CEO Blog: Manifestly, the system of student support and university funding is ripe for review

15 May 2017

When a ‘snap’ election is called, it is tempting for organisations to shy away from anything more than the anodyne or the obvious in their own pre-election statements. The timetable of the 2017 election is such that the parties’ own manifestoes, usually carefully crafted over several months, are now being drafted in haste, by-passing many of the in-house and wider discussions that usually precede their publication.

Of course, once elected, parties always point to their manifesto commitments as a lodestone of their future governance. In the lead-up to the 1964 election, Harold Wilson who was to become Labour Prime Minister is alleged to have said that a week is a long time in politics. Whether misattributed or not, the advent of social media suggests that it would now be more accurate to reduce the time-frame to 24 hours. It is therefore hardly surprising that governments of all colours stray ‘off-piste’ from their original manifesto commitments when faced with the challenges of office and the unexpected.

In spite of its timing, the 2017 election provides universities, which are, after all, supposed to be about promoting new ideas and questioning conventional wisdoms, with opportunities to present these ideas to the government elected on 8 June even though the merits of their proposals may not be immediately obvious to new Ministers anxious to do the ‘right manifesto thing’.

The manifesto published by MillionPlus sets out a programme for the new government not only for Brexit but for an industrial strategy with clout. However, it also questions the political wisdom, so prevalent in recent years, of referring to higher education in England as a market in which universities are ‘providers’ and students are ‘consumers’. Although qualified by some commitments to smooth the passing of the HE and Research Act before parliament was dissolved, the end-game of this approach is clear: greater variability in fee levels and the further promotion of hierarchies in a university system which has previously thrived on a mixture of diversity and collaboration.

However, as the MillionPlus manifesto points out, universities have a wider role in strengthening society and offering new opportunities to potential students regardless of background, age or culture. Once this and the perceptions about the affordability of the system, mentioned time and again in surveys of students and parents, are thrown into the mix, questions need to be asked and answered about whether the current funding system in England is fair and sustainable.

Lest there be no confusion, MillionPlus is not arguing that universities can or should be asked to manage on less money – the impending inflationary increase in fees in England is a minimum, not desirable for its own sake, but because of huge reductions in direct government investment in universities since 2012 – simply that there is a case to review the funding system to achieve a more balanced approach.

There are a number of issues which such a review might consider. For example, an interest rate of 4.6% is currently applied to fee and maintenance loans, from the moment they are taken out (climbing to 6.1% from September 2017). This adds thousands of pounds to loans before students have even finished their studies. Confusingly, interest rates then vary according to whether graduates are earning over £21,000 per year when they have to start repaying their loans.

Students from lower income households take out more loans than others because maintenance grants have been abolished, raising important questions about equity and social justice. Graduates, including teachers and health service workers, whose careers take them into that middle-income bracket of £30-40,000 per annum, will discover that their student loans will increase by over 6% a year. As a result, their monthly loan repayments will never do anything other than pay-off the interest being accrued with no inroads made into the capital sum owed.

This is why MillionPlus has called for the system of student support and the funding universities in England to be reviewed by the new government. And after all why wouldn’t a new government committed to social justice, an industrial strategy that adds value in the regions and upskilling of the future and current workforce to meet the challenges and opportunities of Brexit not want to assure itself that the current funding system is likely to provide a sustainable resource for universities and is seen as affordable not only by full-time, but also by part-time students and those who want and need to return to higher education later in life?

If nothing else, such a review would provide an opportunity to look at the balance of contributions to the costs of higher education that are being made by students, the state and business. It’s not really a lot to ask.