Labour Party: Government’s proposed Higher Education market is a huge gamble - Denham

John Denham MP, Labour’s Shadow Business Secretary, in a speech today to Universities UK, said:

“The 50 year expansion of English higher education has been driven by sustained public investment coupled with trusting the leadership of universities. We have seen real success with the excellence of top research universities alongside the richness and diversity of our higher education system. This should not be lightly set aside.” 

But he attacked the coalition's plans which place this at risk, gambling on a profound change which threatens the very idea of public universities, publicly funded. And he condemned the coalition for trying to railroad through Parliament a huge increase in fees before laying out the full details of their plans.

The government is ending the direct public funding of most undergraduate teaching with the teaching grant cut by 80%. Many universities will lose up to 90% of their public funding. In future, most students will carry the whole cost of their degrees, paying for up to 30 years after they graduate. The near trebling of the fee cap to £9,000 a year, with maintenance loans on top, is intended to create a market in which solely student choice, shapes the size of universities and courses on offer. 

This is not like Labour’s introduction of fees which brought in significant extra money when the limits of public funding were reached and supported the publicly funded university system. Under the government’s plans, it looks like fees of £7-8,000 a year will be needed simply to replace lost income. 

John Denham said:

“The government’s plans are not financial but ideological. They are a gamble - withdrawing public money from universities and pushing through a market that they know will contribute little to deficit reduction especially in the medium term but it will create turmoil for universities and mountains of debt for students.

“The coalition’s approach is founded on shaky ground. Student choice is one, but only one, of the mechanisms we should use to drive change. And the coalition implicitly admits market failure by suggesting it will continue to fund some courses, in science and engineering teaching, as it knows neither students nor wider society value these skills highly enough. But are the arts, humanities, or the degrees which support design, entrepreneurship and the creative economy so unimportant that we don’t care what choices are made? 

“The government is betting the house on this gamble.”

ersity Challenge, to bring new university colleges to areas without provision, HEFCE was overwhelmed by demand. The bids stressed new opportunities to study and support for economic development. But most also saw the wider role – in deepening and enriching the culture of local communities, brining in new talent and leadership – that higher education also brings.

There is a lot more to higher education than success in the competition for students, but one the coalition does not seem to recognise.

We have had 15 years of progress towards respect for diversity; and for the idea that all universities are different and that each can be the best choice for the right students. This is to be swept aside by the crudest of systems in which those who are most valued are those who can charge the highest.

In recent years, advocates of using consumer markets to drive reform of public service have influenced public policy, including Labour policy. The evidence for putting heavy weight on markets is limited. But this is by far the biggest and most worrying experiment yet attempted.

I accept, of course, that there is every possibility that the coalition will manage to achieve the worst of all possible worlds.

English students will pay the highest fees of any public university system in the industrialised world.

Perhaps no money will be saved in the long run.

Yet in practice the market may be so limited by the need to constrain spending and student numbers that little change takes place.

I recognise that there have always been those in the university system who are comfortable with, and advocates of, market principles. Just as there are those who have been genuinely perplexed as to why – if they can fill their institutions with bright students from well off backgrounds – they should be concerned to seek out talent elsewhere.

So while I don’t expect a consensus on these issues, you should know where Labour stands.

We will oppose the current proposals to raise the fees cap. And we will defend the principle of the publicly funded university.

Labour will defend the principle of public education. We will oppose the fee increase. But it is also our job to oppose the government’s plan to railroad Parliament into an early decision. 

David Willetts wants us to vote on the fee cap now, but only publish a Higher Education White Paper in March.

I feel for those Lib Dems whose personal credibility and integrity are on the line who will be asked to vote ‘yes’ before they can answer the simplest questions about the new Higher Education policy.

How will student numbers be determined and controlled?

Will the promises about ‘fair repayment’ be put into law or remain vague aspirations?

How will plans to improve access be given real teeth especially as programmes like Aim Higher are abolished?

Will new organisations be allowed to offer degrees and on what terms?

Parliament should not be asked to increase the fee cap before these and other crucial questions are answered. And I would urge UUK to be cautious about banking promises which have not even been published, let alone put before Parliament.

If we fail in our opposition to the new system we will as we approach the next election inherit a very different world. 

Labour’s challenge will be to rebuild confidence in the very idea of public higher education. In moving towards a graduate tax we will ask how exactly those whose degrees support the highest earnings can make a fairer contribution. 

And as the worst failing of the new market become clear we will have to look at how public funding can best put them right and looking to shape the needed changes which the market won’t achieve.

But I would rather we could build on what we have today.