Why Lord Browne has got his numbers wrong

Lord Browne should check his numbers before giving advice to make universities so expensive that it will put off talented people from poor backgrounds.

A multitude of bloggers have already written extensively about the unfairness of the Browne report and the undeniable act of hypocrisy by the Lib Dems if they renege on their pledge to oppose any rise in tuition fees. This makes for fascinating debate – especially when the House of Commons Library has kindly come up with some numbers assessing the funding of the higher education system.

Good news or bad news first? For those desperate to see a spark of hope in the reform that is likely to further widen the gap between the rich and poor, let us begin with the good news: Assuming that the cap on tuition fees would be removed or simply increased, current students need not worry.

If Marx is right and history repeats itself, then former changes in university policy show there will be a lag of at least two to three years before any tuition fee rise is fully implemented. If and when introduced, history shows again that only incoming students will be affected.

But now for the bad news: Apart from turning the education system into an expensive occupation that will burden many a talented person who does not come from a privileged background, total maintenance and tuition fee loans will increase by billions of pounds per year.

The government, however, will need to foot the bill for increased tuition fees in the short term before an unfair and regressive interest rate gradually takes over and students begin to pay back the higher fees. If the economy does not recover soon, then the additional funding by the government will put an additional strain on the budget.

Indeed, independent research conducted by the House of Commons Library shows that a rise in tuition fees will inevitably lead to greater overall treasury costs unless student numbers in a few years’ time drop considerably:

Fees-and-loans-2009-10

On the one hand, it would be foolish to ignore the fact it is likely the number of people applying for a place at university will be deterred by higher fees. But equally, if the new rules are implemented in a few years’ time, then the overall number of people in higher education is likely to increase.

Assuming, therefore, that student numbers will decrease by 30 per cent or even 40 per cent relative to November 2009 seems highly unlikely. It is far more probable there will be a drop of 10 per cent or even none at all – returning to around  482,000 students. So how much will the government have to pay every year? Removing the fee cap is likely to lead to an average tuition fee loan of approximately £7,000 across all universities in England, Wales and Northern Ireland.

Lord Browne argues that a graduate tax would cost the government at least an additional £3 billion a year until 2015-16 and place a large burden on the budget deficit. What this article shows, however, is that according to the independent research conducted by the House of Commons Library, a rise in tuition fees to £7,000 would probably also cost the government around £3bn per year.

It would be advisable for Lord Browne to check his numbers before giving advice that will make universities so expensive that the phrases ‘progressive’ and ‘fairness’ will become intoxicated words that political parties will soon learn to avoid.

18 Responses to “Why Lord Browne has got his numbers wrong”

  1. yorkierosie

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  2. paulstpancras

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  3. Jonathan Lintern

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  4. Catherine Elizabeth

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  5. Matthew

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong http://bit.ly/cOdawi

  6. Sara Beremenyi

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  7. Jordan Hall

    Browne got numbers wrong; fee rise costs government just as much in the short term as a grad tax would http://bit.ly/bQgK1L #brownereview

  8. Billy Aldridge

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  9. Red Ed

    “If Marx is right”

    There’s no if about it.

  10. Martin Johnston

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  11. Chris

    Yes! No one was asking this!

    Effectively, universities are getting a big hike in their funding, they are getting that money right now from students, and the students are getting that money right now from loans – where is the money coming right now for the loans?

    It must be coming from government debt! Basically, it must be coming from the sovereign bond markets which apparently can’t take any more strain, according to the rest of the coalition’s economic policy!

    The argument for taking away people’s public services is always “We can’t hand national debt to our children”. That is literally, exactly what they are doing, only this time its EXCLUSIVELY children.

    Ed M needs to hammer them on this at PMQs. They are prepared to swallow a massive chunk of national debt to ram through marketisation of higher education, but they are cutting every penny they can of housing and incapacity benefit. Basically, when it comes to swallowing national debt in the short term to help the poor, we can’t afford to – when it comes to swallowing national debt in the short term to help the rich, we can’t afford not to.

    They use a household analogy to say why we just can’t live in debt, can’t afford the interest – now they are bringing in loans WITH interest for children and saying, “Oh, yeah, you gotta take on debt now, pay later. See, you can pay it off later because your economic outlooks will improve. It’s called investing in your future, duh”.

    Our debt is 65% of GDP – when we built the NHS, our national debt was 150% of GDP.

    Lib Dems, I hope you are happy. This is your legacy.

  12. Shirley Williams

    I came into politics to privatise education.

    Switch benefits to CPI, switch students loans to RPI + 2%. I love it.

    To hear David Willets talking about students being “customers” in a “university market”, oh I tell you it warmed my heart, it really did.

    – Shirley Williams

  13. Roger

    You are aware that Marx actually said ‘History repeats itself: first as tragedy, secondly as farce’ and that this doesn’t literally mean ‘history repeats itself’?

    You really should read (or re-read?) The Eighteenth Brumaire of Louis Bonaparte – it is full of great rants like:

    ‘…struggles whose first law is indecision; wild, inane agitation in the name of tranquillity, most solemn preaching of tranquillity in the name of revolution – passions without truth, truths without passion; heroes without heroic deeds, history without events; development, whose sole driving force seems to be the calendar, wearying with constant repetition of the same tensions and relaxations; antagonisms that periodically seem to work themselves up to a climax only to lose their sharpness and fall away without being able to resolve themselves; pretentiously paraded exertions and philistine terror at the danger of the world’s coming to an end, and at the same time the pettiest intrigues and court comedies played by the world redeemers….’

    http://www.marxists.org/archive/marx/works/1852/18th-brumaire/

    Barring that pedantic point excellent takedown of Browne…

  14. Andy Bean

    RT @leftfootfwd: Why Lord Browne has got his numbers wrong: http://bit.ly/bQgK1L

  15. Forlornehope

    The whole point of the student loans corporation, as devised by Gordon Brown, was to get the money off the government debt. If it were to be “repaid” by a graduate tax, then the upfront money would have to be added to the deficit. This is all based on OECD accounting rules, so it’s not in the remit of the UK government to change it. After the revolution we will be able to do whatever we like but until then the UK has to “play by the rules”. Loans taken out by students are private and not government debt.

  16. Tim

    Excellent article

    Good luck to Labour people slamming the Tories and the Lib Dems for this. We’ll have to work together on this one and get a bit of generational solidarity going.

    Labour and Lib Dem activists can help by announcing a leafleting boycott on pro-fees candidates

    But Labour people need to learn a lesson too – don’t put discredited former CEOs of climate wrecking oil corporations in charge of wrecking education!

  17. Lady J

    If I am not mistaken; hasn’t the IFS’s independence been neutralised by the appointment, by Camron of Robert Chote, former head of the IFS, or is it a coincidence that the IFS report is a little kinder to the Con-dem re tuitio fees.

  18. Look Left - 33 and easy, a new nation emerges blinking into the night | Left Foot Forward

    […] week, we also reported how Lord Browne had got his numbers wrong, how we could afford to fund our universities but chose not to, how the Scottish government had […]

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