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June 09, 2011

Cameron summons England’s universities to crunch tuition fees meeting tomorrow

David Cameron has summoned England’s universities to a crunch meeting at 10 Downing Street tomorrow as he grapples with a dilemma that has divided the Coalition for a year - whether to rely primarily on market forces or state regulation to protect students and drive down university tuition fees.

The Prime Minister’s decision will form the centrepiece of a long-delayed white paper and probably determine the shape of higher education in England for years to come.

Representatives of all kinds of universities will go to Downing Street tomorrow for the meeting with the Prime Minister and David Willetts, the minister for universities and science.

The meeting reflects the close interest the Number 10 policy unit, expanded in February, is now taking in the white paper. And it suggests months of discussion between David Willetts and Vince Cable have failed to resolve their differences and generate an agreed policy.

The Department for Business Innovation and Skills appears to have failed to find a way of reconciling Conservative instincts in favour of a free market with Liberal Democrat worries about the impact of the new regime on students and social mobility.

Cameron faces not one but many choices between free markets and regulation. For example, the government needs a new mechanism to control spending on student loans. At present, student numbers - and hence loans - are limited by the quoatas allocated to each university. One option is the so-called core-margin model in which universities retain smaller “core” quotas but compete for an additional “margin” of places. But if ministers go down this road, the Prime Minister has a fateful decision to make about how big the margin should be. The bigger it is, the fiercer the competition and the more uncertain the consequences.

Another issue is the regulatory powers that the government should take in order to control the behaviour of universities. Ministers have been stung by the failure of the Office for Fair Access to fulfil the role they promised for it last year - of a regulator that would ensure more students from poor families would go to university and keep down tuition fees. But if Cameron reaches for too many powers, he will face fierce resistance from the one key ally the government has had during its tuition fee woes - leading universities.

One possible outcome is a white paper with both more regulation and more market. There is agreement within the Coalition on the medium-term objective of establishing a market in undergraduate degrees. But the rush of universities to charge fees of £9,000 a year and consequent failure of a proper market to emerge this year has leant weight to arguments for stronger regulation during some transitional years.

Cameron’s hesitation over the decisiosn on market or regulation has become the most pressing problem for BIS since the Treasury agreed last month to take a lenient view of the “black hole” facing the department’s budget following the rush to £9,000. The Treasury has agreed to demand back from BIS only 30 per cent of the overspend on loans.

Meanwhile, there will be a temptation for ministers to downplay the role of new private providers of higher education in the white paper after the rows over Anthony Grayling’s New College of the Humanities. A week of newspaper headlines about a new crop of very expensive institutions financed by venture capitalists and destined only for the most priviliged in the country can not have been welcome at Number 10.

But the Prime Minister’s choices are complicated by divisions between vice chancellors. Although they realise the meeting at Number 10 tomorrow is an opportunity to shape their destiny, universities have been unable to agree any clear objectives for the meeting.

In contrast to his intervention this week on the NHS, which Cameron promoted strongly, Number 10 is downplaying the meeting tomorrow and appears anxious not to give the impression that Cameron is also taking control of higher education policy.

The white paper is expected to be published in the coming weeks.

1. For more detail on the meeting, please see the story in Research Fortnight Today (£).

2. Opinion: What England's universities should tell David Cameron today

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Comments

fascinating. Thanks

Good article, I recently linked to you in a blog post about the tuition fees increase.

Take a look if you want!

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