This academic year has seen the entry of the first cohort of undergraduate students under the new fees regime. In the first article of a British Politics and Policy special feature John Holmwood reflects on this new regime and the broader changes which brought it about, arguing that higher education has a enduring public value which is obscured within the contemporary debate but that the public university faces an existential threat. 

The academic year has started with the entry of the first cohort of students under the new fee regime. Direct public funding of arts, humanities and social sciences degrees has ceased, with students charged fees of up to £9000, underpinned by a new student loans system. Already, however, it is apparent from a recent HEPI report that the financial calculations on which the loan system is based are precarious. The system is likely to cost as much as the one it replaces, albeit that the cost is deferred from current tax payers onto future tax payers (the latter will, of course, be made up by a significant proportion of graduates indebted to that loan system).

The potential costs of the loan system have led to a restriction of student numbers (not intended by the Browne Review) alongside a zero-sum competition for students through the core/margin system, which during the present academic year will be extended from AAB to AAB (and potentially also extended at the lower end, where 20,000 students were taken out of the core for the current year, with more indicated for the following year).

HESA data does not become available until later and universities have sought to protect their commercial interests by not releasing their data on student application ahead of the release by HESA, not least because they have already begun recruiting for the next academic year. However, it is clear that Russell Group universities are early losers, with their announcement that income from undergraduate degree programmes for the group as a whole has been reduced by £80million (it is unlikely that this is distributed across the group, but it is opening up a division within it). It is also becoming clear that the volatility in student numbers is concentrated within arts, humanities and social sciences rather than STEM subjects.

This is ironic since the Russell Group was an enthusiastic advocate for the new regime, and continues to see its salvation in its further extension to remove the fee cap. Some vice-chancellors within it have been calling for a loans system differentiated by university and course and based upon their differential likely default rates. This call does not fall on deaf ears with David Willetts expressing frustration at not knowing the RAB charges for individual universities, with the implication that a more fine-tuned restriction on numbers could be linked to them.  The Russell Group also calls for greater concentration in research funding, in order that they can compete in a global system of higher education.

The issues are linked. Overseas student fees provide an indicator of the fees that might be charged to home students, and why differentiate between home and overseas students in a global market? Higher student fees, in turn, will enable fee income to be diverted to support research (and other activities).

However, given their spectacular miscalculation over fees, the worry must be that Russell Group vice chancellors have played into the hands of a Government looking at ways to make further cuts to spending and eyeing direct research funding as a potential budget to be cut. Having already abolished the ‘dual funding’ model for undergraduate degrees introduced by the Dearing Review, why not abolish dual funding of research and shift QR money to Research Councils and direct it towards future ‘impact’, rather than reward past ‘impact’?

From the Government’s perspective, TRAC/fEC data suggested that, at an aggregate revenue of £7,500 per student for arts, humanities and social science students under the old fee regime, part of this income was diverted toward research.

Now that many universities are charging £9000 fees aren’t they diverting even more toward research? Where the availability of funding through QR was used to pressure ESRC and AHRC to drop their small grant schemes, with the Government suggesting this was what QR was for, the charging of higher fees will potentially be used to argue that QR money be shifted to Research Councils for ‘competitive’ application. This would also reinforce concentration, since the distribution of RCUK income is more skewed toward research intensive universities than is QR income.

What should be evident is that these developments reinforce a stratification of universities and begin to strip out the research function from many universities. All of this before the larger scale entry of for-profit providers competing with that function already absent from their model. But the issue is not only concentration, but also selectivity. What this means, from the government’s perspective, is that universities need not offer a range of subjects but should focus on their areas of ‘excellence’ (including excellence in attracting students).

Selectivity is increasingly likely to select against the arts, humanities, and social sciences. The exception will be those subjects for which there is a strong vocational demand, or those at the upper end of the Russell Group, where ‘positional status’ of the institution outweighs vocational aspects (or is, itself, an advantage in employment). Without undergraduate student numbers, the research basis of a subject is also diminished in the emerging market model.

Much has been written about the philistinism of the Browne Review and the White Paper that followed it, not least by Stefan Collini in the LRB and his subsequent book. The wider public benefits of higher education identified by all previous reviews are neglected in current policies. Investment in human capital, the student as consumer, and the economic significance of the knowledge economy are the only concerns.

The Robbins Report identified four public benefits. These were the public benefit of a skilled and educated workforce (paragraph 25), the public benefit of higher education in producing cultivated men and women (paragraph 26), the public benefit of securing the advancement of learning through the combination of teaching and research within institutions (paragraph 27), and the public benefit of providing a common culture and standards of citizenship (paragraph 28). Of these, only the first remains as an explicit concern of public policy.

Robbins also wrote that decisions  “should be coherent and take account of the interests of all sectors of higher education, and that decentralised initiative – and we hope there will always be much of this – should be inspired by common principles” (paragraph 20). Market mechanisms are frequently advocated as the paramount means of decentralised decision-making, but it should be clear that they are obliterating three of Robbins’s common principles. Moreover, they seem to be doing so in pursuit of narrow sectional interests within the sector, those of the Russell Group and those interested in deriving profit from higher education.

We know from the recent experience of Hurricane Sandy in Haiti and the Eastern USA that the main victims of natural disasters are public infrastructure and the powerless. With Hurricane David it is the same. The public infrastructure of teaching and research, of the subject array of arts, humanities and social sciences, and of knowledge and debate necessary for a functioning democracy are all at serious risk. The ‘powerless’, in the analogy, are those who lack ‘clout’ in the electoral politics of taxation.

The new cohort of students, and all subsequent cohorts, are asked, as a consequence of a student loan system, to contemplate the equivalent of a 9p in the £ tax on incomes over £21,000 (a threshold that can be reduced by any future government), while tax on incomes over £150,000 was reduced by 5p in the £ because it was a disincentive. The former are also expected to pay for the public benefits of higher education that remain, should the market fail to eliminate them.

It is often argued that it is unfair that those without qualifications should pay for the costs of higher education when they do not directly benefit. As I have suggested, there is a wider benefit, but, in fact, public attitudes are different than supposed. The British Social Attitudes survey show that the commitment to public education remains high among all groups, but is falling fastest amongst graduates. Among the latter group, 42% are in favour of raising fees, with 30% also in favour of a reduction in student numbers. The equivalent figures among those without qualifications are 11% and 19% respectively. Given that the former group is made up of beneficiaries of an earlier system of funding, it seems clear that their views are little more than the protection of their sectional advantage.

It is clear that key actors have their eye on the US system and the favourable position of some of their universities within international rankings. But as Howard Hotson has shown, those universities serve a very narrow section of the population. At the same time, fees have been spiralling, participation rates falling in some states, and the activities of for-profits likened to sub-prime selling in a recent Senate Report. The system generates higher levels of investment than the UK, but that investment is inefficient and has worse outcomes once proper comparisons are made. British public higher education, in contrast, outperforms other systems in teaching, research and in efficiency.

An analogy might be made with health. There is more investment in the US for poorer outcomes and great social inequalities in access. No-one could doubt that there are fine hospitals in the United States, but they deliver health care for the few, while the many are neglected. The situation is the same with higher education.

As the HEPI report shows, the public will continue to fund the system to a similar extent as previously through the cost of the loan system. Yet, why should they have an interest in the success of a few institutions that serve an elite, rather than local universities that serve their local areas and are likely now to be starved of resources. The sectional interest of the Russell Group is falsely raised to a public interest. The emphasis on individual universities and their success within international rankings masks a system that fails the wider public that continues to fund it, albeit indirectly.

Natural disasters create victims, but they also create solidarities. The question for us is whether the social disaster that is the coalition government’s policies for higher education will generate the collective solidarities necessary to defend public interests.

Note:  This article gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting.

About the author

John Holmwood is Professor of Sociology at the University of Nottingham and President of the British Sociological Association. He is a co-founder of the Campaign for the Public University.

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