A growing consensus suggests that the higher education (HE) funding system in England is not fit for purpose. It fails to meet the needs of students, graduates, universities, and business. Through both teaching and research, universities play a pivotal role in fostering the skills necessary to be competitive in the global knowledge-based economy, so there is a pressing need to identify a sustainable funding solution.
But there are numerous instances where the current system is disoriented, with government and the HE regulator in England rewarding one behaviour whilst hoping for another. So, more than seeking a solution to balance the books, policymakers should re-examine the fundamentals of what the whole system should incentivise.
One of the key motivations behind tripling tuition fees to £9,000 in 2012 was to put university finances on a “sustainable footing”. A decade later, it’s clear that this aim has not been achieved. The Department for Education presents perpetually frozen tuition fees as a victory for students. Yet this can equally be seen as a year-on-year real-terms cut in per-student funding – hardly a cause for celebration. Coupled with high inflation, universities have fewer resources to offer the high-quality education that students expect and deserve, and that the economy requires. At the same time, maintenance funding has decreased in real terms amidst a cost-of-living crisis, and the system for graduate repayments is becoming less progressive.
