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As the Government begins implementing the more popular elements of the Augar report, we shouldn’t forget the rest of it (including what it said on fees)…

  • 30 September 2020
  • By Nick Hillman

Sixteen months ago today, on 30 May 2019, the long-awaited Augar report came out. Written by Philip Augar and a team of experts, it included 53 recommendations covering FE, HE and student funding.

At the time, HEPI responded positively to the package of proposals, which were serious, coherent and wide-ranging. They were not perfect, perhaps, but as with all government-commissioned reviews, the panel had to take account of their Terms of Reference, which included not spending new money (specifically, their recommendations had to ‘be consistent with the Government’s fiscal policies to reduce the deficit and have debt falling as a percentage of GDP’). 

To maximise the chance of seeing their package implemented, the Augar panel opted to take account of the political realities as well as the economic realities of the time. The Prime Minister who set Augar in train and received the report, Theresa May, had long questioned the high tuition fee system (even before she saw a reduction in the number of Conservative MPs after a supposed ‘youthquake’ at the 2017 election), and she clearly wanted to reduce the fee levels faced by students.

And at the Policy Exchange event launching the Augar proposals, less than a week after announcing she would stand down as Prime Minister, Theresa May accordingly made it clear that she wanted to see her predecessor implement the report’s proposals.

But no one could have predicted how much change would happen between then and now. When the Augar report was published, Philip Augar said it was a take-it-or-leave-it package. In other words, he said it was a carefully calibrated model, not a pick-and-mix. I suspect the goal was to disincentivise policymakers from banking any proposed savings and then rejecting the counterbalancing proposed new spending. 

But demanding the whole report should be swallowed whole was always ambitious, at least judging by what happened to earlier government-commissioned reports on higher education (see the cherrypicking of Robbins, Dearing and Browne). And after the COVID crisis began, even Philip himself seems to have come to recognise this, writing in the Financial Times that his most high-profile recommendation – reducing the headline full-time undergraduate fee cap from £9,250 to £7,500 – should perhaps be junked while others should still be implemented.

Now it has been confirmed by the Prime Minister that some of those other recommendations are indeed now to be implemented. For example, the Augar report’s first two recommendations were for ‘a single lifelong learning loan allowance’ and access to student finance ‘for modules of credit’, and these ideas have now been accepted. The devil will be in the detail, but this is very good news. (HEPI’s submission to the Augar panel called for ‘financial support so that it reaches students who initially enrol for bite-size learning, rather than restricting support as now to students who immediately enrol for a whole degree.’)

There are numerous reasons why such changes are a good idea: they will help people raise their skills; they will help employers find the employees they need; and they will keep people out of unemployment.

But such tweaks cost money and, now that the Treasury is beginning to finalise its plans for the Spending Review, it is time to focus again on that most famous of all of the Augar report’s recommendations, the one on fees (number 3.2).

In theory, Augar’s model of reducing fees would not have left institutions out of pocket because the Treasury was envisaged as making up the gap between £7,500 and £9,250 (recommendation 3.3).

It was difficult to believe this gap would be made up over the long-term even at the time the Augar review was published, given the other priorities of voters. It is even harder to believe this now that the Government owes more than ever before and has just committed to more spending on raising skills.

In the COVID crisis, we may all have paid too little attention to the fact that the actual proposal for a lower fee cap remains on the table. In other words, it would be possible to implement recommendation 3.2 on reducing fees without implementing recommendation 3.3 on filling in the resulting gap.

There will be voices urging the Treasury in the run up to the Spending Review to cut spending on universities (either to reduce borrowing or to spend more on other priorities, including other educational priorities) and Ministers and officials know full well they still need to provide a comprehensive response to the Augar recommendations.

Cutting fees could play well in the culture war. It would be at one with some of the negative coverage of universities in recent times. And universities are typically in larger towns and cities that are less likely to be represented by a Conservative MP.

But cutting the income of universities now is an objectively terrible idea. If the crisis has shown anything, it has shown that we expect more of our universities, not less. We need them as supporters of their local economies, as anchor institutions for civic life, as educators of millions of students, as research bodies and as big employers.

We are currently expecting them to do more, not less, in terms of what they provide to their students, including more mental health support, better careers advice, improved blended learning options, interventions to stop students dropping out and additional investment in widening participation (the last is a theme of our webinar today. sign up here).

HEPI is a broad church and we have ourselves published in the past papers on potential reforms to the student finance system and we have another one in gestation. Policy should always evolve, to respond to the changing needs to students, the country and the economy.

But it nonetheless seems clear that severe cuts to the main income stream for universities in the midst of a crisis, while failing to replace the lost income, would make the Institute for Fiscal Studies’s dire warnings about the number of universities that could go bust during the pandemic much more likely to come true.

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