22 August 2022

Stop knocking the UK’s great universities – fund them properly instead


With A Level results now in and university places being confirmed, the perennial issue of university funding has once again raised its head. Many commentators are taking the opportunity to criticise universities for asking for more money and stirring up concerns about foreign students robbing UK teenagers of a spot at our elite universities. These criticisms are just the latest tactic in a wider attack on the university sector – one which is completely misguided.

Universities are one of the things we do incredibly well in this country. They are a great UK success story. Our elite universities such as Cambridge, Oxford, and Imperial are consistently ranked among the top five universities around the world. They produce world class research which only the likes of Harvard and MIT are able to come close to. The research conducted by these universities helps to produce the discoveries that contribute to new medicines and technology, while also training the next generation of scientists, doctors, and engineers.

It is not just the very best universities which benefit the UK. We know that universities help increase economic growth in their localities, improve human capital, and bring people from other areas and countries to live, study, work, and spend their money in every region of the UK.

Moreover, universities can have a positive impact on social mobility. In fact, it is the newer, post-1992 institutions which score most highly on this metric. These universities may be less prestigious than Russell Group institutions, but they play an important role in improving the life chances of young people from poorer households.

Given the importance of the university sector and its huge success, it is bizarre how routinely it is criticised and neglected by the Government and the media. It would be akin to the German government criticising its car industry or the French disparaging their wine and cheese. 

Universities are crucial for the UK economy, but we risk declining standards and competitors in the US, Europe, and China overtaking even our most elite institutions if funding does not increase. This would be a disaster for students, staff, and the UK as a whole.

It is world class research in universities which help lead to developments in what the UK already excels at. and in the most important industries of the future such as technology, advanced manufacturing, computing, and AI. What is more, it is the quality of the teaching which will determine the skills of future researchers, scientists, engineers, and other professionals. None of this comes cheap, and so universities need more money. The UK will struggle to continue to produce world leading research and attract the best minds to academic research without funding being increased.

So, what should be done?

The first thing to be looked at has to be tuition fees. Any talk of increasing them is always controversial and no politician wants to touch it, but the issue is too important to neglect any further. Tuition fees have been frozen for several years now, and this is clearly having a devastating impact on the finances of universities. As such, fees will need to increase by a significant amount.

This will be an unpopular move with people rightly concerned about the impact it may have on students from poorer households. Therefore, any increase in fees must be used in part to provide very generous financial support for students from less affluent backgrounds. Moreover, given the pressures faced by younger people and the loss of opportunity stemming from a lost decade and a housing crisis, the minimum salary at which they start repaying their loan should be raised so that they do not have to pay anything back until they start to really benefit from their degree.

Some will also criticise such a move by pointing out that many students have had their education disrupted by strikes from lecturers. This is a fair point, but ignores the fact that the strikes are happening because academic pay and conditions – especially at the more junior end – are far worse than in the US and Europe. Increasing tuition fees will help to tackle this problem.

The Government should also increase funding for universities. As discussed earlier, the research produced by universities brings huge benefits to the UK economy and therefore we should want to see far more of it and of an even higher quality. Therefore, it is important that to increase funding for research, especially in life science, technology, computing, and engineering.

We also need to reform planning. The restrictive system means we have failed to build enough new homes and labs. The lack of labs means that researchers, scientists, and engineers cannot carry out their experiments, which means that not only are they missing out on funding and investment which is instead going to their rivals in the US, the UK is also being deprived of breakthroughs in medicine, science, and technology.

As for the lack of housing, much has been written on this site before about the devastating impact this is having on young people and the country as a whole. It is exacerbating the cost-of-living crisis and also decreasing productivity and hampering economic growth. The UK cannot expect to continue to attract world class researchers and academics if they cannot afford to own a home and experience no real increase in their living standards.

Finally, we should ignore the xenophobic hysteria around foreign students getting places at our top universities. It’s a great compliment to the UK that the smartest people from all over the world want to come to here to study, and we should be grateful for the financial and cultural contributions they make to our universities and local communities. The UK should welcome even more foreign students and encourage STEM graduates to remain in the country.

Our universities are more than a source of pride for Britain, they are essential to this country remaining productive and competitive in a global future – so let’s make sure they keep working for the next generation.

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Ben Ramanauskas is a research economist at Oxford University.

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