears to be all the thought that has gone into it.

The government is capable of grown-up, end-to-end policymaking. It has even achieved this with its aggressive focus on science, technology, engineering and mathematics. For all its over-assertiveness, the focus on STEM subjects is obviously designed as part of a policy to rebuild Britain’s industrial base. It takes one group of disciplines all the way from 12+ to well-resourced research universities, or to apprenticeships and jobs.

It is not perfect, wreaking collateral damage on the arts and humanities. You wonder where the government imagines industrial designers will come from if arts aren’t taught at school. Nevertheless, you can see the point it is aiming for. But that isn’t true of the wider policy landscape.

We will all have found some favourite passage in last month’s Higher Education Commission report, Too Good to Fail: The Financial Sustainability of Higher Education in England, and its genteel lambasting of the economic illiteracy of the current higher education funding system. Overall, the fees regime, with its 30-year horizon for loan defaults, is the sort of enormous burden on future taxpayers that has recently become so unpopular in public sector pensions.

But, unlike STEM, the current fees regime does not achieve a major policy objective. As with the postgraduate loan measure, it is but one possible answer to a problem – the need to balance access by ever more young people against society’s willingness to pay for them all to study.

Consciously or unconsciously – and I like to believe it is the latter – student fees are a sleight of hand practised on the taxpayer and intended to obscure the real cost of expanding education under the illusion of a market.

The lack of coherent policymaking has created a series of funding gaps. What to make of the fact that further education funding for those over the age of 19 has been replaced with loans? This surely deters a large tranche of potential mature students, despite the known employability (and hence tax) benefits of a well-chosen further education course.

And at what point will the forthcoming 17.5 per cent cut to further education for under-19s shrink a key component of our educational pipeline? And, more particularly, dent a vital part of our widening participation strategy?

Or the fees cap. Is it a passive-aggressive incentive for universities to develop third stream revenue? Or a handy way of forcing universities to lobby in favour of increasing fees, thereby doing the dirty work for the government?

Responding to the HEC report in Times Higher Education, Nick Hillman, director of the Higher Education Policy Institute, asked us to believe that the funding model we have could prove better than the alternatives: “It is not perfect, but it does deliver well-funded universities with lots of places.”

Yet it costs the University of the Arts London much more to educate undergraduates than fees provide. Even if Hillman is right, well-funded undergraduate places are pointless if students start ill-equipped and finish with nowhere to go. Policymaking must be viewed as a whole, not through the lens of self-interest. The weakness of government education policy is that the different bits do not connect up.

In business terms, this is a strange way to resource the talent supply chain into employment or research. In education terms, it all looks rather more like politics than policy.

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