How spending review can be a win/win situation

June 26, 1998

Higher education must cite Dearing in its case for extra money instead of falling for the divide-and-rule trick, says Leslie Wagner

The outcome of the comprehensive spending review does not look too promising for higher education. The hints and asides in the margins of public debate all stress the importance of other sectors of education - nursery, primary, secondary and further.

Whenever ministers have been asked to confirm that the proceeds of the imposition of tuition fees will be ploughed back into the sector, they have repeated the mantra that the funds will be available for the expansion of further and higher education. The higher education proportion of the 500,000 extra students promised by the prime minister by the year 2002 is estimated only to be in the range of 70,000 to 85,000 depending on who you listen to.

We have fallen for the old trick of divide-and-rule. Every claim for higher education is translated into an attempt to deprive the other sectors, particularly further education, of what they are rightfully due. It is too easy to portray every higher education claim as an attempt to preserve a privileged position at the expense of others.

Higher education's case for additional funding can be more easily and directly put - "implement Dearing". A naive proposal? Not so. For the Dearing report was incredibly modest in the claims it made for higher education resource needs. In all the furore over student fees this part of the report has been forgotten. It warrants re-examination.

Dearing's analysis of the funding needs of higher education is divided between the short-term and the long-term. The short-term needs amounted to Pounds 350 million of additional funds in 1998-99 and Pounds 565 million in 1999-2000. The government's immediate response was an additional Pounds 165 million for the first year. In the longer-term perspective of 20 years, Dearing looks at both recurrent and capital needs and comes up with a figure of an extra Pounds 2 billion of expenditure over the 20 years to 2016. It sounds a lot but is it? Dearing itself says that the requirements are "modest" and fall significantly short of other calculations provided by the sector. The report is right. In real terms it amounts to an annual average increase over the whole period of around 2 per cent.

Historically, the British economy has grown by more than 2 per cent each year. Gordon Brown has just committed himself to an annual average public expenditure increase of 2.5 per cent over the next three years. Everyone agrees that education will get a higher increase than this 2.5 per cent average for the public sector as a whole.

So the irony is that implementing Dearing will reduce higher education's share of education expenditure, public expenditure and gross domestic product. Quite an achievement. It is perhaps for this reason that the committee's recommendation in this area is written very carefully.

It reads in full: "We recommend to the government that over the longer-term, public spending on higher education should increase with the growth in gross domestic product."

At first reading it seems fairly innocuous. In fact, the two words "in line" between " increase" and "with" are missing. Dearing is not saying that higher education should maintain its proportion of gross domestic product, merely that it should increase as GDP increases, which is pretty meaningless. So it is quite possible to implement Dearing and see higher education's relative position fall.

Even if Dearing's short-term needs are added to its long-term needs, the average annual increase required over 20 years is less than the 2.5 per cent committed for public expenditure as a whole by the chancellor. The short-term bill means that this annual average figure is front-loaded but do not forget the receipts from the student contribution to fee income. The short-term bill is also affordable within the chancellor's framework even if the other sectors of education are given proportionately more funds.

With some clever footwork and professional presentation skills, the comprehensive spending review outcome can be a win/win situation for all concerned. The government can commit itself to implementing Dearing without doing damage to its clear wish to give proportionally higher increases to the other sectors of education. Indeed, I judge that if it was to commit itself to the longer-term target but sought to spread the two-year shorter-term target of Pounds 915 million over three years instead of two, its decision would still be welcomed.

Higher education would receive increases in real expenditure better than any in recent experience and the relationship with further education could become more one of partnership and collaboration rather than the increasing trend to divisiveness and competition.

Leslie Wagner is vice-chancellor of Leeds Metropolitan University.

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