The Costly New Idea of a University

What is the right way to fund our universities? It is appropriate to pay for healthcare and school education out of general taxation because everyone is entitled to benefit from them. But not everyone is entitled to go to university, only those who have reached a certain educational standard and can thus show that they have the potential to benefit from higher education. The country needs plumbers but plumbers do not need degrees, so why should plumbers pay for the cost of other people’s degrees?

In the second half of the 20th century, the generally agreed answer to this question was that society also needs doctors, scientists, lawyers and teachers. These professionals need degrees in order to achieve competence, so society should pay for their higher education. The expansion of universities in the 1960s also turned higher education into an engine of social mobility, broadening the pool of potential doctors, lawyers and teachers, providing access into the professions for young men and women from families who had never had such opportunities before. Since participation rates remained relatively low, the full cost could be borne by the exchequer without it really being noticed that the education of future high earners was being paid for by the non-graduate masses.

Students demonstrate in November 2010 against the rise in fees

But the proportion of young people going into higher education has risen at an astonishing rate, especially among women. In the early 1960s only about five per cent of the population went to university. Even when Oxford graduate Margaret Thatcher came to power, only ten per cent of women were benefiting from higher education. By the time John Major turned the polytechnics into universities, that figure had doubled. In the academic year 2008-09, 51 per cent of female school leavers entered higher education, up from 49 per cent the previous year. The overall figure also showed an all-time high, with 45 per cent going to university, including 40 per cent of young men. A system originally designed for a small elite was now serving half the nation, at huge cost. It was against this background that in November 2009 — as the university admission service was reporting a further surge of applicants to yet another high for the following year — former BP chief executive Lord Browne of Madingley was commissioned by the Labour government to lead an independent review of the future of higher education funding.

History was repeating itself. The first public sign that the Major administration knew that it would be defeated and the Blair circle knew that they would be victors in 1997 was the cross-party agreement in May 1996 to leave the future of higher education funding to the Dearing Report, which would be published after the election, thus taking the toxic question of student fees out of the political arena. Dearing recommended the introduction of “a flat rate contribution of around 25 per cent of the average cost of higher education tuition” — flat rate because he wanted to avoid a higher charge for the most expensive but most essential subjects, such as medicine and biological sciences. A “top-up” fee, as it came to be known, of £1,000 per student per year, paid up front, was accordingly introduced in 1998. That amount was, however, far below Dearing’s recommended one quarter of the real cost of educating an undergraduate. The meagre top-up was insufficient to fill the black hole in university finances and to sustain a mass higher-education system.

The second Blair administration went back on an election pledge (by way of a sleight of hand involving date of implementation) and greatly increased the fee, sweetening the pill by removing the obligation to pay up front and introducing instead a system of loans that students would only have to repay once they had graduated and started earning £15,000 per year. The original ambition was to raise the fee cap to £5,000 in the hope that this would produce an element of market choice: a research-intensive university might charge the full whack while a college focusing on much less expensive humanities teaching might attract more students by charging only half as much. But, as so often in Blair’s second term, he buckled under political pressure and the cap was set at £3,000, which has increased very modestly with inflation to its current level of £3,290.

Browne was effectively being asked to answer four demands. First, as with Dearing, it was his role to take the issue of university tuition fees out of the election campaign — once again, cross-party agreement on this strategy was the first sign that both major parties knew that regime change would be on its way the following year. Labour and Tory manifestos duly deferred to Browne. Only the Liberal Democrats, assuming that they would never be in government, stuck out their necks, proposing not merely a refusal to raise the cap but the total abolition of tuition fees.

Second, Browne was charged with increasing the amount of money going into universities, which had suffered a severe reduction in their “unit of resource” as enrolment soared. Third, he had to reduce the drain on the public purse represented by the government-owned Student Loans Company that finances tuition fee loans and maintenance grants. And fourth, he was encouraged to introduce some flexibility into the system: this came not only from a renewal of the desire to create an element of market choice (why should a student sitting in a class of 20 pay the same amount as one lucky enough to get a weekly tutorial in a class of two?), but also from a recognition that reliance on direct government funding had led to ridiculous constraints whereby universities endured a draconian financial penalty for recruiting numbers above their centrally imposed quota.

Considered as an attempt to answer these demands, the Browne Report is a lean and coherent piece of work. Its premise is that the students who benefit from higher education should make a substantial retrospective contribution towards the cost of it. Why should the binman and the dinner lady subsidise the cost of educating the lawyer and the surgeon? Salaries of graduates are generally higher than those of non-graduates, so it is fair that some part of this “premium” should be given back in the form of a “graduate contribution” to their education. No fee is to be paid upfront, and payback only begins at a salary of £21,000, a figure 40 per cent higher than that in the current system.

In this regard, the Browne proposals are progressive. Consider how a pair of my old students would have fared had Browne been in place in their day. Both have taken the well-trodden path from an English Literature degree to the acting profession. For one of them, a good year consists of a bit-part appearance in a television drama, a brief stint in provincial rep and some theatre-in-education work with disadvantaged children. Total annual earnings well below the Equity average of £20,000 per year. Threshold for repayment of loan not reached. University education still free. The other student has fared better: she has an Oscar on the shelf, commands more than $1 million per film and has a contract as the face of a major cosmetic line. It seems right that she — rather than the binman and the dinner lady — should pay retrospectively for the three years in which she honed her gifts via student theatricals at Cambridge.

A further progressive element is the proposal to make loans available to part-time students, who typically come from less affluent backgrounds. This will be of huge benefit to that especially rewarding pupil the “mature student” — those who went straight to work (or unemployment) from school, but who seek to improve their lot by applying to university later in life. Since age discrimination is now illegal, Browne also opens up the inviting prospect of a new generation of pensioners getting government loans to undertake part-time degrees (to qualify, their “intensity of study,” as Browne calls it, will have to be one-third of a full-time course). There is ample evidence of the beneficial mental health effects of reading and rigorous thinking. A splendid unintended consequence of Browne might be a reduction in the NHS’s horrendous bill for dementia treatment. And most pensioners would be unlikely to reach the £21,000 threshold before they die, so they would get their belated degrees for nothing.

Browne proposes that students may pay different fees at different institutions. Whereas John Major homogenised higher education provision, allowing polytechnics and teacher-training colleges to turn themselves into universities competing for research funding, the post-Browne environment will be highly diverse. In the US, differential fees have created a successful mixed ecology. There are two-year community colleges that provide excellent vocational training, “liberal arts” colleges that offer a rounded undergraduate education as a route into the professions, and full-scale research universities with doctoral programmes and major scientific grants. Each kind of institution seeks to foster a particular kind of excellence, and the best in each kind are highly respected by their students and their communities. It is not a bad model.

In a revealing speech delivered a few weeks before the publication of Browne, universities minister David Willetts implied that the intellectual justification for the new funding regime could be found in the freshly-beatified Cardinal Newman’s The Idea of a University. In the book’s early pages, Newman made a very sharp distinction between research and teaching. Research academies, he argued, do not need undergraduates. We could support his point by citing Cern in Geneva, the Institute for Advanced Study at Princeton or All Souls, Oxford. A university, in contrast to a research institute, is a place for teaching universal knowledge. The formation of the student mind and the creation of the moral citizen: that was Newman’s idea of a university. The example of the best liberal arts colleges in America shows that great teaching doesn’t necessarily require a side-dish of research.

Long before becoming minister, Willetts was arguing that the unintended consequence of the Research Assessment Exercise (RAE), in which money follows research excellence, has been to lead universities to neglect their teaching. An attempt in the 1990s to introduce a parallel Teaching Quality Assessment — a kind of Office for Standards in Education (Ofsted) inspection regime for universities — became a bureaucratic nightmare and was abandoned. Willetts is a latter-day free-market Newman. He welcomes the Browne report because it proposes radically different funding models for research and teaching: research will continue to be funded by the state, but teaching quality will be driven up by consumer choice. Since students will be paying so much more, they will demand small-group teaching and detailed feedback on their written work. They will pass back to their sixth forms information as to whether or not the University of Middle Wallop offers value for money in this regard. Departments with excellent teaching will recruit strongly, while those that give their students second-best will go to the wall.

But can a full-scale market be introduced at a single stroke?

At the moment, universities receive a teaching grant from central government as well as the student fee of just over £3,000. For the purposes of this grant, disciplines are divided into bands. The tariff for the cheapest (Band D) subjects, mainly in the humanities, is about £4,000 per student. Band C — mainly social sciences, slightly more expensive because of a fieldwork element — is £5,000. Band B, the lab-based sciences, brings in about £7,000 per head. And Band A, medicine, nearly £16,000. Browne recognises that there must not be a price disincentive stopping students from studying science and medicine, so he proposes that the marginal cost of Bands A and B will still be paid from central government, not met by the individual student.

When the Browne review was set up, universities hoped that the fee cap would be raised by at least £2,000. For a bog standard Band D humanities student they would thus receive £9,000 instead of £7,000 (£5,000 from the student and £4,000 from the state, instead of £3,000 and £4,000). The additional income would allow them to balance their books and improve student experience by reducing class sizes and increasing contact hours. 

The Russell Group of leading research-active universities argued for a rise well above this level, or even the abolition of the fee cap altogether. They figured that the prestige of their offer, together with the earnings premium their degrees bought, would allow demand to remain buoyant at £7,000 or more, and they gave assurances that there would be generous bursaries so as not to deter students from less affluent backgrounds. If Browne had been doing his work in normal times that is how his report would have turned out. But in the course of the summer it became apparent that he was going to have to take the Comprehensive Spending Review into account. When his report was published, the week before the spending review, it was confirmed that the goalposts had been completely moved. Suddenly, the higher fee was to replace rather than supplement the basic teaching grant from central government.

So instead of getting £4,000 per student from government for the humanities, £5,000 for the social sciences, £7,000 for the sciences and £16,000 for medicines, the central grant will, it seems, become £0 for humanities and social sciences, £2,000 for science and £11,000 for medicine. The students themselves will contribute the lost £4-5,000. A university will therefore have to charge a fee of more than £7,000 per year simply in order to stand still. To gain the minimum additional £2,000 per year that the review was supposed to elicit, the fee will have to rise to £9,000.

The proposal has been presented in the press as an attack on humanities and social science funding, but that is not how it was intended: the clear implication of the report and the CSR, in which the university teaching grant has been slashed by a whopping 60-70 per cent, is that the basic £4-5,000 of central funding will be removed from all students. As Browne was working on his report, humanities and social science applications were at an all-time high, so he reckoned that there would be no shortage of continuing demand despite the price hike. His priority was to ensure that there would be no price differential that would make it even harder than it is at the moment for universities to recruit able students in science and engineering.

Nor is it the case that all government funding will be removed from the humanities and social sciences. The Higher Education Funding Council distributes £1.5 billion annually for research. This covers all disciplines and is divided up according to universities’ performance in the RAE. However, the great bulk of the research income goes to the science departments and the large research-intensive institutions. Smaller and newer universities that receive very limited research funding rely almost entirely on their teaching income from humanities and social science students. It looks as if they will have nothing other than what they can charge in the market place. In that sense, they will have been effectively privatised by the back door. Or they will close — or be taken over by private, for-profit providers.

Browne recommended the outright withdrawal of the fee cap, albeit with an awkward clawback mechanism to prevent excessive charges. In order to save the face of the Business Secretary Vince Cable and the Lib Dems, who have been forced to perform an excruciating U-turn on their election manifesto, Willetts has now announced a normative cap of £6,000 and an “exceptional” one of £9,000. He will presumably come to be known as “two caps” Willetts. Elite institutions will need to earn the right to charge at Cap 2 level by demonstrating improved access for disadvantaged students. Oxbridge has been trying to do this for many years, with limited success. The top universities have effectively been given a term report in this area that says “try even harder”. They have the resources to do so.

It is lower down the food chain that the future now looks very uncertain. If there is no central government grant for the lower-band subjects, the result will be a net loss of teaching income combined with a need to offer an improvement in quality commensurate with what will look to the student like doubling (or more) of the price. In such circumstances, the humanities are going to have to work very hard to demonstrate the value for money that they offer to society in general and prospective paying students in particular.

Some will try to make the argument with reference to the symbiosis between the humanities and the creative industries, which have been the success story of the British economy during the years when manufacturing and engineering have been in decline. But a more powerful defence would be one that refuses to begin and end with the accountant’s bottom line. One of the principal values of the humanities is that they teach us that all controversies have historical precedents — the lessons of which we are very good at ignoring. The debate between those who look for the “economic impact” of universities through the prioritisation of science and engineering, collaboration with business, the development of spin-out companies and so forth, and those who appeal to the pursuit of knowledge as a civilising virtue in itself replicates a dichotomy identified by John Stuart Mill in the early Victorian era, in his pair of essays on Jeremy Bentham (written in 1838) and Samuel Taylor Coleridge (1840). Mill contended that Bentham and Coleridge were the two “great seminal minds” of the age. Britain, he proposed, was indebted to them “not only for the greater part of the important ideas which have been thrown into circulation among its thinking men in their time, but for a revolution in its general modes of thought and investigation”. Bentham and Coleridge, he argued,

were destined to renew a lesson given to mankind by every age, and always disregarded — to show that speculative philosophy, which to the superficial appears a thing so remote from the business of life and the outward interests of men, is in reality the thing on earth which most influences them, and in the long run overbears every other influence save those which it must itself obey. The writers of whom we speak have never been read by the multitude; except for the more slight of their works, their readers have been few: but they have been the teachers of the teachers; there is hardly to be found in England an individual of any importance in the world of mind, who (whatever opinions he may have afterwards adopted) did not first learn to think from one of these two.

To effect a revolution in “general modes of thought”; to inhabit a realm (“speculative philosophy”) that seems utterly remote from “the business of life” and yet to influence society more than anyone else; to be “the teachers of the teachers”; to be the figures from whom all serious minds “learn to think”. Even if these claims were to be greatly diluted, the implication would still be that the intellectual work of Bentham and Coleridge was of extraordinary value to society, even though its direct impact (in terms of the number of people who read their major books) was minimal. Their importance is in itself a salutary warning against the danger of taking the short view of the question of public value in matters relating to the life of the mind.

What, then, were their great innovations? Bentham, said Mill, was “the great critical thinker of his age and country”, “the great questioner of things established”. He was the iconoclast who was no respecter of institutions and traditions. A latter-day Benthamite might well say: why should we fund the humanities just because we have funded them in the past? Bentham, continued Mill, “introduced into morals and politics those habits of thought and modes of investigation, which are essential to the idea of science”. A latter-day Benthamite might very well say: prove the value of what you do by quantifying it. Be precise, be scientific, be empirical, do not rely on windy rhetoric. Give me a metric. Famously, Bentham’s utilitarian principle was “the greatest happiness of the greatest number”. If push-pin (a children’s game) gives happiness to more people than poetry, then push-pin is more valuable than poetry. “Quantity of pleasure being equal, push-pin is as good as poetry.” In this view, quantity — or, as we would now say, “access” or “inclusion” — trumps intellectual athleticism and aesthetic value. By this logic, government might well find itself subsidising access to courses in push-pin’s modern equivalents — computer games — and leaving poetry to the mercy of the market.

Mill admired the modernity and the democracy of Bentham’s utilitarian position, but deplored its lack of imagination: “He committed the mistake of supposing that the business part of human affairs was the whole of them.” Bentham failed to take into account other aspects under which human activities should be judged — the moral, the aesthetic and the sympathetic (a modern term for the latter might be “the socially cohesive”). Bentham must therefore be balanced against Coleridge.

Whereas Bentham began by asking of every received opinion “is it true?”, Coleridge began by asking: “What is the meaning of it?” How can society foster those dimensions of human life that Benthamite utilitarianism cannot account for — the ethical, the beautiful, the cohesive force? Through the creation, Coleridge suggests, “of an endowed class, for the cultivation of learning, and for diffusing its results among the community”. Mill describes how in his treatise On the Constitution of the Church and State, Coleridge (who was actually developing an idea first put forward in Germany by Friedrich Schiller) proposed that there should be what he termed a “nationalty” or “national property” in the form of a fund — derived from taxation — dedicated to “the advancement of knowledge, and the civilisation of the community.” This national fund should support and maintain what he called a clerisy, a kind of secular clergy, with the following duties:

A certain smaller number were to remain at the fountain-heads of the humanities, in cultivating and enlarging the knowledge already possessed, and in watching over the interests of physical and moral science; being likewise the instructors of such as constituted, or were to constitute, the remaining more numerous classes of the order. The members of this latter and far more numerous body were to be distributed throughout the country, so as not to leave even the smallest integral part or division without a resident guide, guardian, and instructor; the objects and final intention of the whole order being these — to preserve the stores and to guard the treasures of past civilisation, and thus to bind the present with the past; to perfect and add to the same, and thus to connect the present with the future; but especially to diffuse through the whole community, and to every native entitled to its laws and rights, that quantity and quality of knowledge which was indispensable both for the understanding of those rights, and for the performance of the duties correspondent; finally, to secure for the nation, if not a superiority over the neighbouring states, yet an equality at least, in that character of general civilisation, which equally with, or rather more than, fleets, armies and revenue, forms the ground of its defensive and offensive power.

University courses in the humanities are of value to the state if and when they sustain a Coleridgean clerisy. Academics must remember, though, that they are a form of “national property”: their work must be for the benefit not of themselves but of the entire nation. Reading Coleridge’s definition of the clerisy in the light of 21st-century debates about university funding, what is most striking is the huge emphasis that he places on what is now called “dissemination”. The humanising work must be “distributed throughout the country, so as not to leave even the smallest integral part or division without a resident guide, guardian, and instructor”. What that might mean today is a major university working in collaboration with a local further-education college or making its lectures available to everyone through podcasts.

The responsibility — the public duty — placed upon the latter-day clerisy is heavy, but in the “knowledge economy” and faced with the global insecurity of the 21st century, the return upon a modest continuing national investment in their work of teaching is potentially vast. Even more than in Coleridge’s day, the task of the clerisy is to bind past, present and future, to yoke inheritance to aspiration and tradition to innovation, and to maintain the understanding of “those rights” and “correspondent duties” that are at the core of national identity. The humanities must be protected so that they can continue to play their necessary role in “securing for the nation” that “character of general civilisation, which equally with, or rather more than, fleets, armies, and revenue, forms the ground of its defensive and offensive power”.

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