Thursday, October 21, 2010

Investment in education is key to reducing the deficit

This article first appeared in the New Statesman on 20th October 2010: http://www.newstatesman.com/blogs/the-staggers/2010/10/higher-education-government

By Sally Hunt, General Sec of UCU and Michael Burke


One of the strangest claims in the current debate on education is that raising student fees will enable British universities to compete internationally. If we take just the "elite" universities, this is already happening -- four out of the world's top 20 universities are British.

As ever, the devil is in the detail. If you sift closely through the Browne review, you will see that he recommends that no extra resources are made available for higher education, with the increase in fees designed to replace the withdrawal of funds from central government.

If the government follows Browne's advice, the chronic underfunding of higher education will deepen and Britain will fall further behind our economic competitors. In the space of eight years, the UK has gone from having the third highest graduation rate among industrialised countries to languishing in 15th place, according to the latest OECD survey.

This irrational approach mirrors the economic debate, which has become dominated by the Budget deficit. However, the deficit is a symptom of the current economic crisis, not its cause. And cutting spending will depress activity further, which will depress tax revenues and lead to deficit widening.

Education can and must be allowed to play a leading role in any revival. However, for that to happen, the government needs to follow the advice of the OECD, which recently recommended increasing investment in higher education to create jobs and raise tax revenues.

Annual spending on higher education in Britain is £23bn, for which the Treasury gets back an estimated return of £60bn. This arises from a variety sources including jobs, exports, innovation, royalties and so on. There is also a long-term economic benefit, which is slightly harder to measure, that comes from a more highly educated and productive population.

That £60bn is a return on investment and highlights the madness of cutting spending on higher education. Spending cuts will lose jobs, exports and innovation.

The cuts are all made in the name of being fiscally responsible, getting the deficit under control and not living beyond our means -- the economic saws of Thatcherism. But not only will the economy suffer as a result of education cuts, government finances will actually deteriorate as result.

This arises from two effects. First, taxes will fall as a result of a weaker economy. Second, spending will end up higher as the government is forced to shell out millions in welfare payments to those denied education places and made redundant from university jobs, including teachers and clerical, cleaning and catering staff.

If we look closely, the government's economics simply do not add up. A £1bn cut in spending on higher education leads to £2.6bn in decreased activity. This decrease in activity leads to both lower tax revenues and higher government spending, as mentioned above.

The same process also operates in reverse -- an increase of investment in higher education will produce a positive net return to government finances through increased activity and the higher tax revenues and lower welfare payments that flow from it. Every £1bn increase in investment in this sector would produce a positive return to government finances, which could be used either to reduce the deficit or to fund further much needed investment, for an even greater return.

Sally Hunt is general secretary of the University and College Union and Michael Burke is a former Senior International Economist for Citibank London.

A short-sighted approach to university funds

This article first appeared in the Morning Star on Saturday 16th October 2010: http://www.morningstaronline.co.uk/index.php/news/content/view/full/96445

By Fiona Edwards


Politicians who benefited from a free university education are now planning to kick away the ladder of opportunity for generations to come.

Earlier this week the coalition government welcomed Lord Browne's proposals to introduce a free market in higher education.

The plans represent a double assault on students - tuition fees are set to more than double to £7,000 per year and commercial interest rates will be introduced on student loans.

Lecturers' union UCU general secretary Sally Hunt summarised the report well.

"Browne's proposals would make our public degrees the most expensive in the world. At an enormous cost of between £40,000 and £70,000 for one child's education, it would be the final nail in the coffin for an affordable university degree for many ordinary families."

Student debt already tops £23,000. Increasing the burden on students and their families is completely absurd.

Before the general election all Liberal Democrat MPs signed the National Union of Students' pledge to vote against any increase in tuition fees.

In order to justify the Lib Dems' sharp U-turn on student funding, Business Secretary Vince Cable played the old Thatcherite card that there is no alternative because of the state of the public finances.

"My own party consistently opposed graduate contributions," he told the Commons. "But in the current economic climate we accept that the policy is simply no longer feasible."

Missing from his argument has been the central role higher education could play both in reviving the economy now and in promoting long-term prosperity and growth in the future.

Shadow business secretary John Denham hit the nail on the head with his rebuttal to Cable on Tuesday, saying: "Higher education is important not just for individual graduates but for growth, prosperity, job creation and our ability to succeed in a competitive world."

Nobel prize-winning economist and former head of the World Bank Professor Joseph E Stiglitz has also pointed out that we need "investments in technology, education and infrastructure ... such spending will stimulate the economy and create jobs in the short run and promote growth and debt reduction in the long run."

A briefing by the Free Education Campaign produced earlier this year pointed out that the previous government's figures reveal the immediate economic benefits that investing in higher education reaps.

The £23 billion spent each year on higher education, funded from both the public and private sectors, produces an economic return of £60bn, arising from a variety of sources including jobs, exports, innovation and so on.

That means for every pound invested in higher education, the economy expands by £2.60.

Treasury models indicate that half of this - around £1.30 - comes back in tax revenue, giving the government extra income on each pound to pay off the national debt or invest in other public services.

The latest evidence from the OECD suggests the return from investing in higher education is key to economic revival. The OECD Education At A Glance 2010 report stated: "Governments should expand tertiary studies to boost jobs and tax revenues."

It explained how the return would be much bigger than the original outlay.

"Even after taking account of the cost to the public exchequer of financing degree courses, higher tax revenues and social contributions from people with university degrees make tertiary education a good long-term investment."

The report shows that the gains are even higher in the UK, with up to a 382 per cent return.

Yet alongside the attack on students, Browne has made the assumption that there will be a huge reduction in state investment in higher education by cutting university teaching budgets by 80 per cent.

This failure to invest is going to exacerbate the serious problem of Britain falling behind other countries with regards to the number of graduates it is producing.

The UK is already plummeting down the graduate league table and is now below the OECD average for graduation rates. In 2000 it was a world leader, 9 percentage points above average.

Failing to invest will also deny thousands the opportunity to go to university, regardless of their ability. There is a real danger of creating a "lost generation" of young people, left behind without the necessary skills which will blight their future for decades.

The caricature conjured up by some that higher education is about academics sitting loftily in their ivory towers is far removed from the real role higher education plays - invigorating the British economy.

It needs to be invested in. The rewards will include tackling the national debt in the short term - and ensuring Britain has a highly skilled, high-growth economy in the long term.

Fiona Edwards is secretary of the Free Education Campaign.

The Free Education Campaign will be addressing a session at the Progressive Students conference called "Organising to challenge the cuts consensus: No to higher fees - invest in education." The session will take place from 10.30am to noon, Saturday October 23 at Birkbeck College, London. Other speakers to address the conference throughout the day include Ken Livingstone, Diane Abbott, Salma Yaqoob, Adrian Ramsay, Kate Hudson and Billy Hayes. The conference takes place from 10.30am-6pm. For further details visit www.progressivestudents.co.uk

Wednesday, October 13, 2010

Don’t turn your back on universities, Vince – invest in them to tackle the deficit

Fiona Edwards of the Free Education Campaign has written the following guest article for Left Foot Forward - the top left wing blog in Britain. Find the original here: http://bit.ly/9e6YzA

In order to justify the Liberal Democrats sharp u-turn on student funding Vince Cable played the old Thatcherite card that there is no alternative because of the state of the public finances.

He told the Commons:

“My own party consistently opposed graduate contributions, but in the current economic climate we accept that the policy is simply no longer feasible.”


But missing from his argument has been the central role higher education could play both in reviving the economy now and in promoting long term prosperity and growth in the future.

John Denham hit the nail on the head with his rebuttal to Cable yesterday saying:

“Higher education is important not just for individual graduates but for growth, prosperity, job creation and our ability to succeed in a competitive world.”

As Nobel prize-winning economist and former head of the World Bank, Professor Joseph E. Stiglitz has also pointed out:

“{We need} investments in technology, education and infrastructure… such spending will stimulate the economy and create jobs in the short run and promote growth and debt reduction in the long run.”

A briefing by the Free Education Campaign produced earlier this year pointed out that the previous government’s figures illustrate that investing in higher education reaps significant immediate economic benefits.

It revealed that the £23 billion spent each year on higher education, funded from both the public and private sectors, produces an economic return of £60bn, arising from a variety of sources including jobs, exports, innovation and so on.

That means for every one pound invested in higher education, the economy expands by £2.60. Treasury models indicate that half of this – around £1.30 – comes back in tax revenue, giving the government extra income on each pound invested to pay off the national debt or invest in other public services.

The latest evidence from the OECD suggests the return from investing in higher education is key to economic revival. The OECD Education at a Glance 2010 report recently stated "Governments should expand tertiary studies to boost jobs and tax revenues."

It explained how the return would be much bigger then the original outlay:

"Even after taking account of the cost to the public exchequer of financing degree courses, higher tax revenues and social contributions from people with university degrees make tertiary education a good long-term investment.

Net of the cost of degree courses, the long-term gain to the public exchequer averages $US 86,000 in OECD countries, almost three times the amount of public investment per student in tertiary education. Overall returns are even larger, as many benefits of education are not directly reflected in tax income (Table A8.4)."


The report shows that the gains are even higher in the UK, with up to a 382% return.


Yet alongside the double whammy attack on students – through plans to abolish the cap on tuition fees and introduce commercial interest rates on student loans – Browne has made the assumption that there will be a huge reduction in state investment in higher education by cutting university teaching budgets by 80%.

This failure to invest is going to aggravate the serious problem of Britain falling behind other countries with regards to the number of graduates it is producing.

The UK is already plummeting down the graduate league table and is now below the OECD average for graduation rates. In 2000 it was a world leader, nine percentage points above average.

The caricature conjured up by some that higher education is about academics sitting loftily in their ivory towers is far removed from the real role higher education plays: invigorating the British economy. It needs to be invested in. The rewards will include tackling the national debt in the short term – and ensuring Britain has a highly skilled, high growth economy in the long term.

London will be hit hard by student fees hike

This was originally published by Progressive London: http://bit.ly/9sezO1

Commenting on the government’s welcome of the Browne review into Higher Education funding, Ken Livingstone said:

“The higher cost of living in London means that students graduating from their degrees will be hit even harder here than elsewhere.

“The government talks about the need to reduce the national debt, despite the damage its approach will mean to the economy, but has no hesitation in ratcheting up graduate debt. The government is going to make students pay for an economic situation that bankers, not students, created.


“This policy will deter poorer students and squeeze very hard those on middle incomes once they have graduated.

“If the government imposes this policy it will have a particularly severe impact in London, which has the largest student population in the country and where those graduates already contending with the higher cost of living in London would be saddled with debt repayments at the same time as they struggle to make ends meet. Trying to pay for the cost of a flat is already hard enough for most graduates in London – now repayments on even bigger tuition debts will be hanging over them too.


“Boris Johnson has been silent on the Browne review today despite the particularly sharp impact the government’s approach would have on London. The mayor has time to write his £250,000-a-year Telegraph column every week but not to comment on behalf of families and students who will have to contend with even higher costs as a result of his Parliamentary colleagues’ attack on middle and lower income people.”

Alternatives to higher fees: Guardian letter from Sally Hunt

Yesterday the Guardian published the following excellent letter from Sally Hunt, General Secretary of the University and College Union:


A graduate tax is not the only alternative to higher student fees (A graduate tax won't happen but tuition fees can be fairer, 11 October). There are benefits to us all from public investment in our universities. For every £1 spent on higher education, the economy gets £2.50 back.

Our economic future depends on the quality of education our citizens have, yet politicians paint potential students as middle-class scroungers rather than as future higher-rate taxpayers. Even before the latest cuts, state investment in the UK was 10% below that of the US.

For the third time in a decade, it seems the main parties are misjudging the public mood on university funding – whether Vince Cable and Nick Clegg call the system a fee, a loan or a tax is immaterial to students and families, who already face a mountain of debt. A very modest increase in the UK's corporation tax rates to the G7 average would raise enough revenue to abolish tuition fees. Big business benefits massively from the plentiful supply of graduates, as does our economy, and should make a contribution.

Education is a right, not a privilege, and our country's future needs the talents of all, not just those with the deepest pockets and sharpest elbows.

Tuesday, October 12, 2010

DOUBLE WHAMMY ATTACK ON FUTURE STUDENTS!

“Lord Browne has launched a double assault on students with his proposal to abolish the cap on tuition fees and introduce commercial interest rates on student loans. Taken together these measures will result in students paying tens of thousands of pounds more for a university education.

If introduced these proposals will be a disaster for students, society and the economy. Instead of denying people the opportunity to go to university the government should increase investment in higher education because a highly skilled workforce is the key to Britain’s future economic prosperity.”

Free Education Campaign

THE UCU HAVE SLAMMED THE REPORT


Commenting on the report, UCU general secretary, Sally Hunt, said: "This is a savage attack on what a university is and what it can offer to all students - not just those with deep pockets - as it effectively privatises the cost of higher education from state to family.

Browne's proposals would make our public degrees the most expensive in the world. At an enormous cost of between £40,000 and £70,000 for one child's education, it would be the final nail in the coffin for an affordable university degree for many ordinary families.

As a result of this creation of a market for student places, we would see departments and universities close and a devastating effect on the curriculum as only so-called priority courses survive. It would become almost impossible to develop courses in new areas of knowledge without directly perceived economic benefit. If enacted, these proposals will weaken our position as a global knowledge centre."

THE NUS HAVE SLAMMED THE REPORT

Commenting on the release of the review, Aaron Porter, NUS President said:
"If adopted, Lord Browne's review would hand universities a blank cheque and force the next generation to pick up the tab for devastating cuts to higher education. The only thing students and their families would stand to gain from higher fees would be higher debts.

A market in course prices between universities would increasingly pressure on students to make decisions based on cost rather than academic ability or ambition. Those already feeling the pinch will clearly be unwilling to take such a gamble and face being priced out of the universities that would opt to charge sky-high fees.

There is no clear assurance that a hike in fees would improve student choice or quality and the evidence since fees tripled four years ago shows that neither student satisfaction nor quality has improved. Universities have not made the case for what they would do with more.

Any graduate contributions to universities should be determined by earnings in the real world after graduation, not fixed prices based on unreliable and misleading guesswork about average salaries."

Student leaders warn against more debt

A letter from a broad range of leading student representatives – including several NUS Officers and executive members – says the debate over the future of higher education funding should not focus solely on how to make students pay more.

The letter was first published by Liberal Conspiracy: http://bit.ly/9uCfdl

It comes ahead of tomorrow’s Browne Education Funding Review recommendations.

The letter

A government review into university funding will soon make its recommendations.

So far the debate has been totally one sided – focusing almost exclusively on how to make people pay even more for receiving a university education. Some in the Coalition government favour making people pay more through a graduate tax whilst others back higher fees of up to £7,000 per year.

With student debt already averaging £23,000, the idea that the cost of a university degree should increase further is absurd.

There are progressive alternatives to funding higher education which would tackle student debt and help Britain create the highly skilled economy it needs – rather than slipping further down international league tables of university participation as it currently is.

To this end, we welcome the UCU’s contribution to the debate, proposing that tuition fees be replaced by an increase in corporation tax.

We demand that the Coalition government uses the review to reduce the burden on students – not as an opportunity to increase these costs.”

Signed

Kanja Sesay, NUS Black Students’ Officer
Vicki Baars, NUS LGBT Officer
Fiona Edwards, Free Education Campaign
Joshi Sachdeo, NUS National Executive Council (NEC)
Rebecca Sawbrigde, Disabled Students’ Rep, NUS NEC
Sean Rillo Raczka, NUS NEC
Neelam Rose, NUS Black Students’ Committee
Cameron Tait, President of the University of Sussex SU
Helen Wakeford, President of University of Glamorgan Union
Kristy Wallace, President of University of Exeter SU, Cornwall Campus
Rosie Tressler, Women’s Officer, Nottingham University
Greg Brown, Environment & Ethics Officer of University College London Union
Aaron Kiely, NUS Black Students’ Committee
Beth Evans, NUS LGBT Campaign
Laura Ions, Communications Officer of Swansea Metropolitan University
Muhammad Sadi, Vice-President, London Metropolitan University Students’ Union
Dan Morgan, Campaigns Officer for Swansea Metropolitan University
Claire Flanagan, Vice President of University of Ulster Student Union
Jonathan Holmes, Liberation Officer, University of Lincoln Students’ Union
Sam Middlewood, Vice President of Brunel University Students Union
Andy McGowan, Funding Officer of Cambridge University Students’ Union
Mensur Burhan, Vice President Welfare and Students’ Rights, London South Bank University Student Union
Emma Wilson, Vice President Education & Welfare of University of Plymouth Students’ Union
Sol Schonfield, Communications Officer of the University of Sussex SU
Elaine Griffiths, Welfare Officer of Coleg Morgannwg
Rosanna Robinson, NUS Black Students’ Campaign, Further Education Representative
Zoe Scandrett, Women’s Officer of Kent University Union
Liam Walker, Student Life Officer of University of Cumbria SU
Oli Luton, Healthcare Integration Officer of Cardiff Students Union