'Market' is a mistake

September 26, 2003

The introduction of differential fees will throw up far more questions than answers, argues Liz Allen.

Education minister Alan Johnson wants every university "to make its own independent judgement of what is an appropriate fee for each course and what the student market will bear". Leaving aside the unproven case for creating such a market, what criteria will institutions use? Popularity of course? The expense of running it? Future earnings of graduates? Competition for places?

Students will want to know what they are paying for, and why. The modern universities have convinced themselves that they will all be able to charge the full £3,000 for at least some of their courses. But for institutions that set out to recruit, rather than select from an over-supply of applicants, this poses problems. Students who can't get a place on a highly competitive course will surely expect to pay less for a course they gain through clearing.

This might not be rational in cost terms but there has been no debate about rational pricing. A popular course may be cheap to run (English literature). An expensive course may not result in high earnings (engineering). High earnings may be due to overall institutional reputation and competitive recruitment rather than the specific subject studied (for example, politics, philosophy and economics at Oxford).

Students who have paid higher fees within institutions where some courses are cheaper than others may well expect to see a difference in what they get, in terms of resources and teaching support. However, not only will their higher fees be used to subsidise bursaries for the less well-off, but to keep academic and course quality at reasonably comparable levels higher fee income must surely be used to subsidise central elements of institutional activity such as libraries, welfare, student services and technical support.

To use high-fee income solely for the benefit of staff and students on the high-fee courses would cause resentment and divisions. What might be the implications for fair and equal pay systems if staff linked to high-fee courses earned higher salaries? Other staff might rightly claim that they contributed towards the overall recruitment and support of the students and staff concerned.

Will disciplines and courses that can't attract high fees disappear, closing departments in vital subjects such as maths and engineering? Will we become an innumerate society that is no longer capable of making anything? Or, if a wealthy university charges low or zero fees for an engineering course, what are the implications for engineering courses run just as well or better at other universities but without a cross-subsidy?

And if a university does not have the subject mix to enable cross-subsidy, must it abandon all its less popular and expensive subjects? How will we prevent the loss of vital provision within regions?

The £3,000 lid for the lifetime of this parliament is a device for smoothing the path of this massive change in higher education. It won't last. The pressure for a higher cap already being mounted by some of the elite institutions driving this policy will intensify and when this cap is raised, the existing inequality in funding between institutions will increase.

It is a funny sort of education system where price and provision can be determined regardless of cost, local need and expected student benefit, decided instead on the basis of overstated reputation, snob appeal or capacity to cross-subsidise. This push to create a market in higher education is being driven by false assumptions about institutional provision and quality and student choice.

Weeks away from a bill that sets out proposed legislation, MPs will be asked to trust that the proposals have been thought through. The government is undoubtedly serious about expanding opportunities and raising educational levels and standards, but differential top-up fees still provide more questions than answers.

Liz Allen is higher education national official at university and college lecturers' union Natfhe.

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