Why tuition fees will cost six times more than they save

The coalition promised to reduce the cost to the taxpayer. But reduced university participation and higher inflation mean we'll end up paying more.

In his first Spending Review as Chancellor, George Osborne announced that the government had rejected a graduate tax but would reform higher education funding in England, requiring better-off graduates to pay more. The aim was to "reduce considerably the contribution that general taxpayers make to higher education". The switch from the direct funding of universities to indirect funding via student loans also helped Osborne to reduce the structural deficit which he said would be eliminated by 2015.

Ministers wasted no time. By December, the direct funding of universities was cut by 40 per cent over three years. Conservative and Liberal Democrat MPs voted through a three-fold increase in the maximum annual tuition fee that a university in England could charge, increasing the latter to £9,000. As a result, full-time students entering university for the first time in 2012 have been charged an average fee of £8,340 with a matching state-backed loan. Maintenance grants have increased marginally. For the first-time, part-time students can access fee (but not maintenance) loans although their course grants have been cut. All student loans will increase by RPI plus 3 per cent.

Unsurprisingly, the number of students entering university fell by at least 30,000 in 2012 with a further, dramatic decline in part-time participation. Applications for 2013 offer a glimmer of hope that there may be a recovery. Even if student interest increases (not forgetting that the coalition has cut the total number of funded places by 25,000 but has yet to put any ceiling on private provider numbers) does Osborne’s assertion that this is a good deal for taxpayers still stand up?

In the second of a series of pamphlets on higher education funding, the university think-tank million+ and London Economics set out to examine the case. Are the changes to higher education funding in England cost-effective uses the latest information from the Labour Force Survey, the Funding Council, the Office of Fair Access, the Higher Education Statistics Agency and BIS, the department responsible for universities, to model the 2012 changes.

All in all, the Treasury can claim to have saved £1.666bn per student cohort. This is largely the result of the reduction in direct grant to universities but takes into account the eye-watering increase in the Resource and Accounting Budget charge (a calculation of the proportion of the loan value that is not expected to be repaid). The Office for Budget Responsibility has already estimated that the loan book will almost double to £9bn. We estimate that over a 30-year repayment period the taxpayer will write-off almost 40 per cent of the loans that students take out.

Once the loss to the Treasury of reduced participation (which in turn leads to reduced tax receipts) and the inflationary impact of higher tuition fees are taken into account, the short-term savings will be outweighed almost six and a half times by the long-term costs of the new system. 

Although the inflationary shock seems to have surprised the outgoing governor of the Bank of England, Mervyn King, both the Consumer Price Index and the Retail Price Index will increase in the first three years of the introduction of higher fees. Not the most popular policy at the best of times, the government’s higher education reforms may lose their sheen even more if consumers work out that regulated rail fares, water bills and postage stamps will increase in part as a result of higher  fees. 

In spite of the cap on working-age benefits from April 2013, the Treasury will make additional payments of £42m and £163m on public sector and state pensions. The Treasury will also pick up the tab because a proportion of its own borrowing is linked to RPI. The government has issued £294bn in index-linked gilts. In 2012 alone it is estimated that the Treasury will pay an additional £655m in interest repayment arising from the tuition fee hike.

Ministers claim that the new funding regime has helped to avoid a further cut in funded student numbers and maintained university funding. In fact, institutional 'gains' will not be evenly distributed and stand to be wiped out completely if 42,000 fewer students are deterred from studying for a degree. There is also the real risk that the unit of resource will be reduced in universities which have done the most to open higher education to new generations of students.

The 2012 changes to university funding undoubtedly have the effect of reducing departmental expenditure. On paper, the reforms also reduce the structural deficit but mask the fact that the government will borrow more.

When all is done and dusted, the changes to university funding in England are an accountancy measure. In economic terms, it’s much harder to see how Osborne’s higher education promise to taxpayers will stack up in the long-term.

 

Pam Tatlow is chief executive of the university think-tank million+. The research was undertaken by Dr Gavan Conlon, an expert in HE finance and partner at London Economics

Demonstrators hold placards as they gather before the start of a student rally in central London on November 21, 2012 against an increase in university tuition fees. Photograph: Getty Images.
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The view from Google Earth is magnificent - but there's a problem

Google Earth is spectacular - but it can give a misleading impression of the planet and the threats we face from climate change. 

 

Google Earth wants you to “get lost” in its updated interactive map. Collaborations with new media partners mean you can now climb Mount Everest, swim with sharks or visit Afghanistan with Zari the purple muppet. No, really:


Source: Google Earth

Yet as Trump slashes support for the science behind satellite imaging, is Google’s emphasis on spectacle leading us down the wrong path?

Google Earth's new look all starts well enough. Opening the new site on your browser takes you to an image of a blue earth floating through the blackness of space. Back in the 1970s, similar images taken from the Apollo space missions helped kickstart the modern environmental movement. As the astronomer Sir Fred Hoyle put it: “Once a photograph of the Earth, taken from the outside, is available, a new idea as powerful as any in history will be let loose.”


Source: GETTY and Google Earth

And it gets better. Enter a destination in the search bar and you are greeted with the option to link directly out to the Wikipedia page: nerds of the world, rejoice! 

A guided tour from NASAearth is also on hand for anyone whose nerdery is in need of a prompt: “Geostationary satellites in geosynchronous orbits. Greenhouse gases and global warming. Glaciers... going, going, gone,” says the Bob Dylan-esque entry on its "ABCs from Space".

You can then choose to orbit your landmark of choice in 3D. And let’s face it - who doesn’t want to glide around the top of Mont Blanc, pretending to be an eagle? It’s almost as good as the BBC’s actual eagle-cam

But then it hits you. This is no soaring eagle, buffeted by wind currents and having to constantly adjust its flightpath in the face of real-world obstacles. This is a world surveyed at a safe and sanitising distance. Tourism for the Trump age – focused on providing “a consumption experience”. Certainly it is the opposite of “getting lost”.

In fact if anything has been lost or downplayed, it is the principles of scientific enquiry. The program is littered with human choices. Local versions of Google Maps, for instance, have shown different national borders depending on where in the world you log in. And while new, open-data imagery from America's Landsat 8 program is helping bring many regions up to date, other high-resolution imagery comes from commercial providers, such as Digital Globe. And as this Google 'help' page implies, there are issues of time-lag to face. 

You can’t even be sure what you’re looking at still exists. In 2015, Bolivia’s second largest lake vanished - a combination of climate change, El Nino, and irrigation withdrawal caused 2,700 square kilometres of water to evaporate into a dry salt pan. (It has not recovered, and seems unlikely to do so.) Yet on the new version of Google Earth the lake is still a healthy green:


Source: GoogleEarth

The much lauded film clips from the BBC’s Planet Earth II are similarly short on context. As I've argued before, David Attenborough's latest TV series did little to explain the stories behind the spectacle – there was no mention, for instance, of the arctic anthrax outbreak which caused thousands of reindeer to be culled, nor the role of climate change in worsening locust swarms. 

Finally, the new update actually shows you less of the world than it did before. Gone is the “Historical Imagery” tool that allowed you to see how a place had changed through time. Now, the Citadel of Aleppo in Syria is only visible as a bombed-out ruin. A surreal street-view reveals two women cheerily taking a selfie – with debris all around and their legs spliced out of shot:


Source: GoogleEarth

So why do these omissions matter? Because they take users further away from the evidence-based approach of earth science. It turns out that satellite images on their own are of limited use when it comes to quantifying change. Instead researchers must turn the raw pixels into numbers, which can then variously represent everything from forests to cities, glaciers and farms.

As Dr France Gerard at the UK’s Centre for Hydrology and Ecology explains, this process enables us to live in a better managed environment – be that by measuring air pollution or the impact of fertiliser on soil. The centre's landcover map, for instance, has been mapping British land use since 1990. Similar methods allow Sam Lavender’s company to provide Ugandans with a Drought and Flood Mitigation service, as part of the UK Space Agency’s International Partnership Programme.

Sadly, the need for public engagement has never been more urgent. Brexit and austerity have cast doubt over important projects in the UK. While in Donald Trump’s America, funds for earth monitoring are set to be slashed. Two missions already under the knife are PACE, a spacecraft set to track global ocean health, and CLARREO, which would have produced highly accurate climate records. Trump has also called for the earth-viewing instruments on the DSCOVR satellite to be turned off. Phil Larson, a former space advisor to President Obama, describes this decision as “baffling”.

So what can be done to reverse this trend? Experts I spoke to believe that collaboration is key. With government programs being squeezed, the earth monitoring industry may come to rely increasingly on the trend towards smaller, commercial satellites. These are great for increasing the quantity of data available but their accuracy needs to be constantly checked against the data from the larger and more reliable state-launched equipment.

There’s also still more data out there to share. As Bronwyn Agrios from Astro Digital points out, many countries have been gathering region-specific data – which could, in future, be made open source. “The neat thing about space is that there’s no border,” she concludes.

To help this process, Google Earth could do far more to raise public awareness of the science behind its special effects. Yet at least in one way it is already on the right path: its own new range of collaborations is impressively large. As well as the BBC, you can take interactive tours with The Ocean Agency, the Wildscreen Arkive, and the Jane Goodall Institute – all of whom put conservation up front. The Goodall journey to Tanzania’s Gombe National Park even describes the use of satellite imagery to measure conservation success.

 

More links with other citizen science projects around the world could turn the program into something truly ground-breaking. If it can incorporate these, then desktop-tourism may yet save the planet from Trump. 

India Bourke is an environment writer and editorial assistant at the New Statesman.

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