Don’t turn your back on universities, Vince – invest in them to tackle the deficit

Universities need to be invested in; rewards include tackling the national debt in the short term while ensuring we have a highly skilled, high growth economy.

Our guest writer is Fiona Edwards of the Free Education Campaign

In order to justify the Liberal Democrats’ sharp u-turn on student funding Vince Cable played the old Thatcherite card that there is no alternative because of the state of the public finances.

He told the Commons:

My own party consistently opposed graduate contributions, but in the current economic climate we accept that the policy is simply no longer feasible.”

But missing from his argument has been the central role higher education could play both in reviving the economy now and in promoting long term prosperity and growth in the future.

Shadow business secretary John Denham hit the nail on the head with his rebuttal to Cable yesterday saying:

“Higher education is important not just for individual graduates but for growth, prosperity, job creation and our ability to succeed in a competitive world.”

As Nobel prize-winning economist and former head of the World Bank, Professor Joseph E. Stiglitz, has also pointed out:

“[We need] investments in technology, education and infrastructure… such spending will stimulate the economy and create jobs in the short run and promote growth and debt reduction in the long run.”

A briefing by the Free Education Campaign produced earlier this year pointed out that the previous government’s figures illustrate that investing in higher education reaps significant immediate economic benefits.

It revealed that the £23 billion spent each year on higher education, funded from both the public and private sectors, produces an economic return of £60bn, arising from a variety of sources including jobs, exports, innovation and so on.

That means for every one pound invested in higher education, the economy expands by £2.60. Treasury models indicate that half of this – around £1.30 – comes back in tax revenue, giving the government extra income on each pound invested to pay off the national debt or invest in other public services.

The latest evidence from the OECD suggests the return from investing in higher education is key to economic revival. The OECD Education at a Glance 2010 report recently stated:

“Governments should expand tertiary studies to boost jobs and tax revenues.”

It explained how the return would be much bigger than the original outlay (table A8.4):

“Even after taking account of the cost to the public exchequer of financing degree courses, higher tax revenues and social contributions from people with university degrees make tertiary education a good long-term investment.

“Net of the cost of degree courses, the long-term gain to the public exchequer averages $US 86,000 in OECD countries, almost three times the amount of public investment per student in tertiary education. Overall returns are even larger, as many benefits of education are not directly reflected in tax income.”

The report shows that the gains are even higher in the UK, with up to a 382 per cent return. Yet alongside the double whammy attack on students – through plans to abolish the cap on tuition fees and introduce commercial interest rates on student loans – Lord Browne has made the assumption that there will be a huge reduction in state investment in higher education by cutting university teaching budgets by 80 per cent.

This failure to invest is going to aggravate the serious problem of Britain falling behind other countries with regards to the number of graduates it is producing. The UK is already plummeting down the graduate league table and is now below the OECD average for graduation rates. In 2000 it was a world leader, nine percentage points above average.

The caricature conjured up by some that higher education is about academics sitting loftily in their ivory towers is far removed from the real role higher education plays: invigorating the British economy. It needs to be invested in. The rewards will include tackling the national debt in the short term – and ensuring Britain has a highly skilled, high growth economy in the long term.

The Free Education Campaign will be addressing a session at the Progressive Students conference called ‘Organising to challenge the cuts consensus: No to higher fees – invest in education’. The session will take place from 10.30-12, Saturday 23rd October at Birkbeck College, central London.

28 Responses to “Don’t turn your back on universities, Vince – invest in them to tackle the deficit”

  1. Steve Rooney

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  2. Fiona Edwards

    My Left Foot Forward blog: 'Don’t turn your back on universities, Vince – invest in them to tackle the deficit' //bit.ly/9e6YzA #browne

  3. Milena Buyum

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  4. Fiona Edwards

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  5. Stephen Canning

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  6. alexlockwood

    RT @Fio_edwards Left Foot Forward: 'Don’t turn your back on universities, Vince – invest to tackle the deficit' //bit.ly/9e6YzA #browne

  7. Shamik Das

    Hear, hear! RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  8. Jenny Bunker

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  9. Ben Folley

    Grt article from @fio_edwards RT @leftfootfwd: Don't turn your back on unis, Vince – invest in them to tackle deficit //bit.ly/cHs3OL

  10. Stephen Mullen

    RT @Fio_edwards: 'Don’t turn your back on universities, Vince – invest in them to tackle the deficit' //bit.ly/9e6YzA #browne

  11. Hazico_Jo

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  12. Mike C

    What has happened to the Labour voice on this? There just seems to have been a very muted reaction from the opposition bench. The government decides to reduce its teaching budget by up to 80% and asks the poor student to pick up the tab! Where is the fairness in that.

  13. Sector29

    “@leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL”

  14. Robert

    Who asked Browne to carry out the review, what Brown the ex prime minister, do you think Gordon would have put up the cost to help our beloved tax payers yes of course, after all it was that other leader who decided students should pay.

    I do not think Cameron or cable have much to worry about, after all if it was Gordon he would have done something to add insult to insult.

  15. Susan Asquith

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  16. Tim

    Glad to see there is an NUS Free Education campaign again. Is this cross organisational successor to the Campaign for Free Education that took Kat Fletcher to her presidency, or more like a front group for one of the factions?

  17. Mr. Sensible

    This is an example of government cuts risking our economy.

  18. We Need Investment, not Cuts, in Higher Education « The Retrofit Lefty

    […] This article from the free education campaign was published on left Foot Forward yesterday. It clearly lays out the economic benefits of investment in higher education. It’s my opinion that those opposed to cuts need to wage more than simply an anti cuts campaign – we also need a positive alternative, an alternative this article provides. […]

  19. George Woods

    Great article by @Fio_edwards on the need for investment, not cuts and higher fees, in education //bit.ly/9e6YzA

  20. David 'Daf' Adley

    RT @woods_george: Great article by @Fio_edwards on the need for investment, not cuts and higher fees, in education //bit.ly/9e6YzA

  21. Michael Burke

    Excellent piece.

    In the words of the OECD recently, “Governments need to invest in higher education to boost jobs and tax revenues”.

    //www.oecd.org/document/52/0,3343,en_21571361_44315115_45925620_1_1_1_1,00.html

  22. Gordon Gibson

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit: //bit.ly/cHs3OL

  23. Fighting the Browne review means making the case for investment in our Universities « The Retrofit Lefty

    […] question is whether these cuts are necessary. The Free Education Campaign has recently posted an article on the foremost Left-of-centre blog in Britain, Left Foot Forward, on how investment in higher […]

  24. David 'Daf' Adley

    RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit //bit.ly/ao4IGY

  25. Gurjit Singh Sidhu

    RT @daf_adley: RT @leftfootfwd: Don't turn your back on universities, Vince – invest in them to tackle the deficit //bit.ly/ao4IGY

  26. Student Broad Left

    @timrollpickerin @wesstreeting @AaronPorter Investment in free education! Read how education stimulates economy: //bit.ly/9e6YzA

  27. Student Broad Left

    There is an alternative to 9k fees and @aaronporter tax on students. It's called free education: //bit.ly/9e6YzA #investmentnotcuts

  28. Chris James-Watkins

    RT @broadleft: There is an alternative to 9k fees and @aaronporter tax on students. It's called free education: //bit.ly/9e6YzA #in …

Leave a Reply