Why tuition fees could bankrupt universities

A new report warns that more institutions will be at a "high risk of failing".

One of the strongest arguments against the coalition's higher education reforms is that they will put more universities at risk of bankruptcy. The decision to cut the teaching budget by 80 per cent - including the entire budget for arts and humanities - and introduce a system in which money follows the student, means that universities will be left to sink or swim according to the whims of the market.

This point was well made in a recent letter by 681 Oxbridge academics (and you thought 365 economists was a lot) to the Independent. They wrote: "[W]e fear that the proposed new model by which "the money follows the student" will produce random effects in the HE sector, depriving some courses of income streams, and decimating the funding for teaching in some institutions, without any coherent and publicly announced policy in regard to which of these institutions and courses the Government believes should be left to fail. As has been publicly announced, this is to be left to the market to decide."

Today's report by the National Audit Office rightly argues that students need to be told more about those universities at risk. Last year, seven universities were placed on an "at high risk" register but this could increase to 23 by the end of the first year of the new fees being introduced. A previous report by the University College Union put 49 of England's 130 higher education institutions at 'very high', 'high', or 'high-medium' risk of serious impact from cuts to the teaching budget.

The Higher Education Funding Council currently waits for three years before it publishes a list of universities at high risk of financial failure and, even then, the list is not made publicly available. However, those "at risk" are known to include Thames Valley University and London Met. The NAO rightly argues that this arrangement should be reviewed. It notes:

As a greater proportion of funding begins to follow the student, the funding council should consider whether the current arrangements strike the right balance between protecting institutions and their students, on the one hand, and enabling prospective students to take more informed decisions on where to study, on the other.

With fees due to rise from £3,290 to a minimum of £6,000, the pressure for transparency will grow - and rightly so.

George Eaton is political editor of the New Statesman.

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Calum Kerr on Governing the Digital Economy

With the publication of the UK Digital Strategy we’ve seen another instalment in the UK Government’s ongoing effort to emphasise its digital credentials.

As the SNP’s Digital Spokesperson, there are moves here that are clearly welcome, especially in the area of skills and a recognition of the need for large scale investment in fibre infrastructure.

But for a government that wants Britain to become the “leading country for people to use digital” it should be doing far more to lead on the field that underpins so much of a prosperous digital economy: personal data.

If you want a picture of how government should not approach personal data, just look at the Concentrix scandal.

Last year my constituency office, like countless others across the country, was inundated by cases from distressed Tax Credit claimants, who found their payments had been stopped for spurious reasons.

This scandal had its roots in the UK’s current patchwork approach to personal data. As a private contractor, Concentrix had bought data on a commercial basis and then used it to try and find undeclared partners living with claimants.

In one particularly absurd case, a woman who lived in housing provided by the Joseph Rowntree Foundation had to resort to using a foodbank during the appeals process in order to prove that she did not live with Joseph Rowntree: the Quaker philanthropist who died in 1925.

In total some 45,000 claimants were affected and 86 per cent of the resulting appeals saw the initial decision overturned.

This shows just how badly things can go wrong if the right regulatory regimes are not in place.

In part this problem is a structural one. Just as the corporate world has elevated IT to board level and is beginning to re-configure the interface between digital skills and the wider workforce, government needs to emulate practices that put technology and innovation right at the heart of the operation.

To fully leverage the benefits of tech in government and to get a world-class data regime in place, we need to establish a set of foundational values about data rights and citizenship.

Sitting on the committee of the Digital Economy Bill, I couldn’t help but notice how the elements relating to data sharing, including with private companies, were rushed through.

The lack of informed consent within the Bill will almost certainly have to be looked at again as the Government moves towards implementing the EU’s General Data Protection Regulation.

This is an example of why we need democratic oversight and an open conversation, starting from first principles, about how a citizen’s data can be accessed.

Personally, I’d like Scotland and the UK to follow the example of the Republic of Estonia, by placing transparency and the rights of the citizen at the heart of the matter, so that anyone can access the data the government holds on them with ease.

This contrasts with the mentality exposed by the Concentrix scandal: all too often people who come into contact with the state are treated as service users or customers, rather than as citizens.

This paternalistic approach needs to change.  As we begin to move towards the transformative implementation of the internet of things and 5G, trust will be paramount.

Once we have that foundation, we can start to grapple with some of the most pressing and fascinating questions that the information age presents.

We’ll need that trust if we want smart cities that make urban living sustainable using big data, if the potential of AI is to be truly tapped into and if the benefits of digital healthcare are really going to be maximised.

Clearly getting accepted ethical codes of practice in place is of immense significance, but there’s a whole lot more that government could be doing to be proactive in this space.

Last month Denmark appointed the world’s first Digital Ambassador and I think there is a compelling case for an independent Department of Technology working across all government departments.

This kind of levelling-up really needs to be seen as a necessity, because one thing that we can all agree on is that that we’ve only just scratched the surface when it comes to developing the link between government and the data driven digital economy. 

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an  introduction from James Johns of HPE, Labour MP, Angela Eagle’s view and Conservative MP, Matt Warman’s view

Calum Kerr is SNP Westminster Spokesperson for Digital