Quitting Europe would be big, but not a crisis on the home front

Financial fallout from a decision to leave the EU would, in reality, be minimal for higher education institutions, argues Alison Wolf

January 31, 2013

Source: Paul Bateman

We will give the British people a referendum with a very simple in or out choice,” announced David Cameron last week: to stay in the European Union on the terms our government negotiates or to “come out altogether”.

Suppose the UK population chooses “Out”. How much should universities, as universities, care? And how much would we even notice?

For Britain as a whole, the consequences are large. Given academics’ views and voting patterns, it is hard to believe that most would be in the “Out” camp.

But for our institutions it is not obvious that the change would be dramatic. And I can think of some university finance directors who would be grinning widely.

It has been an article of faith in Brussels that, within the EU, states will converge in every way. A few years ago, I co-authored a report for the European Commission on “convergence and divergence” in European education. Our sponsors took it for granted that we would find convergence, and we had a hard time even getting “divergence” into the contract title.

Yet we found no signs that European education systems were converging and becoming more similar than in pre-EU days: not in mainstream schooling, not in apprenticeship and training, and certainly not at university level.

The UK higher education sector is unusual within Europe in being unitary, having got rid of its polytechnics. It is also unusual in its level of internal competition, with major differences among institutions in, for example, entry requirements. Unusual - but not unique, and neither feature has changed because of EU membership.

UK universities have changed a bit recently because of the Bologna Process, which mandates credit-based degrees; other countries have changed much more, moving to a three-tier degree framework (undergraduate, master’s, doctoral) from systems that had different structures. But Bologna was not an EU initiative, and it now stretches well beyond this continent.

There are, however, consequences of EU membership of which university finance directors are highly aware. As most people know, the UK is the only European country that consistently has some of its universities in the top 10 or top 20 of global league tables. Our universities’ reputation brings us applicants from all over the world.

The financial viability of the sector now depends on our continuing not just to attract large numbers of students but to charge many of them high “overseas” fees.

Students from other EU countries, however, count as “home” students, to be treated just like our own. All home students are entitled to the same tax- funded subsidies, whether through direct payments to institutions that reduce fees or via loans. In a “capped” system such as ours, where universities are allowed only a limited number of home undergraduates, places offered to non-UK-domiciled home students reduce the numbers available for UK-domiciled ones.

Back in 1994, EU-domiciled non-UK students made up about 3 per cent of our full-time undergraduate body; today they are about 5 per cent. It is still a small percentage, but absolute numbers are substantial. Last year’s Higher Education Statistics Agency figures show 74,000 non-UK but EU- domiciled full-time undergraduates, more than two and a half times as many as in the early 1990s. If we left the EU, we could charge these students more money. We could also, or instead, try to recruit more of them in total without turning UK students away.

I’m quite sure we would leap at the chance. Scotland charges non-Scottish UK students more than it does its own. A separatist gesture? Hardly - what has Scotland got against the Welsh? The Scots do it because they are allowed to discriminate financially within a country, although not against other EU countries. Several of our leading universities similarly charge students from non-EU Jersey more than they charge students from France or Poland. If we can, we will.

One obvious worry, if we left the EU, would be access to research funds. Finance officers tend to loathe EU research projects. One told me that he would forbid anyone to accept one if he could because the administrative costs made all of them into loss-makers. But for scientists in particular, they offer major support for large, cross-national projects. The science community seems bound to scream in horror at the prospect of being cut loose.

Yet even there I wonder. A lot of big European science is inter- governmental but not EU-based: Cern and the European Space Agency, for example. When you look at beneficiaries from the EU’s Seventh Framework Programme, the biggest states get more money in total but are also the biggest contributors. Only a few of the small states seem to benefit disproportionately. If the national contribution were channelled straight into home science instead, it is not obvious that UK science would be any worse off, especially given the administrative overheads.

Meanwhile, as last week’s Times Higher Education made clear, there has been no obvious trend towards scientific collaboration between UK and other EU researchers as compared to collaborations with other, non-EU countries. Leaving the EU would be a major, life-changing event. But not because of its likely impact on British universities.

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