Alison Wolf: The Augar Review takes productivity, Industrial Strategy and skills seriously. Will the new Prime Minister listen?
Alison Wolf is professor of public sector management at King’s College London and a cross-bench peer. She was a member of the Post-18 Review of Education and Funding Independent Panel (the Augar Review) but writes in a personal capacity.
Last week, the Prime Minister launched the Augar Review of Post-18 Education and Funding. Her speech strongly endorsed some of its major recommendations, notably for further education. The media in the room duly directed their questions to issues affecting universities, ignoring the ‘other 50 per cent’ who don’t head straight to higher education. Wider media coverage also focused overwhelmingly on university fees, while various university bodies piled in with criticisms.
There was, meanwhile, near total radio silence from the main Conservative leadership contenders. As a member of the Augar panel, I’m personally relieved that they stayed quiet. A new government does not need expensive ill-understood commitments or ‘not on my patch’ promises, sparked during the campaign by lobbying or leading media questions. However, Augar addresses major issues, affecting our entire population, with large price tags attached. These will be waiting for the next Prime Minister.
A Westminster village take is that the Review was a panic-stricken response to Jeremy Corbyn’s promise to abolish university fees; and that with Labour also languishing among young voters, it’s no longer really relevant. That’s completely wrong. Our technical and adult education are in crisis. There is a growing gap between what the labour market demands and what post-18 education supplies. And polls and focus groups alike show strong public support for vocational and technical provision.
Augar provides what it says on the tin: a review of all post-18 education, and how to pay for it. And the review panel discovered that technical and further education were in even worse shape than any of us had realised. Courses teaching technician and advanced craft skills are vanishing from English education at speed, even though the economy is crying out for these skills. Today’s young people are effectively offered a single choice. A full degree, now – or nothing.
Overall, Augar’s recommendations are designed to reverse this idiocy, and to do so at little extra cost to the Exchequer. But of course, they are made within a wider fiscal context. A new Prime Minister will be heavily lobbied by the powerful education lobbies who represent universities and schools, and are focused on an imminent spending review.
Back in 2010, English universities got a major boost in their finances. Student fees of £9000 (now £9250) gave them a big increase in income per student. Universities have generally had an excellent decade, as one of the best-resourced systems in the world. They have also cemented their position among the world’s very best for quality and research productivity, and are enormously attractive to overseas students, who bring in over £15 billion a year in fees and other spending.
Compare this with the rest of education (let alone with social care). In schools, real spending in the sixth form has fallen by more than 20 per cent per student. Spending on 5 – 16 year olds has meanwhile been held fairly constant in real terms: but costs have risen faster than inflation, so there are plenty of school horror stories with which to fill the pages – and no doubt many more to come before the autumn spending review.
As for further education, which serves the whole non-university adult population from 18 to 85 plus, its funding has been devastated. The core adult education and skills budget has fallen by 45 per cent in real terms since 2010, student numbers have plummeted, and public spending per student is more than six times as high in universities as it is in the nation’s colleges.
This imbalance looks even harder to justify in the light of regional inequalities. Among young people in their late 20s, over half of the London-schooled went to university: it’s under 30 per cent in the North East and the South West. Except in London, young women are enormously and increasingly more likely to attend university than young men. So among young men in the North East, only one in five went on to university; in the South West, less than a quarter. The country’s single-minded determination to reach ‘50 per cent in HE’ has left a lot of people behind with no good alternatives.
Unfortunately, reform will face an additional obstacle this autumn. Universities’ good fortune – which they are, very naturally, defending – was fuelled by an illusion, and the Treasury is now facing the washback from its too-clever-by-half fiscal trick.
Sean Coughlan, the BBC’s education correspondent, described this far more vividly than we did, when he asked, last year: How can you lend someone almost £120 billion and not have a hole in your budget? Or how can you give out £17 billion, only receive back £3 billion and not be any worse off? Answer: When you’re the government and it’s the student loans system.
Student fees are paid to universities through a loan mechanism, and the Treasury decided that loans didn’t need to appear on the books as spending: after all, they would be repaid. But of course, that wasn’t actually true – only some of them would be. Under England’s ‘income contingent’ system, people, rightly, only pay education loans back as and when they earn a certain amount, and a lot will never be repaid. In his 2018 fiscal sustainability report, the head of the Office for Budget Responsibility observed that “The loan book is large and growing rapidly…the value of the outstanding loan book is set to rise to around 20 per cent of GDP by the 2040s.’
The Office for National Statistics has now called time on this piece of creative accounting. The money that won’t be repaid will have to be accounted for; and so a large part of the universities’ budget will be back on the table in the next spending review, to be fought over rather than safely ring-fenced as not really spending at all.
Until Corbyn suddenly launched his ‘no fees’ policy, there was, finally, a cross-party consensus in this country: the costs of higher education should be shared between the student and the taxpayer, the individual and the community. Politicians should be reassured that there is also strong support for this position in the population at large.
But things do need to be paid for. And in the super-complex world of education financing, it is essentially impossible to change anything without someone losing – and finding some moral high ground from which to attack the change. Augar does its sums and recommends more money for the neediest – cash to get FE back on its feet, to invigorate technical education, to allow adults to retrain and progress, and to reinstate maintenance grants for the poorest students. Its analysis takes productivity, skills gaps and the Industrial Strategy seriously. Come the autumn, we will find out whether a new government does the same.
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