The rodent report

November 4, 1994

Peter Breeze argues that extra money raised from charge must stay in higher education.

The report of the Commission on Social Justice published last week recognises that if higher education provision is to expand further, and if any such expansion is not to be "botched", then it needs "more resources" and an end to the "bureaucratic paperchase". It makes an excellent case for the economic necessity of an expanded system. So far, so good.

But the report then enunciates a "principle": that the extra resources required should flow (presumably entirely) through a student contribution, via fee and maintenance income-contingent loans, available to all students. The justification given is that the current system is unfair, because it is disproportionately used by wealthy families, because higher education qualifications are invariably a route to higher earnings and because it provides no support to, for example, part-time mature students.

It is indeed unfair. Those of us who work in higher education know only too well that the current level of expenditure on higher education is already insufficient to provide adequate standards of living for students, adequate time and resources for academics and levels of pay.

To provide these, assuming a return to a "grants only" system and the extension of mandatory fee awards to those first-time participants currently ineligible for a grant, would put about four pence in the pound on income tax. It can safely be said that no political party will make that proposal in its election manifesto!

So is the case made for the report's "principle"? There is certainly no serious exploration of other funding sources (eg a tax on graduate employers). The economic implications of an improved education system are not examined in this context (the merchant bank Kleinwort Benson has estimated there would be up to a million fewer unemployed with consequent reductions in the social security budget and increases in tax revenues). And there is no reference to the size of the higher education system the UK is likely to require.

Paradoxically, the report ignores a contradiction at the heart of its own proposal: the report is about social justice, but the proposal is concerned far more with individual contributions and benefits. In a report intended to be visionary, this is extraordinarily pragmatic. Indeed the more access to higher education is expanded, the less biased against under-represented groups it is likely to become and the less a proposal based on individual benefits could ever be justified.

The report is also unclear about the demand for higher education. It assumes demand will simply continue to rise. The Australian experience (still only five years young) is, as usual, quoted to demonstrate that demand has not been affected by the introduction of income-contingent loans. The UK experience is far from conclusive: the great expansion since 1988 has largely been during a recession when employment opportunities were scarce and this year demand suddenly levelled off.

Why? Because there were other jobs available as the economy began to come out of recession? Because of the evidence of graduate unemployment? Because of the evidence of student poverty and debt? It is doubtless a combination of all these (and other) factors, but it is as yet unproven that loan systems will not frighten away the very types of student we all want to recruit.

Further, the proposal explicitly does not guarantee higher education the increased funding that income contingent loans might raise, devoting three pages to an essay opposing hypothecated taxation which would receive a delta double minus at even the University of Poppleton. To introduce a system that makes the individual pay for his/her education and then not channel those extra resources into improving and expanding the higher education system would be absurd and call into question any commitment to improve standards and quality. That commitment must be given.

Our society needs a much more thorough look at the funding of higher education than this report provides, one which contemplates planning future expansion, nurturing the demand and examining how the revenue should be raised.

Taxation, industry, student contributions (though please not the appalling proposal, happily not made in this report, to introduce top-up fees which would lead to an even more hierarchical system than we have now) could all be entertained and problems concerning the effects on demand and on equity considered.

When we know what size of system we want and the level of resource needed per student, only then can we estimate the funding required and the mix of funding methodologies necessary.

Accepting, without more ado, the "principle" that "the student must pay all the extra" is not good enough. The present system is unfair, but a wider examination of changes is still required.

The commission may have laboured long and hard. For higher education, it has at best brought forth a modestly-proportioned rodent.

Peter Breeze is president of the Association of University Teachers and writes in a personal capacity.

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