Friday, 24 January 2014

University tuition fees in England: pricier and pricier

What was is that 'Public Policy and the Past' said three years ago, when we came to consider the debacle of the Government's reform of English higher education? Well, let's just recap, shall we? 'The new system bids fair to completely bankrupt the Exchequer, while delivering very few quality or efficiency gains. It's a slow-motion car crash - a system that won't work and can't work'.

The result? Well, now it's confirmed - a system that will probably cost the Exchequer about the same as the old one. That's because universities have been 'freed' to charge a lot more than they used to bill the taxpayer, because their costs keep quite naturally going up (despite a period of pay restraint among most staff), but most of all because the money's being pumped into a very leaky pipe indeed.

The terms of the new loans are pretty generous, and most students will never pay off the £27,000 in tuition fees that there'll have forked out for. Once they get to thirty years (and they're probably 51!) they'll get a letter saying 'thanks very much, we don't need any more of your cash'. What's worse, the pretty heroic assumptions about graduate earnings that were made in 2010 have turned out to be too optimistic - again, you might have read about that here first. Throw in European Union students who can't be chased and can't be made to pay, and a lot of other people who'll probably disappear from the system altogether, and you're now looking at approaching half the taxpayer's money disappearing like condensation on a window.

We used to be told that the Resource Accounting and Budgeting Charge - the amount that would leak out in this way - was just under 30 per cent. Then it rose to 35 per cent. Then 40. The other day the relevant Select Committee was told that this might rise to 50 per cent - the moment at which the taxpayer starts being worse off than just leaving things alone and only charging students £3,300 in the first place. By the way, if you're reading this and you're a UK taxpayer, bear in mind that for every one point rise in the RAB charge, you get stung for £100m. So that little tiny accounting number in the footnotes? It just cost you £2bn - quite a sizeable chunk of all the income tax, National Insurance and Value Added Tax that you, your family and everyone you've ever known will every pay.

The Department of Business, Innovation and Skills is fighting a rearguard action right now to appear even halfway competent with some pretty basic sums - and having to admit that its failure to control places at private universities might well involve cutting funding for Widening Participation initiatives. This is the last thing David Willetts, the Minister for Universities (above) needs, most of all because it's all been predicted for so long. The idea that held sway between the early 1960s and the mid-1990s - that Higher Education was a critical national priority that should be thought of as investment in human capital - has been torn up, and replaced with, well... No-one's really, sure, actually.

Here's a cliche that seems relevant: you couldn't make it up. How could anyone invent a system that charged the taxpayer and the student more, but delivered no appreciable rise in teaching quality? How is that even possible?

Answers on a postcard, please.