Higher education in a market?
Yesterday I wrote about blogging university heads, so let me just take as my theme for this post a comment made by one of them, the Vice-Chancellor of the University of Salford, Professor Martin Hall. In his latest post, Professor Hall takes a closer look at how a university education is now being treated and how, if at all, this relates to what we might call a market transaction. As the price students have to pay for their education is described, at least in popular parlance, as a ‘fee’, he thinks it would be reasonable to expect this to be a payment for a service on a par with fees we pay to banks, lawyers or certain pay-as-you-go public services like refuse collection. So, he asks, is all this a market?
His answer is complex, but interesting. It cannot be a market, he suggests, because in England the payment methods (after graduation, subject to income) are too irregular, and the price is controlled by government and has little enough to do with supply and demand. As too many universities will opt for the £9,000 fee option, it is likely that there will be further regulatory controls on its availability and on the conditions that universities charging it will need to fulfil.
As critics of government policy (in various countries) have sometimes claimed that higher education was being commodified and marketised, it is worth saying that there is no evidence of this at all. In fact, there is an argument for saying that we might be much better off if it really were the case. Rather, we are witnessing a curious kind of bureaucratisation, in which governments are replacing money with new controls and constraints: the view that the state cannot afford to pay the cost of higher education, but should dictate to a much greater extent than before exactly how it is offered, monitored and evaluated. There is probably an understandable instinct in all of this, a kind of apologetic statement by the government to the citizen: ‘Sorry, we cannot fund higher education, but we’ll try to compensate for the effect of our financial withdrawal by closely controlling everything that gets done at college.’
In the new world of higher education, nobody is actually ‘buying’ a commodity, or even a service. Rather, we are moving towards what you might call ‘targeted taxation’, under which the cost of education is being funded much more directly by those benefiting from it, with some level of subsidy coming from the wider society. It isn’t really a fee, but rather a kind of educational equivalent of a capital gains tax, if you like an ‘intellectual gains tax’. There is nothing really wrong with that in principle, but it needs to be set into a much more coherent policy framework that explains what is actually happening. What is missing also is a more coherent perspective on what we still expect the state to do in subsidising higher education – a point on which Britain’s recent strategic review (the Browne report) is, in my view, really rather weak.
I think we need to accept that the old taxpayer-pays-all system of higher education is now unmanageable and unaffordable. But we need to have a framework that replaces it that shows some understanding of what higher education is actually for, and that can explain to a tetchy population why the old model could neither fund higher education satisfactorily nor make it equitable. If we can get a better policy framework for this, it may become easier for countries uneasy about these changes to make their own necessary reforms.