With postal voting well underway, the time is right to look across the main party manifestos to see what might be in store for universities and students. It’s a mixed bag with little revealed about what it will cost and what are the tangible benefits. In the end, the only plans that seem to matter are those of the Labour Party. However, there is no solid indication about how they might fund what are bold plans. Nevertheless they do have options to act within the tight fiscal constraints they have set themselves.
What is on offer?
TEFS has already looked at the main manifestos and drawn some conclusions. The Conservatives want to carry on as before with no change indicated. It is fair to say there is deep-rooted anxiety and dissatisfaction about the situation.
Two outcomes are inevitable. Many courses and even universities will close leading to displaced students and staff redundancies. Declining maintenance support for students will deter many as the population rises along with demand. But after a substantial decline on their watch, they now plan to mend the damage far too late and,
“Fund 100,000 high-quality apprenticeships for young people, paid for by curbing the number of poor-quality university degrees that leave young people worse off”.
The alternative to A-levels are T-levels that will not lead to university. But they too will be closed down in a period of chaos for colleges. The overall ‘social engineering’ aim is to deter students from university to the point where only those with well-off families can go. (TEFS 12th June 2024 ‘Conservative manifesto reveals more of the same’)
In stark contrast, the Liberal Democrats want a review of Higher Education that will take time. In the meantime, they want to see more widening participation and will spend money to,
“Reinstate maintenance grants for disadvantaged students immediately to make sure that living costs are not a barrier to studying at university”.
(TEFS 10th June 2024 ‘Liberal Democrats start the manifesto ball rolling’
At either end of the political spectrum are Reform and the Workers Party. Both must be taken seriously as further polarisation of the electorate emerges.
Reform makes wild promises to,
“Scrap Interest on Student Loans. Extend loan capital repayment periods to 45 years. Restrict undergraduate numbers well below current levels, too many courses are not good enough and students are being ripped off. Enforce minimum entry standards”.
Along the way they plan to further control universities and what they deem to be ‘free speech’. Oddly, this mirrors the aims of the Workers Party who are more strident on controlling universities starting with “de-privileging the machinery of mass university education”. Everyone should have access to universities, but under more state control.
“Universities are now private business entities. We will, therefore, bring our complex and out-of-control University system back under national scrutiny, whilst scrapping tuition fees and ensuring guarantees for full academic freedom”.
In Scotland, both Labour and the SNP do not plan to change the no-fees position that has been in place for some years. But for Labour this is a very different position to that promised in the rest of the UK.
Costs.
This week London Economics and the Nuffield Foundation released their assessment of the costs in ‘General Election Briefings: Examination of General Election manifesto commitments on higher education fees’ (pdf) (see also a good summary from the Higher Education Policy Institute). The Conservative no-change policy will still cost the tax-payer about £2.01 billion per year in England.
The Liberal Democrat offer will cost much more and increase the cost per year by another £1.31 billion. The further cost after a review of the system is unknown.
The Green Party goes further and aims to abolish tuition fees bringing the cost to the government up to £11.94 billion per year. If all current loans were also replaced by grants in their system, then the annual cost would rise to £18.64bn. This is far too high at present and might explain why Labour are shying away from this.
The Workers Party are not so shy, Although London Economics have not modelled their plans the cost would be similar if not higher than that projected for the Liberal Democrats.
Reform plans would increase costs by £4.48 billion per year.
This leaves Labour. London Economics have not reviewed what options might be open to a Labour administration but instead concludes,
“The Labour Party’s manifesto includes little in relation to HE fees and funding. While there might be significant changes to the system to introduce a greater degree of progressivity under an incoming Labour government, the lack of detail in the party’s manifesto means that we are unable to specifically model Labour’s manifesto commitments on HE fees and funding”.
There is no doubt that they have modelled some possible options but are not able to reveal them this side of polling day. But we can expect changes based upon statements made in the manifesto and leading up to it being released.
The only promises that will matter.
With the Labour Party so far ahead in the polls, there is a record landslide victory in sight. In practical terms, only the Labour Party’s manifest promises on Higher Education and student support would matter. TEFS has looked at these and concluded that a ‘bold’ plan is afoot. However, how it would be funded remains obscure. There is no change in the projected budget set out and so we must conclude that any change will happen withing existing parameters (TEFS 14th June 2024 ‘Labour manifesto reveals a bold plan for universities’).
There are clear aims and promises in the manifesto and these are predicated on the assertion that,
“Labour will continue to support the aspiration of every person who meets the requirements and wants to go to university”.
However, the means to fund these are not apparent in the balance sheet set out in its ‘Fiscal Plan’ that shows new revenue and reallocations between departments. The assumption is that any changes to the financing of higher education must work within existing budgets. That may be a big ask since previous statements made it clear that,
“Reworking the present system gives scope for a month-on-month tax cut for graduates, putting money back in people’s pockets when they most need it”
This implies that more students should enter higher education and put even more pressure on budgets. Previous statements have indicated that,
“We will build on the legacy of the last Labour government’s target for 50% of young people to go to university”
There is a promise to work with universities on this and therein lies a window of opportunity for rational debate to replace the prevailing open conflict between universities and the government.
“The current higher education funding settlement does not work for the taxpayer, universities, staff, or students. Labour will act to create a secure future for higher education and the opportunities it creates across the UK. We will work with universities to deliver for students and our economy”.
It is hoped that students and employers would be involved in working through a new system that distributes the repayment between the beneficiaries and not falling on the shoulders of students alone.
How then might Labour achieve change?
The simple fact is they want a more progressive repayment regime with students paying less per month.
If an incoming government is to achieve its objective of funding universities at the right level and cut tax/loan repayments for an increasing number of students, then it would appear to be an impossible task. If fees were to rise, as they must do, then repayments would rise for students under the current system. The crisis in universities is mounting and they are crying out for stability so they can plan not panic.
But there is a way out. Simply redistributing the burden across graduates, graduate employers and the general taxpayer would lower the cost for a student whilst making room for fee rises. These three represent the beneficiaries of higher education and it is fair that each should pay their share. Models such as a graduate tax on graduate employees and employers might seem attractive.
TEFS has looked closely at the simplest option that could be introduced quickly. This is a ‘National Insurance Graduate Levy’ that is inherently index linked. It simply protects universities from inflation pressures as it tracks pay inflation of graduates. TEFS has advocated this for some time and explored the advantages (see latest post TEFS 5th June 2024 ‘Funding students and universities and the election vacuum: addressing an urgent need with a National Insurance Graduate Levy’). It could also be presented to the Scottish voters as a no-fee option.
This would have progressive payments built in and would not represent a ‘new tax’ as it is simply a redistribution of the current student loan repayments. It would work within the ‘social contract’ like a reverse state pension (TEFS overview). It could be done quickly through consultation with universities, students and employers. TEFS would expect to see this built into a comprehensive spending review and starting in 2025. It would stabilise a rocky system and help all in planning across students, universities and employers.
There is no doubt that a new funding model is needed urgently for universities and students alike. It can and should be done.
The author, Mike Larkin, retired from Queen’s University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics.