Vince Cable is, if you’ll pardon the pun, deep in the Browne stuff. Lord Browne’s proposed reforms to higher education funding – and overall rise in tuition fees they represent – have quite understandably upset a significant portion of the party. Cable’s whole-hearted endorsement of them has led to the accusation that we’ve gone back on one of our core principles in the name of political expediency. This accusation is not without merit, but let’s map out the situation as best we can.

Significant cuts are in the pipeline for higher education. Already this year restrictions have been placed on the number of places universities are able to offer students, resulting in a decrease in available places of 10,000. Without additional funding, fewer people will be able to go to university. Some people may hold that this is not necessarily a bad thing – graduate-level employment opportunities are below the number of graduates universities are already producing, seemingly creating an oversupply of young people who will be disappointed by the reality of post-university life in a difficult economic environment.

The problem is that the sheer scale of the cuts planned will cripple the ability of universities to provide significant numbers of places for many years, even when the economy begins to pick up and increasing numbers of graduates are required.

Our MPs therefore face a quandary. If they rebel against this measure, they may yet cause a chronic shortfall in higher education that will condemn the UK to a substandard educational system for at least a decade, putting us well behind our competitors. If they do not, they will be actively working against the free provision of education, which to any liberal must be seen as a public good. Knowledge is one of the greatest liberating factors in any life, and the promotion of its acquisition by any individual lies at the heart of liberalism.

It is not, however, illiberal to say that the extent to which the acquisition of knowledge can be promoted by the state must be partly determined by the capacity of the state to do so. We want to promote the cause of learning and knowledge forever, not just for now. Universal principles must also be eternal, and therefore our approach to implementing them must be based on sustainable and pragmatic foundations. Browne’s report is limited in this regard – it focuses purely on a sustainable funding mechanism for higher education, which although it includes some support for the less well-off in the form of maintenance grants and so on, fails to provide scope for the state to expand its role in the provision of higher education when economic circumstances differ.

It also has another serious shortfall: it aims to create a free market in higher education using the wrong market participant. The aggregate demand of 18-year-olds across the country will not necessarily lead to the provision of courses with a wider economic benefit – and herein lies a key issue.

State investment in education can be considered as analogous to state investment in other economically beneficial areas, like infrastructure. The provision of graduates can in itself be considered a public good; scientists, doctors, teachers and engineers all provide a strong contribution to our economy – a contribution which justifies funding from general taxation, even if that leads to the less well-off funding the children of the middle classes.

However, the decisions made by prospective students when applying to university are not directed towards contributing to the economy, because they involve answering questions which only have individual rather than public impact. For example, factors impacting on which course to take certainly include issues like future employability and skills acquired as a consequence of the course, but also include factors like, ‘How do I want to spend the next 17% of my life?’. Three years is a long time, and the potential enjoyment to be gained from a course will factor into a prospective student’s decision-making.

This may lead to a future HE market producing an abundance of graduates who do not necessarily return the investment made in them by the state to the economy. The factor that may prevent this in a completely free market system – the requirement to repay debt regardless of circumstance – has been neatly removed by Browne’s proposal to only start repayment of fees after the £21,000 threshold. I can therefore safely predict that if Browne’s proposals are implemented in full, they will ultimately not produce the sort of higher education sector we would want while including some sort of state provision.

And I would say that, as liberals, we do want some form of state provision. Lack of access to social capital means that the less well-off will take on substantially greater risk than their better-off counterparts if the burden of fees is on the student, hampering social mobility and your chance of freeing yourself from the circumstances in which you were born. Browne’s proposals aim to rectify this, but in doing so amplify the market distortions already present in HE provision.
I therefore propose that we accept Browne’s proposals as they are, but add in an extra element that will go some way towards rectifying the errors in the proposals and simultaneously allowing us to demonstrate that we remain committed to free higher education. The extra element is a state-backed buyer of courses consisting of a consortia of representatives from the public sector, business & industry (i.e. the sector skills councils) and the research establishment. The responsibility of the buyer is to anticipate demand for particular types of graduates in the near term and structure their purchases accordingly.

Students could apply for the courses purchased in this manner and receive fee-free education. Courses would be allocated by a progressive system based on parental income deciles (i.e 30% of courses for the first decile, declining to zero towards the end) and by the talent of the student. Similar schemes already work relatively successfully in the vocational sector with industry-backed apprenticeships – this would be a broadening of scope.

The aim would be to distort the market, but not dominate it; universities would naturally aim to capture a share of the courses bought and adjust their offer accordingly. The number of courses purchased would fluctuate depending on the finances available to the Government, making it sustainable regardless of circumstance. It would ensure that education would be free for perhaps up to 30% of the student body at any given time, while retaining those elements of the Browne proposal that ensure the less-well off have relatively less risk when applying to university even if they are not on a course bought by the consortium. It could perhaps be considered a bursary on a massive scale.

Retaining the principle that education should be free for those best able to take advantage of it would be a relatively lesser watering down of our commitment on tuition fees than accepting Browne’s proposals wholesale. But given that this is merely a suggestion on a blog, it’s unlikely to get near Government; Cable’s recent email to members indicates that alterations to the proposals will be piecemeal at best. Given that this is the case, I cannot see any way forward for our MPs other than to vote against the Browne proposals and push the ball back into the Conservative (and Cable) court with an amendment demanding that higher education be paid for by raising capital gains to equal income tax – or simply protected from the cuts entirely. After all, spending on infrastructure – intellectual infrastructure in this case – is legitimate form of deficit spending.