The Browne review of higher education funding and devolution

The Browne review of higher education funding and fees, published last week, is supposedly a statement of policy for England only.  The review was probably expected to result in a substantial increase in the annual cap on the deferred variable fees (presently £3,290), so expanding further the resources flowing into English universities.  This would create serious strain for Scotland, Wales and Northern Ireland, where the market-oriented approach to both universities and the value of a degree to individuals isn’t so widely shared.  Certainly, that was the case when I looked at higher education and devolution for Universities UK a few years ago.

The present climate for public finances has altered the picture considerably.  Along with expanding the resources for higher education in England by removing the fees cap altogether (Browne) or raising it to £7000 (as Vince Cable has hinted), the proposal now is also to use that to reduce the contribution of public funds to higher education generally.  The ‘teaching grant’ – meaning the teaching funds allocated to the Higher Education Funding Council for England – will also be reduced from £3.5 billion to £700 million, and universities required to make up the shortfall from the deferred variable fee system. The explanation offered for this shift is not a particularly detailed one; the Browne report says (p. 27):

In our proposals, public spending reductions are made by removing the blanket subsidy that the public currently provides for all courses through the HEFCE grant; and targeting investment in priority areas rather than spreading it thinly. This will expose institutions to more competition as they will no longer get a large block grant year on year regardless of the quality of teaching; more of the investment in higher education will be directed by students.

The £700 million Browne leaves for teaching is to be allocated only to ‘priority’ subjects or areas.  Otherwise, teaching income is wholly to follow students, and ultimately to be paid by them.

(It’s worth noting that the teaching grant only accounts for about half the funds disbursed by HEFCE.  The other large element for which they’re responsible is funding for research by university lecturers, allocated according to departmental performance in the 2007 Research Assessment Exercise.  That in turn is separate from the funding provided by the research councils, which is allocated for specific projects, and which appears also to be in line for substantial cuts.)

Already there are dramatic warnings about the implications of this from Steve Smith, president of Universities UK, coupled with suggestions from the most elite institutions in England that this isn’t enough, and that Cambridge is considering ‘going private’ to fund itself.  (As I recall, the UK’s other private universities, notably Buckingham, aren’t eligible to receive grant funding from the UK research councils; I wonder if those responsible for these rumours have borne in mind the impact of losing that huge source of income on Cambridge.)

Altering the fees chargeable in England would have a substantial effect on Scotland, Wales and Northern Ireland in any case.  It would significantly expand the funding of many English institutions, particularly elite-level ones like Oxford, Cambridge, UCL or Imperial College.  While the costs for students would increase, on the institutional level this probably wouldn’t have a huge impact on institutions that primarily provide courses for students who are locally based, like many of the former polytechnics.  Glasgow Caledonian doesn’t compete for students with London Metropolitan, but with institutions closer to home like the University of Paisley or the University of the West of Scotland.  But for institutions in Scotland, Wales and Northern Ireland that aspire to operate at or close to that elite level (chiefly, Edinburgh, Glasgow, Cardiff, Queen’s Belfast, and maybe St Andrews) the problems would be huge.  Finding alternative approaches to university funding that don’t involve copying the English approach has been a challenge; even when times were good, devolved budgets were sufficiently tight to make substituting public funds for those flowing through deferred variable fees a real challenge. Moreover, there has been a strong tendency for devolved governments to prefer to support students at university rather than institutions, when there is a choice; this has been the approach of both the Welsh Assembly Government (through two policies, one encouraging Welsh students to study in Wales by paying part of their fees, and now by targeting support at students from poorer backgrounds wherever they study), and the Scottish Government (where the SNP abolished the ‘graduate endowment’ on coming to office).

If the Browne review has any effect on policy at all (even if it’s not wholly implemented), it will also have a profound effect on the devolved governments and the choices they can make about higher education in Scotland, Wales and Northern Ireland.  But the effects of its recommendations outside England weren’t a factor for Browne.  He and his fellow panel members were appointed by a Secretary of State whose remit extended only to England, and their terms of reference made no mention of such wider effects.  It’s perfectly right that England should be able to make its own policy choices; but if these have effects on the devolved governments, then they need to be involved in the making of them too.  Unilateral action for England that has such serious spill-over effects is simply inappropriate.

The Universities UK report mentioned earlier suggested the following as a possible, UK-wide, way of dealing with some of the problems that England’s deferred variable fees regime was already causing (p. 38):

Funding for higher education should be allocated to the devolved administrations (and within UK Government) on a basis that either recognises levels of territorial need, or delivers equivalent funding on a per capita basis. This would take into account the extra resources higher education receives in England, which attract no additional funding under the Barnett formula. Such a grant would need to be unconditional so that (as with the present system of funding) the devolved administrations could allocate it as they saw fit. But even on such a basis, there would be greater public expectation that higher education would receive that funding, and it would therefore create a more level playing field.

As matters stand, the UK Government’s approach herds the devolved governments into making policy choices they oppose, and which are broadly opposed by their electorates too.  Politically speaking, it’s a gift to nationalist parties who can argue that their country’s resources are being used in a way they don’t consider to be proper, in a system that denies them a choice about this.  London’s lack of awareness of this, and the wider implications of this approach to higher education funding, indicate the effect of its narrow approach to thinking about devolution.

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