For Staff

Responding to the government's graduate fee proposals - December 2010

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By the time you read this, MPs will in all likelihood have voted on the contribution graduates will be expected to make towards their degrees from 2012 onwards.

The principle that students should meet some of the cost of their education - and that a higher education system with over 40 per cent participation could not be funded by taxpayers alone - was enshrined in law and public policy (in England) in 1997. Upfront fees were replaced some nine years later by a fairer system of contributions, which could be paid after graduation.

So it takes some doing for the coalition government to have rendered this issue so controversial and emotive.

Part of the explanation lies in the Lib Dem's misguided pledges on fees, which evoked heartfelt protests from young people, a blizzard of comment and debate and a fair amount of cynical political posturing. But it is the draconian nature and distribution of the £2.9bn government cuts to higher education (from a budget of £7.1bn) that has caused such unhappiness and has even raised questions about the very principle of graduate contributions.

Inconsistent decisions flying in the face of stated policies have also added to a sense of injustice; from 2012 onwards, universities charging students more than £6,000 a year will be required to satisfy increasingly stringent conditions for widening participation and access, while at the same time the government is abolishing the education maintenance allowance (EMA) and Aimhigher.

The proposed removal of government funding of some £3,700 from every undergraduate course - effectively withdrawing all direct funding from arts, humanities and social sciences courses - is deeply problematic, and sends the wrong signals about the value of these subjects. If one of the government's responsibilities is to bend and shape higher education in the national interest, it should maintain a stake in the teaching of every student in the land, and the simplest way of doing that is directly funding every course. Their explanation - that this is a re-routing of government funding via the student fees loan (some 40 per cent of which will never be recovered) - although technically correct, is a complex message that is currently failing to win hearts and minds.

Every day brings a different statistical analysis of the new fee regime but they generally agree that the poorest students will be better off. The Institute for Fiscal Studies forecasts* that those in the bottom 30 per cent of lifetime earnings would actually pay back less than under the current system, while only the highest-earning 30 per cent of graduates would pay back the full amount of their loans. That is an effective subsidy for the less well off from the taxpayer, and from wealthier graduates who will pay more. There are some 580,000 part-time students; under the current system, they are all paying upfront fees; in future they also will be able to borrow the full cost of their education and pay it back when they can afford to.

Debate and protest will continue until and beyond December 9, but my prediction is that the raising of the cap on fees to £9,000 will go through Parliament, to be followed later this month by more detail about the 40 per cent higher education cut in the funding letter from BIS to HEFCE, and then finally in HEFCE's funding letters to individual universities in January. We expect these letters and the proposed spring White Paper to provide more detail about our funding for the years up to 2014/15.

To be clear - we expect the government to have removed some £60m annually from our teaching budget by 2014/15 and the only realistic and viable way forward is an increase in fees, to a minimum of £7-8,000, if we wish only to stand still. Research and science funding has of course been protected (albeit with a cut in real terms of around 9 per cent by 2014).

Our world will begin to look very different. Decisions on fees will have to be strategic and reflect the quality of education we wish to provide; are we content to 'stand still', or will we generate enough to invest in more staff (or recruit fewer students) and facilities? We have set up a pricing and bursary review to bring forward an initial report to Senate (and Council) next month.

Differential fees will potentially cause volatility in student demand from year to year and across courses, and I am sure we will not be immune from this. If we wish to continue helping to support subjects through difficult times, we will have to generate larger surpluses to provide funds to take us through the lean years. Surpluses have sometimes been wrongly characterised as a lost opportunity; they will be vital to our future academic sustainability.

Finally, we will have to get better at what we do, and that will involve scrutiny of teaching standards. We need to ensure the Partnership Agreement helps to promote a balance of expectations and responsibilities between students and academics, so each understands and acknowledges the others' needs; so students understand how research guides their teaching and how they benefit from that, and all our academics appreciate what students need and deserve.