The government’s university policy doesn’t add up

The coalition’s higher education reforms are unnecessary, unfair and incompetent.

David Cameron and Nick Clegg's plan to treble tuition fees was never fair or necessary, but it's increasingly clear that it isn't sustainable either. It looks more and more like they rushed through legislation too quickly so that now the sums just don't add up.

A further round of damaging cuts to universities could be on the way.

It has been clear for some time that this government's attack on the life chances of the next generation is unnecessary. Fees are set to treble because of the huge and disproportionate 80 per cent cut in university teaching grants. This squeeze is already being felt, with universities making cuts that will harm students just when we most need them focused on supporting economic growth and the creation of new jobs.

The UK is the only country in the OECD, apart from Romania, cutting investment in higher education and science. In the United States, President Obama has pledged the largest commitment to research and innovation in American history. In Germany, Chancellor Merkel has announced a €12bn increase in the budget for education and teaching by 2013.

As well as being unnecessary, the reforms are unfair. They risk setting back what Ed Miliband has called the "British Promise" – the promise that the next generation will always do better and benefit from more opportunity than their parents or grandparents. The head of the social mobility watchdog the Sutton Trust, Sir Peter Lampl, was clear when he said:

Fees on this scale will deter many students from lower- and middle-income homes from higher education in general, and from the prestigious universities charging the highest fees in particular.

As well as being unfair, the government's attempts to implement its new approach are looking increasingly incompetent. Cameron and Clegg both asserted that universities charging the maximum fee for tuition would be the "exception". Yet it is clear that won't be the case.

Already, 18 universities have announced that they will set their fees at £9,000. The upshot is that it looks like Nick Clegg, not content with breaking his promise on tuition fees in the first place, will be breaking it again. The widely respected Higher Education Policy Institute's view that fees of £9,000 will be the going rate looks ever more prescient.

But further problems could be on their way. The government only budgeted for universities to charge £7,500 on average in tuition fees. If the institutions go higher than this, students are likely to struggle even more to pay back their loans, and in turn more of these loans will have to be written off.

This write-off counts as a subsidy in the government's public spending figures. Higher tuition fees as a result means more government subsidy as more student debt has to be cancelled.

The cost of that subsidy will have to be found from somewhere, and it is this financial ticking time bomb that is now exercising minds in Whitehall and vice-chancellors' offices. With George Osborne's Treasury door likely to stay firmly shut, Vince Cable and David Willetts face increasing scepticism about whether the current funding settlement for universities and for student support will stay in place.

Making demands

The government has already begun threatening further cuts to teaching or research funding. One other possible way it could choose to plug the funding gap is to cut student numbers further.

Higher education think tanks have warned that in the longer term the government might have to increase the rate of interest on loans, or increase the number of years over which students have to make repayments.

Cutting student support – reducing grants or cutting the National Scholarship Fund – are other possible ways the government might make its sums add up, albeit with just as damaging consequences for would-be students.

The scale of the further cuts in the higher education budget, according to House of Commons Library figures, range from £80m to £1.3bn, depending on how high average fees rise.

As more universities have threatened the maximum £9,000 fee level, so the government, and in particular Nick Clegg, has increased the demands on universities, particularly Oxbridge, to take more students from state schools. But a few more students from disadvantaged backgrounds going to Oxford and Cambridge, whilst good news for the individuals concerned, will not amount to a successful policy to keep widening participation in Britain's universities, if large numbers of would-be students are deterred from going to the one most suited to them to take the course most appropriate to their hopes, ambitions and talents.

Because the government has got its sums wrong, we are in the extraordinary position that students and their families will have to pay more than they expected, while the government saves less than it thought it would and universities face the prospect of even bigger cuts than they'd been led to believe. It could all have been so different. More thought, consultation, a white paper properly completed, and maybe, just maybe, the current flawed, incoherent and uncertain approach to some of Britain's finest crown jewels, our universities, could have been avoided.

Gareth Thomas is the shadow higher education minister and MP for Harrow West (Labour)

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The Brexit Beartraps, #2: Could dropping out of the open skies agreement cancel your holiday?

Flying to Europe is about to get a lot more difficult.

So what is it this time, eh? Brexit is going to wipe out every banana planet on the entire planet? Brexit will get the Last Night of the Proms cancelled? Brexit will bring about World War Three?

To be honest, I think we’re pretty well covered already on that last score, but no, this week it’s nothing so terrifying. It’s just that Brexit might get your holiday cancelled.

What are you blithering about now?

Well, only if you want to holiday in Europe, I suppose. If you’re going to Blackpool you’ll be fine. Or Pakistan, according to some people...

You’re making this up.

I’m honestly not, though we can’t entirely rule out the possibility somebody is. Last month Michael O’Leary, the Ryanair boss who attracts headlines the way certain other things attract flies, warned that, “There is a real prospect... that there are going to be no flights between the UK and Europe for a period of weeks, months beyond March 2019... We will be cancelling people’s holidays for summer of 2019.”

He’s just trying to block Brexit, the bloody saboteur.

Well, yes, he’s been quite explicit about that, and says we should just ignore the referendum result. Honestly, he’s so Remainiac he makes me look like Dan Hannan.

But he’s not wrong that there are issues: please fasten your seatbelt, and brace yourself for some turbulence.

Not so long ago, aviation was a very national sort of a business: many of the big airports were owned by nation states, and the airline industry was dominated by the state-backed national flag carriers (British Airways, Air France and so on). Since governments set airline regulations too, that meant those airlines were given all sorts of competitive advantages in their own country, and pretty much everyone faced barriers to entry in others. 

The EU changed all that. Since 1994, the European Single Aviation Market (ESAM) has allowed free movement of people and cargo; established common rules over safety, security, the environment and so on; and ensured fair competition between European airlines. It also means that an AOC – an Air Operator Certificate, the bit of paper an airline needs to fly – from any European country would be enough to operate in all of them. 

Do we really need all these acronyms?

No, alas, we need more of them. There’s also ECAA, the European Common Aviation Area – that’s the area ESAM covers; basically, ESAM is the aviation bit of the single market, and ECAA the aviation bit of the European Economic Area, or EEA. Then there’s ESAA, the European Aviation Safety Agency, which regulates, well, you can probably guess what it regulates to be honest.

All this may sound a bit dry-

It is.

-it is a bit dry, yes. But it’s also the thing that made it much easier to travel around Europe. It made the European aviation industry much more competitive, which is where the whole cheap flights thing came from.

In a speech last December, Andrew Haines, the boss of Britain’s Civil Aviation Authority said that, since 2000, the number of destinations served from UK airports has doubled; since 1993, fares have dropped by a third. Which is brilliant.

Brexit, though, means we’re probably going to have to pull out of these arrangements.

Stop talking Britain down.

Don’t tell me, tell Brexit secretary David Davis. To monitor and enforce all these international agreements, you need an international court system. That’s the European Court of Justice, which ministers have repeatedly made clear that we’re leaving.

So: last March, when Davis was asked by a select committee whether the open skies system would persist, he replied: “One would presume that would not apply to us” – although he promised he’d fight for a successor, which is very reassuring. 

We can always holiday elsewhere. 

Perhaps you can – O’Leary also claimed (I’m still not making this up) that a senior Brexit minister had told him that lost European airline traffic could be made up for through a bilateral agreement with Pakistan. Which seems a bit optimistic to me, but what do I know.

Intercontinental flights are still likely to be more difficult, though. Since 2007, flights between Europe and the US have operated under a separate open skies agreement, and leaving the EU means we’re we’re about to fall out of that, too.  

Surely we’ll just revert to whatever rules there were before.

Apparently not. Airlines for America – a trade body for... well, you can probably guess that, too – has pointed out that, if we do, there are no historic rules to fall back on: there’s no aviation equivalent of the WTO.

The claim that flights are going to just stop is definitely a worst case scenario: in practice, we can probably negotiate a bunch of new agreements. But we’re already negotiating a lot of other things, and we’re on a deadline, so we’re tight for time.

In fact, we’re really tight for time. Airlines for America has also argued that – because so many tickets are sold a year or more in advance – airlines really need a new deal in place by March 2018, if they’re to have faith they can keep flying. So it’s asking for aviation to be prioritised in negotiations.

The only problem is, we can’t negotiate anything else until the EU decides we’ve made enough progress on the divorce bill and the rights of EU nationals. And the clock’s ticking.

This is just remoaning. Brexit will set us free.

A little bit, maybe. CAA’s Haines has also said he believes “talk of significant retrenchment is very much over-stated, and Brexit offers potential opportunities in other areas”. Falling out of Europe means falling out of European ownership rules, so itcould bring foreign capital into the UK aviation industry (assuming anyone still wants to invest, of course). It would also mean more flexibility on “slot rules”, by which airports have to hand out landing times, and which are I gather a source of some contention at the moment.

But Haines also pointed out that the UK has been one of the most influential contributors to European aviation regulations: leaving the European system will mean we lose that influence. And let’s not forget that it was European law that gave passengers the right to redress when things go wrong: if you’ve ever had a refund after long delays, you’ve got the EU to thank.

So: the planes may not stop flying. But the UK will have less influence over the future of aviation; passengers might have fewer consumer rights; and while it’s not clear that Brexit will mean vastly fewer flights, it’s hard to see how it will mean more, so between that and the slide in sterling, prices are likely to rise, too.

It’s not that Brexit is inevitably going to mean disaster. It’s just that it’ll take a lot of effort for very little obvious reward. Which is becoming something of a theme.

Still, we’ll be free of those bureaucrats at the ECJ, won’t be?

This’ll be a great comfort when we’re all holidaying in Grimsby.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.