Protestors against the £9,000 tuition fees outside the University of London in 2010. Photo: Getty
Show Hide image

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+

Getty
Show Hide image

Aussies and Kiwis can be “us” to Brexiteers - so why are EU citizens “them”?

Nostalgia for the empire means Brexiteers still see Australians and New Zealanders as "Brits abroad". 

There are many terrible things about Brexit, most of which I counted, mournfully, on the night of the referendum while hiding in a stairwell because I was too depressed to talk to anyone at the party I’d just run away from. But one of the biggest didn’t hit me until the next day, when I met a friend and (I’m aware how ridiculous this may sound) suddenly remembered she was Dutch. She has been here 20 years, her entire adult life, and it’s not that I thought she was British exactly; I’d just stopped noticing she was foreign.

Except now, post-referendum, she very definitely was and her right to remain in Britain was suddenly up for grabs. Eleven months on, the government has yet to clarify the matter for any of Britain’s three million European residents. For some reason, ministers seem to think this is OK.

If you attended a British university in the past 20 years, work in the NHS or the City – or have done almost anything, in large parts of the country – you’ll know people like this: Europeans who have made their lives here, launching careers, settling down with partners, all on the assumption that Britain was part of the EU and so they were as secure here as those with British passports. The referendum has changed all that. Our friends and neighbours are now bargaining chips, and while we may not think of them as foreigners, our leaders are determined to treat them as such. People we thought of as “us” have somehow been recast as “them”.

There’s a problem with bringing notions of “us” and “them” into politics (actually, there are many, which seems like a very good reason not to do it, but let’s focus on one): not everyone puts the boundary between them in the same place. Take the Tory MEP Daniel Hannan. The sort of man one can imagine spent boyhood afternoons copying out Magna Carta for fun, Hannan spent decades campaigning for Brexit. Yet he’s not averse to all forms of international co-operation, and in his spare time he’s an enthusiastic advocate of CANZUK, a sort of Commonwealth-on-steroids in which there would be free movement ­between Canada, Australia, New Zealand and the UK.

When pushed on the reasons this entirely theoretical union is OK, when the real, existing one we’re already in isn’t, he has generally pointed to things such as shared language, culture and war memorials. But the subtext, occasionally made text by less subtle commentators, is that, unlike those Continentals, natives of the other Anglo countries aren’t really foreign. An Australian who’s never set foot in Britain can be “us”; the German doctor who’s been here two decades is still “them”.

There’s a funny thing about Hannan, which I wouldn’t make a big thing of, except it seems to apply to a number of other prominent Leave and CANZUK advocates: for one so fixated on British culture and identity, he grew up a very long way from Britain. He spent his early years in Peru, on his family’s farm near Lima, or occasionally on another one in Bolivia. (You know how it is.) That’s not to say he never set foot in Britain, of course: he was sent here for school.

His bosom pal Douglas Carswell, who is currently unemployed but has in the past found work as both a Conservative and a Ukip MP, had a similarly exotic upbringing. He spent his childhood in Uganda, where his parents were doctors, before boarding at Charterhouse. Then there’s Boris Johnson who, despite being the most ostentatiously British character since John Bull, was born in New York and spent the early years of his life in New England. Until recently, indeed, he held US citizenship; he gave it up last year, ostensibly to show his loyalty to Britain, though this is one of those times where the details of an answer feel less revealing than the fact that he needed to provide one. Oh and Boris went to boarding school, too, of course.

None of these childhoods would look out of place if you read in a biography that it had happened in the 1890s, so perhaps it’s not surprising that they instilled in all of their victims a form of imperial nostalgia. I don’t mean that the Brexiteers were raised to believe they had a moral duty to go around the world nicking other people’s countries (though who knows what the masters really teach them at Eton). Rather, by viewing their homeland from a distance, they grew up thinking of it as a land of hope and glory, rather than the depressing, beige place of white dog poo and industrial strife that 1970s Britain was.

Seen through this lens, much of the more delusional Brexiteer thinking suddenly makes sense. Of course they need us more than we need them; of course they’ll queue up to do trade deals. Even Johnson’s habit of quoting bits of Latin like an Oxford don who’s had a stroke feels like harking back to empire: not to the Roman empire itself (he’s more of a late republican) but to the British one, where such references marked you out as ruling class.

There’s another side effect of this attitude. It enables a belief in a sort of British diaspora: people who are British by virtue of ancestry and ideology no matter how far from these shores they happen to live. In the 19th century, Australians and Canadians were just Brits who happened to be living abroad. What Britain absolutely wasn’t, however, was just another European country. So, in the Leavers’ minds, Aussies and Kiwis still get to be us. The millions of Europeans who have made Britain their home are still, unfortunately, them.

I’m sure these men bear Britain’s European citizens no ill-will; they have, however, fought for a policy that has left them in limbo for 11 months with no end in sight. But that’s the thing about Brexiteers, isn’t it? They may live among us – but they don’t share our values.

Jonn Elledge is the editor of CityMetric

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.

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

0800 7318496