Competition and Universities: building new Higher Education policy

We took a severe beating in late 2010, from which we’re still not entirely recovered. From here, we can go in two directions: we can build a Higher Education policy that we can be proud of, or we can leave our policy in the pieces it’s currently in, and prepare for 2015’s brutal assault.

It’s hard to see a treasured policy fall apart under the pressure of electoral and financial reality. We all know there are positive aspects of the increase in graduate contributions that we can claim as ours: a Labour or Tory government would not have faced the public scrutiny that our reversal did. It was harsh and damaging, but the result is a better policy, as the FT notes. Decline in University applications seems to be less pronounced than previously believed, more broadly representative of the number of teens finishing Further Education, when accounting for the rush for places last year.

Crucial reforms to Higher Education needn’t cost the earth, or be beyond us in times of fiscal contraction. In fact, some reforms would increase standards of teaching, which can be poor as Universities place more emphasis on research. Not all University degrees are currently worth £9,000, whether paid for through taxes or individual contributions. We can, however, bring reform to make sure Universities are competing in the ways that they should.

The Conservative party’s moves towards limiting foreign students are designed for their social conservatism, and against the free-market principles for which we’re perpetually told that they stand. There’s room for Liberal Democrats to lead on sensible, open immigration policy for international students, who enrich and help to fund undergraduate education.

I hope that paying almost the full cost of their degrees in graduate contributions will make the students of 2012 take a close look at their educations and demand value. Tim Leunig’s proposals for reforms to allow universities to attract students from other institutions would shake some from an uncompetitive relaxation.

Most importantly, we need something new and radical. If we so desire, we could go into 2015 with the policy we pursued in 2010, as Lord Smith of Clifton has argued. We could advocate the total abandonment of contributions, contrary to what we’ve practised in government. But when I’m taking my turn staffing our Liberal Youth stall at Freshers’ Fayre in September, I’d like to be able to advertise some progressive, pragmatic and liberal reforms to a system which isn’t going to be overturned any time soon.

Mike Bird is a LibDem activist and student at Exeter University

* Mike Bird is the Chair of Liberal Reform

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12 Comments

  • @Graeme Cowie
    “That’s what really affects the ability of the less well-off to attend University, rather than the fees”

    The issue about tuition fees isn’t about people from poor backgrounds being put off university – it clearly doesn’t affect them as the fees aren’t paid up-front. There are two issues with tuition fees: 1. Is it fair that the average graduate uner the new system will pay far more in taxes and tuition fees over the course of their lifetime than they receive in the cost of their tuition? – why is it fair that they should subsidise those that don’t go to university? 2. Are the payments fair across the income bands – if you believe in regressive taxation (as is the case with the new system) with the rich paying less then the answer is, yes.

    “which as we know are only paid back according to what you’re earning later.”

    Yes, it’s always worth repeating that those graduates on higher incomes will pay less than those on middle incomes under the tuition fee system. The opposite of a graduate tax.

  • @ Steve

    By the rich paying less, I can only assume you mean that they do so because they pay their contributions over a shorter period of time, thus accruing less interest? It really does depend on the figures, due to rising interest as more is payed back in a shorter period of time. You’d have to define much better what you mean by rich and middle income salaries.

    How are they subsidising those who don’t go to University? Until recently, it was the other way round.

  • Callum Morton 16th Jan '12 - 7:16pm

    The point of this coalition government (or so we keep telling people) is two parties working together in the national interest. We said that our pledge break on tuition fees was due to us being in a coalition and not having a majority. Are we really suggesting that we invent a Labour-style policy and forget our message? We keep saying coalition is about compromise. By going off into the wilderness with our HE policy we would be forgetting our roots and what Liberal Democrats are supposed to stand for. We would also be losing the little faith the public still has in us.

    We said Further Education would be better without EMA. It isn’t. Let’s not do the same with HE!

  • It’s not just because of the coalition, Callum. We have made quite a point that the new system is a fairer way of managing repayments, and we’re right. I don’t really see how this would be a Labour-style policy, just an acknowledgement that going into an election proposing the total rejection of graduate contributions (which we just imposed) are inherently unfair.

    Especially now that we now publicly accept that there will be considerable public spending constraints in the next parliament. The costed plans don’t really work any more, in my opinion. They might well in the future, if that’s what we want. I don’t agree with it personally. Electorally, going into the next GE advocating an abolition of payments is just impossible. We’ll be an absolute joke.

    Further education is, in my opinion, better without EMA, and better with a targeted system. There was a huge amount of unnecessary payment to students.

  • Callum Morton 16th Jan '12 - 8:24pm

    Agree to differ on tuition fees! But I’ve spent the past couple of years dedicated to students in the FE sector and, whilst EMA wasn’t perfect by any means, it did achieve a monumental amount. Most don’t have the facts when it comes to EMA. It increased attendance, retention, enrolment and success rates – all for the less well off students. “no-one shall be enslaved by poverty, ignorance or conformity” comes to mind.

  • We’ll have to agree to disagree on EMA too, I’m afraid! I saw some pretty obvious abuse of it myself, and was happy to see a targeted system for expenditure on necessary travel etc. proposed as its replacement.

  • @Mike Bird

    “How are they subsidising those who don’t go to University? Until recently, it was the other way round.”

    The average graduate earns ~100k more in their lifetime than the average non-graduate. Taking a sensible guess of a tax rate of 35% on that 100k, the government takes an average of 35k more in taxation from the average graduate compared to the average non-graduate. If the cost of their university tuition was less than 35k then graduates were, on net, contributing more to the costs of tuition than they were receiving in tuition, and that’s before we even take tuition fees into account. Under the new system, a graduate is expected to contribute 35k plus 27k in tuition fees = 62k extra to the government over the course of their lifetime compared to non-graduates.

    Yes, the aggregate interest paid by the high earning graduate is less and when we use the definition of tax progressivity (tax paid as a proportion of gross income), tuition fees are regressive above salaries in the 30k-40k range.

  • Matthew Huntbach 17th Jan '12 - 11:58am

    Given that Tim Leunig actually IS a university lecturer, he seems remarkably out of touch with the reality of university life, one of his favourite tricks being to propose something that already exists and is commonplace as if what he’s saying is some major innovation of his own devising. Take this from him:

    Of course, the best form of competition would be to allow students to move from one university to another after they have started their courses. LSE takes foreign students for a year, under the general course programme. They take second year courses, and if they do well enough, and prefer LSE to their previous university, then they can stay on for the third year and graduate with an LSE degree.

    Imagine making this the norm for every British undergraduate. Now that would concentrate minds in senior common rooms across the country.

    Such things already exist. When I was the admissions tutor for my university department I very often handled applicants from other universities who wished to join our second or third year. There was a box you could tick on the UCAS form if that is what you were doing. Academic Regulations for our university laid down how such people should be treated, and I suspect the same applies to every other university. There are also a variety of exchange schemes, so students can spend time at other universities and get credit for it. Dealing with such cases was a standard part of my job when I was my department’s Exam Board chair.

    During the time I was dealing with admissions, creaming off the top layer of the first year of “less prestigious” universities to join our second year sometimes seemed a good recruitment strategy. Indeed, we got a fair number of such applicants. However, a big problem was that in a decent degree course one thing follows from another in order to get the students to a specialist stage, different universities teach things in different ways with different emphases so each can make use of its own specialists. The consequence is that someone who has passed, even done well at, the first year of one university is not necessarily equipped to enter immediately the second year of the same subject at another university. In fact our experience was that when we recruited students who had done well in the first year of other universities, there were often big gaps in what they had studied so they just did not have what we needed for our second year. However, when we told our potential new recruits “OK, but you’ll have to start in our first year”, few were willing. Worse still, we had cases of people who pleaded with us to let them into our second year, saying “I’ll do what’s needed to catch up” and we relented, but then they failed their second year exams because they couldn’t. The career of such a student is hugely damaged – they can neither move forward nor move back. After several such sad cases, I became much more wary of this sort of thing.

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