Should universities be allowed to drown in debt?
Policy Exchange’s ‘Sink or Swim’ report raises some valid points – there does seem to be a few debt-ridden, pretty rubbish universities, especially in London. If a university is both debt-ridden and rubbish, then there is a strong argument for letting it fail.
The report also highlights this very important issue: ‘Professor Adrian Smith, the government’s director general of science and research, criticised the lack of political discussion about top-up fees, saying: “That debate has been kicked into touch…in the meantime, universities are going bankrupt because they don’t have enough money.”‘
Higher tuition fees are not a vote-winner and so, despite the fact that universities are crying out for funding, this issue is on ice until after the election.
Unfortunately the report overlooks a few points.
If a university fails, then its students are stuck. This is not the stock market, this is education. The universities that are more likely to fail are generally the newer ones – such as London Metropolitan University, who are in all sorts of financial woe – who tend to have more poorer and first generation students. Moving students to other institutions is not viable either.
The report also seems to misunderstand the nature of the higher education market in Britain. The report states that: “It is a broadly accepted fact that for a market to be successful there must be an element of failure. For instance, students might vote with their feet by choosing not to attend a university, and if they did so would it be right to prop up that university regardless?”
The most worrying part of the report was its blithe acceptance that a private company could find 10% of cuts to be made at any university, enabling the company to make a profit. But where? On the one hand the report states that universities are utterly strapped for cash and in a financial pickle, and then it insists that a 10% funding cut is as easy as ABC. This is more than a little illogical.
Students already get less funding per head than they did ten years ago. Funnily enough, they now also get a lot less contact time. Perhaps, rather than from the teaching budget, the private investors could skimp on research? Sack the dung beetle researcher in the Biology department. But where do you draw the line? Only doing research for financial benefit? That is not a healthy attitude for a university to have. I’m no foaming leftie, but the idea of educating for profit makes me feel slightly queasy.
Thankfully, Sally Hunt, Secretary of the University and College Union had this to say: “We are not prepared to watch our universities risk hard won reputations and future financial health by signing capital and revenue over to what are in effect private sector property developers. We’ve seen the disastrous consequences of this kind of privatisation across the public sector and will fight it wherever it rears its head.”
Good.
Policy Exchange’s ‘Sink or Swim’ report raises some valid points – there does seem to be a few debt-ridden, pretty rubbish universities, especially in London. If a university is both debt-ridden and rubbish, then there is a strong argument for letting it fail.
The report also highlights this very important issue: ‘Professor Adrian Smith, the government’s director general of science and research, criticised the lack of political discussion about top-up fees, saying: “That debate has been kicked into touch…in the meantime, universities are going bankrupt because they don’t have enough money.”‘
Higher tuition fees are not a vote-winner and so, despite the fact that universities are crying out for funding, this issue is on ice until after the election.
Unfortunately the report overlooks a few points.
If a university fails, then its students are stuck. This is not the stock market, this is education. The universities that are more likely to fail are generally the newer ones – such as London Metropolitan University, who are in all sorts of financial woe – who tend to have more poorer and first generation students. Moving students to other institutions is not viable either.
The report also seems to misunderstand the nature of the higher education market in Britain. The report states that: “It is a broadly accepted fact that for a market to be successful there must be an element of failure. For instance, students might vote with their feet by choosing not to attend a university, and if they did so would it be right to prop up that university regardless?”
The most worrying part of the report was its blithe acceptance that a private company could find 10% of cuts to be made at any university, enabling the company to make a profit. But where? On the one hand the report states that universities are utterly strapped for cash and in a financial pickle, and then it insists that a 10% funding cut is as easy as ABC. This is more than a little illogical.
Students already get less funding per head than they did ten years ago. Funnily enough, they now also get a lot less contact time. Perhaps, rather than from the teaching budget, the private investors could skimp on research? Sack the dung beetle researcher in the Biology department. But where do you draw the line? Only doing research for financial benefit? That is not a healthy attitude for a university to have. I’m no foaming leftie, but the idea of educating for profit makes me feel slightly queasy.
Thankfully, Sally Hunt, Secretary of the University and College Union had this to say: “We are not prepared to watch our universities risk hard won reputations and future financial health by signing capital and revenue over to what are in effect private sector property developers. We’ve seen the disastrous consequences of this kind of privatisation across the public sector and will fight it wherever it rears its head.”
Good.
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