Labour £6K fees policy ‘not incredibly sensible’, says IFS expert

Education election briefing also hears claims that coalition’s private colleges policy was ‘completely mad’

April 24, 2015

The Labour Party’s policy to lower fees to £6,000 has been described as “not incredibly sensible” by the head of education at the Institute for Fiscal Studies, who said it benefits only the highest earning graduates.

An election briefing for education journalists hosted by the Education Media Centre and the UCL Institute of Education also heard from Alison Wolf, a cross-bench peer who led an independent review of vocational education for the coalition, who called the government’s rapid expansion of public funding at private colleges “completely mad”.

Lorraine Dearden, director of the education sector at the IFS and professor of economics and social statistics at the IoE, discussed higher education funding at the event, held on 23 April. She said that “all taxpayers, regardless of which system we have…are making a considerable contribution to HE”, including under the £9,000 regime.

Professor Dearden said that under Labour’s proposed £6,000 fees “graduates will pay less. But it’s not all graduates who pay less. It’s only those graduates who do very well in the labour market.”

She continued: “The lowest earning 60 per cent of graduates would not pay back their £6,000 fee and would not pay back their £9,000 fee, so it makes absolutely no difference to them.

“The only graduates who benefit from the Labour Party system are the highest earning graduates.”

The IFS has previously said that middle- to high-income graduates “are the primary beneficiaries of this reform, with the very highest earners benefiting the most”.

Professor Dearden said the policy increased the “taxpayer burden”, paid by non-graduates and graduates, as it required direct public funding to replace lost fee income for universities.

She suggested that the £6,000 fee policy was a “not well thought-out policy in terms of who pays” and called it “not incredibly sensible”.

Supporters of Labour’s policy argue that the coalition’s student loans system is not sustainable and that £6,000 fees would lower the write-off rate on loans. Liam Byrne, the shadow universities, science and skills minister, has said the student finance system will “implode” without change.

Meanwhile, Professor Wolf, who is Sir Roy Griffiths professor of public sector management at King’s College London, said the coalition’s policy on private providers had been driven by a focus on “getting [student] places that would cost less” after universities rushed to charge the maximum £9,000.

The government has been criticised by the Public Accounts Committee after initially allowing private providers to expand their Student Loans Company-funded provision without any cap on numbers and without any quality oversight.

Of private providers, Professor Wolf said that “some of them, I’m sure, are great. But it’s the sort of programme which is guaranteed to produce, sooner rather than later, at least one or two examples of fraud which will blow the whole thing out the water.

“What is extraordinary to me is how long it took them to find out that this was happening.”

Professor Wolf said there had been “staggering growth” at some private colleges, which have expanded their provision mainly via Pearson-awarded vocational Higher National courses.

She argued that flaws were “inherent in the policy. It was a completely misconceived policy of somehow creating a, quote, market. I think it’s been deeply harmful.”

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