The cost of training and education

It’s always dangerous to write a blogpost when in the middle of watching Question Time – especially one that involves the Secretary of State for Health who’s driving through a very controversial Health and Social Care Bill through Parliament.

The question here is: Who pays?

Over the past 15 years the burden of education and training as far as higher education is concerned has shifted from institutions to individuals. This is demonstrated by the introduction of ever-rising tuition fees. The submission from the University and College Union to the 2007 Comprehensive Spending Review contains some interesting statistics on total and per-student spending. I noticed that the statistics that they have quoted indicate that my time at university coincided with particularly low per student spending.

Paragraph 1.6 of the Higher Education White Paper indicates that £3billion per year will be saved as graduate contributions replace state grants as a form of funding for universities. This is a very clear transfer of burden from the state to individual students.

I understand why some want to point out that families that do not have anyone who went to university should not subsidise those that do. Yet if we took that principle elsewhere – such as those not wanting to pay for foreign wars and the expensive weapons systems would mean a bureaucratic nightmare trying to find out who wants to pay for what and who does not.

In terms of the beneficiaries, one of the arguments often put out is that graduates earn more over their lifetimes than non-graduates. Yet this figure has dropped significantly over the past 10 years. In 2001 – shortly before I graduated, I was told that figure was £400,000. In 2011, that figure was £100,000. I’ve not seen anything on the distribution of that average – i.e. to what extent is that figure skewed by the extremities of earnings at a higher level. If we took out the top five percent and the bottom five percent of earners, what would that figure be?

There is then the issue of interest charged on debts built up over time at university – and I’m not talking about tuition fees. I’m talking about living costs. Combining tuition fees with the interest payments as well as repayments of those debts and we are potentially reaching eye-watering levels. Around ten years ago I graduated with debts of around £15,000. This was in the days of upfront fees for which I was fortunate to have my parents paying for them. Take into account of inflation & a situation where you have to pay full fees and you are looking at graduating from university with a £50,000 millstone. Combine the impact of interest payments on all of that and the difference between the £100,000 ‘graduate premium’ (which remember is an average) and the amount that graduates have to pay back starts to look smaller and smaller.

There are a whole host of other wider costs that have not been considered either. It’s all very well for politicians and those in favour of higher and/or unrestricted fees to say that if student loans are not repaid by retirement, they will be written off. David Willetts has gone on record as saying that he thinks graduates will easily be able to afford the extra repayments. At a time when renting – let alone buying a house is now becoming unaffordable? What about global food prices? They are going up too. What about petrol prices and the impact that fuel price rises have on the costs of living? It’s also not looking good for the buses or the trains either.

Where does this leave graduates? Like me, many have had to return back to the house of Mum and Dad. Boomerang generation? I’m part of that. I don’t want to have to live at home, but I don’t really have much of a choice.

We are also in a world where people are having to retrain and upskill. One of the messages we were told at school over 15 years ago was that we were moving into a world where we’d no longer have a job for life. When I joined the civil service I secretly hoped that I would be the exception to that rule – but as it turned out I’ve closed the chapter on my first real career as a result of the public sector job cuts. That means retraining and upskilling.

We then stumble across this obstacle. If you already have a degree or equivalent qualification, you  do not qualify for assistance at all. It’s a little thing hidden here.  This at a time when we are told more and more of the jobs in the economy are requiring people to have degrees – and in the specialism of that field due to the high level of competition for jobs out there anyway. Post 18 further education took a 25% hit in the recent spending review so the increased pressure inevitably gets transferred onto students and/or courses are closed altogether. This was after the cuts that were brought in just before the general election by Labour.

In all of the discussion about ‘who pays?’ and ‘who benefits?’ little mention has been made of the benefits that employers get from a skilled workforce educated increasingly at the expense of individuals. One thing that doesn’t seem to have been discussed is business’s contribution to training and education. How can we ensure that those businesses that take on proportionately more graduates than other firms contribute towards the costs of the institutions that educated them?

Surely we can do better than therushed, ill-thought-through, poorly resourced and poorly researched Browne Review – which in itself was a catastrophic act of political cowardice by both Labour (that set it up) and the Conservatives – neither of whom seemed to want to debate higher education funding at the 2010 election. “We will wait for the results of a review after the election” is not a sound manifesto commitment. You are asking people to vote for you on the basis of a non-commitment. £68,000 research budget for a policy that was inevitably going to send shockwaves throughout a sector that spent £25,900,000,000 last year?

Like the reforms to the NHS, changes to higher education do not have legitimacy in the minds of the general public because what is being done was not openly and honestly debated in the last general election – irrespective of the Coalition Agreement.

The Conservatives said it would:

consider carefully the results of Lord Browne’s review into the future of higher education funding [P17]

Labour’s manifesto simply mentioned that Lord Browne’s review would report later on that year. [P3.7]

The Liberal Democrats – for the record said that they would “scrap unfair tuition fees” [P33] in their manifesto. This was accompanied by a wave of publicity during the election campaigns, which is why people were understandably with the scrapping of such a key pledge when the Liberal Democrats entered a coalition with the Conservatives – the latter had no policy, no mandate for what their plans were. Hence the rebellion by 21 Lib Dem backbenchers, including my local MP Dr Julian Huppert who noted that the perception of a 17 year old will be different to that of a 50 year old economist. For me, that comment can be applied to people all over the country. Affluent middle-aged people will inevitably have different perceptions of debt compared to teenagers, many of whom will not be from affluent families. What impact will this have on aspirations of people from poorer-to-middle income backgrounds when looking at the telephone-number debts that they might rack up?

Some will say that there are schemes and grants that people can apply for. The fact that they have to apply is inevitably a barrier – some people may not even realise that these grants exist, or that there is funding that they may be entitled to. We know this because billions of pounds go unclaimed in state benefits every year – benefits that people are entitled to, irrespective of whether you think they should be entitled to them or not. In 2010 that figure was £16billion.

So what is the answer? Some answers should have come out in the debates of the 2010 general election campaign. Labour nor the Conservatives had the courage to debate this issue openly and honestly with the electorate to tease out some of those answers. This means that we were prevented from finding them out.  Instead, we are left with the worst of both worlds – a poorly researched set of proposals that have no democratic legitimacy.


4 thoughts on “The cost of training and education

  1. Interesting stuff. There’s also the issue that the Labour’s attempt to get more school leavers into Higher Education has resulted in more and more entry level jobs requiring a degree. I can’t help but feel that young people are increasingly being held over a barrel in terms of even getting the most lowly roles in a number of industries.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s