Ed Maltby examines the government’s Higher Education White Paper.
According to the White Paper, private firms will be given degree-awarding powers, allowing them to teach and award higher-education degrees at Further Education colleges.
The market will be opened to allow multinational corporations to take over UK universities or set up their own institutions.
In general it will be easier for a wider range of types of organisation to gain degree-awarding powers. This promises to create a large market in cheap arts and humanities degrees (around £5,000 a year) taught by Edexcel at FE colleges.
Next stop down that road: universities like the so-called Hamburger University in the USA, run by McDonalds. (The US original cannot yet quite award degrees, but it has got its course credits accepted by other colleges for degree purposes).
Private universities, such as the University of Buckingham, will be helped by the Student Loans Scheme being extended to their students.
The overall goal of the government is the extension of market forces in education. In this sense it is coherent with the general policy of the last few governments.
The government aims to limit the fees charged by universities and to allow private providers to compete.
The government will limit the number of applicants that a university can recruit if it charges top-whack fees. All universities will be given a certain basic number of students that they can recruit, plus an unlimited number of students who score AAB or better in their A-levels.
Universities that can’t recruit sufficient AAB students in addition to their basic quota will need to dip into the “lower-scoring applicants’ pool”. To qualify to recruit more sub-AAB students than their basic allocation, these universities will have to charge £7,500 fees or lower.
Top-tier universities will have no trouble recruiting enough AAB students on £9,000 fees.
Bottom-tier universities will have to lower their fees in order to be able to recruit more students from the lower pool, and so to cut costs, drive down wages, cut unprofitable courses, and focus on a particular market niche. The quality of education, teaching resources and contact time will suffer.
Mid-range universities will attempt to invest their way into the elite group. In an attempt to attract AAB students, they will undertake large “prestige” investments, hire star lecturers, construct impressive buildings, launch marketing campaigns and so on. We can expect a leap forward in the marketisation of universities.
The government will manufacture penury in education, forcing “lower pool” universities to charge no more than £7,500 per year per student, while removing central government teaching grants for all the arts and humanities by 2015. This will almost certainly force some universities to close, especially in London, as the funding plans have no London weighting.
The White Paper indicates that there will be no government support to bail-out failing colleges. Bankruptcy will mean either shutting down the institution or having it bought out.
Universities will probably also outsource more and more parts of their operations. The selling off of student accommodation, already widespread, is likely to continue, and that model will be applied to other services too.
The government’s proposals include making it easier for universities to change their corporate structures to a “legal form of their choosing”.
“Changing to a charitable company limited by guarantee could be a first step for public universities to move towards becoming for-profit companies.” [researchresearch.com]
Universities have tax benefits from their current legal status as charities, but the new market regime may create new incentives for some to become plcs.
Publicly limited companies can raise large amounts of money through such mechanisms as bond issues (hundreds of thousands of pounds). Universities who want to “spend their way” to elite status are particularly likely to take this route. Leeds College of Music has already been taken over and dissolved into Leeds College of Music Limited, a publicly-limited subsidiary of Leeds City College.
The governance structures of post-1992 universities make it possible for members of Boards of Governors to personally enrich themselves, as the BoG members of post-1992 institutions will become the initial shareholders in the case of a stock market flotation.
All this pushes towards less democratic structures on campus. The overall trend will be to subordinate every aspect of campus life to capitalist discipline and business-oriented management.
In accounting terms, the government can say it has made a big saving by shifting the burden of higher education funding from central grants and onto student fees covered by loans.
However, the volume of credit that the government will extend to students via the Student Loans Company (SLC) is set to increase dramatically. Loans to cover tuition fees will triple; and student loans will be extended to cover part-time students and students attending private institutions not previously covered by the SLC.
The credit burden for the government is made worse by the fact that student debt cannot be recovered in the same way or at the same pace as commercial debt. There is a limit on the rate of interest it can charge — although the government plans to change this — and it expects to recover only 70p out of every £1 it lends.
The Government predicts the debt will reach £190 billion by 2041 — roughly the same size as the current welfare budget.
Government plans to minimise the level of debt include:
• Encouraging HE institutions to offer fee waivers instead of bursaries to poorer students. Instead of having a bursary to support themselves through their studies, these students will owe less money to the government, but take on a greater level of private, commercial debt for living expenses.
• Giving itself the option of changing the level of interest it charges on student debt. The government has inserted a clause into the 2011 Education Bill, likely to be voted on in October, which will allow it to re-set the level of interest on student debt by administrative decree and without consulting Parliament. The end objective is probably to reorganise student debt so that the prospective stream of repayments becomes good enough to be sold to a bank.
• Using its “lower applicant pool” system to pressurise universities into charging lower fees (around £7,500) in order to reduce the overall level of debt.
We should respond: “Free education — tax the rich!” Education should be funded centrally, through progressive taxation. We should demand a living grant for all students. We should also oppose attempts to change the interest rate on the debt and to replace bursaries with fee waivers.
The intensification of marketisation will mean attacks on the rights of workers. Universities will try to systematically screw more profit out of their staff. This means shifting the burden of teaching onto low-paid postgraduates on insecure contracts.
South Bank University and Imperial College have already dropped out of the national pay-bargaining scheme. As the sector becomes more divided and diverse this scheme is likely to come under greater attack.
Universities will start cutting courses which are seen as unprofitable, and staff who are too stroppy or surplus to the new market requirements will be sacked.
Students should link up with campus trade unions and start a campaign in advance against the market-style chaos that will accompany the scramble of universities to position themselves for the market.
University managements will start investing money in ludicrous building and marketing programmes and other bells and whistles and threatening the institution with ruin if the gamble doesn’t pay off.
Students’ Unions and activist groups should read through their universities’ financial reports and scrutinise the minutes of Board of Governors meetings to keep an eye out for such developments. The detail of university finances will become highly political. For example, an increased debt-to-income ratio is a warning sign that the university may be considering radical reforms such as becoming publicly limited in order to attract cash and investment fast. Activists will have to read such documents as the UCU’s “Insider’s Guide to University Finance” in order to learn how to anticipate management’s plans.
Students should oppose market-oriented advertising splurges and prestige projects, instead demanding that teaching, research, resources, staff pay and student care are seen to before all other considerations.
There will likely be a proliferation of local struggles, on a range of issues linked to the overall White Paper marketisation drive. It is necessary for these struggles to be linked up into a national political drive to force the government to withdraw the White Paper. Otherwise the gains and victories of these local campaigns will be limited.
The national, democratic political co-ordination offered by the National Campaign Against Fees and Cuts is important for local student activist groups and student unions.