Plans to expand higher education places may be under-funded, warns think tank

David Kingman reports on a recent warning from the Higher Education Policy Institute that the Government’s new proposal to remove limits on student numbers may not be adequately fundedgraduation cap  on a pile of money ( student debt )

The Coalition Government’s plans to remove the cap on the overall number of undergraduate students that higher education institutions can recruit in England may be inadequately funded, potentially leading to a cash crisis in higher education, a leading higher education think tank has warned.

HEPI, the Higher Education Policy Institute, has recently launched a new report – A Guide to the Removal of Student Number Controls – which argues that the Government still hasn’t adequately explained how the increase in student numbers will be paid for. The report warns that the quality of England’s higher education could deteriorate if no new funding is provided.

No loans sale

The removal of the cap on student numbers at English universities was one of the most attention-grabbing policies to be announced in the 2013 Autumn Statement. From autumn 2015, English universities will no longer be penalized if they admit more than their allotted number of student places; previously, this had been capped in order to place a limit on the amount of money the government would have to lend to new students in the form of student loans each year.

At the time, Chancellor George Osborne made it clear how he believed the policy was to be paid for: “The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential” (although few details were ever provided of how this would actually work in practice). However, this idea appears to have been abandoned in July 2014, when the Business Secretary Vince Cable announced that the proposed sell-off would no longer go ahead.

The new report from HEPI makes it clear that although the increase in student numbers is still very much in the pipeline, the Government still hasn’t made any firm commitments on whether it will provide additional funding to pay for it. The Government has predicted that an extra 60,000 “Home” and EU students will enrol each year under the new arrangements, which the report says will mean “spending per each student is set to come under severe strain” unless additional resources are provided.

The report claims that adding an additional 180,000 students to the current total after three years would increase the number of overall enrolments by around 20%. To provide the same level of resources per student which the government does currently would add up to an extra £720 million in grants and teaching costs and £700 million in student loan write-offs.

HEPI argues that, given both the Conservatives and Labour are committed to making further cuts in public expenditure whichever of the wins the 2015 general election, it is difficult to see where more money will come from.

An aspirational policy?

The report argues that increasing the numbers attending higher education is a worthwhile policy in itself. It should enable more young people to achieve their full potential in life, while also providing economic benefits from creating a more highly-skilled workforce.

The danger is that if the government fails to provide universities with the necessary resources to teach all of these extra students then the quality of higher education will suffer, as current teaching budgets would need to be spread much more thinly to make up for the shortfall. As Sally Hunt, leader of the UCU lecturers’ union told the BBC:

“Higher education is not something to be piled high and provided on the cheap. While the policy is admirable in its intention to widen access, the government needs to clearly spell out where the extra funding will be found and introduce robust quality controls.”

HEPI’s report does acknowledge the possibility that George Osborne may have made his announcement for the slightly cynical reason that it will offer the Coalition parties an “aspirational” policy to appeal to families with on the campaign trail in 2015. That may benefit the politicians in the short-term, but unless the extra money materializes from somewhere, then something will clearly have to give in English higher education.