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    A blog from the Center for International Higher Education

The BP paradox: 100% market driven with state controls
October 30, 2010 - 1:30pm

English (rather than British) higher education is presently digesting the report by Lord Browne, the ex-boss of BP, called Securing a Sustainable Future for Higher Education, published on 12 October. Browne’s report provided the context for the higher education component of the government’s Comprehensive Spending Review (CSR) announced on 20 October, which reduced the state budget for higher education by 40%, to be achieved in the period to 2014/15. This is, quite literally, an unprecedented cut in public support for higher education. Within this cut, the research budget is to be frozen in cash terms, so that the major cut falls on the teaching budget.

This is where the Browne report comes in: he proposes that public funding of university teaching should effectively cease, other than for “strategic” subjects in science, technology, medicine (so-called STEM subjects) and some others, with the costs being covered by greatly increased tuition fees, with universities being able, effectively, to charge whatever fee they think the market will bear. This allows the 40% saving to be made, though these higher fees would be paid up-front to universities by the government (as happens now) and recovered from the students through the tax system once they were earning (starting at a higher income level than now). So the immediate impact is that the government has actually to find more money immediately, but, it is assumed, this will be off-balance sheet.

Everyone expected Browne to recommend “lifting the cap” on what universities could charge in the way of fees – currently just over £3000 – but it was not expected that he would propose the complete removal of funding from non-STEM teaching. This would have the arguably paradoxical effect of making some of the UK’s leading universities (Imperial, say) largely state-funded institutions, while many less prestigious institutions, with little or no STEM and hardly any research, would become effectively private, as almost all their income would be from student tuition fees. It is hard to see how many government policies – widening participation, or engagement with business, say – would be implemented in such a context, with the government’s current financial levers removed.

Browne makes a number of recommendations that have not featured at all in general media reports - which have all focused on the fees issues - but which are of great interest to university managers and students of higher education. Many of these measures appear to be of a centralising sort, with greater control being proposed over academic standards and with a new, more centralised Higher Education Council overseeing the system, for example. So there is an odd mixture of reliance on market forces plus more intrusive state controls.

It is not clear at present how far Browne’s proposals will be implemented. We are operating in completely unknown territory in terms of possible student responses to much higher tuition fees, the impact of this on institutional incomes (and viability in some cases), and the political fallout once students and their parents confront the reality of what is being proposed. It is not clear to me how much of Browne will, in the event, be politically saleable. My guess is that we see a greatly-modified set of proposals actually implemented, though much higher tuition fees seem here to stay.

 

 

 

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