Without overhauling the market-driven system, reducing high fees will only benefit the government
On the face of it, this sounds strange. How can cutting fees, paid by students to universities, be a way to cut government spending? The answer is worth spelling out, as it touches on an abiding myth about England’s system of university funding. Most people assume that making students pay for their education must save public money. The introduction and subsequent hiking of fees was rationalised using the language of economic “sustainability” and “fairness”: why should ordinary taxpayers bear the cost of an education from which graduates derive the primary benefit?
But, as with the politics of austerity more broadly, this rationale was bogus. The influential and apparently progressive appeal to “fairness” fails not least because indebting a generation of students has not substantially reduced the cost of higher education to the taxpayer. Just as savings from the coalition government’s cuts to benefits were outweighed by the amount paid to private contractors to carry out the notorious “fit-to-work” assessments, it was already clear by 2014 that the regime of high university fees was likely to cost the government more than it saved, mainly due to the large and growing proportion of graduates unable to repay their debts.
Thus we arrive at the seemingly paradoxical situation in which reducing student fees can be embraced as a cost-cutting measure: less money lent out and never repaid. Needless to say, the government is not proposing to replace universities’ lost income with public funds.
That explains the Tories’ sudden interest in lowering fees. But it raises a bigger question about austerity: if it doesn’t save public money, why do it? It’s not only incompetence, although there is plenty of that around. It is, as it has become customary to point out, ideological: a political choice bound up with a particular, neoliberal vision of society and the individual. This explanation is not, however, at odds with a more material one. It’s tempting to think that when governments’ ideological commitments lead them to do things in the name of saving money that end up costing more than they save, they are doing something irrational or self-defeating.
But what is self-defeating from the point of view of “the economy” or the “public purse” may be very good indeed for the people who really matter: the individuals and companies that stand to profit from the dismantling of public goods and their subjection to a market logic. These are pies that are home to many a politician’s finger. Who cares about the state of public finances when your investments are doing well and a lucrative life-after-politics is only a revolving door away?
The reforms that introduced tuition fees were never about fees alone, but about a broader project of marketisation. As with other besieged public services such as healthcare, this project seeks to expand private sector involvement while encouraging public bodies to behave more like private businesses. The point of replacing central funding with student fees was to force universities to compete for income (undergraduates), something which proponents of the fees regime insisted would “drive up standards”.
The architects of the present system always anticipated that some institutions would go bust (coyly termed “market exit”), and that new, private “providers” would take their place. Despite various attempts to expedite this process, private and for-profit universities have yet to appear on any significant scale; but as with the NHS, the role of the private sector in “delivering” services within theoretically public institutions has greatly expanded.
Over a few short years, marketisation has transformed higher education to a degree that is difficult to appreciate from the outside. The competition for fee income has subordinated university life to a never-ending student recruitment drive. Ever-increasing resources are ploughed into vanity building projects and branding initiatives, while support services are cut or outsourced. The academic workforce is increasingly placed on casual contracts, with departments hiring and firing according to the latest projections for student numbers.
While a handful of senior managers and professors rake in six-figure salaries, most staff have seen their pay fall by 20% in real terms since 2009 as their workloads have spiralled. Students, living under mountains of debt, grasp at a thin consumer power as the only kind available and wield it against their teachers. In a sector often regarded – and not entirely without reason – as relatively cushy, the human cost is considerable. Stress and mental illness are rife among students and staff alike (a recent report found the mental wellbeing of workers in higher education to be significantly lower than the wider population, with more than half showing signs of depression).
Simply reducing the level of fees won’t solve any of this, since it leaves the underlying system untouched – as it is intended to. It won’t necessarily produce any financial benefit at all for students, many of whom will end up paying the same amount out of a reduced notional total (paying £30k of a £50k debt, for instance, is no different to paying £30k of £45k). But it will squeeze universities, which will recoup lost income however they can, most likely through hikes to already eye-watering rents for student accommodation.
So here is yet another paradox: high student fees are at the root of all that is wrong with universities; yet reducing them, without changing the fundamentals of the current system, won’t help. Meanwhile, the only thing that would help – a reversal of marketisation and a return to higher education as a free public good – seems further away than ever.
If there is little to celebrate in the prospect of a fee reduction, some of the government’s other cost-cutting ideas for higher education are worse. A less eye-catching measure currently being considered is to lower the threshold at which graduates begin repaying their loans from about £27,000 to £23,000 (the terms of student loans can be changed retrospectively whenever the government sees fit, a scenario that Martin Lewis, founder of Money Saving Expert, has called a “breach of natural justice”). Like the recent rise to national insurance and the end of the £20 “uplift” to universal credit, this is a quietly brutal policy that will hit people for whom every penny and pound counts, for whom every little hurts.
- Lorna Finlayson teaches philosophy at the University of Essex