Students walk past the Radcliffe Camera building in Oxford. Photograph: Getty Images.
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Universities need to look beyond higher tuition fees

Vice chancellors should join the discussion about alternatives to the current model.

Ed Miliband’s promise of "radical" policies for higher education funding is welcome. It reflects the reality of an unsustainable system that will have to be changed whatever happens. As Labour develops its new approach, are England’s universities are up to the challenge they face?

Last week the rate of debt cancellation reached 45 per cent. Of every £1,000 lent to students for fees and maintenance, £450 will never be repaid. The bill for this write off falls on the taxpayer. In round terms, each year the government will borrow £14.8bn, knowing it will never see £6.6bn again.

Many in the university sector don’t seem to see a problem with this level of waste. High fees have done them well for three years, letting higher education escape the worst of the pressures felt by the NHS or local government. That boost is slowly petering out as research funding falls and the fee is eroded by inflation. But many vice chancellors seem quietly confident that, sooner or later, government will crack and let fees go up again. David Willetts has certainly not ruled it out.

As loan write-offs hit 45 per cent, that confidence is surely misplaced. Even if politicians had the stomach for higher fees in what is already the world’s most expensive public HE system, the maths is against them. If fees rise further, even fewer graduates will pay back in full and the cancellation rate will rise steadily until it is over 50 per cent. What responsible government is really going to fund universities through a route that wastes one pound in two?

More trouble is looming from George Osborne’s decision to fund further expansion from the sale of the student loan book. As the Public Accounts Committee has warned, selling the loan book may only be possible at a huge loss to the taxpayer. Selling an underperforming capital asset to pay your running costs is never a good idea, and no one knows what happens when the money runs out.

After three good years, the financial underpinning of universities is looking increasingly shaky. Vice chancellors who told themselves that high fees would bring independence are now more exposed to government decisions on public funding than for a long time. Something has got to give. Maybe, if the coalition won again, a few universities would be allowed to break ranks (giving us Ivy League fees but none of the Ivy League’s social responsibility) while the rest would have funding remorsely screwed down or undercut by private institutions.

The alternative is to recognise that higher education will always have to be a public and private partnership, and this partnership should be as clear and transparent as possible. Scrap the ideology of high fees and put every penny of public funding you can into teaching. Fees will fall, public debt will fall, the cost of debt cancellation will fall, and more graduates will actually repay what they borrow.

We could take the opportunity to bring about much-needed change, giving employers financial support to co-sponsor degrees and promoting more routes for older and part-time students. Do this and, according to Commons Library modelling, we could see fees at around £3,500 a year for a three year degree and give universities an additional £1bn of usable finance every year.

The vice chancellors’ confidence in further fee hikes looks misplaced. It will be interesting to see when they join the discussion about alternatives.

John Denham is Labour MP for Southampton Itchen and former universities secretary

John Denham is Labour MP for Southampton Itchen and former universities secretary

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Google’s tax worries, Oxford’s race dilemma and the left-wing case for leaving Europe

The truth is that many black students looking at the white, middle-class Oxford would justifiably conclude that they don’t belong.

As a Gmail user and a Google searcher, am I morally compromised by using the services of a serial tax avoider? Surely not. Google gets roughly 95 per cent of its revenues from advertising and much of that from clicks on the ads that surround its offerings. I have long observed a rule never to click on any of these, even when they advertise something that I need urgently. Instead, I check the seller’s website address and type it directly into my browser.

Taking full advantage of its services without contributing to its profits strikes me as a very good way of damaging the company. More problematic are pharmaceutical companies such as AstraZeneca (zero UK corporation tax in 2014) and GlaxoSmithKline (UK corporation tax undisclosed but it has subsidiaries in tax havens), which makes many prescription drugs and consumer products such as toothpaste – I chew it to stop me smoking. To boycott all such companies, as well as those that underpay their workers or pollute the planet, one would need, more or less, to drop out from the modern world. Consumer boycotts, though they have a certain feel-good factor, aren’t a substitute for electing governments that will make a concerted effort to tax and regulate big corporations.

 

After EU

David Cameron is finding it hard to get changes to EU rules that he can credibly present as concessions. But the talks that would follow a vote for Brexit would be a hundred times more difficult. Ministers would need to negotiate access to the single market, renegotiate trade deals with 60 other countries and make a deal on the status of Britons living in the EU, as well as EU citizens living here. All this would create immense uncertainty for a fragile economy.

With a current-account trade deficit of 4 per cent, the dangers of a run on sterling would be considerable. (This apocalyptic scenario is not mine; I draw on the wisdom of the Financial Times economics editor, Chris Giles.) But here’s the question. If the UK got into the same pickle as Greece – and George Osborne had to do a Norman Lamont, popping out of No 11 periodically to announce interest-rate rises – Jeremy Corbyn would walk the 2020 election. Should we lefties therefore vote Out?

 

University blues

Hardly a Sunday now passes without David Cameron announcing an “initiative”, either on TV or in the newspapers. The latest concerns the under-representation of black Britons at top universities, notably Oxford, which accepted just 27 black students in 2014 out of an intake of more than 2,500. As usual, Cameron’s proposed “action” is risibly inadequate: a requirement that universities publish “transparent” data on admissions and acceptances, much of which is already available, and a call for schools to teach “character”, whatever that means.

The truth is that many black students looking at the white, middle-class Oxford – with its disproportionate numbers from a handful of fee-charging schools, such as Eton – would justifiably conclude that they don’t belong. Cameron rules out quotas as “politically correct, contrived and unfair”. But quotas in some form may be what is needed if young people from poor white, as well as black, homes are ever to feel that they would be more than interlopers.

In the meantime, Cameron could tell elite universities to stop setting ever-higher barriers to entry. As well as demanding two A*s and an A at A-level, Oxford and Cambridge are introducing tests for “thinking skills” and subject-specific “aptitude”. Whatever the developers of such tests claim, it is possible to coach students for them. State schools don’t have the resources to do so or even to research the complex requirements of the various colleges and subjects. Oxbridge admissions tutors must know this but evidently they don’t care.

 

A fine balance

The latest government figures show that, despite the former education secretary Michael Gove introducing £60 fines for parents who take their children on term-time breaks, the days lost to unsanctioned holidays are up by 50 per cent to three million in four years. This was a predictable result. Previously, the sense of an obligation to respect the law and set their children an example of doing so persuaded most parents to confine absences to school holidays. Now a modest price has been placed on term-time holidays. Parents do the sums and note that they save far more than £60 on cheaper flights and hotels.

A similar outcome emerged in Israel when daycare centres introduced fines for parents who arrived late. Previously, most preferred to avoid the embarrassment of apologising to a carer and explaining why they had been delayed. Once it became just a monetary transaction, many more happily arrived late and paid the price.

 

Minority report

Here in Loughton, Essex, where I live quietly and unfashionably, we are dancing in the streets. Well, not quite, but perhaps we ought to be. According to an analysis by the Policy Exchange think tank, Loughton is the third most integrated community in England and Wales, just behind Sutton Coldfield in the West Midlands and Amersham, Buckinghamshire, but above 157 others that have significant minorities. We are well ahead of fashionable London boroughs such as Islington and Hackney, where residents obviously keep Muslims and eastern Europeans out of their vibrant dinner parties, whereas we have bearded imams, African chiefs in traditional dress and Romanian gypsies dropping in for tea all the time.

Again, not quite. I’m not sure that I have met that many non-indigenous folk around here, or even seen any, except in the local newsagents. Still, I am grateful to Policy Exchange for brushing up Loughton’s public image, which was in need of a facelift after the BNP won four seats on the council a few years ago and a TOWIE actor opened a shop on the high street.

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war