Britain’s universities need more money. The expansion of higher education over the past couple of decades – without a related increase in spending – has left them in dire need of new and sustained flows of revenue. While there is no doubt that top-up fees are a possible answer, they are most definitely not the right answer.
Since the 1960s, the number of school-leavers going to university has increased from one in 20 to over one in three today. Student numbers have gone up by 90 percent since 1989. While this represents a positive expansion of educational opportunity, it has undoubtedly come at the expense of quality. Expenditure per student has declined by 37 percent in real terms since 1989. The ratio of students to teachers has doubled from 9:1 ten years ago to 18:1 now. Meanwhile, the pay of academics has fallen even further behind that of other public sector workers.
The pressure on universities, having eased slightly since the expansion of the late 1980s and early 1990s, is now back on again, thanks to the government’s pledge to have 50 percent of eighteen to 30 year-olds experiencing higher education by 2010. If this target is to be met – and we believe it is imperative that it is – then new ways of funding this expansion must be found. These must secure an improvement in the quality of university education while guaranteeing that access – for students from low and middle-income families – is enhanced.
When the government scrapped the maintenance grant and introduced tuition fees in 1997, it established the principle that state, students and their parents should each contribute towards higher education. Indeed, contrary to popular belief, the state is still – by far – the major contributor to the cost of a student’s tuition. The government estimates that the £1,100 paid by students represents only a quarter of the cost of educating students. The low-interest loans that students receive to pay their living costs also represents a huge state subsidy.
Accepting this contention does not, however, mean that we should go down the road of top-up fees, which would allow universities – if they chose – to set fees above the current £1,100 limit. Even if low-income families are exempted from them, top-up fees risk deterring young people from such backgrounds from going into higher education. This has been the lesson from the introduction of tuition fees. During the period 1996 to 2001, when fees were introduced and maintenance grants abolished, the number of applications from poorer students increased by only 3.8 percent, whereas the overall number of applications increased by 8.7 percent. To reverse this trend the government must not simply rule out top-up fees but also consider the reintroduction of grants for young people from low-income backgrounds.
While middle-income parents should be expected to bear some of the cost of their children’s living expenses at university, they should not have to bear the costs of tuition. Fees of £1,100 may be manageable for them but it is utterly unrealistic to expect even relatively affluent middle-class families to pay some of the figures mooted – between £5,000 and £15,000 – especially if they have a number of children wishing to go to university.
The political effect of top-up fees could be highly detrimental for New Labour. The party’s success has come from its ability to build a broad coalition of our heartland support and ‘middle England’. Hitting ‘middle England’ with huge top-up fees threatens to rupture this alliance, allowing the right to convince the middle-class that their true interests can best be served by an alliance with the rich (who, incidentally, are likely to be least concerned about top-up fees, which they can easily afford). The future of Britain’s public services, too, relies on the middle-classes continuing to believe that collective provision has something to offer them. Top-up fees will severely dent this belief.
The progressive solution to the university funding gap, therefore, is to abolish fees altogether – thus relieving middle-income parents of the burden of tuition costs – and introduce instead a graduate tax. This allows former students – irrespective of their background – to pay back the costs of their tuition which the state will have effectively loaned them.
If the government is not able to meet the cost of funding the expansion of universities during the period between the introduction of a graduate tax and the moment when it begins to bear fruit, it may need to consider asking those who received free tuition in the past to make their contribution now. The simplest way of doing this would be to introduce a new 50 percent higher rate of income tax for those earning over £100,000 – the vast majority of whom will have benefited from free higher education.