The Dearing Compact is dead

This piece was originally written for the student newspaper of the London School of Economics, The Beaver.

Back in 1997, when tuition fees were first on the agenda of the then Labour government, Lord Dearing’s report on higher education funding argued that those who benefit from higher education could reasonably be expected to pay a fraction of the cost of that course. The since cherished ‘Dearing Compact’ saw higher education as a funding coalition of sorts, between the state, the student and the employer, with each expected to pony up their fair share in line with the benefits derived from the system.

Only 13 years later, the Browne Review, released earlier this month, fired a warning shot at this compact. The entire report was based on an assumption that there would be severe cuts in the higher education budget in the near future, totalling 80 percent of the teaching grant awarded to universities annually by the Higher Education Funding Council for England (HEFCE) and a targeting of funding towards subjects deemed to be more economically viable.

Lo and behold, in a chick-and-egg style scenario, George Osbourne, Chancellor of the Exchequer, stood at the dispatch box in the House of Commons on Wednesday announcing the very same figures, with 7 percent cuts to the budget for the Department of Business, Innovation and Skills every year for the next 4 years and real terms costs to science funding. In order words, the Coalition has declared the end of public funding of higher education and a destruction of the Dearing Compact.

An so we see, born from the ashes of the last fortnight’s disaster zone, the creation of the “Browne Compact”. No longer is there a mutual balance between the student, the state and the employer, instead the Government sees fit to agree that the sole contributor to higher education should be the graduate and edge towards a true market in education.

Whatever way you try and look at this, it is a total disaster for students, and for higher education as a whole.

The sector was braced for cuts, but not on this scale. The inevitable outcome of the demolition of the higher education budget is that fees, at the most cash strapped institutions at least, will have to rise to at least double their current levels in order to sustain the same level of student experience. Of course, realistically, this will not happen in the way envisioned. The market in fees will not be based on sustaining quality and competition of course outcomes, but instead prices will be weighted based on league tables and prestige.

The reality of this new Browne Compact is that elite universities will charge the highest fees because of their league table positions, and other less prestigious, but arguably better universities, will be forced to charge lower fees in order to remain competitive in the market. Of course this is wrong in two respects. Firstly because league tables are heavily skewed towards research output – no fair way to set a fee level when the research has very little impact on your teaching – and secondly, it creates a widening gap between elite institutions that don’t need money – both because of their reliance on private funding and large cash reserves. That does not benefit students in terms of their debt burden and it doesn’t benefit students who could be herded like cattle into their lectures, have even less access to good resources than they do now and ultimately receive a terrible student experience.

Of course the principles that form this new model are deeply flawed in themselves.

Lord Browne and the Government believe higher fees will mean quality is driven upwards in universities because students will have freedom to move funding around the system. In fact the opposite can be illustrated even at LSE. Fees for virtually every course have increased at rates equal to or above inflation for the last 6 years, and yet student satisfaction rates have fallen. And this is from an institution that already charges some of the highest fees in the world for postgraduate and international students. It proves that the market is inefficient at correcting these problems and justifying cuts and fees increases on the basis of improved choice and competition is flawed.

Student debt already stands at an average of £24,000 on graduation. Under these proposals, debt would virtually double to around £40,000 and would not carry any additional benefit. Rather it would merely prop up universities that are having the funding cut from the other end. Students should not be expected to pay more for less.

The true argument for higher fees however, is to support deficit reduction. In fact that was the reason that the truly progressive option of a graduate contribution, like that put forward but the National Union of Students in its Blueprint from Higher Education, was dismissed as unworkable. The argument is that the substitution of funding from government to student will the Government can reduce the deficit meaning a better further for that same generation of undergraduates. Of course what they conveniently forget is that increased fees mean they have to loan out more money via student Finance England. The overall impact is that the Government is back to square one for the duration of the Parliament because they will have to spend the money upfront anyway.

And that poses the real question. Where should the debt burden fall? Given that student satisfaction across the sector has stagnated for the last 6 years despite increased funding and the trebling of fees and that graduate employment prospects are the worst they have been in a generation, is it fair to burden students with at least double the amount of debt that we will graduate with when the only real justification, when you wipe away the smokescreen, is deficit reduction?

You can’t expect students to pay more for the same, or worse, more for less. That’s not how the market works, and it would have Lord Dearing spinning in his grave.