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.

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