Liberal Vision

Three cheers for the Browne review

The debate over the Browne review of higher education funding has only just begun, and the most negative responses, predictably have come from those who haven’t read it, or are wedded to unworkable and regressive systems like the graduate tax or pure state funding. From this corner we hope the government adopt the proposal in full, as an entirely workable compromise between the parties, building on the best elements of the previous government’s innovation in the sector.

In response to Simon Hughes statement we believe this proposal will help drive quality by changing the role of government from provider to regulator and forcing institutions to be more responsive to the needs of their students. By retrenching the principles of no up front payment, a higher repayment threshold, and a reasonable repayment percentage it should not put off anyone able from any background. Deep risk aversion to debt is better tackled by targeted support by institutions (this report helps that) and schools than multi-billion pound middle-class welfare. The repayment system with a 30-year write-off also means the system is fair and progressive. People cannot be forced to pay more than the cost of their education, and low-income earners are not punished by excessive debt for life.

It is hard to understate just how thoughtful and balanced this report has turned out to be. The six principles guiding the proposals are outlined as

• More investment should be available for higher education funding
• Student choice should be increased
• Everyone who has the potential should be able to benefit from higher education
• No one should have to pay until they start work
• When payments are made they should be affordable
• Part-time students should be treated the same as full-time students for the purposes of learning

The proposals themselves can be summarised as:

• The cap on fees will be removed
• The government will pay the cost of learning up front, students don’t start repaying until their income exceeds £21,000
• Payments are affordable at 9% of any income above £21,000, the interest rate is no higher than the government borrowing rate
• The mechanism will also apply to part-time courses
• Institutions that charge higher fees will have to pay back some of that to the government to offset the cost of borrowing
• After 30 years any outstanding balances are written off
• Living cost loans will be available to all at £3,750 per year
• Tapered maintenance grants of up to £3,250 per year will be available to students from households with income up to £60,000 per year
• Alumni donations will, like gift aid, be tax free
• All these thresholds and payments will be reviewed in line with the cost of living

Some benefits of the proposed solution:

• The system should permit an increase in the quality, flexibility and the number of places by increasing sector finance sustainably
• Quality will be driven by student demand, competition between institutions, and backed up by a simplified and unitary higher education regulator. Higher Education institutions will have more control over their own destiny.
• Variable fixed fees means students can think through the cost and benefit to them of specific courses and seek compensation for poor quality supply.
• No one can ever be impoverished by this scheme, nor can it be used as a future stealth tax by the state
• Unlike the NUS graduate tax proposal it will not increase government debt or force cuts in other areas to pay for them.

The only pity of this report is that it didn’t come from the Liberal Democrats. The party has had the Centre Forum report, Open Universities, since 2006, which makes many of the same points. Stephen Williams MP attempted to change the internal debate in 2008.

The political debate today is all about whether MPs will break election pledges to oppose fee rises, the real political tragedy though is that many of those MPs knew the policy they were committing to was unworkable populist guff to keep the peace with militant activists, and win a few temporary student votes. This is a case of local opportunism, and a failure to lead, biting back.

The courageous thing to do now though is accept the party got it wrong, highlight all the alternatives are worse and cannot be justified whilst other services are being cut, and back this report. In the long-run perhaps it will persuade the party to check what it pledges to do more carefully.