'The only option is to go private'

March 7, 1997

Excellence plus full funding could equal a degree costing Pounds 50,000 or more. Ron Johnston says. The vice chancellors of Cambridge, Edinburgh, University College London and Warwick have declared "that educational standards and research excellence are threatened by continuing significant funding reductions". A joint letter last year to The Observer and an interview with Derek Roberts, provost of UCL, led to the claim that the four were planning a "new generation of 'super universities'".

So how does the Higher Education Funding Council for England's new formula match up to their needs? The seven English institutions they identified as potential super leaguers had an average grant increase of only 3.2 per cent for 1997/98 over 1996/97 (about the rate of inflation). Some have been capped, so those facing large losses can be safety-netted, but even if the largest institution involved (UCL) had received all its quality-related entitlement, this would have increased its allocation by only 4 per cent, from Pounds 5,900 per student to Pounds 6,173.

The vice chancellors envisage either drastic reductions in student numbers, with no overall cut ("neither desirable nor politically acceptable"); or increased funding, "with a new pattern of sharing the burden between the taxpayers and the beneficiaries".

How would this increased funding be paid for? Universities get about Pounds 5,000 per science student a year. A grade 5* department also gets about Pounds 35,000 a year per staff member through the new QR formula, amounting to some Pounds 2,800 per student. So total annual income per student is about Pounds 7,800. For "library-based subjects" it may be Pounds 4,500-5,000, and Pounds 10,000-11,000 in the clinical disciplines.

The vice chancellors claim this is inadequate for international centres of excellence. The necessary 25 per cent salary increase, more support staff and additional spending on libraries, laboratories and buildings would add at least Pounds 3,000, increasing the annual cost of a science degree to Pounds 11,000 (Pounds 6,500-7,000 for lower-cost disciplines, Pounds 13,000-14,000 for clinical).

They want only 12 universities funded at this level, with the rest fulfilling their missions with less money per student. Politicians and other universities would resist strongly the substantial premium the funding councils would have to add to their allocations to this elite group. (An average premium of Pounds 3,000 per student in 12 institutions could cost at least Pounds 300 million per annum, Pounds 3 million less on average to each non-elite university.) If the public purse cannot provide the premium, the beneficiaries may have to. If the 12 cannot raise the "needed" extra income in top-up fees from their students, then the only option is to go private. They would have to negotiate a divorce from the state sector, and charge students Pounds 30,000-35,000 for tuition on a three-year science degree, with maintenance adding Pounds 10,000-12,000. An arts or social science degree would be at least Pounds 35,000.

Students could need a loan approaching the size of their first mortgage (probably delaying their entry to the housing market, with interesting implications for the national economy). Would the Government offer loans at "lower than market" interest rates or tax rebates on repayments? This, like a voucher scheme redeemable at any institution, would involve accepting top-up fees.

An "elite institution" would be expensive for students. What, for example, about the capital already invested in the 12? Would any government be prepared to let Oxford, Cambridge, and other institutions take over buildings erected with public money, plus land, at no cost? If not, how much more would the students have to pay to cover the cost of buying them?

Could endowed scholarships reduce the cost? An investment of some Pounds 200,000 would be needed to cover tuition and maintenance per student. If the elite had 100,000 students, some Pounds 20 billion would be needed to provide them with free education (tuition only). Such philanthropy is unthinkable in contemporary Britain.

How many universities could get students to pay for degrees costing Pounds 50,000 or more? If the answer is few, if any, then what alternative is there to the continuing erosion of quality highlighted by the four vice chancellors?

Ron Johnston is professor of geography at the University of Bristol.

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