The government has underestimated the costs of its new student fees regime, leaving a black hole of more than £1bn a year, said a report by the Higher Education Policy Institute (Hepi) last week. The report – which led to "unishambles" headlines – says the government's calculations on the net cost to the Treasury of student loans (known as the Resource Accounting and Budgeting or RAB cost) depend on optimistic assumptions. With a potentially harsh spending review looming, it has raised questions about how the government might seek savings in the universities budget. Will the loan repayment package change? Will student numbers be cut? Are other parts of the HE sector at risk?
Nick Barr, professor of public economics, London School of Economics
The design of your loan scheme matters because if you get it wrong it costs too much and you have to cap student numbers. Capping student numbers, when demand is rising, seems crazy. You can hear them sniggering in South Korea. If my fairy godperson were to grant me one wish, I would freeze the salary threshold at which graduates start repaying loans at £21,000, ensuring that this did not rise in line with earnings. Thus inflation would gradually reduce the real value of the threshold.
Prof Steve Smith, Vice-Chancellor of Exeter University and chair of UCAS
The truth is we do not know whether the government's figures are right, or Hepi's. There are too many unknowns. How many students took out loans this year and how much did they take out? We don't know that yet. But my personal view is that the reduced intake numbers for this year have made the problem of student support costs go away for now, regardless of what the RAB charge is. However, the early data suggests that this may have been a one-year blip. Numbers should pick up next year.
Shabana Mahmood MP, Shadow Universities Minister
The government must respond to the Hepi report and explain why ministers have got their sums wrong. Students will be rightly worried that loan terms will change and become more onerous, or that the number of student places will be cut in future. The government must therefore re-think its ideological decision to cut the teaching grant by 80% and treble tuition fees to £9,000. Labour would immediately cut tuition fees to a maximum of £6,000, paid for in part by reversing the corporation tax cut for the banks.
Prof David Green, Vice-Chancellor, Worcester University
The Hepi calculation is just speculation and arithmetic, and not based on real-world economics. Politically, of course the Treasury would like fewer people on their balance sheet, but I'd be very surprised if that happens in reality. Shut those people out and they will take the jobs in Tesco, and the people who would have had the Tesco jobs will become Neets [Not in Education Employment or Training].
I would expect within three years the vast majority of universities will be charging £9,000 or near that. We haven't got the balance quite right. I think it's wrong that young people should enter the workforce with a debt of such proportion. Graduates, the state and business all benefit from HE. I think all three should make a contribution.
David Willetts MP, Universities Minister
The Hepi report is extremely pessimistic and deeply flawed. They assume the worst possible outcome for taxpayers on every variable they've assessed. In fact our RAB calculations occupy the middle ground, with some economists arguing the reverse of this report – that we have over-estimated cost per student.
Howard Hotson, Professor of Early Modern Intellectual History, Oxford University
Do the government's calculations account for the possibility of a collapse of the euro? Or the inevitability of further climate change by 2045? The unknowns of this moment in history defeat any attempt to predict the future precisely. If government accountants cannot forecast the budget deficit from one year to the next, how can they precisely plot the trajectory of the average graduate's income during the next 30 years?
The new university funding mechanism simply transfers risk from the current government to a future generation of students and taxpayers. In such uncertain conditions the only responsible course is to retain a substantial degree of "pay as you go" for taxpayers and most students – precisely what the new funding mechanism has thrown overboard.
David Palfreyman, Bursar, New College Oxford
The welcome new stress on vocational options from the government should mean fewer students in higher education, hence less cost. This would bring us closer to Germany, with more further education and less higher education, and further from Greece or Spain with far too much HE. Which economy would you rather rely on to pay your pension?
Continuing public cuts will eventually raise the choice of cutting research money or student support cash – assuming that protecting the schools budget will always trump universities, and assuming the cost of loans is not lessened by higher interest rates.
Alex Bols, Executive Director, 1994 Group
It is essential that any government miscalculation of student support expenditure does not result in claw-back from the research budget. The long-term health of the UK's research base and of the economy as a whole should not be jeopardised by a retrenchment on current spending commitments.
Sally Hunt, General Secretary of the University and College Union
Squeezing more money out of students and their families is not the way for us to keep up with our global competitors or ensure UK universities are properly funded. A look at the emerging economies shows that we need more graduates, not fewer, so we do not agree with a cap on numbers or ambition. We think the government should consider taxing big business for the substantial benefits it gains from a plentiful supply of graduates and using that money to expand, rather than reduce, opportunity to study.
Dr Gary Day, Principal Lecturer in English, De Montfort University
There is nothing more important than education. Can't the government tax the rich more? Stay away from us!
Source: 29th October 2012, The Guardian by Anna Fazackerley
http://www.guardian.co.uk/education/2012/oct/29/multiple-choice-higher-education-funding
No comments:
Post a Comment