English university fees, and Scotland, Wales and Northern Ireland

I’ve been looking at the UK Government’s statement about its proposed higher education policy. In reality, this isn’t much of a policy; it’s taken the form of a ministerial statement, available here, and we’re promised a white paper ‘later in the winter’ on many details, including the key question of what happens to the teaching grant (which drives the consequentials for Scotland, Wales, and Northern Ireland).   At this stage, all that’s clear is that fees for universities in England are going up, dramatically, and that this will involve a reduction in the teaching grant, with effects on the block grant which are already causing concern in Scotland, Wales and Northern Ireland.  It’s worth noting, though, that that’s unlikely to need primary legislation, as the idea of a two-tier fees regime with extra conditions attached to fees above the basic level forms part of the Higher Education Act 2004, which underpins the present system.  This is therefore unlikely to receive the sort of detailed Parliamentary scrutiny that one might expect with a major new policy.

I’ve already discussed the extent to which this change drives policy in Scotland, Wales and Northern Ireland, and the vagueness of the present statement means there’s little to add to that.  But it’s worth making one broader point – one I’ve already made in the context of the Browne report (HERE).  What we’re seeing in higher education is driven by two factors.  One is the point I’ve already made about the extent to which policy for England drives all higher education policy, regardless of the formal division of power.  The second is the nature of policy in England, compared to that in other parts of the UK.  English policy is much more market-oriented, and uses market mechanisms, than any other part of the UK.  It’s only in England that  teaching-only higher education institutions have been created, in the most recent wave of expansion.  It’s only in England that profit-making organisations have been given university status and the power to award their own degrees.  Similarly, the Browne review – imbued with the idea that higher education benefits the individual recipient not wider society, that it’s a private good not a public one – was in principle only making policy for England.  Scotland and Wales don’t share this approach (nor does Northern Ireland, to the extent it’s been able to make coherent policy of its own).  Their policies remain rooted in ideas of higher education being a public good as well as conferring private benefit.

The problem is that it’s impossible to adopt a different approach to the mix of public and private goods if a government lacks the resources to fund that from general taxation.  It becomes impossible for devolved governments to have a materially different view of what policy should be, if they can’t shape how public services generally are funded as well as what those services are.   Financial autonomy is necessary for political autonomy.  Otherwise, all devolution allows is the distinct administration of the same, English-determined, policies – which is not what the general public in Scotland, Wales or Northern Ireland appear to want.

Why should this matter to the UK Government?  There are two reasons.  First, there is a political interest for the UK to ensure that devolved governments can deliver different policies, if it wants to secure the political and constitutional benefits of devolution.  The purpose of devolution was precisely to enable Scotland and Wales to make different policy choices (not just administer the same general policies differently), and at present that means that they’re likely to want to make more social-democratic ones.  Otherwise, all that happens is that disagreements about policy manifest themselves in the political and intergovernmental arenas, and at best lead to tetchy relations and tit-for-tat undermining of the other government’s policies.  On one level, the UK Government will ‘win’ these – it will be able to drive devolved governments into having policies very like the ones it adopts, without needing to rely on legal mechanisms to do so.  But on another these debates can’t be won, as all that sort of outcome does is to prove that devolution doesn’t in fact deliver the sorts of outcomes that are the ‘settled will’ of people in Scotland and increasingly Wales.  That ends up undermining the political project of devolution as a whole.  The only beneficiaries of that are nationalist parties.

Second, there’s an economic impact.  The supply of trained and skilled people into the labour market is one of the few instruments available to the devolved governments to influence the economy of their part of the UK.  The economies of Scotland and Wales (as well as much of northern England and indeed the south west) have fared pretty poorly in this respect.  The Scottish Executive under Jack McConnell sought to address this by attracting overseas students to study in Scotland and then stay there after graduation, through its ‘Fresh Talent’ initiative, for example (though that foundered on a combination of Home Office reluctance to treat Scotland differently to any other part of the UK, and the impossibility of making the post-graduation residency conditional on staying in Scotland).  For those interested, this paper from Scottish Affairs in 2007 has much to say about the policy and its background.  Students will probably be much keener to move to areas where pay is high after graduation, if they’ve got higher debts to pay off, making it yet harder for poorer parts of the UK to retain graduates and the economic benefits they bring.  The current arrangements have cushioned the impact of these issues (though they are certainly present).  Forcing the same policy onto the devolved governments amounts, in substance, to a unilateral moving by the UK Government of the goal posts of the division of powers put in place in 1998.

The last time the UK Government did anything like this was the Welfare Reform bill. That was different because the bill was largely about non-devolved matters, with fairly limited spill-overs into devolved functions like vocational education and health.  The problems it caused were eased when the Scottish Government chose not to pick a fight and so the main disagreements were between the UK Government and the Welsh Assembly Government.  Nonetheless they created a lot of business that was only resolved when the JMC (Domestic) came on the scene.  The English higher education policy presents much greater problems for all the devolved governments.  Their complexity and the looming elections may keep them off the top of the agenda for a while, but they will come back with a vengeance.

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4 Comments

Filed under Devolution finance, Intergovernmental relations, Northern Ireland, Policy issues, Scotland, Wales

4 responses to “English university fees, and Scotland, Wales and Northern Ireland

  1. James Matthews

    “Financial autonomy is necessary for poliotical autonomy”. Errm, well yes, but devolution was never intended to deliver full political autonomy, the other name for which is independence. Short of that, the non-English nations of the UK are just going to have to accept that they are going to be affected (sometimes, in their view, adversely) by what England does – at the moment ujustly and undemocratically influenced by the unrestricted powers of their representatives at Westminster. If they can’t accept this situation they know what to vote for

  2. Chris

    Alan,

    Your analysis is fine so far as it goes, but where does it lead you?

    Scotland could almost certainly continue to operate successfully with fiscal autonomy, although serious forward planning and preparation would be required for when the oil runs out. Wales and Northern Ireland run very substantial deficits and could not at present survive with fiscal autonomy: they depend on substantial subsidies from England and Scotland. Most political rhetoric within Wales for the adoption of a needs-based formula for distributing block grant aims at increasing this subsidy rather than reducing it; although it is not put in that way, it involves transferring some of Scotland’s block grant to Wales.

    Fiscal autonomy for each of the constituent parts of the UK would quite likely in due course lead to its break up, but that is a matter of speculation on which your views are no doubt as good as anyone else’s (presumably you don’t think it would, about which I think you would be wrong, or you would not be particularly fussed if it did). However, I do not think you can just tease us by pointing out the obvious, namely that fiscal policy is often a determining factor in establishing social policy. Wales is I think your principal interest, so further particulars on how fiscal autonomy for Wales could actually work to enable the further divergence of social policy in the UK for which you argue would be useful. Yes, Holtham (which would not involve meaningful fiscal autonomy) would enable differential rates of income tax and some other taxes to be set, but the Scottish Government and Parliament have had that power for 12 years and not used it.

    Disclaimer: I am completely opposed to introducing increased higher education costs for students unlucky enough to be resident in England, and I think social policy should be orientated to reducing not increasing them. You don’t need to be either Welsh or Scottish to take that view: you just need to think to the future. But there is no need to let that opinion, if we both share it, lead to the break up of the UK.

  3. russell mellett

    Hello Alan:

    Of course financial autonomy and political autonomy are linked. And full fiscal autonomy is consistent with political independence. What is being lost here, is the notion that a significant degree of fiscal autonomy (for example via devolution of the income tax) would give Scotland, Wales and Northern Ireland the means to respond to demands for a different mix of public goods in their region, while strengthening the link between their public spending and own taxation. So significant devolution of revenue raising capacity can increase both the fiscal responsibility and political responsiveness of devolved government. Overall, there are a number of policy options for devolution finance between the status quo (little or no taxation powers), and full fiscal autonomy that can, and should be explored.

  4. Pingback: David Cameron at the Commons Liaison Committee « Devolution Matters

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