Higher university tuition fees a disaster, says Newcastle MP

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28 Apr 2014

Our two universities, Keele and Staffordshire, are vital for our young people and, in so many different ways, for our local economy.

And, with controversy stirring again over student fees and a general election just a year away,   there’s lots of urgent, unfinished business to get the system right.

A decade ago, I helped lead Labour backbench opposition against a market in higher education. As a result, fees were capped at £3,000 a year, grants were improved and bursaries introduced to help the less well-off.

Crucially, too, a vote had to be held in the Commons over any raising of the cap – a ‘democratic lock’ that made every MP accountable. Little did we know, sadly, that on entering the coalition the Liberal Democrats would abandon promises from three general elections, and agree to triple fees to £9,000.

It was a price that students, saddled on average with £45,000 of debts, are paying through the nose today.

As a result, the number of state-educated pupils at universities is now falling, part-time student numbers have almost halved, more are looking abroad, and the social background of people doing longer courses – like medicine and engineering – has narrowed further.

So what does the future hold? It was a question I put to the Prime Minister in the Commons before Easter. ‘What plans does he have,’ I asked, ‘to reform higher education fees and loans, so that the system works for students, works for all universities, and also works for the country?’ He was, frankly, nonplussed and side-stepped at the dispatch box.

Meanwhile, Nick Clegg and Danny Alexander - the Liberal Democrat who controls the purse strings as Chief Secretary to the Treasury – have refused to rule out fees rising; but, in a recent interview, universities minister David Willetts admitted ‘they could’.

This would be a disaster, not just for students fretting about debt. Paying real interest rates now, with maintenance loans on top, three in four graduates will still be paying loans back well into their 50s.

It will also be bad for the taxpayer generally. Over the last month, research by two independent think tanks – the Institute of Fiscal Studies and the Sutton Trust – has shown that the government is now writing off 45% of student debt.

That’s £450 million for every £1 billion and close to the 48% where, aside from the other effects, the triple whammy introduced in 2012 hits all taxpayers in the pocket.

Last month, even Willetts’ former political adviser admitted the government had ‘got its maths wrong’. ‘There is a big funding gap,’ Nick Hillman - now head of the Higher Education Policy Institute - warned, ‘and something has to be done about it’.

So where does the future lie? Certainly not in ever higher fees, more worry and bigger write-offs.     

Ed Miliband has already committed Labour to cutting fees to a maximum £6,000, but also aims to be more ‘radical’. I certainly want us to go much further.

In the Commons, my colleague John Denham, a former Secretary of State for Innovation, Universities and Skills, has been doing sterling work for us in reshaping the lie of the land.

By sensibly switching resources from debt cancellation to university teaching, he has set out a blueprint for lower fees, so more people can afford to pay them back, and more income for universities, where the net cost to the taxpayer is £3 billion a year less.

The figures have been produced by the House of Commons Library, which is strictly non-political. Tuition fees would fall to £4,000 – roughly the old 2004 cap, indexed for inflation.

A boost to mature, part-time and employer-backed degrees would also be part of the mix, revitalizing higher education, not just for school-leavers, but for all.

The plans need tweaking, but what we need now is the Government to run the figures through its own Civil Service experts, because the current system is a cruel experiment which is truly failing.

With the universities setting up an expert Student Funding Panel themselves this week, we want them to engage, too. And not just trot out the same hackneyed pleas for higher fees and a full-blown market, like the United States, where only the sky is the limit. 

(Article originally published by the Sentinel, at http://www.stokesentinel.co.uk/Paul-Farrelly-Higher-university-tuition-fees/story-21013786-detail/story.html)