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WEEKEND READING: 25 years on from the Dearing report, have we kept its spirit alive?

  • 5 November 2022
  • By Nick Hillman

These remarks were made by Nick Hillman, Director of HEPI, to yesterday’s Centre for Global Higher Education (CGHE) event marking the recent twenty-fifth anniversary of the Dearing report.

  1. My first point is about Lord Dearing himself because HEPI, which is an independent charitable think tank founded 20 years ago, had Lord Dearing as its first Chair. The reputation we have for independence and evidence-based work partly comes from the way in which Lord Dearing set the scene in HEPI’s early days. Take this anecdote written by my predecessor and HEPI’s founder and current President, Bahram Bekhradnia, on the occasion of our eighteenth birthday two years ago: it was essential, if HEPI and its work was to be authoritative and credible, to be seen to be independent of any outside – especially any official – body. It didn’t take us long to establish those credentials. Early on, one of our first reports concerned the personal and public economic benefits of higher education. Our conclusion – that the economic benefits were not clear-cut – caused great concern in Whitehall, particularly as the Prime Minister had not long before announced a 50% participation target and student fees were being introduced, partly on the basis of the economic benefits to the individual. Lord Dearing, the first HEPI chair, received a call first from the Permanent Secretary of the Education Department, and subsequently from the Minister of State for Higher Education, attempting, not too subtly, to have the report suppressed. To his great credit Lord Dearing was having nothing of it and pointed out to them how awkward it would be for the Department and the Minister if word got out that they had tried to censor an independent think tank.
  2. I hope a good example of how we’ve tried to maintain our independence at HEPI since that time is the sort of documents that we publish: we are unlike the bigger and more political think tanks based in London, which tend to push one part of the political spectrum, as we publish reports from across the board. For example, last year we published three very different papers on funding, which is our key issue today: a paper by Alan Roff, Deputy Vice-Chancellor at UCLan from 1996 to 2011, who is a massive critic of the student funding system we have and who wants to see it ripped up and replaced with a graduate contribution scheme; work by Professor Claire Callender and Dr Ariane de Gayardon comparing the views of graduates on the 2006 repayment system to the somewhat less positive views of those on the 2012 system; and a paper by Lord Willetts, which is largely a defence of those 2012 changes. So we have strived to stay true to Lord Dearing’s strictures on staying independent.
  3. Something very interesting happened in the late 1990s when the Dearing report came out. We often talk as if the system that was implemented then was the one Lord Dearing recommended. But the Dearing report came out in 1997 and the first funding system implemented after, in 1998, was means-tested fees of up to £1,000 without income-contingent loans backing them up. You were liable for the full £1,000 or not, depending on your household income. Usually, reports come out and the Government accepts them, half accepts them or rejects them. But the fascinating thing about the Dearing report is that, initially, the Government did not really accept its recommendations on student finance yet by 2004-06 they were implementing something that looked like the Dearing recommendations, when Tony Blair, Charles Clarke and Alan Johnson introduced £3,000 fees paid through income-contingent loans. It’s quite unusual for a Government report to be initially rejected and then subsequently accepted as people come to realise it is wise and its advice should be followed but that is what happened.
  4. The basic idea on fees and funding in the Dearing report of a fee that would not be differentiated by subject, for example, but which would cover one-quarter of the average cost of higher education tuition backed by an income-contingent loan has actually proved remarkably durable. Here we are, 25 years later, still talking about it. We often speak in higher education policy as if there was a period of free education and then a period of expensive education. But the period of free education lasted only from the late 1970s, when the last means-tested frees were abolished, up until 1990 (when I matriculated), when the first maintenance loans came in and we were expected to contribute towards the cost of our maintenance. So that period of entirely free higher education in the UK was very brief and briefer than the Dearing system is proving to be – though of course when the fees did come in in 2006, almost a decade after the Dearing report appeared, they were higher than Dearing had recommended (as well as variable rather than flat-rate) and we of course put them up to £9,000.
  5. Some people might argue that in the Coalition years we moved very significantly away what Dearing recommended but I would say what we have is closer to Dearing than it is to the Browne report, which was delivered to us in Whitehall in 2010 and which recommended no cap on fees at all, with a form of tax on institutions if the fees got really high. We are still waiting for the Government to say what it will do on the back of the Augar report, but that appeared in the first half of 2019, two-and-half-years ago, and now there are only two years left to the next general election, so there isn’t time left to introduce a new funding system before people go back to the polls. It is fair to conclude therefore that the Dearing report has been more influential than other big reports on social policy. I was listening to Andrew Dilnot being interviewed the other day on the radio about his social care report. Although that is regarded as influential, it has yet to be implemented even though it came out in 2011.
  6. If you think I am wrong about Dearing’s impact, consider this: back in 2010 all the big political parties were committed to large spending cuts in the Department for Business, in which higher education policy then resided. So we only had three choices: cutting places; slashing the unit of resource (spending per student); or doing what we did and raising fees and loans. I would argue that the system we imposed in 2012, despite some of the challenges today, is still much closer to what Dearing recommended than those other alternatives we could have put in place but resisted. And I would argue that the system has sustained because it carefully balances so many interests, such as the interests of students, the interests of institutions and the interests of taxpayers. Progressive repayments and no student number caps are very big prizes we should not put at risk today.
  7. The degree to which the 2012 reforms have come unstuck, with a very significant RAB (loan write-off) charge largely occurred after 2012. For example, Theresa May’s increase to the student loan repayment threshold, announced in 2017, made the system very much more expensive. Problems also stemmed from George Osborne’s abolition of maintenance grants from 2016, which increased loans and meant students from less well-off backgrounds have to take on the biggest debts. Both these changes regrettably increased the write-off costs.
  8. Partly because of these changes, which moved the system further from the Dearing model, people are still on the hunt for alternatives, including a graduate tax. I would question whether telling the 97 per cent of mothers of young children who want their kids to go to university that their offspring will be hit by a brand new tax is really likely to be the vote winner than some people seem to think. There were good reasons why New Labour implemented something like the Dearing proposals while simultaneously publishing a report (sadly seemingly no longer available on the internet) called Why not a Pure Graduate Tax? and there were good reasons why Vince Cable similarly rejected a graduate tax after his brief flirtation with the idea.
  9. Much the most important thing about the sort of shared funding modelled proposed by the Dearing report is that it allowed us to remove student number caps. One of my first jobs in higher education policy back in the late 2000s was calculating how many people who had applied to Ucas were not going to find a place that year. Yet after we’d tripled the tuition fee cap, we were then able to persuade the Treasury that they should remove student number caps. We’ve got this bizarre coalition at the moment from the fringes of the left and the fringes of the right, with people like Wonkhe on the left and people like Gavin Williamson when he was the Secretary of State for Education on the right, arguing that we should reintroduce some form of cap.* That would be an extremely odd thing to do when the number of 18-year-olds is set to grow every year up until 2030. It would also be against the number one recommendation of the Dearing report, which said: ‘the cap on full-time undergraduate places should be lifted over the next two to three years and the cap on full-time sub-degree places should be lifted immediately.’ So it was a crucial part of what Dearing was arguing that we should not cap the number of people who go to higher education and anyone in the mainstream political centre should fiercely oppose attempts to reimpose a cap today. Capping higher education places is as absurd as capping the number of people who can go to school.
  10. There is one other really important recommendation in the Dearing report which we don’t talk about enough, which is Recommendation 70 on the cost of living: ‘We recommend to the Government that it reviews annually the total level of support for student living costs taking into account the movements of both prices and earnings.’ I know from my own time in Whitehall that, while maintenance packages have gone up over time, they can be set rather arbitrarily. Rarely does anyone sit down to ask ‘How much does it really cost students to live?’ or ‘What does the Student Income and Expenditure Survey say?’ – and even if they wanted to, there is no recent such official survey currently available. But Dearing did think someone should do that. As maintenance has this year gone up by under 3 per cent while inflation has topped 10 per cent, that holds another important lesson for today’s policymakers.

* UPDATE 6 November 2022: Mark Leach has contacted HEPI to say Wonkhe is not in favour of capping student places. My claim otherwise in the speech above was based on various sources that I took to reflect that organisation’s view, such as an article authored by a senior staff member on the Wonkhe website, an episode of the Wonkhe Show (in which I debated the issue with two other Wonkhe staff members) and social media commentary. If readers regard it as an unpersuasive or inappropriate example of support for student number caps from a left-wing perspective, an alternative example would be those within the UCU who have campaigned for new student number controls.

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