It’s long been assumed that whatever the outcome of the coming general election, fees would remain stuck in the freezer for the time being. We’ve pored over Public First polling that has neatly demonstrated how unpopular raising fees would be and concluded that no political party could feasibly contemplate this. But the ground is now shifting beneath our feet and I think a modest but significant fee rise looks more likely than ever.
On the list, taking names
One of the most telling things to have happened in the election so far for universities, was the authoritative report in the FT that “universities going under” was on Sue Gray’s “shitlist” of six acute problems facing a new government in July along with:
- The potential collapse of Thames Water
- Public sector pay negotiations
- Overcrowding in prisons
- NHS funding shortfalls
- Failing local councils
Sue Gray, you will remember, is now Keir Starmer’s chief of staff and leading Labour’s plans for a transfer of power and new government. (As an aside, given USS owns a significant chunk of Thames Water, you could also make a case that there’s a serious HE angle on that one too).
This is all counterintuitively encouraging news for the sector in that it’s clear that we do not need to start from scratch in making a case to Labour and a new administration about the peril that universities are in. We can skip the economic impact of HE reports and endless restating of the case. That job has now been done. They get it. And that’s good news because we can move straight to the next part – solutions and what comes next.
The above list is striking because the scale of some of the challenges on it are enormous. The next government is truly inheriting one of the worst in-trays in living memory. There are also many other absolutely steaming issues not on the list that need urgent attention in the form of policy development, legislative time, money, political capital, international cooperation, etcetera. And so to say that a new government will have limited bandwidth for major higher education reform in the short term is a huge understatement.
But counterintuitively, I believe this situation actually makes a fee rise in the short term more likely: let me explain.
Timing is everything
It seems likely that there will be an Autumn budget followed by a spending review in 2025, buying some time, legislative space and cash to deal with some critical issues now and pushing longer-term questions to next year at the earliest to give new ministers and their teams time to implement longer-term policy plans. A full spending review any earlier is seen as probably too difficult to achieve.
And as much as a new government won’t want the headache that would come with universities failing on its watch, it also doesn’t want to preside over an increasingly regressive repayment system for graduates and a poor offer on maintenance without having an answer on how and when it will address these. Labour might even make limited promises on these before the election.
Everything else it may want for and from universities in the long term is a bigger question that may need an Australian-style Accord to sort out – and there’s probably no space for that in this crucial first year.
In a former life, and in the build-up to the 2015 election, I worked as a Labour adviser on HE, and although I ultimately wasn’t listened to then (I said that just lowering fees to £6,000, as was promised, was a bad idea), I’ve got plenty of reasons to believe the people working on this now have a more clear-eyed view of the overall situation. Last year’s ditching of the “abolish fees completely” pledge is Exhibit A. The shitlist is Exhibit B.
£6,000 was designed as a soundbite policy to get through one tough weekend of interviews, and to capitalise on lingering feelings that fees had risen too high, too quickly. But the political landscape has changed utterly since then, and the outrage over £9,000 was at a time when most of this September’s university starters hadn’t even entered primary school.
My advice for an incoming Labour government this time is to use the timing of the election to their advantage. In the Autumn budget or ideally before, they should announce an urgent “get to safety” package that stems the tide of university financial losses with a modest fee rise to say £9,850, a fairer package for students and graduates, and a push that aligns higher education policy with national priorities, perhaps with some additional central funding via OfS – all to be delivered in the first months of a new government and heavily signalled in advance to help reassure prospective and current students, banks, employers and everyone else rightly concerned about the state of university finances.
But I thought fee rises were politically impossible
Now those Public First polls about HE funding are striking for just how much, when asked, people don’t think fees should rise. But they also tell us something else which is that HE funding is really not a big issue for most people, in fact, it’s very near the bottom of a long list of key issues at the ballot box. And when people are asked, it also turns out that they quite like universities! So all things being equal, you could reasonably take from this that there isn’t likely to be a mass mobilisation to the barricades if a new government were to gently raise fees to prevent universities from going bust.
Tripling fees from c. £3,000 to £9,000 in one swoop was a much bigger shift that clearly crossed a threshold of public anger at the time, but we are not talking about rises anywhere close to that magnitude, and also offsetting it with a fairer overall funding package at the same time. The Labour government in Wales did something similar following the Diamond review – abolishing the tuition fee grant in return for a greatly enhanced maintenance offer. No one at the time batted as much as an eyelid at the first part of that equation.
The other measure of public opinion that now matters is the General Election polls. Every day, poll after poll, and subsequent MRP models point to an overwhelming Labour win with a majority large enough to make difficult, grown up decisions without facing fear of immediate rejection at the ballot box.
I don’t think anyone can realistically make a case that raising fees by say £600 per year, and keeping it underneath the presentationally difficult £10,000 threshold will cause any long-term problems for a Labour party sitting on a big majority. The opposition may oppose it because that’s what they tend to do, and those on the left who want fees abolished altogether won’t be happy either.
But all of them will have lost an election, so that’s life.
In the long term, the new government may even be rewarded for making such decisions in the national interest. There are plenty of areas where we can expect a similar approach, for example, NHS reforms that have already been heavily signalled as coming and are likely to cause huge public battles with unions and others.
Shadow Secretary of State Bridget Philipson pointedly refused to rule out raising fees on Question Time last week, saying only that “she didn’t want to have to do it”, which gives plenty of wiggle room for actually doing it if she felt it was the right course of action. Governing is full of having to make unpalatable choices, and that’s what you sign up for when you try and win an election.
Quid pro quo
Of course, a modest fee rise and improvements to maintenance and repayment won’t come as a blank cheque. So I’d expect the package to have a tail of measures that bring universities in line with wider governmental priorities, for example in incentivising the funding of healthcare places, tougher action on access and participation and perhaps other elements of regulation or market measures designed to ensure that any additional funding goes to where it’s needed most. It could also be backed with a transformation fund as proposed by Alistair Jarvis on Wonkhe earlier this week.
The breathing room won’t last for the life of the whole Parliament, so there also needs to be a commitment to work towards a longer-term settlement once the sector is out of danger and there’s space for the national conversation about how the sector is organised in the future, how research is funded, quality measured, how many people we want to go, or need to graduate in different areas and all the other big questions of the sort that Chris Husbands is asking today on HEPI.
In the meantime, you need to continue to plan for fees to remain frozen for the foreseeable future and no other money to come from the government in any form. But if the polls continue to point towards a big Labour majority over the next few weeks, then I think you can also be quietly optimistic that some relief could be on its way.
