Left Foot Forward's Daniel Elton reports on how the coalition's higher education market ended up inflating prices and introduced pressures to increase government debt.
Remember all that lovely spin about how higher education tuition fees of more than £6,000 a year would be rare?
“Mr Willetts gave warning that universities should only charge maximum fees only in ‘exceptional circumstances’.” – The Daily Telegraph, February 21st 2011
“People keep citing £9,000. You know, £9,000 should be the exception not the rule. If you want to go through the £6,000 barrier you are going to have to jump through a lot of hoops.” – The Independent, December 5th 2010
“Simon Hughes (Bermondsey and Old Southwark) (LD): ‘One of the worries out there is that all universities might end up being allowed to charge £9,000. What assurance – what rules, what guarantees-can my Right Hon. Friend give that “exceptional” will mean “exceptional”, and that £6,000 will be the limit for most universities in the country?’
“Vince Cable: ‘That is a highly pertinent question in the light of the experience of the last government, who had a two-tier system. There was a migration of all universities to the top of the range. They operated, in effect, like a cartel, and that must be stopped.'” – Hansard, December 9th 2011
Well, it’s all turned out rather differently.
As the BBC reported this morning:
More than a third of England’s universities have had their plans to charge £9,000 for every course officially approved. Some 58% will be allowed to charge £9,000 for at least some courses in 2012, said the fees watchdog the Office for Fair Access.
One major reason why is that universities fear students will price as shorthand for quality, so resulting in universities actually competing to raise prices. As Left Foot Forward reported recently, the Vice Chancellor of De Montford University, Professor Dominic Shellard, told his student newspaper that DMU will charge £9,000 next year because:
“…whether we like it or not there’s a correlation between what you charge and people’s perception of quality. We’re quite ambitious as an institution, we want to go well beyond this notion that we’re a post-92 institution. It was a reflection of our ambition.”
We are fast heading towards a two-tier higher education sector where potential employers will ask applicants “did you go to a £9K university?”; strangely, senior Liberal Democrats said they changed thier minds on tuition fees due to the need to reduce the deficit.
Yet, with government paying fees up front and institutions competing to drive prices upwards, we have a recipe for increasing government debt, at least in the short term.
20 Responses to “How the Cable/Willetts market in higher education ended up inflating fees”
Mr. Sensible
Couldn’t agree more Daniel; the Coalition’s record on higher education is one of broken promice after broken promice.
And as you correctly point out, as a result of this, the taxpayer, as well as the student is footing the bill, leaving the government scrabbling around for ways to fund it.
Catherine McDonald
Simon Hughes said in Dec that £6k shld be limit for most universities yet today we learned fees will average £8,393 http://bit.ly/nG9mqN
Sam McBratney
Simon Hughes said in Dec that £6k shld be limit for most universities yet today we learned fees will average £8,393 http://bit.ly/nG9mqN
Harry Barham
Simon Hughes said in Dec that £6k shld be limit for most universities yet today we learned fees will average £8,393 http://bit.ly/nG9mqN
cim
One major reason why is that universities fear students will price as shorthand for quality
And, well, they’ll be at least somewhat right. The more money the government pays for the course, the better the course can be.
If it was the student’s own money then there’d be a cost-benefit question to consider, but of course it’s not – the loan has such generous repayment and writeoff terms that it basically makes no financial difference to any student what the exact fees level is/was.
So the students have no incentive not to pay the high fees, the universities have no incentive not to charge the high fees, and the government has no way to stop them doing so.
I’m actually really quite surprised that there are so many universities not charging 9k for all courses.
Mr Sensible. as a result of this, the taxpayer, as well as the student is footing the bill, leaving the government scrabbling around for ways to fund it
Since students pay tax anyway, surely all HE is generally going to be taxpayer funded one way or another. The debate is about which specific taxpayers should pay for it.