26 June 2020

It’s time the Tories answered the big question about our universities

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Is a university education a public good, or a private one? This is a question which British policymakers have been trying to escape for too long, and it’s time the Conservatives answered it.

The current structure of the English fees regime is a strange hybrid. On the one hand, the Government effectively subsidises mass university attendance via un-repaid tuition fees. Yet it exerts very little influence over how these funds are spent.

We might expect such a vast outlay of public money to entail a close interest in which courses, candidates, and universities receive it. But instead this process is pretty much run as if students were private consumers, with individuals and institutions deciding who studies what and where. (On the other hand, ministers also expect top-flight universities to compete with global rivals overseas on a UK public-sector budget, which isn’t fair either.)

Viewed through the prism of New Labour’s woefully misguided desire to get university attendance up to 50% of school leavers, this strange disconnect makes a deal of sense. It is a fee structure which maximises incentives to create and fill places on courses, whilst minimising considerations about value for money, opportunity costs, or future prospects.

Squeamishness about fees has compounded this problem by maintaining caps, which has allowed vice-chancellors to cluster at the top of the scale and created a higher education ‘market’ with no price signals.

The Conservatives ought to have plenty of motivation to take action on this. Not only are the opportunity costs of forcing a growing share of each generation of school leavers onto the degree treadmill substantial, but ‘elite overproduction‘ – priming a growing cadre of young people for a relatively static number of elite jobs – is one of the key forces skewing the ‘culture war’ against the right.

Rather than penning endless op-eds lamenting the blizzard of ‘snowflakes’ or the left’s ‘march through the institutions’, Conservatives should be using their political power to drive forward structural reforms. They once grasped the importance of this at school level, so why should university education be any different?

But if it is relatively easy to conclude that ‘something must be done’, deciding what to do is a thornier problem. At root, it comes down to the question of what higher education should the Government pay for, and why. One view, embodied in the recent reforms announced by the Liberal administration in Australia, is that the state ought to be steering students towards degrees which will enhance their employment prospects.

Thus a swath of technical and vocational courses, alongside such subjects as languages and mathematics, are set to see tuition fees cut whilst others, including law, commerce, and the humanities, face often steep increases, with ministers encouraging prospective students in those disciplines to split their honours with a more professionally-focused one.

Some will object that it is perverse that the state should be subsidising degrees which offer students a major boost to future earnings, or effectively picking up the training tab for what are often very profitable industries. But whilst there may be great merit in trying to encourage more industrial sponsorship of relevant qualifications, it is surely no less perverse for the Government to subsidise degrees which don’t offer any long-term financial benefit to their students.

Likewise, it is all very well arguing that a degree offers a range of intangible benefits, but as Bryan Caplan argues in The Case Against Education, this in itself isn’t sufficient to justify public subsidy. The costs of state funding for ‘unprofitable degrees’ are tangible and countable – it must be demonstrated, not assumed, that the benefits outweigh them.

If subsidised higher education really is a form of investment, ministers should articulate a much clearer idea of what the return on that investment to the nation is supposed to look like, and then structure a pared-down fees regime around that vision. There should be a real distinction between those degrees deemed a public good, where subsidy is accompanied by close state interest in who, what, and where gets funded, and those deemed an essentially private good.

In the latter case, prospective students would enjoy the same freedom as now to choose what they studied and where, but in full knowledge that the cost would be borne by them. In subjects with strong employability prospects or demand for graduates, this won’t hurt uptake. Subjects without those conditions may have fewer takers, but we do not usually expect the state to subsidise public access to elite diversions.

Such a shift should be accompanied by a suite of complementary policies aimed at strengthening the non-university pathway to skilled and fulfilling employment, building on the foundations of apprenticeships and T-Levels.

The Government should also consider more radical measures to deflate the artificial value lent to degrees in the jobs market, for example by prohibiting screening applicants for non-essential qualifications in public sector employment. This should be combined with a shift away from the modern, needless focus on graduates in professions such as policing and nursing. After all, if the average degree really does confer useful employability skills (notwithstanding whether three years at university is a remotely efficient way to impart them) then these ought to show up in an aptitude assessment. (As an added bonus, the attendant shrinkage of the higher education sector would open up lots of plots of developed, urban space for new housing. How many family homes could fit on the plots of our surplus universities?)

Such measures will be fiercely resisted by the ‘Blob’, just as school reform has been. But if Conservatives want to have any chance of winning the ‘culture war’, they need to start contesting the institutions which shape society – while the electorate will still give them the power to try.

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Henry Hill is Assistant Editor of ConservativeHome.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.