Thursday 22 January 2015

University funding challenge

I've written this feature on university funding for the Jan/Feb 2015 edition of Public Finance.

As the general election looms, Nick Clegg’s decision to back a trebling of tuition fees could come back to haunt him. A study by the Higher Education Policy Institute think-tank in Oxford suggests 10 Liberal Democrat university seats could be vulnerable to student anger, after the party’s decision to support higher fees despite its manifesto pledge to phase them out.

here are also doubts that the expected financial savings will be made. There is growing evidence that graduates will face debts into their 50s, while the Exchequer may see little real benefit because nearly half of the loans will have to be written off.

To understand why, look again at the 2012 student funding package and how it differs from what went before. When Labour introduced income-related ­tuition fees of up to £1,000 in 1999, it also replaced the remaining maintenance grants with loans to be repaid at a rate of 9% of graduate income above £10,000 a year. In 2006, fees rose to £3,000, although universities were permitted to charge less. Fees were no longer income-related, though some maintenance grants were restored. Tuition fee loans were introduced and the graduate repayment threshold was raised to £15,000.

The coalition government trebled fees to a new maximum of £9,000, extending the income contingent loans accordingly. But two crucial additional changes were made. First, the repayment threshold was increased to £21,000. Conservative ministers wanted it to be £18,000, but the LibDems insisted on the higher level. The second was the addition of a real rate of interest. Previously debt rose with the retail price index (RPI).

Under the new system, undergraduates are charged RPI+3% while studying and then pay interest of up to RPI+3% on a sliding scale once they graduate. The result is that from this year, graduates will pay off their loans – now much larger after the fees hike – much more slowly than under the old system.

Read the full article here.

Thursday 15 January 2015

Election 2015: consensus and challenges

In my latest Sutton Trust blog, I look at education in the general election and beyond.

Maybe they will surprise us. Perhaps in the weeks that remain before the voters cast their ballots on May 7 there will be something radical said on education, such as pledging for-profit schools or cutting tuition fees. But I wouldn’t count on it. And in one sense that’s no bad thing.

Underneath the often overblown rhetoric about unqualified teachers, local authority control or curriculum change, there is a far more consensus and continuity with the main political parties than you might think. Indeed there has been a strong degree of continuity in approach since Kenneth Baker’s reforms of 1988.

And this sense of commonality may explain why this week’s Comres poll for ITV showed that only 7% of the public saw ‘improving the education system’ as a big priority for government, ranking it last behind immigration, the economy, the NHS, welfare, housing and other issues. Other polling has suggested that the two main parties are fairly evenly matched as ‘best’ to deal with the issue.

All the main parties broadly support a strong degree of autonomy for schools and will continue with academies. Labour may not introduce new free schools, but will allow new academies which are pretty similar. All the parties recognise the need for greater regional management of an increasingly autonomous system, even if there are degrees of difference in what would be devolved.

With Nicky Morgan as a more consensual education secretary, there is more focus on teachers and teaching by the Government, echoing a theme that her shadow Tristram Hunt has been keen to put on the agenda. Although there are loud exchanges about ‘unqualified teachers’, their numbers are relatively small and their relevance to the system is less important than the rhetoric might suggest.

Both parties back a College of Teaching, rather more fervently than the profession if our polling last May is anything to go by, and both recognise that more needs to be done to improve professional development, a subject to which we will return next week.

So, this consensus may bring a degree of stability in schools. Big changes to the exam system have yet to filter through, and schools will have to tighten their belts further even if the overall national budget continues to be protected. They will welcome a breathing space.

Yet all this tacit agreement may mask the problems that an incoming secretary of state will face. And it is in their competence addressing those problems that they will be judged as much as on any exaggerated dividing lines drummed up for the purpose of election debates.

The most obvious is the need for many more school places, which requires considerable investment and strategic planning, as well as training the teachers to take the new classes.  This week’s Local Government Association survey put the need at 880,000 – a 12% increase nationally. There is also a real challenge addressing potential teacher shortages in key subjects if the balance between Schools Direct and university-based provision is not better planned.

But other deeper seated issues also need to be addressed.  The first is the attainment gap that still prevails in both primary and secondary schools. True, there have been some improvements in recent years, and the combination of extra money through the pupil premium and Ofsted rigour is at least getting schools to focus on their disadvantaged pupils much more than before.

But this may not be enough in itself. The prevailing mood against top down reform has meant that there is still too little pressure on schools that aren’t doing enough for their disadvantaged pupils. The new EEF Families of Schools tool reveals the starkness of the differences between schools with similar characteristics.

So, more needs to be done to get good teachers to underperforming schools outside the increasingly successful capital, as well as improving professional development generally. As we argue in our Mobility Manifesto, stronger incentives should build on the pupil premium awards to reward successful schools, and those that use evidence effectively. And there is a good case for revitalising leadership education by revitalising the National College of School Leadership, which many heads feel has lost its way as an amalgam with the old teacher training agency.

A second area ripe for change is in social mobility, which our research has consistently shown remains far too low in this country. In particular, we need to have fairer admissions in urban secondary schools, a revitalised national ‘gifted and talented’ programme for highly able students (our Sutton Scholars programme offers one model) and an opening up of the best independent day schools to talented children of all backgrounds.

This needs to be matched with a better co-ordinated approach to access to leading universities – where the gap remains nearly ten-fold between the poorest and richest families – that makes far more effective use of the £800m access funds now being spent. The new HEFCE networks are a start; using that funding wisely is the next step.

Ahead of all that, getting it right in the early years should pay dividends later on. All the parties are keen to promote their plans to improve childcare. That is a laudable labour market policy, helping family finances and improving employment opportunities particularly for women.

But it won’t necessarily support child development for disadvantaged children unless it is accompanied by a much more rigorous approach to the quality of education and care that they receive. With limited resources, as our Sound Foundations report argued last year, a government needs to balance the long-term economic benefits from getting that right against the more immediate benefits of a larger workforce.

If there is now a broader consensus on standards and structural issues in schools, whoever forms the government after May should have more room to move further on these issues. Hopefully, as they do so, they can develop a degree of cross-party agreement on lasting steps that will narrow attainment gaps and improve social mobility