Taming of the screw

December 1, 1995

Is this the last straw? Again and again since 1981 the funding screw has been tightened on universities. In the past five years alone the amount of money for each student has gone down by 25 per cent. Over the life of the Conservative Government it must now, with this week's further 12 per cent cut over three years, have been reduced by at least half in real terms.

And this latest cut, like that of 1981, is without the opportunity to compensate for lost per capita income by increasing numbers. At least further education, which also faces large real terms per capita cuts, does have the prospect of rising numbers. But they must operate on a lower average unit cost: less than Pounds 3,000 compared to more than Pounds 4,000 in higher education.

Every year since 1989 the universities have been saying this cannot go on, that quality is being degraded. Every year the Committee of Vice Chancellors and Principals has demanded that the Government act to save them. And every year the Government has blithely continued to tighten the screw, to ignore vice chancellors, higher education staff and students' complaints, and to duck the big question of whether students should pay for tuition and if so how. This year is just more of the same - except that the tightening is harsher. Seven per cent in one year is going to cause serious dislocation in a system where a number of institutions are facing deficits and the Higher Education Funding Council for England's projections show more heading that way.

The HEFCE has said that it will have to review all capital projects and while it clearly hopes to save those to which it is already committed, it is also going to have to consider what sums will be needed for safety netting if institutions are to cope with recurrent costs.

So what will the CVCP do? It meets in full session next week. It will be asked to sanction work on a paper to go to the Government setting out a preferred option for student contributions - something the minister responsible for further and higher education, Eric Forth, has been egging them on to do. That will surely be agreed.

They will also no doubt accept the offer made this week by Mr Forth of help in accelerating Private Finance Initiative deals. After all what choice do they have? But will they go further? Will they, for example, take decisions as to what they will do if once again their demands for action by Government are ignored? Reluctance to take such decisions is the weakness of their position.

Perhaps now they may take courage from the example of their German colleagues, long thought to be even more allergic to charging students for tuition than their United Kingdom counterparts. The German rectors are now seriously threatening their government with a showdown (page 8) and even in France (see below), university leaders are beginning to act on the realisation that dependence on politicians does not produce solutions.

What if nothing is done? The universities this week acquired a champion they may not welcome. In his second reading debate speech on the new student loans bill, former higher education minister Robert Jackson - who said, "one of the most serious social trends in society over the past 20 years has been the pauperisation of the academic profession" - identified clearly the alternative to finding more private money. "Under the present policy the only way to square the circle is systematically to degrade the quality of a university system that is exclusively dependent on public funds."

The non-controversial, though difficult, part of turning to private funding is in respect of capital. Higher education has already raised some Pounds 1.6 billion in private investment. Now it must do more as capital funding vanishes. The Private Finance Initiative has drawbacks. Negotiation of deals may be long and complicated, but they can be successful for glamourous prestige projects with obvious earning potential like Brighton's leisure centre (page 3). But when it comes to using the initiative, as is apparently now being suggested, to raise the money needed to mend roofs and buy teaching equipment in institutions which may already be facing a deficit and which cannot increase their revenue by expanding their numbers, there are not likely to be many private sector takers.

The far more contentious but actually easier way of increasing revenue both to pay the interest and consultancy charges for PFI schemes and to mend the roofs and upgrade facilities is to charge students - while, of course, making sure means are provided for them to meet the bills. That, as Mr Jackson was pointing out, is why it is so important that the loans scheme be properly reformed. It is probably also why opposition to privatised loans (even if they were to be properly organised) is so fierce from those most keen to avoid tuition charges.

The vice chancellors have it in their power to force the issue. They will be Pounds 300 per student short in real terms next year compared to this. It is a sum many of the affluent families whose children concentrate in higher education could afford. Those who qualify for full grants might be spared. Unlike maintenance where there is no sanction against parents who do not pay, the universities could enforce a levy by refusing to enrol non-payers. Even the French now charge an enrolment fee. It is a notion the vice chancellors might like to entertain next week.

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