The marketization of English higher education and the financing of tuition fees

ThisarticleexploresthemarketizationofEnglishhighereducationwithparticularreferencetotheintroductionofundergraduatestudenttuitionfees.Itarguesthatthebreakdownofthepoliticalconsensusthatunderwrotethepublicfundingofundergraduatestudentfundingwastheconsequenceofideologicalandeconomicchangesthat,followingthethreatofsome universitiestoimposetop-upfees,resultedintheappointmentoftheDearingCommittee andthereafterthesteadyintroductionofvariablefeesuptoaceilingof£9,000perannum,repayablethroughincome-contingentloans.Itreviewsthecontemporarybreakingofthepoliticalconsensusonthisissue,asevidencedbytheLabourParty’spromiseinthe2015generalelectioncampaigntolowerthemaximumannualfeeto£6,000,withthefurtherpossibilityofreplacingincome-contingentloanswithagraduatetax.Itconcludesbyputtingforwardthepolicyoptionsthatarelikelytoemergeinthecontextofthepublicationofthecurrentgovernment’sGreenPaperonhighereducation.

These pragmatic economic considerations were steadily reinforced by the growing ideological consensus that the pursuit of higher education enhanced what was essentially a private rather than a public good, and thus it should be paid for by the individual recipient rather than from the public purse. Not surprisingly, such claims gained increasing strength in theyearsofsuccessiveConservativeGovernmentsunderMargaretThatcher,althoughironically, thankstointernalpartydivisions,notoneofhergovernmentssucceededinbringingastudent loansschemetofruition (FarrellandTapper,1992:274-84).Butthesoilhadbeenthoroughly tilledpoliticallyfortheDearingReport(1997)tolaythegroundsforthesubsequentLabour Government, under the auspices of the Secretary of State, David Blunkett, to take the vital stepofintroducingaflat-rateincome-contingentloansscheme,andsubsequentlytounderwrite variablefees.Therewasaninitialceilingof£1,000perannum.Thiswasraisedto£9,000inthe earlyyearsoftheCoalitionGovernment,adevelopmentsupportedbythefindingsofanother officialreviewofhighereducation,theBrowneReview,Securing a Sustainable Future for Higher Education (Browne, 2010). However, this review did not recommend a fees ceiling.As noted, therehasbeenmuchdiscussionofthefeesceilingbeingloweredto£6,000perannum,withthe possibilityofincome-contingentloansbeingreplacedbyagraduatetaxtosecurethenecessary funding (Gill,2015:5).Thedangerofremovingtheceilingontuitionfeesisthat,withoutaviable accompanyingpolicyonstudentloans,themostexpensiveuniversitieswouldpossiblybeout of the reach of students from poorer families, which would risk creating a division in higher educationtoparalleltheonethatmarkstheprivatesecondarysector,withitsstratumofasmall numberofveryexpensiveschools.
The second contextual change is that, although there may be a broad acceptance that highereducationisapublicgood,thishasmuchtodowithitsenhancementofknowledgeand promotionofhigh-statusculture,anditdoesnotmeanthatitisnotalsoaprivategoodandthat studentsasitsbeneficiariesshouldnotmeetatleastsomeofitscosts.Certainly,asseeninthe policystanceofUniversitiesUK(UUK)thereisconsiderablesupportforthisviewwithinthe universities(seetheresponseofitsStudentFundingPanelto'thenewIFSreportonstudent funding ' -Universities UK, 2015). Moreover, the current funding via income-contingent loans with a high ceiling level gives considerable control to the universities to plan their financial futureswhiledistancingtheprospectofbureaucraticstatedirectionoftheiradmissionspolicies. Ofcourse,thereissomenostalgiainlookingbacktotheimmediatepost-Andersonyears,before thepost-Robbinsexpansiontookoff,andinimaginingthatthestatewillinfuturecontinuously fundhighereducationgenerouslyonanagreedquinquennialbasis.Butpoliticalrealitysuggests thatthisisnotanareaofpublicpolicylikelytobeshelteredpermanentlybecausethedemands of other policy imperatives (for example, health care for the expanding elderly population) have increasingly significant political appeal (for example, consider the 2015 general election manifestos of all the major parties, in which concern for the funding of the National Health Service takes precedence over every other policy).The ideological framework, within which policyispartlyshaped,hasshiftedinadirectionthatmakesthedemandforatleastapartial paymentoffeesbythestudentmoreacceptable.Moreover,itisimportanttopointoutthatthe shifttofundingteachingthroughstudentfeesgivesuniversitiesmorecontrolovertheirown development.Theuniversitiesarenowfunctioninginthecontextofastate-regulatedmarket (Palfreyman andTapper, 2014), for we have moved away from a centrally planned system of highereducationinwhichdevelopmentwashighlydependentuponthefundingbodies-firstthe UniversityGrantsCommitteeandsubsequentlythefundingcouncils.

The policy alternatives
In analysing these alternatives we have been guided by the principles implicit in the previous section of this article that the universities should control their own fee levels, which rules outtheloweringofthemaximumfeefrom£9,000to£6,000perannum,andthatagraduate tax should replace income-contingent loans. Either of these moves would leave the funding of higher education to the vagaries of public expenditure and vulnerable to the shortfalls in fundingthatoccurredinthe1970sand1980s.Suchmovescouldalsogivethestatepotential controlovertheadmissionsprocess,perhapsevenimpactingupontheacademicprofileofthe universitybychoosingtofundonlythosestudentswhoselecttostudycertainacademicoptions, aswassuggestedbybothPlaidCymruandUKIPintheir2015electionmanifestos.Thereare alsopossibleacademicramificationsinreplacingincome-contingentloanswithagraduatetax, although the costs (and assumed benefits) are mainly political and have to be borne by the governmentthatenactsthepertinentlegislation.Alreadywehaveanincreaseinapplicationsto overseasuniversitiesinresponsetotheimpositionofhighfeesandthiscouldbeintensifiedif thosewhohavegraduatedfromanEnglishuniversityhavetopayagraduatetaxthroughouttheir workinglivestofinancefuturetuitionfees.Alsoasanearmarkedtaxthiswouldrunintostrong opposition from theTreasury, which has always opposed such hypothecated taxation.When variabletuitionfeeswerefirstintroducedtherewasconsiderablesupport(ledinparticularby theLSEeconomistNicholasBarr-seeBarrandCrawford,2005:101-19)fortheideathatthey shouldbeunderwrittenbyagovernment-financedschemeofincome-contingentloans,which wasstronglyfavouredoverproposalsforagraduatetax:sowhyshouldanincominggovernment gooverthesameterritoryagain?
So action is pursued on three fronts: (1) to introduce technical changes to the current student loans scheme that will lessen its dependence upon the public purse (even possibly makingtheuniversitiesassumetheresponsibilityforraisingfinancialsupportforatleastpartof thecostsoftuitionfees);(2)torequiretheuniversitiestoassumegreaterresponsibilityforthe academicqualityoftheprogrammestheyoffer;and(3)topermit,througharegulatedprocess of access, more institutional providers to enter the market in order to increase institutional competition and student choice.Although we are not going to return to a system of higher educationinwhichstudentaccessisoverwhelminglypubliclyfinanced,wecanconstructamodel inwhichthereisamoreequitablesharingofthecostsoftuitionandinwhichstudentscanbe better assured that they receive quality higher education (while the universities retain more controlovertheirownaffairs).
TedTapperhasspentnearlyallhisacademiccareerattheUniversityofSussex .Hisresearch has developed in two broad fields: the politics of secondary schooling, with a focus on the increasing authorityofthecentralstate;andthepoliticsofhighereducation,encompassingareasonablylargebody of work on the governance of higher education and the politics of policymaking. More recently, he has examinedtheroleofideasintheprocessofchangeinhighereducation.