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 was a Labour MP from 1992 to 2015, and a Secretary of State 2007 to 2010. He is Director of the Centre for English Identity and Politics at Winchester University

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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.