A recent review essay. Thoughts from readers?
@ The Pacific: Good questions. My point isn’t that journals can’t adopt that stance, only that I won’t referee for…
12 responses to “On the transformation of British higher education”
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Collini is just accurate, alas. It's not a coincidence that, increasingly, non-British UK academics are escaping to the European continent (Netherlands and Scandinavia, and some spots in Germany — other systems remain largely close and parochial).
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I agree with the essay. My sister is at university at the moment studying a fine art degree and the quality of teaching is shocking. The budget has been cut that much and alot of tutors have left, so very few tutorials are run and most of them are oversubscribed. Considering each student paid £3000 (the rest is topped up by the Welsh Assembly) none of the money appears to have reached the Art school.
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I thought this review was brilliant. It made me very angry. I went for my undergraduate in philosophy in 2005 specifically to avoid the introduction, under Labour, of (more) so-called top-up fees, 'capped'(!) at £3 000. Five years later I was in graduate school observing riots over the introduction, under Tories and Liberal Democrats, of (more) so-called top-up fees, 'capped'(!) at £9 000. Well, not really 'top up', since arts and humanities now receive no funding at all. I wonder which party will add on more fees in the next few years. For sure, no party will reverse any of these stupid, myopic, ideologically-driven changes.
Still, at least I have a couple of diplomas to see me through the winter: one to burn and one to eat.
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The essay is misleading in a number of respects. The most important:
(1) It nowhere notes that the new framework leads to a significant *increase* in per-student funding for universities. Under the previous system, we received approximately £3500 p/a in government funding for a Humanities student and £3000 p/a in fees. Now we receive £9000 p/a. That's a £2500 p/a increase in teaching funding per student.
(2) It says nothing whatever about the loan framework for the new fee, which is dramatically more progressive than the US norm, and significantly more progressive than its UK predecessor. Students pay nothing back at all until they earn around £25,000 p/a (the median annual income in the UK is around £21,000) and during that time the loan is interest-free in real terms. Thereafter they pay it back at 9% of their income above £25,000, with real interest running at around 2%. Any residue is forgiven after 25 years. In most respects this functions more like a graduate tax than a loan, and – since the previous loan system operated similarly but had a repayment threshold rather below £25,000 – it actually means that graduates have to pay less per year than they previously did. The Institute for Fiscal Studies – not a particular friend of the government – estimated that the new system is actually more progressive than its predecessor. (It's of course legitimate to worry that all this will change, but we should note how it currently works too.)
(3) It repeats the shocking – but shockingly misleading – claim that the government has cut funding for undergraduate education by 80%, and cut funding for humanities subjects by 100%. But (i) in the short term there is actually an increase in government funding, since the government is paying the loan money up front; (ii) since the government is very substantially subsidizing the loans, even in the long term it will still be providing very substantial funding; (iii) the Humanities actually do better financially than any other subject under the new system. (Previously the government paid more than the £3500 baseline level to "high-cost" subjects, mostly sciences. The £3500 baseline is zeroed across the board (that's the "100% cut") and then the high-cost subject funding is somewhat cut too – but that doesn't affect the Humanities because, with a very few exceptions, Humanities subjects didn't get it anyway.)
(4) It represents the new framework as a radical turn by a radical new government. But (loath though I am to defend the current government) there is much more continuity than this. The Browne Report that started this off was commissioned by the previous government with all-party support and set up so as to report after the election precisely so this did not become an electoral issue; this is actually exactly what happened in 1997, in reverse, with the report that triggered the original introduction of fees in the UK. The changes made to the proposal by the government actually toned-down its free-market aspects (there was no hard fee cap in the Browne report) and increased the cost to the taxpayer. The Labour opposition attacked the fee increase mostly just because it was unpopular; virtually the reverse dynamic played out in the 2000s when the fee was raised to £3,000 by Labour.
Perhaps Newfield's, and McGettigan's, account of the sinister ulterior motives for the UK fee framework are nonetheless correct. But it's at least worth being aware of the straightforward face-value account: that the government genuinely wants to increase the money available for higher education against a backdrop of major decreases in government funding, for ideological or political reasons does not wish to raise the money through general taxation, and for ideological or political reasons thinks that the cost of a University education should be paid – in arrears, and to some extent – by those students who go on to be earning salaries significantly higher than the UK median.
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I was hoping that David Wallace would take the time to set the record straight. I'm in about 95% agreement with what he says. Taking on the role of his under-labourer, I'll mention two relatively small points of disagreement:
David's point 1. Though the bottom line is unchanged — about £2,500 increase in revenue per typical humanities and social sciences student to universities from the higher fees — the figures that make this up are a bit different from the ones he reports. Before the £9,000 fees, a university received just short of £4,000 per typical humanities and social sciences student in T-grant and just over £2,000 from fee income. Some of this money went to bursaries to "widen participation" among working class students, and the rest went into the university's coffers to spend as they choose. Under the £9,000 fees, a greater portion — perhaps about £500 more per student — now goes to bursaries. (It should also be mentioned that funding for research has been frozen in cash terms since the new government came to power in 2010. So there's been an erosion of that source of revenue for universities by inflation. The increase in revenue from fee income is also being eroded by inflation, as the fees have also been frozen at £9,000 for the time being.)
David's point 2: The income repayment threshold is £21,000, not £25,000.
To amplify, rather than quibble with, David's point 3: The government's allegedly independent Office for Budget Responsibility's current estimate of the amount that a student's loan will end up being subsidized through write-offs or lower interest rates is 35%. So the government will end up paying, out of general taxation, about £3,150 of the £9,000 that a university receives (minus bursaries) per student per year.
Given this fact, it's just claptrap for the author of the linked piece to write: 'While American policymakers fiddled with public funding, the British burned it. …If Thatcher once famously remarked, “there is no such thing as society,” Cameron has operationalized this as the somewhat less resonant, “there is no such thing as a public good.” For these latter-day Tories, even educational goods are private…'
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Just to clarify. All the points raised by Wallace and Otsuka are discussed in some detail in the first 3 chapters of the book.
Understandably, Newfield has concentrated on the way in which the argument develops in the later parts – for a US audience perhaps less interested in the funding detail. Incidentally, Wallace gets a lot of it wrong – e.g. repayment thresholds (as noted); interest ranges from RPI to RPI+3 (6.6% for last year, 6.3% this year while studying); write-off is 30 years; there was no fee cap in Browne, but there was a levy; etc.
But David Willetts, Minister for Universities and Science, has been very clear about the privatisation agenda (partly enabled by removing all direct grant funding to universities for arts, humanities, law, business, social science, etc subjects – yes, 100% to those subjects and 80% overall). The aim has been to create a 'level playing field' for 'alternative providers' but cutting public funding to areas where the latter can compete and extending access to loans for fees.
The straightforward 'face-value'/'unit of resource' account misses the conditions of the new market – particularly how recruitment is made more difficult for most institutions despite the obvious unmet demand. If cheaper new providers expand as planned, then the idea is that they should exert pressure to drive down the fees currently clustering at the maximum 9000 per year. With the Office for Fair Trading, an 'anti-trust' body, now announcing a 'call for information' on fee-setting in England, quite how long 9k will be the norm for humanities degrees is moot. They will clearly examine the policy of setting a flat 9000 fee regardless of degree course.
(See what's happened at Salford for humanities if you want a sense of the downside of the new market).As for educational goods: In the 2011 white paper, HE is clearly presented as a human capital investment – the return is to assessed in terms of higher graduate earnings: you would be hard-pushed to find any reference to non-private, non-market goods in that document.
LSE and Oxford will do fine out of these reforms. It's the rest of the sector where things are much less certain.
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To Mike Otsuka: You're right, of course, about the threshold (as Andrew McGettigan is about the timescale); I was writing from memory and should have checked. On the breakdown of the £6500, this might (I'm not sure) be a definitional matter: the fee income is c.£3000, and the notional (pre-reform) HEFCE grant is c.£4500, but c.£1000 of the grant is offset against the fee, representing the fact that the original £1000 fee introduced in 1997 was intended to ease the burden on the Treasury, not increase University funding (this is another minor error in Newfield's review). I suppose it's a matter of taste whether that offset is placed against the fee or the grant; Oxford's internal accounting does the former but there's no deep reason to.
To Andrew McGettigan: guilty as charged on repayment threshold and write-off (see above). I don't accept your other two "corrections": "real interest around 2" is my simplification of "RPI to RPI+3" (there might be a discussion to have about the definition of inflation but if that's your point it's a substantial matter for debate rather than a factual error; you can legitimately object that I didn't discuss interest during the period of study if you like, but it's a fairly minor real-terms correction and I was aiming at brevity); I said nothing either way about a levy in Browne (though I'm perfectly aware of it; there's a reason I said that there was no *hard* cap). What other facts do you think I get wrong? Your "a lot of it wrong – e.g…." implies that there's more to come.
I don't think Newfield can really be let off the hook because of the target audience: much in the review is actively misleading about the framework, not simply silent. But I'm glad to hear the topic is discussed more responsibly in the book itself, which I look forward to reading, and an author is of course not responsible for distortions and misrepresentations in a review.
On "educational goods": I'm not particularly a fan of the Browne Report's rhetoric, which does dwell extensively on the economic case. But you wouldn't actually be that "hard-pushed to any find reference to non-private, non-market goods" in the report: the very first paragraph of "the investment case for higher education" reads:
"Higher education matters. It helps to create the knowledge, skills and values that underpin a civilised society. Higher education institutions (HEIs) generate and diffuse ideas, safeguard knowledge, catalyse innovation, inspire creativity, enliven culture, stimulate regional economies and strengthen civil society. They bridge the past and the future; the local and the global".
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David: When I was on the verge of becoming HOD of Philosophy at UCL, before absconding to the LSE, I had a meeting with the Provost/President and the Dean to discuss my plans for the Department. In drawing up these plans, I calculated how much extra revenue the university would receive from Philosophy students after the introduction of fees. I made sure to double-check my figures. These are the ones I came up with for the year just prior to the charging of £9,000 fees: "£3,951 HEFCE Group D T-grant + £3,375 fees – £1,310" offset, which I subtracted from fee income, to arrive at my figures above of "just short of £4,000 per typical humanities and social sciences student in T-grant and just over £2,000 from fee income".
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As I said, this is discussed in chapter 2 of the book. Of course, there is more resource per student if the maximum tuition fee is raised from c. 3 500 to 9 000. (And I do think the discussion above of how grants and fees broke down is inaccurate: no mention of London Weighting, for example, which changes the figures for LSE, while the 'baseline cut' to the other subjects ranges from 4 000 to 4 600 pa per student).
The issue I focus on is why universities and colleges have not, by and large, set fees around the government's target of 7 500.
But really these are all preliminaries and the effects of these reforms are not to be judged by what fee levels are over these first few years. It's fundamentally about market reform.
Universities have used cross-subsidy extensively – philosophy departments where they exist have not managed to keep the surpluses you're assuming. I discuss Middlesex in the opening pages, but they deemed that any department not contributing 55% of its income to central allocations was 'loss-making'.
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Looking back through HEFCE documents, I see that some of my above figures are from 2010-11 rather than 2011-12, the latter of which is the year just prior to the introduction of £9,000 fees in 2012-13.
So here, for the record, is the income per student in different subjects that a university (charging the maximum fee) received in 11-12, and then in 12-13 when fees went up to £9,000:
Group D (including business and all of the humanities and social sciences apart from those listed in Group C below):
11-12: Standard resource of £3,670 + £3,375 fee – £1,345 = £5,700
12-13: Standard resource of £0 + £9,000 fee = £9,000
INCREASE: £3,300Group C (including modern languages, fine arts, psychology, geography, mathematics, archaeology, and architecture among others):
11-12: Standard resource of £4,771 + £3,375 fee – £1,345 = £6,801
12-13: Standard resource of £0 + £9,000 fee = £9,000
INCREASE: £2,199Group B (including engineering and the natural sciences, but not clinical degrees):
11-12: Standard resource of £6,239 + £3,375 fee – £1,345 = £8,269
12-13: Standard resource of £1,483 + £9,000 fee = £10,483
INCREASE: £2,214Group A (clinical medicine and dentistry, and veterinary):
11-12: Standard resource of £14,680 + £3,375 fee – £1,345 = £16,710
12-13: Standard resource of £9,804 + £9,000 fee = £18,804
INCREASE: £2,094So, with the introduction of £9,000 fees, the increase in a university's income per humanities and social sciences student was about 50% greater than per students in other subjects.
I agree with you that universities may use income from Group D students to cross-subsidize other students. I also agree that these figures just report income from the first year under the new fees, and that we also need to consider the extent to which these changes — and others, such as AAB+ (now ABB+), core and margin, and the increased role of for-profit institutions — introduce market pressures that will have long-term effects.
My figures for 11-12 are somewhat at odds with your figures in Table 2.1 of p. 27 of your book. I'm not sure what accounts for the discrepancies. All of my 11-12 figures are drawn from Table C of HEFCE's document spelling out their recurrent grants for 2011-12, released in March 2011. The source for Table 2.1 that you list below your table (which is a now-dead HEFCE link that I was able to retrieve via internet archive's 'wayback machine') doesn't shed light on how you arrived at your 11-12 figures.
Re London weighting: You're right that my figures ignore that. But my understanding is that this weighting is essentially unchanged pre- and post-£9,000 fees, and therefore the increase in income per student across the different Groups is about the same, whether the university is inside or outside of London.
Notes of explanation for readers:
(i) The "Standard resource" is the government's actual teaching grant to universities per student.
(ii) The maximum tuition fee was £3,375 in 11-12. But a university didn't receive all of that fee as income. It received only the "top up" introduced in 2006 of the original £1,000 tuition fee that was introduced in 1998. So one needs to subtract £1,345 in "Assumed fee income", which is the original £1,000 fee adjusted for inflation.
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Why this talk of going beyond a 'face-value account'? What's going beyond a 'face-value account' about collecting Willets' statements? What McGettigan does there must constitute a service to the authors of this policy, even if, in choice of register and venue, they had originally allowed such statements to have a more limited reception. Now that the public has largely accepted the silly story that these reforms help with the deficit, and now that the question of public provision in higher education is so nearly settled beyond recovery, surely the authors of this policy might wish that there was wider readership for their stated analysis, as the work of putting it all into practice goes forward? No?
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Forgive me, two Ts in Willetts.
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