View from Westminster

This week’s announcement of a review into student fees is welcome. The UK has the highest cost, to students, anywhere in the world. But we must fund university education from somewhere, and it is right that those who benefit from a university education, with greater life outcomes and opportunities, should make a greater contribution than those who don’t.

There are many facets to this debate and too many to discuss here. However, I am reminded of a constituent who told me he had tried to get in to a university to read maths. The course was full and he didn’t make the grade, but the admissions tutor said to him that it didn’t matter what degree he had, just so long as he had any degree. In that one story, I realised just how much universities have morphed from being places of learning into businesses. Of course it matters what your degree is in and this is something that has troubled me for some time.

The system requires students to take on a debt of over £27,000 for tuition fees, plus further debt for living allowances – a total that could reach £50,000. But if you don’t reach the threshold to start repaying debt, or in the 30 years you must repay it, you fail to pay it all back, the remaining debt is wiped off.

Society subsidises university fees, either through debt forgiveness or through central subsidies for expensive courses such as engineering or medicine, because wider society benefits from it. But that outcome is not aligned to the interests of universities, who will see greater profits from putting on cheap to run courses than complex, resource hungry courses. Importantly, if a graduate has a degree that society does not value, he or she will be paid less and so the taxpayer will pick up a second bill through debt forgiveness. In short, why should taxpayers give larger subsidies to those courses that are less valuable to us all, than those we need?

Damian Hinds, the Education Secretary, has three priorities in his review. These are centred around the cost of a course, its benefit to the student and its benefit to the wider economy. He is right to tackle this and this area has complex outcomes through actions and interventions that are tricky to predict. I am pleased he has seized the nettle - we need to sort this out.