Ask for less, get more

[This is the first of a new, regular column I'm now doing for Research Fortnight]

It is supposed to be painful.

The cuts in university funding in the coming years announced by the government now total £915 million. Most cuts are due to come from the Higher Education Funding Council for England’s non-research spending. Next year, spending on teaching will be down a shade below £300m, on capital projects by £135m.

This is not just an inevitable consequence of the crunch in government spending. Business Secretary Peter Mandelson announced the latest turn of the screw just before Christmas and he has not been followed by other government departments spelling out new cuts.

Universities have been singled out for torture because the Treasury does not want to waste this crisis. Academic squealing is supposed to batter the public psyche, softening up students and parents ahead of the debate on undergraduate fees later this year. We are going to be told there is no alternative to a hefty rise in fees and tougher conditions on student loans.

Sadly it is not just the government’s finances that are being squeezed. As the impact of the billions injected into the economy peters out, citizens are also going to feel poorer. Asking them to pay more to go to university is not going to be a popular message. Fees will rise, but it is unlikely to be by enough to restore university finances. The Daily Mail will make sure of that.

So universities face years of under-funding, an era of unrelenting grim. What is to be done? The response of vice-chancellors so far, complaining about the damage that cuts will do, is a failure. It does not just bounce off the politicians, it actually assists them in dumping higher fees on the public.

A better idea would be for vice-chancellors to tell the parties they want less money from HEFCE, not more. HEFCE’s teaching budget next year is £4.7 billion and the universities should be seeking commitments from the party leaders before the election to scrap a full £4bn of it. In return, universities should ask for a commitment to provide additional means-tested financial support for all students, and for a sympathetic hearing later in the year when they plead for the cap on fees to be removed.

John Browne’s review of fees later this year can sort out the detail of this trade. But there are 1,267,000 full-time students in England, so a straight swap would add an average of around £3,000 a year to student support. We would probably end up with fees between around £8,000 and £15,000 a year. The substantial government contribution could be used to ensure a generous regime for poorer students so that entry really was needs-blind.

Risky? Undoubtedly. But no government is actually going to want to bankrupt the universities. And consider the radiant beauty of the prize—the return of university independence.

We have grown used to universities being constantly told what to do. But it wasn’t this way in the past and doesn’t have to be this way in future. For the fleeting decades when the welfare state paid everything for students, we needed HEFCE to keep the universities honest. Now, as students themselves pay more and become increasingly demanding in their choice of degree and university, the market can do the job better.

HEFCE’s vestigial £700m a year for teaching, its capital budget and the billions in government research funding would be plenty to ensure universities paid attention to whatever national needs ministers can articulate. Students would get more of what they think is good for them rather than what ministers think is good for them. Competition between universities would boost their competitiveness in the global market for HE.

Just as the Treasury has done, universities should seize the opportunity. Faint heart never won fair maiden.