Protestors against the £9,000 tuition fees outside the University of London in 2010. Photo: Getty
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Student loans policy likely to cost more than the system it replaced – how could they be so wrong?

Tripling fees to £9,000 was a clever exercise in smoke and mirrors accounting. Students and universities are paying the price.

The latest estimate of the costs of the student loan system given by David Willetts, the Universities Minister, comes as no surprise. Both before and after the Coalition rushed through its reform of university funding in 2010, we warned in briefings to MPs that the government’s sums were wrong.

Willetts has now conceded that 45p in the pound of the money lent to students for fee and maintenance loans may never be repaid by graduates. This figure stands in sharp contrast to the Impact Assessment published by his own department of Business, Innovation and Skills. In June 2011 BIS claimed that the write-off would be between 28 and 32 per cent.

Using detailed modelling of the costs of the system undertaken by London Economics, we had no hesitation in providing evidence to the BIS Select Committee which challenged these assumptions. As it turned out the Committee’s MPs were rightly sceptical of the government’s forecasts.

It took until May 2013 for Willetts to throw in the towel and concede that the write-off might be 35p in the pound. By December 2013 an answer reported in Hansard confirmed that the BIS estimate had risen to 40p. Three months later this has increased yet again. It seems that Nick Clegg’s promise that the majority of students will never repay their loans is about to come true but it is hardly good news for taxpayers.

So is this all just an arid argument among economists? Behind all of these figures is a story which goes to the heart of the coalition’s fiscal policies and its belief that higher education should be opened to the market. Tripling fees to £9,000 was a clever exercise in smoke and mirrors accounting which removed direct funding of universities from the BIS departmental budget. Its primary aim was to help George Osborne eradicate the structural deficit by 2015. Lifting the fee cap was also accompanied by policies which favoured private providers which now benefit from double the amount of state-subsidised fee loans than were available under Labour even though they remain largely unregulated.

Unsurprisingly many younger students have opted into higher education even though fees have risen. Unless their parents enjoy considerable wealth, they have little choice but to take out a fee loan if they want to study for a degree. But 30,000 qualified students chose not to progress to university in 2012 and may never return to higher education. Critically participation by part-time and older students has melted away. This is a horrible waste of talent.

Ministers claimed that universities would be better off under their reforms – a claim that is now treated with a great deal of scepticism. By 2015 universities will have had to absorb three further years of cost-cutting with no inflation-proofing. The grant to the Higher Education Funding Council will fall by a further 9 per cent by the date of the election. The NUS is worried about maintenance grants not keeping pace with the cost of living.

Osborne’s response is to lift the cap on student numbers but not provide any additional resources. The idea is that universities will rise or fall according to how well they compete for additional students. Of course, this move will inevitably increase further the amount that taxpayers will have to write-off but there is little mention of this.

It is difficult to understand how or why the coalition got the costs of their higher education reforms so wrong for so long. The thousand dollar question which all political  parties now have to answer is just how they will fund universities in the future to deliver a system that is fair for students, graduates and taxpayers. It’s unlikely that a funding regime that costs 45p in the pound is the solution.

Pam Tatlow is Chief Executive of the university think-tank million+

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Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

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