Thursday, October 21, 2010

A short-sighted approach to university funds

This article first appeared in the Morning Star on Saturday 16th October 2010:

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

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