Government planning will not fix English universities

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With the publishing of Lord Browne’s report earlier this month, it seemed that the Coalition government was on the right path to creating a competitive market-based university system. Now they are doing a U-turn and are feeling “uneasy” about the suggestions outlined in the report. The proposals included in the report that addressed the problem of university funding are now being scrapped.

In recent days there has been increasing political discourse about the benefits of a tuition fee cap. Leading Liberal Democrats have stated that they are “uneasy” about the proposed unlimited fees, as they believe it would create a disincentive for pupils from poorer backgrounds to attend university.

The concept of unlimited fees that accompanies a shift toward a free-market university system is not about shutting out students from low-income backgrounds. It is about ensuring that those who receive a better education from a highly regarded university pay more than someone who attends a less prestigious institution. This is fair.

The individual who pays more for higher education makes the rational decision that by attending that particular university their future earnings will be greater and generally their gain is greater than the cost of study, therefore they are prepared to pay more for their education. This should be the same consideration that all school leavers make regardless of their background. If they are capable of getting into higher quality universities paying more should not be a disincentive, as the repayments are the same for all.

Worse still is the proposed alternative: a graduate tax. A redemption penalty that has been proposed by the Liberal Democrats transforms student loans into a tax on success. It penalises those who can pay it off earlier rather than later. Students who enter a high paying job and are in the position to pay off their loan should be able to do so, why should they pay more? The government should not dictate how and when students choose to pay off their loans.

Though the Browne report was a step in the right direction for both universities and university funding, it has fallen victim to various pressure groups and politicians. We need to allow a market-based system if English universities are going to remain internationally regarded.

Madsen Pirie in the Sunday Times

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Madsen has a piece in the Think Tank slot of the Sunday Times, proposing the abolition of the National Curriculum. He points out that the Curriculum was originally intended to ensure that state schools gave a decent grounding in the basics, but grew unwieldy as every interest group sought to include its own pet subjects taught in the way it decreed.

It would be better, says Madsen, to give schools the freedom to decide what to teach and to leave teachers to exercise their skill and experience in deciding how to teach it. They are probably better at it than civil servants and politicians. External exam boards will set syllabi, and schools will teach them to help their children pass. The performance of schools will attract or deter parents, and choice will improve quality far more surely than imposed uniform standards can achieve.

The full text of his article is available here (£).

The perverse incentives of league tables

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The education system in this country is creating a generation of children who are unable to think for themselves. Since the introduction of league tables in 1992, there has been a shift in priorities in schools away from traditional teaching methods towards teaching exam tactics to help schools to advance up the league table rankings.

League tables were created to try to give parents the information that would allow the forming of a free market within education and school choice. However, this objective was never achieved. Instead, the tables have given the government greater scope to intervene in schooling by the introduction of various target and policies. As a result, not only has the quality of education decreased, but the league tables themselves have ceased to represent the actual relative quality of schools.

A flexible, free-flowing education system would reflect their needs and interests of individual students. League tables have cemented a reverse system where all classes are aimed at meeting a centralized target, blind to the needs of students. This target culture has manifestly failed to improve standards.

It is time for a revolution in the way we approach schools and measure their relative success. The national curriculum encourages the standardization of teaching that allowed the league tables to be introduced. It is time for both to be re-examined. Today, the aspiration of children and parents are very different to what they were in the 80s or even the early 90s. With more pupils than ever aiming to attend university, surely a better measure of a schools success will be the number of children they can get accepted into institutions (assuming that the universities themselves are given the freedom to choose students as they see fit rather than by government fiat).

Yes, there are problems associated with this measure; as some universities have lower entry requirements than others, but it would still provide a better indication of the quality of schooling provided than the current system. With university places becoming more and more competitive, if a school was judged on school leavers going on to these institutions then it is a positive indication of the quality of that school.

With universities becoming more disillusioned with the quality of education of incoming students, it is becoming increasingly important that children are educated beyond the curriculum and taught the skills required to thrive in further education and society in general. Freeing schools from the league table system would be a small but important step in that direction. 

Science funding is better off without the government

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Philip Salter writes on BBC Online today on why private funding is vital for translating scientific research into economic growth.

University funding déjà vu

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Back in the early 1970s, Canada’s universities were in turmoil from plans to sharply increase tuition fees due surging demand for places and escalating costs to taxpayers.
It all sounds so familiar today. Much of the argument then was similar to that of the UK today – who should attend university, who should pay, what should universities charge, what is the role of the state?

Following Lord Browne’s report last week, there’s some indication that part of the debate may be near a settlement. Although nothing is yet formalised, it seems that UK universities will be able to offer whatever courses they choose at near market-clearing prices. Debate has shifted from the public funding of universities themselves to funding the students directly. No doubt the UK government will remain a big partner to the universities, but the overall structure of academia has moved closer to the Canadian model, if not the full American one.

Back in the 1970s, the fundamental economics of a university education were the same as now – is a university education a consumption good or an investment good?

If the former, then there’s little justification for taxpayer assistance to the consumers of a university education. If a pure consumption good, taxpayers may just as well fund tickets for Premier league football matches. If, on the other hand, a university education is a pure investment good whereby the student increases his or her future income, then again there’s little justification for taxpayer funding.

However, the debate isn’t being framed like that. Instead, positive externalities – social justice, fairness, national productivity and the like - are cited for continued taxpayer funding. Of course, positive externalities are in the eye of the beholder: the Sky Sports subscriber may prefer the externalities of Wayne Rooney scoring a goal for England (if only!) to those of an archaeologist deciphering the writing on a Babylonian vase.

In 1973, an academic study tried to measure the investment component of students’ decision-making process. It found very little evidence that students took any notice of their future earnings when selecting their course of studies. As a denizen then of the various student lounges and bars, I can’t recall any discussion about education as an investment decision. We were too busy having fun, with taxpayers footing the bill.

The study concluded that educational decisions taken by students were driven more by non-investment factors – parental and peer pressure, postponing the dreaded time of actually working for a living, the pleasures of a student lifestyle. As long as the money rained freely from above, there was no need to consider payback time.

UK students currently don’t pay anywhere close to the full cost of their education. As the burden of funding shifts ever more to the student, expect their decisions to become more investment based.

That 1973 undergraduate thesis was under the tutelage of the late Edwin West, an old friend of the ASI, and its author was – me. Plus ça change! 

Let's end the bog standard in education

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Towards the end of the 19th century and increasingly into the 20th and 21st, politicians and intellectuals became convinced by the idea that they could run the country through central planning than the individual decisions of each and every person acting in their own interest. In this climate of control they usurped and marginalised private schooling, planning centrally what had previously occurred spontaneously. In time the “bog standard comprehensive” came to be the model for all but the richest.

Tony Blair used the term “bog standard comprehensive” in a conference speech, which was coined by the now repentant Peter Hyman. Perhaps it is discourteous to the many talented professionals working in the toughest schools, but its popular usage attests to the fact that it captures the essence of the state we’re in. The “bog” evokes images of stagnation – and this is exactly what has happened under a system directed centrally by the government. While freer industries have thrived in conditions of competition and innovation, centrally planned schooling has languished behind.

Schooling is long overdue for a shakeup to release the talents of the students currently stuck in the quagmire. As an industry, teaching methods are firmly entrenched in the past. For example, most children don’t learn to speak a language despite spending their lives sitting for hundreds of hours in a classroom attempting to do so. Even those with top grades can’t hold a basic conversation. As the language expert Paul Noble points out: “Students realise that even if they do get a GCSE in French, they still won't be able to speak the language”. In contrast, private companies guarantee that business people will learn more than this in a couple days.

This is not a call for another revision of the national curriculum and a new national strategy to push all children into intensive language lessons. This would entirely miss the point. Instead we need to free schools, and the first way this could be done is to allow them to run for a profit. As with any service industry, experimentation would become the norm and best practice would be copied where appropriate. Education companies abroad are ready to invest, while there are many companies in the UK currently teaching adults various skills that would be able to add immense value to teaching children. Without this change, most will be left mired neck-deep in an unwholesome bog standard education.

Time to liberalise the teaching profession

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This week Minister for Education Michael Gove cut seven educational quangos, partially scaling back Whitehall’s interferences into schooling. This is good news, but there is still much more to be done to reform schooling in the UK. One area that needs to be focused on is the liberalisation of the teaching profession, allowing different routes into the profession and more choice for schools over who they employ.

As things stand, anyone who wants to teach in a state school in the UK must have a QTS (Qualified Teacher Status), which means that they must have undertaken some form of government-led teacher training in the form of a PGCE or GTP. Having taken a PGCE, I can vouch for the fact that attaining the QTS is largely a time-consuming paperwork exercise, as potential teachers attempt to prove their ability to achieve things such as ‘promoting equality and inclusion within teaching’ and other abstract ideas created by the TDA. Far more valuable was the hands-on training I received placed within a school, where I had the advice of fellow teachers and a mentor who could share best practices with me.

In light of this, I really don’t see the argument for the continuation of centralised teacher training to achieve QTS. Training should take place within a school, with state schools allowed to recruit graduates and train them on the job without the involvement of a higher education provider. But more than that, I believe the QTS should not be a necessary requirement to teach. Independent schools within the UK often choose to employ teachers who have not undergone formal teacher training, recognising that other factors make a good teacher, such as previous professional experience and an expertise in their subject area. In fact, some of my most inspiring teachers had never taken a teacher training course, but were passionate about education with an infectious enthusiasm for the subject. However, today too many potential teachers are driven away from teaching in the state sector by the continual interference of government, their lack of freedom to teach what they want and the heavy paperwork and planning requirements necessary when working towards their QTS.

So it's time the government got serious about giving teachers more freedom by giving the schools more autonomy. They need to let the schools take charge of teacher training once more, let them make their own judgement calls on who to employ and train, and remove the barriers of entry into teaching created by the compulsory QTS.

The unlimited price of shoes?

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As Sam pointed out on Wednesday, Lord Browne’s report is to be largely welcomed. However, Vince Cable, after initially praising the report, has now raised concerns about what he calls “unlimited fees” and declared that the system needs to be more progressive than it is now. There is a real risk that Browne’s ‘free-market lite’ approach will become a spaghetti soup of regulation.

It is disingenuous to call a system with no cap unlimited when it will be limited by competition. Nobody talks of the unlimited price of shoes, and for good reason. In a free market, universities will be able to charge what people are willing to pay for it and not a penny more. Prices will be driven down by competing providers.

To address Cable progressive concerns is rather easy. Free market reforms would progressive. Currently university education amounts to a transfer of money from present non-graduates to future graduates. Putting the cost burden onto the beneficiaries of higher education is to use the buzzword of the moment “fair”.

There is a real risk that Vince Cable will want to set another cap, higher than the last but no less foolhardy. Fee caps artificially increase the demand for university places, cause students to be less engaged and demanding about their course, and ultimately decrease investment in higher education. This last point is crucial, as universities need more money if they are to be able more offer targeted bursaries to poorer students.

The unions are of course up in arms about any reforms. The student unions are misguidedly trying to protect their members from fee increases, while the teaching unions are concerned that their members might lose their jobs. This is all framed in concern for the poorest, but they are barking up the wrong tree if their concerns are real.

If access to university from poorer sections of society concerns them, they should be looking at the quality of education received prior to university and looking into the vast difference in quality between schools that are run and regulated by the government and those that aren’t. To reduce this gap we need innovation and investment. Vouchers and for-profit schools are the way forward. And for those that don’t go on to university? Well, at least there will be less chance of them being illiterate and innumerate, unable to find someone willing employ them on at the minimum wage.

The right step for university funding

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The Browne review, which is published today, is a big step in the right direction for university tuition funding. It calls for the price controls on tuition fees to be removed, so that the cost of a degree represents the supply and demand for that course. I was on Stephen Nolan’s Radio 5 Live show on Sunday night talking about this, which you can listen to here.

As FA Hayek showed, prices are the market's way of communicating how much of a good is available versus how much demand for that good there is. A highly-priced good is difficult to come by, ensuring that only the people who need it most (and thus are most willing to pay for it) will get it – this ensures a fair allocation of goods to the people who want them most. The current cap on university fees means that universities have no way of communicating the scarcity of university places to prospective students.

Courses with high demand cost the same as courses with low demand, removing this information mechanism and forcing students to rely on hearsay about the quality of courses. In a freely priced system, these high-demand courses would be more expensive and their popularity and quality would be communicated through prices. This would allow students to make an informed choice about which course is best for them and prevent the overdemand and undersupply of places that currently takes place.

The second point is that government subsidies for university education are a net transfer of wealth to university graduates from non-graduates, the latter of whom are overwhelmingly the poorest in society. By demanding that ‘the government’ pay for them, students are tacitly accepting a system that steals from the poor to give to the rich. It is absurd that someone earning minimum wage should pay through the tax system for someone else to study history, economics, law or medicine – that lucky person getting the education will go on to earn far more than the person who’s had to pay for him. A free price system in education would communicate information effectively and make sure that it is the student who pays, not the poor.

Saving Gove's free schools

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A leaked civil service assessment suggests that many of Michael Gove's vanguard of 16 free-schools won't be ready to open next September. Whilst the reform is to be lauded, a key element is missing. I suggested months ago that the price of not including profit-making schools in the free-school scheme could be to see a disappointing take-up.

Unfortunately, this assessment appears to be coming true. Labour have already rightly pounced on Michael Gove's depreciating estimations of the number of free-schools to arise from his policy. In Sweden, the Social Democrats eventually abandoned their opposition to free-schools thanks to its speed and effectiveness – but this speed was largely down to profit-making bodies, and even so, it took years. Whilst free-schools break open the government monopoly on state-funded education, this small victory risks being easily reversed by a more statist future government simply because take-up was so slow due to profit-making being barred.

Perhaps a similar malaise lies at the heart of the lack of popular enthusiasm for David Cameron's Big Society. Whilst volunteering and non-profit involvement can play an important part in replacing government provision of state-funded services, it is obvious that there is a limit to the amount of time that people will be willing to give, no matter how developed the vision of a volunteer-based society becomes.

Profit-making bodies could have a huge role to play, with the added incentive spurring greater numbers of entrepreneurs to rapidly fill the yawning gap in demand for better public services. Unlike volunteering, where it seems a good idea but so many people don't think they could find the time, profit-making is both a good idea and is easily a full-time occupation.

Fortunately, the Justice Secretary Ken Clarke is allowing profit-making bodies as well as charities to be paid by results with regards to reducing re-offending rates: we can expect this policy to be a huge success, and it's no surprise that it appears to achieve cross-party support. Why Michael Gove insists on pursuing an underwhelming revolution in education when the power of entrepreneurs could be so effectively tapped remains a mystery.