The government has set itself a target of getting 50% of young people into higher education. The wisdom of getting so many people to go to university is debatable (our own Rector, Sir Richard Sykes has described it as "ludicrous"), but that isn?t really the point. The government is determined to follow its agenda and we must therefore look at how we deal with the consequences of such a policy.
Expansion of higher education obviously has a cost. The cost of new facilities, hiring more teachers, providing more accommodation, etc. Students also need some money to live on. Even without this expansion, many universities are already struggling to pay their way. Universities get a grant from the government for each "home" (including EU) student. The level of this grant does not vary between universities ? though some recognition is given to more costly courses (such as medicine).
Current funding arrangements mean that Imperial College makes a net loss on each undergraduate home student ? a problem exacerbated by IC?s recent salary increases to "attract and retain the best staff". (The overseas student cash cow helps to make sure Imperial just about breaks even.) Furthermore, while there is a universal funding formula for teaching, the College is able to get more money for research if it shows better results. This causes a distortion in commitments where teaching is often compromised (something highlighted by the redundancies of non-research teaching staff in both Geology and the Medical School last year.) Aside from the operational difficulties, everyone here is more than aware of the critical need to spend money on renewing the College?s campus, facilities and residences. (Just sorting out the College?s electricity shortage will cost around £13 million. The South Side refurbishment is expected to come to £20 million.)
Whilst a costly central London location and the ghastly 1960?s buildings make Imperial?s problems worse, its funding difficulties are shared by many other leading universities. Government figures published by the audit office show that UK universities need an extra £1 billion a year to keep going and a capital injection of £5.2 billion to bring facilities up to scratch. And all the time there is the "brain-drain" of academic talent to the United States where academic pay is significantly higher ? as is funding of research and teaching facilities. So, if the universities are struggling to cope as it is, how will they cope with higher education expansion? Or more to the point, who will pay for it?
The government?s plans for higher education expansion play second fiddle to more mainstream commitments (to improve basic public services such as the NHS, policing, primary/secondary education, renewing our transport infrastructure and tackling urban deprivation). With the British electorate consistently voting for parties that pledge low taxes it is unlikely that the Exchequer can provide the significant increases in higher education funding that are required to sustain expansion. A graduate tax had been mooted, which would allow significant amounts of money to come in, perhaps facilitating a reduction in the up-front debt burden placed on students. With this in mind, the University of London Union (ULU) had lobbied the government to consider a graduate tax as an alternative to the current system of tuition fees and loans. However, the main problem with a graduate tax is that it would take a few years for the money to actually come in (after students start graduating under the new arrangements). It was also vehemently opposed by the National Union of Students (NUS) who saw it as another blow to the principle of free education. (Ironically the NUS also supports the expansion of higher education which makes keeping it free unsustainable).
While the government?s review of higher education funding is still under way, it has effectively ruled out the prospect of a graduate tax. This essentially means that the current system of tuition fees and loans is likely to remain the mainstay of student finance. Last week it was reported that the government was considering the re-introduction of grants for the poorest students. These would be around £30 a week in term-time. While this news has been enthusiastically welcomed by the NUS, one has to wonder how these grants would be paid for. Means-tested grants were recently proposed by the Independent, which suggested applying full market-rate interest rates to student loans. The rationale being that higher interest repayments would fund the grants that would reduce the debt burden for the poorest students. While this sounds reasonable in principle, its an over-simplification of the issues concerning student hardship. Those facing the worst hardship are not necessarily those from the poorest backgrounds. For example, there are quite a few cases where (for a variety of reasons) the parents do not provide the level of support the local authority expects. (A problem former ICU President, Hamish Common, used to be keen to raise.) The government has also, to date, failed to provide a realistic level of "London weighting" ? something that ULU has been campaigning about for some time.
Yet, tinkering with means-tested grants and market-rate loans are not going to provide the significant increase in funding required to sustain, let alone expand, higher education in this country. The problem is most acute with the leading research universities, which see their position in the world sliding with the lack of funds. The government is juggling competing priorities and something has to give.
UK academia is beginning to accept (albeit unwillingly) that sole reliance on state funding is not going to work. The original Dearing Report (which paved the way for tuition fees) had two of its key recommendations ignored. The first was the retention of means-tested grants for the poorest students. The second was giving universities flexibility in the level of tuition fee they wished to charge (read "top-up-fees" for elite universities and sought-after courses such as law and medicine). With the government now seemingly prepared to accept one of the two Dearing recommendations it ignored, it is conceivable it may accept the other. In March this year Margaret Hodge, Minister for Higher Education (and target of London Student?s Hodgewatch campaign) refused to rule out top-up fees.
The Russell Group (a self-declared group of 19 elite research universities, including Imperial) have formally adopted the position that any higher education should not be denied to potential students on the basis of their ability to pay. That does not represent a complete ruling out of tuition fees. Two Russell Group universities, York and Glasgow (who?s VC is to be London University?s next VC) have publically opposed top-up fees. But some others have been more receptive. It?s perhaps worth looking at our own Imperial College. In 2000, Natasha Newton, ICU President, was able to secure a "guarantee" from the then Rector, Lord Oxburgh, to "rule out" top-up fees. When Sir Richard (who was a member of the Dearing committee) took over last year, he was widely quoted in the press as suggesting students should pay fees of up to £20,000 p.a. He later told Mr Common (and Felix) that he had been "misquoted". However, since then he has made fresh comments saying that he favours the freedom to charge top-up fees. While he maintains that his "preferred" option is to be free of state-funding with a £1 billion endowment that is unlikely to happen soon (although it was suggested by the Tories at the last election) since "privatisation" of the universities could be even more polticially apocalyptic then top-up fees. It seems that there has been a shift in the College?s position on top-up fees and this is something that the Union should seek to clarify with the Rector. Its possible that the Rector?s comments are being made in an attempt to "hold the government to ransom" by demanding more money to avert top-up fees but it?s a fairly hollow threat since the government would need to first grant powers to charge such fees.
Any introduction of top-up fees (even in limited form) fees would be politically explosive. At last year?s Labour Party conference, Tony Blair recognised that tuition fees had been a major campaign issue on the door-step. The government would need to offer sufficient carrots (such as headline-appeasing student grants) to be able to introduce such a measure. Of course top-up fees would act as a further barrier to higher education, putting the government?s targets in jeopardy. The paradox, however, is that there don?t seem to be too many alternatives if the government?s expansion targets are to be met.
So what will the government do? Well, with endowments, graduate taxes and top-up fees unlikely to figure, there will be some playing around with grants and market-rate loans. But the government doesn?t seem to have any long-term solutions. It seems the more prestigious research universities will be forced to build-up their own endowments through fundraising (Imperial is aiming at raising £350 million in five years). The universities lower down the pecking order are likely to wither away. As for the government?s "50% in higher education target"? They?ll probably have to find some way of claiming it without achieving it. Vocational education is already considered to be in the higher education sector. Perhaps they will just classify modern apprentice-ships to be too?