I have blogged on the PM's post-18 education review for the Sutton Trust and Public Finance.
It was 16 months before the 1997 election and Conservative
education secretary Gillian Shephard had a problem. It was a time of austerity.
University intakes were growing rapidly. New ways had to be found to fund
higher education that didn’t simply involve the taxpayer.
So she approached David Blunkett, her Labour shadow for whom
I then worked to support her in setting up a review
– with explicit backing from Don Foster for the Liberal Democrats – under the
late Ron Dearing. The review would report
after the general election and would be wide-ranging in its outlook. But it is
remembered for one thing: it led to the introduction by the
new Labour government of tuition fees paid by students (then opposed by the
Conservatives and Liberal Democrats).
In 1998, the decision was also taken to convert all
maintenance grants to loans (some had already been converted), but to
means-test fees. Those who faced new fees also got higher interest-free loans
repaid after graduation for those earning over £10,000 a year.
Since the Dearing review, we have had other big changes to
the system. In 2006, fees were increased to a maximum of £3000 – after a big
argument in the Labour Party against variable fees that led to the plans almost being defeated
– and income contingent loans were explicitly available for fees. By then,
Scotland had already abandoned fees. Means-tested maintenance grants were
reintroduced and the repayment threshold was raised to £15,000.
Peter Mandelson set
up the Browne Review in 2009, which reported
to the coalition government after the 2010 election. It led to a £9000 fee maximum and no more
variability in reality than the 2006 reforms despite the government saying it
expected many students to pay just £6000. Repayments now started at £21,000 – a
hugely expensive concession to the Liberal Democrats that ensured that many
loans would never be repaid – and a real rate of interest was introduced that
would only start to bite when inflation picked up more recently. Tinkering
since then has seen maintenance grants scrapped and – at a cost of £3 billion a
year – the barely noticed raising of the threshold to £25,000.
That’s the background to the latest review announced by Theresa
May on Monday. But the background also includes rising student numbers –
touching the 50% of young adults entering higher education by age 30 target set by Tony Blair in
1999 – and some narrowing of the access gap between disadvantaged and better
off students. Perhaps more importantly, the political backdrop includes a
popular pledge by Jeremy Corbyn to scrap
fees that undoubtedly helped win seats like Canterbury and Reading East for
Labour at last year’s election. So rather than seeking cross-party consensus,
this review is more about neutralising a perceived party disadvantage.
But the confused history of fees is reflected in the
confused nature of the review. A bizarre flurry of weekend briefing – propped
up by the Secretary of State in his first TV interview on
Marr – suggested that a key outcome of the review might be universities
charging more for courses in expensive STEM subjects and less in humanities.
Given the importance of STEM subjects to the economy this could perversely
discourage students from doing those subjects and cold harm
social mobility by encouraging poorer students to take cheaper courses. One can
only assume its intention was to distract attention from reports that fees
would fall to £6,000 a year, which ministers feared would raise expectations
that might not be realised.
And the review has not exactly had an auspicious start. It
is good that it is looking at the too often overlooked FE sector and at the
paucity of apprenticeship options – barely 10,000 young people a year start
higher or degree apprenticeships compared with 330,000 freshers at university –
but it will be vital that the review panel feels able to take a hard look at
the whole funding system and the interaction between different levers.
Modelling
by London Economics for the Sutton Trust in November showed that it would cost
about £1 billion to restore maintenance grants. It was a mistake to remove them,
even if students got higher loans, and this should be the first priority for
the panel. Then if the committee wants to look at fees and variability, they
should be varied according to family income not the cost of the course. A model
that would reduce average fees to £3,500 a year could – with restored
maintenance grants – reduce debts for the 40% poorest students from over
£50,000 to £12,700 and increase the proportion of loans repaid from 55% to 65%.
The total cost of this would be up to £3 billion – about the same as the
threshold change announced last October. Less radical means testing could cost
less. There is also a need to get better value from the £800 million a year
that universities spend on access and outreach in England, building a reliable
evidence base on what works. But the priority should be leveraging this existing
money to achieve better outcomes for young people from disadvantaged
backgrounds, rather than to risk stalling progress with cuts.
And then the review should take a long hard look at what’s
on offer for those who go don’t go to university. For all the words about
apprenticeships, the brutal reality
is that less than a third of those taking higher apprenticeships are aged
under 25 (let along being 18 or 19). Most apprenticeships for young people are
limited level 2 programmes with few career prospects and patchy progression to
higher levels. If anything, the apprenticeships levy is reinforcing a bias
towards adults doing higher apprenticeships as the levy lacks the levers to
prevent it being used simply to upskill existing staff. Addressing that issue
and the quality of technical and paraprofessional education in colleges is as
important to social mobility as changing the funding of higher education.
This week’s review may have had a pretty inauspicious start.
But as the panel deliberates over the next year they have the chance to make a
real difference to social mobility – if they get their priorities right.
