Universities funding review is a chance to address the balance

The vice chancellor of Anglia Ruskin University gives his response to the Prime Minister's review of university funding.

The announcement of the long-heralded review of funding adds to the sense of continual change taking place in our higher education system.

But before looking at what improvements need to be made, it is important to correct this growing misconception that our universities receive excessive funding.

While the Prime Minster did reference tuition fees in her speech, the implication was very clear that our higher education is more expensive overall than our peers. This is simply not the case.

The latest Organisation for Economic Co-operation and Development (OECD) figures showing the proportion of gross domestic product spent on higher education (HE) puts the UK firmly in mid-table compared to our international peers and our system performs very well against most measures of quality.

However, what is clear is that the tuition fees charged to our students, for a public university system, are among the highest in the world.

It is this – coupled with the excessive interest rates attached to the student loan, the hidden public subsidy (the majority of loans will never be repaid in full, but this isn’t made clear to the public), and the loss of maintenance grants – that has led to the impression we are not delivering “value for money” for either our students or the country.

But before we throw the baby out with the bath water, it is important to recognise that the current system has increased HE participation to record levels and has allowed our universities, which are of significant benefit to the UK economy, to remain internationally competitive.

And although our fees are high and the interest rates charged cannot be justified, the structure is progressive – those who earn more, pay off more of their loan.

So what needs to be addressed in the funding review? Well, it seems clear that the Prime Minister isn’t considering abolishing fees entirely – and with a HE participation rate of 45 per cent, it is difficult to see how the country could afford this.

In my view the model we should aim for would explicitly show there are private benefits and a public good from having a vibrant and quality university system. A split of around 60:40 private/public seems broadly appropriate, and is in line with the OECD’s estimate of the balance of benefits.

In an ideal world the public component would be paid at the time of study, by the government, and would be clear and transparent. This public component would contribute to all of the activities required in a university that do not speak explicitly to an individual student’s direct education, such as the costs of widening participation, mental health support and the unfunded current costs of public good research.

If the public contribution is made up front then mechanisms to recover a greater proportion of the student benefit component will need to be made, and we may have to consider extending the write-off period to 40 years.

I strongly believe there should be a zero interest period while a student is studying and future interest charges should be linked to CPI, so debt does not grow in real terms.

Repayment should be in the form of a graduate tax based directly on income. A progressive tax-based system could be flexible enough to charge lower rates for those providing obvious public benefit, such as graduates working in the NHS.

It is equally important that any system doesn’t charge more for courses that are expensive to deliver, such as many vital STEM subjects, or penalise courses that do not have a clear vocational link. Many of these are in the arts and creative industries areas which have huge cultural and social significance.

It is no secret to say that the current system is too rigid. Ideally a new system would allow modular delivery so that students can study at their own pace and accelerate or slow down according to their personal life. We should consider ‘Lifetime Learner Accounts’ as part of the model, as this would allow individuals to return to study later in their careers.

I’m proud that Anglia Ruskin is already embracing many innovations and is among the largest adopters of degree apprenticeships in the country. These and other forms of work-based learning should be integral to the new model.

The outcomes of this funding review will shape UK higher education for many years to come and it is important that our voice, alongside that of past, current and future students, as well that of other universities of all shapes and sizes, is listened to during the next 12 months.