The economics of idiocy: a degree-level introduction
By William Rees-Mogg, Times [London], December 02, 2002
http://www.timesonline.co.uk/article/0,,482-499533,00.html
In business terms, British universities are over-trading and
underfunded. Since the late 1970s the number of students has been
dramatically increased, from one in eight of the relevant age group to
one in three, but the funding has not. As a result the Department for
Education and Skills own index of public funding per student has fallen
by a half. Tony Blair has promised to make this very bad situation still
worse, by raising the number of university students to one in two by
2010. No pro-rata funding has been provided for this.
Any business run in this way would already be bankrupt. The universities
are still hanging on, but at the cost of miserable pay for their staff,
particularly the teaching staff, of deferred expenditure on the physical
plant, of cutbacks and spending on books, equipment and so on. The
principle of free university education has been abandoned and students
now expect to leave substantially in debt.
This policy of expansion has been carried out by successive governments.
As much blame can be attributed to the Conservatives from 1979 to 1997
as to Labour since 1997. Nevertheless, the Labour Government has
continued the policy of increasing student numbers beyond any increase
in funding and it plans to widen the gap even further between now and
2010.
The policy has been political rather than practical. There has been no
serious investigation of the facts. No government has felt able to
answer the fundamental questions: what are the functions of universities
in the 21st century? How far should they be intellectual and how far
vocational? Should they be teaching physics or technology, Latin or
media studies, Milton or pop culture? Nor has there been any adequate
inquiry into the likely demand for student places, or the likely
availability of jobs for the graduates who are being produced. Policy
has been based on political soundbites rather than serious research.
The students themselves are persuaded to give up three or four years of
useful earning, and take on £10,000 to £20,000 of debt, by the assurance
that a university degree will help them to get much better-paid jobs. It
is even said, nonsensically, that each will earn £400,000 more in a
lifetime.
However true that may have been when one student in eight was a
graduate, it is manifestly less true when one in three is a graduate,
and will not be true at all, except for the best graduates of the best
universities, when one in two is a graduate. Already some professions
cannot absorb all the graduates who have taken a vocational course in
their subjects.
Governments have also been reluctant to recognise the disparities in
quality between universities. There is a jealousy against the best ones,
though this is not confined to Oxford and Cambridge, though the
Chancellor of the Exchequer, who himself went to an excellent Scottish
university, foolishly regards them as nests of elitism and snobbery. In
its own field of science and medicine, Imperial College is every bit as
good, or better, and one can hear similar facile sneers at Imperials
support for top-up fees. Unless our world-class universities regain the
freedom to manage their own finances, decide their own pay-scales, and
charge their own fees, there is no chance that they will retain their
international standing.
Next month the Government is expected to publish a review of the way
universities and students are financed. Originally this review was
expected this month, but it has been broadened to provide a ten-year
strategy for the whole of higher education, and Estelle Morriss
resignation has given a convenient additional reason for delay.
The real reason for delay, however, is that the Government does not know
what to do.
....
Simon Walters alleges that Mr Brown made a scathing condemnation of
the Prime Ministers elitist plan to allow the best universities to
charge top-up fees of up to £15,000 per year. This campaign has been
lead by Sir Richard Sykes, the Director of Imperial College London; the
Prime Minister has been sympathetic to it.
Mr Brown said: There is this ridiculous idea that low-income families
earning £15,000 can pay Imperial College £15,000 a year in fees. There
is a difference between elitism and excellence. Apparently the
Chancellors preference would be a graduate tax, which would,
presumably, be used by the Government to raise the payments to the
universities, probably on a relatively egalitarian basis.
The Prime Minister supports top-up fees and recognises the value to
Britain of the premier league of universities; Gordon Brown prefers his
graduate tax and is hostile to any special status for the best
universities; Charles Clarkes position is somewhat more obscure. In
personal terms he is much closer to Tony Blair than to Gordon Brown. He
actually favours elitism and is prepared to defend it in public.
Yet Mr Clarke recently told a group of Labour MPs that he is considering
a National Insurance surcharge on the employment of graduates, to be
paid by employers. This would not be a graduate tax, but a tax on
employing graduates. Companies might be happy to pay it for a scientist
or engineer with a first from Imperial College, but would be reluctant
to pay for junior staff or for third-class graduates from what Lord
Desai, in last weeks House of Lords debate, called these ghastly
universities. He seems to have been referring to the lower grade of
converted polytechnics.
I hope, but without much confidence, that the White Paper, when it
comes, will give a serious analysis of the problem. Any business
analysis would start by looking at the demand side, at the probable
balance between the future demand for university graduates and for
non-graduate vocational skills, and at the demand for university places.
On the employment side, there seems already to be over-supply, at any
rate in the most fashionable areas.
Certainly in those areas of business I know most about, the young
graduates of this generation are having a hard time getting into their
first jobs, much harder than a generation ago. That is true of
broadcasting, journalism, publishing, law and finance. A good degree
from a first-class university can be help in getting an interview; a
modest degree from the average converted polytechnic is only too likely
to go into the reject pile. If the fees of these less prestigious
institutions should be raised, or new taxes are imposed on those who
attend them, they could easily become uneconomic for their students.
.....
The Government is having a heated internal argument about the three
opposing Freedom to decide their own fees is the condition of
independence for all universities, good and bad. It was a disaster that
the universities and teaching hospitals lost their independence after
1945; they paid the price of depending on Government funding.
Poor students should, of course, be helped to pay for their university
education, by grants as well as loans. But there is no magic about
university education. It is not a universal good. ....