Higher education in England is currently the subject of an extraordinary experiment in the allocation of public funding: the question is, will the patient survive, and if so, in what state?
The Conservative/Liberal Democrat coalition government is (in England, but in not the rest of the UK, where higher education is a regional responsibility) removing, at a stroke, almost all of the public funding for teaching, lending it to students to pay tuition fees, and then make them pay it back after graduation, as soon as they start earning a half-decent salary (currently £21,000). Fees are expected to go up from the present level for undergraduates of just over £3000 to (the government assumes) £6000, or in some cases up to £9000. The government clearly assumes that the £9000 level will be exceptional – but there are some indications that it may become the new norm, not least because of concerns that charging less may send a signal about academic quality (which is exactly what happened when the present fee regime was introduced in 2006). If the government is wrong about fee levels, then its financial planning is in serious trouble.
The deeply weird aspect of this is that, although the government constantly repeats its mantra that the UK is in a financial crisis (actually, the latest figures from Eurostat give the UK’s government debt as 68.2% of GDP, compared with an EU average of 74.0%), the current proposals will not save the government money in the short or medium term. As the government’s grant letter of 20 December 2010 to the Higher Education Funding Council for England said, because of “the upfront costs of graduate contributions, the aggregate effect could be that this total [government] investment in HEIs in England would rise in cash terms from around £9 billion in 2010-11 to around £9.5 billion in 2013-14 and £10 billion in 2014-15".
That is to say, this completely experimental approach to the public funding of higher education, implemented on a scale and at a speed that is probably unprecedented anywhere, is not expected to save money – on the contrary - even on the government’s optimistic projections. It is, we may think, an extraordinary way to go about policy making in a modern democracy.