How higher tuition fees will cost the government more

Ministers face a spiralling bill for loans after underestimating how many universities would charge

The hike in tuition fees is set to create a huge financial black hole because the government underestimated how many universities would charge the maximum £9,000 fees, according to a powerful committee of MPs.

A report by the Public Accounts committee suggests that the funding gap could cost the taxpayer an extra £95m a year and lead to a reduction in the number of undergraduate places. Tougher restrictions on student places will be deeply unpopular after several years of increasing competition and fewer job opportunities.

When the government lifted the cap on fees last year, ministers said that the top rate of £9,000 could only be charged in "exceptional circumstances". However, 60 out of 124 higher institutions have said they will charge the highest rate for at least some of their courses.

105 universities had declared the fee they will charge, with an average of £8,765. The government modelled its plans on an average fee of £7,500.
This means that the current balance of outstanding loans -- £24bn -- is expected to rise to £70bn by 2015-16, the report says.

This is ironic, given that reducing the deficit and solving the funding crisis in universities were the justifications for increasing fees. Lest we forget, Nick Clegg justified his U-turn on tuition fees thus:

At the time I really thought we could do it [not increase tuition fees]. I just didn't know, of course, before we came into government, quite what the state of the finances were.

So not only will the increased fees actually increase the strain on the public purse, they also fail to do anything to combat the funding crisis of higher education that motivated the Browne Review in the first place, coming as they do in conjunction with savage cuts to university budgets.

The Department for Business, Innovation and Skills says the full cost will not be known until September 2012, after students have received their loans. It is impossible to know whether the trebling of fees will have an impact on student demand, and how many students will waive their loans. Conversely, as my colleague George Eaton pointed out in March, the funding gap could end up being much higher.

Given the speed with which the legislation was rushed through, it is unsurprising that serious problems have surfaced. With Oxford University considering a vote of no confidence in the government's higher education policy today, waiting til freshers' week does not seem like an adequate solution.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.