The first announced public sector spending cuts were targeted at the universities sector.
It was always an odd choice: New Labour had said its priorities were education, education and education and that 50% of all school leavers should go to university.
The reward? Threats of massive cuts in funding. The estimate of the cost varies from £600 million to £2.5 billion. In either case the impact will be massive. And the logic is simple: let the student pay.
Which is fine, of course, if you’re a parent used to paying £25,000 a year school fees in the sixth form (I kid you not). University is then a cheap finishing school and a welcome respite from previous spending. For everyone else university fees are a nightmare: for students the system is designed to ensure they come out ensnared with debt so they must be good and compliant toeing the line workers living in fear of not meeting their financial obligations who will do exactly as they’re told — just as big business wants.
Now the Russell Group of the 20 strongest universities in the UK has hit back in an article in the Guardian. They say:
It has taken more than 800 years to create one of the world's greatest education systems and it looks like it will take just six months to bring it to its knees. Britain's higher education system is superb — second only to the US, with 18 of our universities in the world's top 100 — and recognised across the globe as a gold standard.
But our gold standard system could be replaced with one of silver, bronze or worse, under swingeing cuts to the funding of higher education and science recently announced by the government. Exactly how much will be slashed and where the axe will fall is unclear, although it has been put at up to £2.5bn.
I suspect they exaggerate just a little. But I mean that: just a very, very little. If we’re passionate we tend to, inadvertently. And these people are passionate, and with good reason. Education is the bed-rock of society, of sustainability, of wealth, of well being, of our future. And it’s being jettisoned. As they say in response:
Our politicians must take a responsible approach to the funding of higher education and recognise that it is one of the jewels in the country's crown, worthy of protection because of the extraordinary value that it brings to our society, international competitiveness and economy. We call on the government to state clearly that higher education will not be cut further and to seriously consider reversing cuts already proposed.
Have no doubt, this is the first of many calls to arms. People will not accept cuts.
And there is no reason to accept cuts. The budget deficit can be filled with extra taxes. Now is the time to raise them. And people had better get the message before May because Cameron is saying he is intent on cutting this year. Disaster is looming.
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Richard, bit curious about the reference to massive debts for the student or fees for the parent. First, tertiary education funding does need improvement (in addition to the increased granted by Labour since 1997).
If we accept your premise that this puts the onus on the student to pay, the operation of the top up fees regime was to move the liability for fees from the hard up parent to the better of graduate. Isn’t this just a form of targeted taxation to those who can afford to pay (the graduate income needs to be over a certain amount before repayment kicks in).
I’d also query why we shouldn’t consider parental income in tuition fees. If the parents of a fair proportion of students (17 per cent of students are at independent schools, if we are being charitable then around 10 per cent of them will be on full fees) can afford fees for schools why should they get an expensive tertiary education for free?
Which is fine, of course, if you’re a parent used to paying £25,000 a year school fees in the sixth form (I kid you not).
Or perhaps not. You may simply be several hundred thousand worse off than you would have been if you hadn’t saved the state the cost of paying for your children’s priary and secondary education.
Richard
I really can’t understand your claim that “for students the system is designed to ensure they come out ensnared with debt so they must be good and compliant toeing the line workers living in fear of not meeting their financial obligations who will do exactly as they’re told — just as big business wants”.
This portrays a misunderstanding of how student finance and student loans work.
(1) Student loans are not the only form of non-parental finance – there are means-tested grants and scholarships.
(2) Student loans are only repayable by graduates earning more than £15,000 per year and the standard repayment is fixed at 9% of gross earnings above £15,000.
(3) The interest rate on student loans is generous to say the least – it is pegged to RPI and has recently been historically low (in fact, it has been a negative rate for a lot of student loans).
Student loan repayments are more akin to a “graduate tax” because repayments are only required by graduates earning above the threshold and the first £15,000 of annual income isn’t even taken into account in calculating the repayments – indeed, most student loans are now collected through employer PAYE systems – making the repayments even more like a “graduate tax”!
I’m not sure how a loan that you only have to repay once you’re earning more than £15,000 (and which you then stop repaying if you don’t earn that much) can be designed to “ensnare” students with debt “so they must be good and compliant toeing the line workers living in fear of not meeting their financial obligations who will do exactly as they’re told — just as big business wants”. This makes no sense in the context of student loans!
@Ken
Have you tried living on £15,000?
And buying a house?
And a pension?
And keeping a family?
Whilst losing 9% of gross pay?
It’s a doddle I assure you
This may be a tax – but it’s very regressive
And I really don’t like regressive taxes
Richard
On £15,000, of course, you are not going to be buying a house or providing for a pension. You will be paying rent and hoping you can subsist on the state pension in your old age.
Your marginal tax rate will be tax (20%), NIC (11%), tax credits withdrawal (39%), student loan repayment (9%). Yup, that’s a 79% marginal rate. We worry (well, I don’t, actually!) about the effects of a 50% marginal rate on the motivation of the higher paid, but what about this guy?
9% is just the tip of the iceberg of regressive taxes in this country.
Generally there’s no family to care for, but we PhD students live on a stipend which is the equivalent of something like £15,000 pre-tax (it’s actually £12,400 tax-free). As James rightly points out, at my level of income you don’t buy, you rent. I made a bit on the side in teaching, but netting that off I still managed to save £100 a month for writing up. Losing 9% would have been a squeeze, but I can imagine the possibility as I’m now writing up on £600 a month out of savings.
Obviously the cost of living varies across the country (and London students do get a bit extra), but it is quite possible to live on £15,000 per annum if you don’t have a family and are prepared to live in the way that your income demands. That means you don’t borrow for a house, you don’t run a car. You may not pay into a pension, although you can probably manage something (with employer contributions, one hopes). You make sure you shop at cheap supermarkets. When you go out, you do so cheaply. You don’t splurge on expensive items. In short, you cut your coat according to your cloth.
Of course with a family, it’s a very different game and I won’t even try to pretend it would be easy to keep a family on £15,000, it can’t be.
Philip
Your situation has one particular factor I would like to draw out. For you, this level of income is a short term situation. Presumably, you expect to get your Phd and then get a good job (good luck to you on both counts, by the way!). It all looks a bit different if you do not have real expectations of an improvement in your financial circumstances. I say this without meaning to belittle the financial prudence you are clearly exercising.
Yes, that’s a fair comment. And of course, people’s situations do change as do their needs. I certainly wouldn’t want to sound like I was saying that because I’m coping, everyone can cope: plainly that’s not true. All I meant to show was that it is possible to cope on £15,000 as a recent graduate.
The nonsense is to aspire to put 50% of youngsters through “university” to no apparent good purpose other than to massage unemployment statistics and increase the size of the education sector. University education should be state funded and for the 10% highest academic achievers only. Then it will mean something once more.
@Woolley
As much as I think yours is the ‘common sense’ view, other nations aim higher and seem to have the edge on us in many ways.
@ Carol.
I don’t see the logic in processing millions of young people through the system if they do not have the aptitude. Many arrive for their university interview with almost remedial standards of literacy. They are being deceived into debt and three wasted years by a target driven government and fund hungry institutions. I do not see this as aiming high and any nation that does will have it come back and bite them in the future. Where is the end result?
Let us have apprenticeships for real skilled jobs, take back our manufacturing through import tariffs(we will have to in the end anyway) and yes, let the taxpayer fork out for these by grants to bona fide manufacturing employers (not McDonalds burger flippers please), and for the “worthwhile” top 10% at university. No objection to that. It’s high taxes for big government, needless bureaucracy and waste that I have a problem with.
@woolley
I admit to some sympathy with what you’re saying – if not the way you say it
I enjoyed academic life: still do
But to suggest a university style education suits all and all life needs is absurd
What we do need is real life long learning
And few provide that
Richard
In a similar vein to Guernsey’s OFC’s microcosm. It is becoming increasingly obvious that if you are not suited to that environment then opportunities to improve oneself and remain in situe are becoming fewer and farther between. It is not at all clear what school leavers are supposed to do if they cannot afford the overseas university fees and wish not to ‘office’ themselves. As for those that leave school with limiting academic qualifications, usually those of second or third generation welfare dependents, the future is an unending two-fingers up at everything and everyone.
In comparison, I can only imagine the state of morale in the de-industrialised areas of the UK. It is why we need initiatives like the Green New Deal. Action that starts rubbing the sticks to produce some fire. There cannot be a quick fix to re-enfranchise those that will not, for what ever reason, subscribe to an academic stint – likely to achieve nothing but debt or feeling sub-materialistically successful compared to their less driven, and crucially, less law abiding peers.
University degrees will never be a common measure of achievement. The badge is not universally accepted. It is not an indication of ‘opportunity for all’ and so should not be a political manifesto driver.
We have been led to believe that short-term aspiration is a means to an end. It means nothing without ‘real life long learning’. Real, not reactionary, skill sets provide sustainability.