Hepi: voucher-style funding is not the answer

September 24, 2009

A "voucher" system for funding higher education would cause more problems than it would solve, a report published this week by the Higher Education Policy Institute says.

The system, under which students are given vouchers worth a certain amount to spend on higher education wherever they want, nevertheless remains a "serious alternative approach" to paying for university education, Hepi says.

A report last year by the think-tank Reform, The Mobile Economy, recommends that all 19- to 21-year-olds should receive £4,300 a year to spend on a degree or further education course at any institution, including those overseas.

The Hepi report, published on 24 September, says support for vouchers tends to go "hand in hand" with support for free-market economic models.

Proponents argue that bureaucratic controls will be reduced once governments no longer need to fund universities directly, that students will be empowered by increased choice and that increased competition will drive up quality.

But evidence from Colorado, in the US, where a voucher scheme was introduced in 2005, shows that its scheme achieved none of its stated aims. And when the recent Bradley Review in Australia considered vouchers, it was a watered-down version, with a cap on tuition fees and direct funding for some courses.

The Hepi report says: "Among the strongest arguments put forward for vouchers is that they will reduce the cost of education per student ... however the public interest is not served solely by producing the maximum number of students as cheaply as possible."

Vouchers could lead to the Government becoming "indifferent" to the health of individual universities, it says, and subjects of strategic importance could also suffer.

"Whatever benefits the introduction of a voucher scheme would bring would be more than offset by the disadvantages," Hepi concludes.

Elizabeth Truss, deputy director of Reform, said the paper had missed the "central issue, that government control of the purse strings has created a nervous university sector, afraid to speak out about lowering standards".


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