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General election 2024: Higher education fees and funding

  • 1 February 2024
  • By Nick Hillman
  • HEPI Director Nick Hillman takes a look at the state of the debate on fees and funding as the next general election hoves into view, and introduces four upcoming events on the issue – in London, Belfast, Edinburgh and Cardiff.

The logic of fees

Whether we like it or not, there is one higher education issue that tends to bestride all the others at general elections, and that is tuition fees.

In many ways, that is an odd fact. Undergraduate fees have existed in some form or other in most of the UK since 1998 – for more than a quarter of a century in fact. That is twice as long as the period of entirely free higher education for undergraduates, which lasted only from the late 1970s (when the previous means-tested fees disappeared) until 1990 (when maintenance loans kicked in).

Moreover, higher education finance is a devolved matter. So general elections do not directly affect policies in this area as directly as they once did, at least outside England.

And in the period since 1998, there have been 12 years of Labour Government, five years of Coalition Government and nine years of Conservative Government. So all three major UK-wide parties have backed fees while in office at Westminster.

In opposition, they have often taken a different stance, however, irrespective of whether they sit on the right, left or in the centre. Michael Howard’s Conservatives, Nick Clegg’s Liberal Democrats and Jeremy Corbyn’s Labour Party all acted as if those students who want free education can determine the outcomes of general elections.

As an electoral tactic, this has not worked because:

  1. students care about other issues too when voting;
  2. people who go to higher education are only there for a small period of their lives (while many do not go at all), so students are a discrete and ever changing group – and they may not bother registering to vote;
  3. there aren’t generally enough students in enough marginal seats to make a difference to an overall election outcome;
  4. promising free higher education can raise doubts about a party’s wider economic competence – so it can lose you votes as well as win them; and
  5. promising free tuition has tended not to be meaningful in electoral terms because it is a policy that major parties have adopted only when they have had scant prospect of actually winning an election.

In other words, promising free higher education has been a tactic borne of desperation (or else the sort of ideological purity that can repel voters). The fact that major Westminster parties tend to back tuition fees in office and reject them from opposition reached its apotheosis when the Labour Opposition at Westminster was promising to abolish fees at exactly the same time as a Labour / Lib Dem administration in Wales was raising fees to £9,000. It still amazes me that so little was said about this at the time.

As parties get closer to power and realise they are committed to spending billions abolishing fees rather than implementing immediate changes now, like tackling NHS waiting lists or fixing school roofs, their leaders tend to backtrack. At least, that is what David Cameron did before 2010 and Keir Starmer has done more recently.

Nick Clegg tried to backtrack before the 2010 election too, but Liberal Democrat members were not having it. He then, oddly, put a policy he apparently didn’t agree with at the heart of his election campaign. As Michael White of the Guardian put it:

Given that Clegg had spent two years ineffectually manoeuvring to ditch his own policy in favour of something more realistic, the puzzle is why he let himself be cornered into endorsing the anti-fees pledge in the election, complete with “read my lips” photos.

That error became abundantly clear to everyone, including Nick Clegg himself when he found himself serving as Deputy Prime Minister in a Coalition Government committed to (nearly) tripling the undergraduate fee cap.

Yet even if all three major UK-wide parties have accepted the logic of fees while in office, many people think the current system is not working well in any part of the UK.

Across the whole the UK, the unit-of-resource for educating each home student is too low causing institutions problems. In some places, there are restrictions on student places that cause families grief (and which might even be changing the demographics of Northern Ireland, as one-quarter of NI students study in Great Britain). Moreover, the cost-of-learning crisis is evident among students in all four parts of the UK but is felt (even) more acutely in some places more than others.

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A word about Scotland

Scotland, it must be said, has not followed the same route as other parts of the UK, with the introduction around 15 years ago of free higher education for home students. The SNP have been re-elected more than once since, each time promising to keep the policy in place. So ‘free’ higher education has lasted in Scotland, even if its relative success rests on the Barnett formula, which enables more public spending per head than in England, and may come at the cost of other public services. Moreover, even with the Barnett formula in place, universities are more underfunded in Scotland for each local student than they are elsewhere.

For a long time after the reintroduction of free higher education in Scotland, many people found the lack of open debate about other funding models stifling. But things are changing, due in part to the challenges faced by the SNP, concern about continuing tight restrictions on student numbers and trouble balancing the books at Scottish universities. For example, Liz Smith MSP, the Shadow Cabinet Secretary for Finance and the Economy, has just told The Herald that new policy options should be considered in Scotland, including a graduate endowment.

In terms of future student funding arrangements in Scotland, it is the next set of Scottish Parliament elections – which are not due until 2026 – that may prove far more decisive than the next UK-wide general election.

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The next general election

The next general election must happen by January 2025 and seems certain to occur this year (as the Prime Minister, who gets to choose the date, has suggested it will be in 2024). Universities are hurting financially, famously losing money on each home student (as, for example, home student fees have lagged behind inflation) alongside the long-standing losses on research, making institutions more and more reliant on other income sources, including international students.

So higher education funding should perhaps be on the radar of policymakers more than ever before in the run up to the next election. Imagine a major university in a marginal constituency going bust in the run up to the election. This is far from beyond the realms of possibility. And whoever was most at fault, people would just expect the Government of the day to take action (as they did when MG Rover fell over just before the 2005 election or when University College, Cardiff got in trouble around the time of the 1987 election).

It is not just the level of tuition fees or the amount of each institution’s income that should be politically salient, however. Students’ living costs have not kept up with inflation either – in England, for example, 2024/25 will be the fourth year running when the maximum maintenance loan has increased by less than inflation, losing value in real terms.

Yet, oddly, higher education funding seems to have slipped down the order of political priorities.

In many respects, it feels like the mid-1990s all over again, when there was a falling unit of resource, rising tension between universities and a long-standing Conservative Government and a lack of clarity on what would come next (leading in time to the National Committee of Inquiry into Higher Education, which produced the Dearing report). But crucially, higher education policy was not devolved in the way it is now back in those days.

Many people think something will have to give soon. Moreover, it seems likely that – given that each part of the UK is now running its own higher education funding system – there could be lessons to be shared on what to do and what not to do already staring us in the face.

For example:

  • Which part of the UK has the best student maintenance system – and, whichever it is, could the any other part of the UK afford to copy it?
  • Is the removal of student number caps always worth striving for – or is it better to spread the available resources less thinly?
  • What is the fairest way of collecting student loans – should we try to maximise the proportion of graduates who repay their loans in full or use the loan system as a backdoor redistribution mechanism?
  • Have the benefits of free higher education been understated in much of the UK?
  • What is the right balance between taxpayer funding, graduate repayments and parental contributions?
  • How can we most reasonably raise the income higher education institutions receive for teaching each home student?
  • Should outstanding student loans accrue interest and, if so, at what rate?
  • Does the return of the devolved administration in Northern Ireland mean overdue changes are likely to happen there?
  • Is it time for convergence or even greater divergence between the higher education funding policies in each of the four parts of the UK?
  • Should part-time students be treated equitably with full-time students where this does not already happen? 

In an attempt to provide a useful single starting point for such rich conversations to occur, the Nuffield Foundation have tasked London Economics with looking at the current four student funding regimes throughout the UK to answer questions like how much they cost, how much institutions get for teaching each student and who pays back what. In the words of London Economics, ‘The analysis aims to improve the understanding the current fees and funding arrangements in each of the Home Nations, as well as the implications of potential changes to each of the systems.’

At HEPI, we are honoured to be hosting four free events across the UK in conjunction with London Economics and the Nuffield Foundation in late February and early March. These will make up a sort of joint UK-wide tour and, at each stop, the findings will be presented by London Economics and then discussed with the aid of four different expert panels, with plenty of time for audience Q&A.

The confirmed dates are:

  • in London on the afternoon of Wednesday, 28 February 2024 (Waiting list only)
  • in Belfast on the afternoon of Friday, 1 March 2024
  • in Edinburgh on the afternoon of Monday, 4 March 2024
  • in Cardiff on the afternoon of Wednesday, 6 March 2024

You can also find information about these events on the HEPI website at https://www.hepi.ac.uk/category/events/

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