university funding

Since this is about to become a full blown party debate in the Lib Dems, it might be worth highlighting that an online debate has begun today at the Economist.

It seems slightly odd to me that I have only ever written once about Higher Education policy, given that I am a governor of my university, and hear about it all the time in meetings. But it has become a big issue at the moment in the Lib Dems, and seems to have been one of the major discussion areas at the Liberal Youth conference over the weekend, so I thought it might be time for me to jot down a few thoughts.

One thing that seems clear, and I believe this is common currency in university board-rooms across the country, is that the current muddled system cannot go on. 98% I believe it is of courses are charging the full top-up fees, and even they do not make up for the real terms fall of over 60% in funding per student over the past decade and a half or so.

On top of that, it fails to create any kind of price mechanism where people might be able to see what value a university or rather its applicants put on a particular course at a particular institution. It is a nonsense to think that three grand at The New University of Bloggshire is as good value as three grand at one of our world leading institutions like Oxford, Cambridge and Imperial. Instead we rely on very subjective analyses of the National Student Satisfaction Survey and even that is difficult as the organizers may put a good course in a subject area in which an institution is not so excellent and devalue that one course.

What also seems clear is that the value of a first degree is, shall we say, not as high as perhaps it was when all those who say "I got university free, so I'm damned if I'm going to see the next generation up to their necks in debt" went to university. It is a very generous sentiment, and, whilst I didn't in fact go to university I do recognize the hypocrisy - had I taken my school teachers' advice I would have had free higher education and a living grant too. That may not of course be the fault of the Higher Education Institutions so much as primary and secondary education - I don't suppose many students in my day would have had to be taught remedial English and maths at university as we are told some are today in order to get the most out of the Higher Education experience. Additionally, many more students than previously feel the pressure to do second and subsequent degrees in order to stand out in the job market as perhaps a first degree would have done for them in previous generations.

I think the majority feeling in those university board-rooms is that they would prefer to see the fees cap lifted completely when the opportunity arises sometime after 2010, even though by that time many may not want to charge too much so as to be in competition for a smaller number of students when the 18 year old cohort dips significantly in around 2012. We are also on tenter-hooks waiting to see how economic troubles in the wider world will affect student numbers - in previous recessions there has been a boost to Higher Education as people out of work re-train, but faced with fees and debts and an even more uncertain economic outlook, we wonder whether this will be the same this time round.

So, regardless of how our policy affects students themselves, the universities are in an ever more uncertain position. Whatever option we choose, we must see to it also that universities get sufficient funding. There will be no merit in having free Higher Education if the universities themselves cannot deliver that within the budgets allowed.

Anyway, I wanted to suggest an idea with this post. It's somewhat half formulated, and I certainly have not tried to run any figures on it yet, but I hope you might get the idea and maybe be willing to help develop it in the comments.

I have always regarded universities as social enterprises, mutual institutions of a sort. Indeed I once tried to persuade Brookes to adopt a more overt mutualism in its management structure. During the Great Depression in North America, when students were still having to pay fees but had very little money left for anything else, many embraced mutualism as a way to get through. This was the era in which the co-op meal plan, the co-op houses and halls of residence, and the university credit unions burgeoned. Partly as a result of this they have a much stronger alumni culture than we have here.

A credit union type system could be used to enable universities to charge a full market rate for their courses whilst financing all students "needs blind" so that they do not have to pay anything until they are earning. These credit unions would enable alumni (and possibly applicants before they are at university) to save, with interest, in less toxic investments than they have been in the banking system of late while funding current students through university and who would then be expected, as part of their "pay back", to join and save, investing in the next cohort of students, when they graduate.

On top of this we need a package of measures perhaps to encourage the development of low cost co-operative halls of residence and mutual housing societies to prevent the basic accommodation needs of students becoming the £5-7,000 per year drain that the big corporate halls providers expect to charge and the private rented sector delivering second class housing for students.

University fees. Oh dear, what a sensitive subject. I've just watched Question Time's "Next Generation" edition and the biggest applause came for a question on scrapping tuition fees, and today I had my last Academic Board here in which we were treated to a presentation on the National Student Satisfaction Survey initial results.

I'm reminded that Stephen Tall takes an apparently very un-Lib Dem position on tuition fees and that we are currently thinking about the party's future policy on Higher Education funding. But, horror of horrors, I think I'm beginning to agree. I suppose I ought to be careful about what I say here. I am one of the elected staff governors of my institution, and at some point in my four year term I dare say we're going to have to take a position on the future of university fees in order to feed into the process of deciding what happens next when the £3,000 annual cap on fees is debated around 2010.

Next academic year, as the elected governor, I am hoping to host a series of events for staff and students to help inform any decision I might have to participate in on this and some other pressing issues, such as the pressures universities face to bring in corporate "partners" (privatise to most people I suspect) in various areas of operation. So for now, these thoughts are just musings on what might be one line of reasoning.

Back to the National Student Satisfaction Survey. We were presented with a very pretty colourful document showing a table with red blobs for where the university scored in the lower quartile of student responses nationally and green ones where we scored in the top quartile, and yellows for he in-between areas. There's a huge project going on nationally to collect and interpret these data and eventually the "results" will be on the UCAS website supposedly to help prospective students decide where to go.

I have to say they seem pretty subjective - for a start universities themselves can't control in what groups, and some of them seem pretty counter-intuitivie, particular subjects may be placed. And then the raw figures do not seem to reflect the numbers of students on a course. So you could have a hundred courses with three students on each, where one student completed the survey and gave you a bad mark and you'd end up with a hundred rows of "red" squares and one course with a thousand students on where 700 completed the survey and gave you top marks and you'd end up with a mostly red page.

And I suddenly realized where in my varied career I had seen such a chart before. It looked just like the old Stock Exchange FTSE-100 SEAQ/Ceefax prices screen with reds for falling shares and in that case blue for rising prices. And it got me thinking...someone is expending an awful lot of effort to translate student perceptions into some pseudo-objective rating for an institution or subject that is intended to give a guide on which basis people will choose what institution or course to go to.

But because there's no real market in fees - practically nobody has decided to charge less than the £3,070 "maximum" fee (mainly because it is nothing like enough to make up for the 60% real terms drop in state funding over the past couple of decades) - this perceptual information cannot translate into prospective students' value judgment about where to spend their money. This effectively compulsory tax on learning cannot put a price on any particular course or institution or any number of factors why someone might want to study somewhere.

There seems to be an assumption, from my observations of conversations of other governors and senior management of universities, that the fees cap will need to be completely abandoned when the next decision date comes along in 2010. And they're right, to an extent. This muddle cannot continue. It is serving nobody. We either have to bite the bullet and fully fund free higher education, in which case you either give all institutions the same unit funding and those in which excellence comes at a price will descend to mediocrity, or we have to open up the market so universities charge their full costs in fees and make their own decisions about who to assist to afford their prices, to whom to offer discounts and for what subjects and so on.

This latter will be painful - we do not have a culture of people saving up front for college as they do in the US for example, or the incentive that though they may be not well off, they can make it onto their desired course if they achieve the grade to stand out and get a scholarship. And of course in my ideal world of land taxes paying for a citizens income there would be something to save for college, even for the least well off families. But we cannot lurch from one government decision to another every few years. This next decision in 2010 needs to be the last. It needs to set out a longer term target - either to return to full funding or to aim for a totally open market, over the course of, say, a decade, so that youngsters only just entering education now, and their families, know what to expect by the time they get to deciding on university courses.

I started to write this on Thursday evening. As I come to complete it, this story is just breaking in the Guardian. QED?

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