Hard sums are unavoidable for universities

Labour’s pledge to axe fees suggests that ever-higher charges may not be inevitable, but tough choices between university priorities seem unavoidable

May 25, 2017
Man standing next to cash machine
Source: Alamy

University leaders are in an odd place when it comes to university finance. On the one hand, as has been frequently observed recently, they are likely to be on the progressive side of the political spectrum. Hence, their gut is likely to tell them that the state should bear most of the cost of higher education.

However, their first professional duty is to ensure that their institutions flourish. For that, money is a crucial (if not a unique) requirement. And it is apparent that governments – in the anglophone world, at least – are becoming increasingly unwilling to provide it.

Hence most English vice-chancellors’ at least tacit support for the tripling of fees in 2010. At a time of swingeing cuts in other areas of the Budget, including further education, the only realistic alternative was deep cuts.

And hence Australian vice-chancellors’ support – initially, at least – of proposals in 2014 to uncap undergraduate fees to compensate for a 20 per cent cut in direct government funding. As Peter Coaldrake, vice-chancellor of the Queensland University of Technology, said in these pages last week, higher education is always going to be a target for cuts in constrained times, and shifting most of the funding burden on to students would at least have freed universities from “the tender mercies of government patronage”.

In the US, private universities are not subject to such mercies, and have the endowments to salve their consciences over sky-high tuition fees, with numerous reductions for the underprivileged. But public universities have seen their budgets from the states shrink for years, resulting in steep fee hikes that, again, sit uneasily with their broadly liberal ethos.

In the UK, the Labour Party’s manifesto for the 8 June general election has shaken the perception that the shift from public to private funding of universities is inexorable. Labour is pledging not just – as it did in 2015 – to cut tuition fees but to abolish them. The costing of the proposal – £11 billion: by far the most expensive of many Labour spending pledges – implies that the party would aim to replace universities’ fee income with direct grants. But whether it would be fully replaced, whether it would rise with inflation and what it would mean for student numbers are just some of the worries vice-chancellors would have were there much prospect of Labour winning the election.

Given that there is not, the Conservative manifesto is the one to focus on. Ominously, the Tories have promised to launch a review of all tertiary education funding, aiming to “ensure that further, technical and higher education institutions are treated fairly”. Given the plight of further education and the government’s intention to get serious about technical education, the review may well recommend redistribution of some university funding.

On the plus side, the Conservatives are promising to raise the proportion of gross domestic product spent on research to the Organisation for Economic Cooperation and Development average of 2.4 per cent within 10 years, and to 3 per cent in the “longer term”; the current figure is about 1.7 per cent. Labour is also pledging 3 per cent by 2030.

In Australia, recent government proposals to raise loan repayment thresholds, make students pay a slightly higher proportion of their tuition costs and cut university funding by 2.5 per cent were initially met with murmurs of approval – understandable given that the 20 per cent cut proposed in 2014 was still on the table. But, last week, vice-chancellors came out in unanimous opposition to the proposals – which may anyway be rejected by the Senate.

A Universities Australia statement highlighted the impact on students. Given vice-chancellors’ previous acceptance of much higher fee rises, some will be cynical about that. But university leaders are in an invidious position. Everyone wants well-funded research and teaching, high academic salaries, high student numbers and low student fees. That is ostensibly what, in England, Labour is offering. But if the party does lose by a landslide, it seems unlikely that any future party leader will go digging in the debris for policy ideas. Hard choices between the above priorities may be inevitable.


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