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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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.