Wednesday, 1 September 2010

Dr John Green Guest Blogs - An Insider’s Guide to Changes in British Universities - 2 - Fees and Privatisation




During the last government, Lord Browne was tasked with carrying out a review of how tuition fees should be modified as the cap was lifted – when the £3,000 tuition fee was introduced by the last government, a concession was that it would rise by no more than inflation and that it would be capped for five years. A change of government and the influence of the Liberal Democrats in the coalition means that all bets are off for how the fee system will evolve in the wake of Lord Browne’s review. What are the likely outcomes of the review and how can we expect the government to respond? And what is the likely impact on students and universities?

Lord Browne’s review was supported by all parties and he began his work under the previous government. Until the new coalition came in it was speculated that fees would be raised (and a figure of £7,000 was widely heralded). However, it is also expected that there will be some allowances for differentiation by university - universities have differing teacher to student ratios and styles of tuition - and by course. This fed from ongoing student unrest about the fact that fees are the same for arts courses as, for example, clinical medicine courses though their operating costs are wildly different.

Recently, a surprise intervention from the Vince Cable suggested the abolition of fees altogether and directed Lord Browne to consider a graduate tax, whereby graduates would pay a tax proportional to their earnings throughout their life. It is now seemingly supported by David Willetts and David Cameron and Lord Browne has been directed to consider it seriously, although there is some feeling that this concession to Liberal Democrat policy could diminish after the summer recess. However, what this clearly shows is that there are significant funding gaps and there is no clear and fair way forward to meet that gap.

Running parallel to this, is the possibility of privatisation of universities. It is no secret that the top UK universities have long been examining the implications of freeing themselves from the government constraints of quality assessment regimes and reporting. They have made no secret of the fact that they have also evaluated the cost of doing so - the loss of quality-assessed elements of grant funding and a dependence on government funds channelled through metric based criteria are an unwelcome intrusion on universities’ freedom to mange their own affairs and one which they would gladly be rid of. For the top universities government funding now represents possibly 15% or less of their income - therefore they see the opportunity of being self-funding and independent.

Such a move would change the whole structure of UK higher education and make it similar to the US, creating a “premier league” of exclusive, highly selective universities similar to the Ivy League. Top universities would then be free to charge fees to meet their chosen market. Ivy League universities have sufficient endowment funds to ensure that all applicants, irrespective of income can be admitted - for example 50% of students at Harvard are funded by endowment bursaries. However, the UK is nowhere near having the funds to achieve such support - so if the top universities were to privatise the effect on the socio-economic student profile could be very damaging.

It is, I believe, inevitable that fees will continue to be charged to students (either contemporaneously with their study or as a post-study tax), albeit there will be some loan/deferment system in order to protect fair access. It seems inevitable that those fees will be variable and that students at “better” universities will be charged greater fees – probably akin to levels in the US. Thus fee levels of £25,000 per year at some of the better universities are not out of scope within the next few years.

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