Tories will take scissors to nightmare red tape

September 10, 2004

Shadow education secretary Tim Collins says his plans would cut debt for students and release cash for universities.

All political parties and newspapers accept that UK universities, challenged by some hugely well-resourced international competitors, need a great deal more money. It is all but universally agreed that funding per student has to rise significantly after two decades of uninterrupted falls. There is also a widespread recognition that market mechanisms can help the status, quality and independence of higher education, and that students cannot continue to have their education subsidised by the taxpayer.

Whatever the theoretical merits of top-up fees, the monster born by the 2004 Higher Education Act - with its compromises and retreats - is pretty hideous. It will cost the taxpayer £1.1 billion a year to give universities an extra £0.9 billion. Any rise in fees must be agreed in a Parliamentary vote -killing off the hope to which some vice-chancellors cling that £3,000-a-year fees are just a starting point. There are no guarantees that fee income will be additional to, rather than a substitute for, public funding -while the Act creates an interfering, manipulative, corrosive emblem of political correctness in the shabby, squalid form of the Office for Fair Access.

Conservatives suggest that Offa should be sent packing, and that most of the Higher Education Funding Council for England should follow. The state will continue to be central to the funding of universities, as in all countries -even in the US, where the Government still pays for much of higher education.

But in the UK, money should be distributed with fewer strings attached and with much less interference than accompanies the present paper-pushing nightmare. Conservatives will replace both the grant for teaching and tuition fees with a system of National Scholarships. Funding will follow the student and will not be allocated, top-sliced, ring-fenced or mucked about with by Hefce. More of a market, fewer forms, fewer form-fillers, fewer audits, less frequent and minimally intrusive inspections, the treatment of academics as grown-ups. Will anyone really miss the present system?

The amount of money matters as well as how it is distributed. Our plans will match the £1.8 billion a year that fees would raise under the Act - and our scheme would get that level coming in from 2006 not 2008-09.

Our scheme will release £3 billion within five years to meet urgent needs in the teaching infrastructure and we will provide £9 billion - £500 million a year in matching funds for 18 years - towards an £18 billion endowment-building exercise. Every pound university fundraisers secure will become two in their coffers. Endowments are not the sole answer - but they give the Ivy League a critical competitive advantage over the Russell Group that we can no longer ignore. Many members of the Campaign for Mainstream Universities have developed endowment strategies and will benefit from matched funding.

We will pay for all this by removing the near-£1.7 billion a year the taxpayer is expected to shell out subsidising student loans. The taxpayer saves a further £450 million a year if there are no fee remissions to fund. That pays for replacing fees.

Meanwhile, the transfer of a now commercially rated and run student loan book to the ownership of the sector will give it a massive new asset that will be used to generate the extra billions. Students end up paying higher interest rates - but without fees most of them will have a lot less debt.

So the majority will pay considerably less in total than under Labour's scheme. Students from disadvantaged backgrounds who would get £1,500 grants under the Act will do so under our plans, and will be broadly in the same position under either scheme.

But we will scrap the 50 per cent participation target. Britain is close to the top of the international league table for the numbers who go into higher education. The total is about 45 per cent, more than competitors such as the US, France, Germany, Italy and Japan. Our plans do not require us to cut back the number of places in higher education. Present levels are about right, and a pause in the breakneck expansion will help us focus on quality not quantity.

Some will say that students should pay more, others that they should pay nothing. Some would rather cling to a chance of huge income from vast fees in future rather than accept a more prosaic way of generating billions now.

I hope that others will recognise a genuine attempt to give universities more financial and operational independence, considerably more money than anyone else has put on the table, and a recognition that Britain thrives only when higher education is secure.

Tim Collins is shadow education secretary.

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