Supporting the Liberal Democrats

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Whilst the government's reforms of tuition fees may be generous (for instance, by increasing the repayment threshold from £15,000 to £21,000), the latest proposals fly in the face of any claims to "fairness". Welsh students are apparently to receive all the benefits of a more lenient repayment system, but without experiencing the higher tuition fees. This means that they will benefit just as much as English students from lower annual repayments, but will be able to repay their debt significantly faster. If any policies can be described as "unfair", surely they are those that discriminate against certain sectors of the population by law. In this case, this is grossly "unfair" to English students in that they will receive a less generous deal than Welsh students.

Whilst the coalition government appears to be presenting the proposals along similar lines to those I have proposed in previous blogs, they have missed a golden opportunity with regard to this new innovation. If the government had kept tuition fees at the current level in Wales whilst preventing them from benefiting from the increase in the repayment threshold, we may have seen protests in Wales against keeping the system the same rather than changing it. Protests in Wales demanding the same overly generous repayment deal that English students will get would have flown in the face of the National Union of Students that has been misleading students with regards to increased student debt.

On a more positive note, students have started to organise themselves against socialist misinformation. A fast-growing Facebook group of students in support of the general thrust of the coalition's reforms – Students FOR Tuition Fees Reform – has been set up in the past few days, already expanding to well over 500 followers. Hopefully, more students will bother to read the coalition's proposals and reject NUS scare-mongering as a result of it. Perhaps Liberal Democrat MPs may take heart from the fact that some students have bothered to listen to them and vote for the reforms. It is up to those of us who favour these reforms to show our support by "liking" the Facebook page, writing to Liberal Democrat MPs, and showing them that not all students will protest a fall in their annual repayments that improves university standards.

The Lib Dems are listening

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It seems as if the Liberal Democrats may be reading this blog. We can't say for sure, but after a truly lamentable start to how university reforms were being presented, they appear to be taking the advice of classical liberals. Rather than making the reforms about deficit reduction and accepting the unpopularity of a rise in tuition fees, they are attempting to redefine the debate. They might not be taking our ideas but they are certainly converging on them: Already, they've done something similar to my suggestion of renaming it so as to differentiate the scheme from up-front tuition fees: I proposed something akin to a "graduate income repayment", and now we hear Nick Clegg (as well as John Hemming) talk about a "graduate contribution scheme".

The Liberal Democrats have finally found their message. Now they simply need to shout a little louder, and a little more. Students aren't stupid, but up until now some extreme socialist activists have misled them: not having actually read the proposals, they readily act upon any number of myths. On closer inspection, the National Union of Students (NUS), having vowed to hound Liberal Democrat MPs as traitors, actually has fairly similar proposals to the coalition government's.

Remarkably, the NUS appears to have got away with this gross hypocrisy: although they would end graduate contributions after 20 years rather than 30, and would set an unrealistically low level of contributions, a system of income-related graduate contributions would remain. The government's proposals fulfill their call for an end to up-front fees for part-time students, and are actually substantially more generous with regards to lifting the repayment threshold from £15,000 per year to £21,000: something the NUS would have kept the same.

The key difference is in abolishing the ability of universities to set their own fees, instead having all funding centrally directed - presumably according to perceived "need" rather than rewarding universities based on their popularity with students. I'm certain that the vast majority of student fury was directed against paying more rather than against maintaining a market in higher education. How absurdly ironic that even the first reason is based on a myth: students would in fact pay less per year under the new system.

The road to freedom

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There is likely no book on the market that better sums up the state of the British education system than Chris Woodhead's A Desolation of Learning. It opens with a damning tsunami of proof on the dumbing down of exams and ends with a thoughtful conclusion entitled The Road to Freedom (a nod to an essay by Iris Murdoch, not Hayek). Everything in between is just as good.

Written prior to the transfer of power from Balls to Gove, the critique of both is still relevant to the current debate. Take his references to Oakeshott for example. Despite Gove's unreserved and worthy personal intellectualism, the government nevertheless often defines education policy as an economic public good instead of intellectual private good that happens to result in unforeseen public benefits. The distinction is important because the former has been used to justify increasing government interference for social and economic ends impacting unduly upon the role of the educator and those to be educated.

Every person I speak to involved in education policy is asking themselves the same question right now - when will Gove come out and confirm or deny whether free schools can be run for profit? Woodhead addresses this issue straight on this book and offers a robust defence of for-profit schools for the delivery of education (and is not afraid to support them over the charitable model). On this he writes: "where there is no profit motive there is no incentive to expand capacity. It is more congenial to avoid risks and challenges of expansion and instead to channel ever-increasing surpluses into ever more elaborate facilities, which entrench the elite nature of the institution. Surpluses, which could achieve high returns on investment if re-invested in capacity creation, are used to build state of the art, five star facilities for the tiny minority of pupils whose parents can afford the highest fees. It is hard to think of An ownership system less likely to expand capacity and widen access." So true.

Reflecting upon education policy since the book, I think Woodhead strikes the right tone. There are of course things to congratulate Gove for, and leaks about this week's white paper suggest that there will be more to celebrate. An overhaul of teacher training looks to be unashamedly radical and positive. But still we are right to want more because the success needs to be undeniable and universal. And as James Tooley of Newcastle University states in TES, "The problem with the free-school policy is that, ultimately, the schools are not accountable to the parents, but to their paymaster, the Government."

Woodhead and Tooley are both right. Gove needs to allow for-profit free schools. Once free to choose, future governments will not be able to to wrestle power back from the people, as they will be up against one interest group they cannot ignore: parents.

Juvenile delinquency and how to beat it

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One of the big problems with urban life is juvenile delinquency. Straightforward crime is bad, but fortunately relatively rare, but the day-to-day hassling that people get from gangs of teenagers affects a lot of people. Usually these kids don’t plan on getting violent, but they know that their victims don’t either, so they feel free to bully and intimidate for the fun of it. It’s also a relatively modern phenomenon.

Teenagers become delinquent because they’re bored, they feel powerless and they have too much energy. Being annoying or violent to other people is an entertaining use of energy which makes them feel important. So, what can we do to change this?

The typical answer is to build ‘youth centres’. Unfortunately, because they don’t tackle the real causes of juvenile delinquency, ‘youth centres’ are a bit of a white elephant – you can build them, but they probably won’t come. As usual, you can’t throw money at a social problem and expect that it’ll go away.

The underlying cause of juvenile delinquency is that teenagers are forced to go to school even if school isn’t right for them. Many people have non-academic talents and abilities and, by forcing everybody to stay in school until they’re sixteen, the government is trying to force square pegs into round holes. They disrupt classes at school, making it harder for students who do want to learn to do so – a big problem that hurts smart kids from poor backgrounds – and then have long evenings with excess energy to vent their frustrations on the rest of us.

The solution to this is surely obvious. If the school-leaving age was lowered to thirteen or fourteen, it would enable youths for whom school isn’t right to get jobs and spend their energy at something worthwhile. They’d be earning money (which would be good for them) and gaining a sense of responsibility and self-worth, and wouldn’t have so much excess energy that they need to vent on the world in the evenings.

Forcing all teenagers to go to school holds back those who really do want to go and frustrates the ones who don't – and the rest of us have to put up with their frustration. There's no point in deluding ourselves that they're benefiting from it when they could be acquiring real world skills in the workplace. The solution isn’t sticking-plasters like ASBOs or youth centres, it’s allowing them to get jobs and grow up.

Raising tuition fees won't affect graduate mortgage chances

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You may have seen the student furore at changes to tuition fees yesterday. Hundreds of violent socialist and self-professed "anarchist" students besieged and occupied the Millbank tower. However, the vast majority of them really ought to calm down. As I pointed out in my analysis of the Browne Review, there are plenty of myths flying around.

The truth of the reforms is that there will be a fall in graduates' annual repayments, with the threshold for repayments being raised to £21,000 from £15,000. Student debt is not a mortgage-style debt: whilst interest will be allowed to accrue, this merely affects the time it takes to repay the debt - annual repayments are completely income-dependent and set to fall. Most significantly, university education will remain free at the point of use (which could be problematic, as my full analysis shows).

New myths have come to my attention and desperately need dispelling. One comes from a misreading of this BBC report (representative of many other reports in the media) on the reforms' effects on mortgages: skimming the report would give the impression that increases in the headline figure of student debt will affect a students' chances of getting a mortgage. Not so. The article actually states that it is the current system that affects students' chances. The proposed rise in the threshold of repayment would make it easier to get a mortgage and, with no change in the 9% income-dependent figure, the only way I can see it affecting mortgages is through the 5 extra years of repayment before the debts are forgiven.

The article's calculation gives the figure of current annual debt repayments for a graduate on £30,000 per year at £150 per month. What it fails to mention is that with the Browne review and government's proposals, this will fall to £105 per month. I challenge any socialist or well-meaning student protester to demonstrate how falling annual and monthly repayments will make it harder to get a mortgage.

The coalition's universities policy: a distinctly mixed bag

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The coalition government put forward its response to the Browne Review of Higher Education last week. On the bright side, they have adopted the vast majority of Browne's proposals, and have rejected a government levy on headline fees over £6,000. Unfortunately, they have decided to keep a cap at £9,000, have put severe constraints on accelerated loan repayments in the misguided pursuit of "fairness", and have failed to address any of the long-term problems highlighted in my analysis of the Browne Review.

Furthermore, the government has failed to find a decent strategy for selling the reforms. Perhaps they could use some of my suggestions: it should be made clear that graduate repayments are purely income-related, and should be renamed to reflect this. A distinction ought to be made between these income-related repayments and mortgage-style debts, as well as with up-front fees that would more accurately be described as "tuition fees".

The coalition would also be wise to consider my analysis of the real problem with the Browne Review: In short, that students bear no risk - whatever the headline fee, the amount of annual repayments will always be the same. This provides no brake to degree inflation, provides no incentive for universities to justify higher headline fees with higher quality, and provides every incentive for all universities to charge the maximum amount allowed to them.

An up-front tuition fee of a set percentage of the headline fee would go some way to solving these problems. It would encourage real price competition, forcing universities to be accountable to students alone as customers, as well as providing some form of guarantee for taxpayers paying the up-front bill.

The flaws in the proposed cap are obvious: it provides a baseline level that will be taken up by most universities, particularly when they can charge as much as they like without affecting annual graduate repayments at all. With a cap there can be no price competition whatsoever as it is set at the bare minimum. It will also probably be too low to replace the government grants being cut, thus perpetuating universities' dependence on a significantly smaller pie of government subsidy rather than obligations to students.

The proposed financial penalties for accelerated loan repayments are misguided. This tax on thrift encourages slower or deferred repayment, directly affecting the taxpayer by increasing the cost of financing student loans. It also discourages optional up-front payment of tuition fees, merely increasing the risk borne by the taxpayer for loans that otherwise would not have to be given. It also eliminates a vital source of price-competition to keep headline fees down: the differences between headline fees paid up-front by richer students would at least provide some incentive for universities to keep prices down unless they could justify increases with better quality.

The liberalization of education needn't be about left and right

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US Secretary of Education, Arne Duncan, met Michael Gove yesterday. His arrival in the UK should be a reminder to us all that if we care about what’s best for our education system, we can put aside the traditional divide between the political left and right.

Duncan is a devoted Democrat who grew up tutoring children at his mother’s after-school programme on the South Side of Chicago, an area not known for being populated by latte-swilling middle class parents. He wrote his undergraduate dissertation on the plight of the urban underclass and has called schooling “the civil rights issue of our generation”. In addition to this – shock horror – he supports policies to lessen state involvement in education.

Obama’s administration has overseen an investment of more than $4 billion in the ‘Race to the Top’ competition, designed to spur reforms in state and local district education. States must vie for federal money by submitting proposals that include reforms to expand charter schools, and the evaluation of teachers is based on their students’ exam performance. Duncan supports the coalition government’s proposals for free schools, which model themselves on the charter schools that he has given room to.

Meanwhile, back in the UK, school reform is facing considerable opposition from the left wing. Labourites continue to insist that ploughing yet more taxpayers’ money into comprehensive schools is what’s needed to raise standards, despite the fact that such tactics have been shown to be a comprehensive failure. The experiment into tight government control of education has lasted over four decades, and over 90% of those going through the school system have been subjected to it. And the result? Standards are woeful, teachers are demoralised, and parents who can’t afford private school fees or expensive houses find their options for educating their children severely limited.

The NUT is sending threatening letters to state heads asking them of their intentions with regard to free school status, and plans to create a list of individuals who support the free school scheme in a tactic more reminiscent of the Salem witch trials than a simple bid for freedom of information. Meanwhile the Anti Academies Alliance describes the Academies Bill as a ‘savage attack on the education system in this country’; ‘an attempt to destroy a democratic, planned, state education system and replace it with a two tier, market driven collection of independent schools at the mercy of education companies driven by profit’. It’s a shame that left-wingers in the UK seem to understand so little about free market economics. If they’d read Smith or Hayek they’d understand that an atmosphere of competition fosters high standards, and that planned societies are possible only in conjunction with totalitarian governments.

It is an obscenity to suggest that those backing the liberalisation of schooling don’t care about those from disadvantaged backgrounds. Indeed, the coalition’s plans for free schools promise to be of most benefit to the disadvantaged, since the wealthy will always have the option of shopping around. For the sake of our education system, let’s hope that we can put political bias aside and learn something from Duncan’s visit.

Response to Browne review: myths, problems, solutions

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Today the ASI has released a think piece by Anton Howes, which defends the Browne Review and its recommendations for the future of university funding. Anton argues that the Review’s key recommendations – such as its call for the removal of a cap on tuition fees – would end the shortage of university places and allow for a more efficient university system that benefits students. Combined with some modifications to the Review’s proposals for tuition fee repayments, this would allow British universities to retain their world class status and resolve the untenable situation of Britain's universities.

The report does not directly address the government’s proposals, announced earlier today, because the Browne Review remains as the comprehensive investigation into funding. The government's proposals do not address many of the problems and solutions raised by Lord Browne, and as such the article focuses on the pragmatic, evidence-based proposals in his review. The coalition’s policy will go through several rethinks over the coming months, and members of the government would do well to remain conscious of the facts and not the myths about higher education in the UK.

Private league tables would bring public benefits

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Yesterday researchers at Bristol University released a report claiming to prove that league tables create better results in schools. The report’s authors have shown that schools in Wales, where league tables were abolished in 2001, are achieving worse results than those in England. In principle, it makes sense that the existence of information for the consumer would increase competition and therefore the quality of the school. But, as I have argued before, in their current form league tables are broken and inhibit educational success.

Setting aside the other factors that may have affected this result, it still seems that Wales made the right decision to abandon league tables defined by government targets. The report’s release coincides with the Chief Executive of Ofqual calling for the abolition of the very targets that make up these tables, arguing that the current system of tables is an inadequate provision of information. “Simplistic” league tables, which only consider whether a child has achieved five GCSE of C or higher, narrow children’s learning and create a tendency to “teach to the test”. There are many other factors other than simple results that create a good school.

Obviously it is good for pupils to gain as high a grade as possible. However, this is not parents’ only priority when it comes to their children’s education. It seems that rather than Wales being wrong to abandon league tables, it was the inability of the government to create a more effective way of providing information to the parents. This meant that there was no way to compare schools and thus competition was not fostered.

Privatizing league tables would make them accountable to the consumer rather than the government, and would provide a broader ranking of schools. If the government stopped crowding out private companies’ league tables, competition would allow private tables to use wider criteria than government targets, and in turn spark greater competition between schools. 

It's simple: Oversupply graduates and you'll get graduate unemployment

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The Guardian reports that graduate unemployment is at its highest rate for the last seventeen years. Is this a surprise to anyone? You don't need an economics degree to figure out what happens when you oversupply something without the demand for it.

One of the policies of the last government has been to squeeze as many people through university as possible, irrespective of the need for more university graduates, in the naïve believe that having more university graduates is an infinitely good thing.

As today’s report shows, this view was wrong. There is an oversupply of graduates caused by government subsidies for university education, just as there is an oversupply of farm produce caused by government subsidies for farming. This oversupply has depressed wages and, as today’s report shows, created mass unemployment for graduates.

Today’s report should be a wake-up call to the government, hammering home the damage that social engineering policies can cause. If some of the now-unemployed graduates had spent the last four years in the workforce, developing skills that were needed by employers, far fewer would be in their situation.

Top-down attempts to reshape society rarely work as their planners intend. The experiment with creating a ‘knowledge economy’ by creating a massive number of university graduates has failed, by creating a supply where there was little demand. Had the government not skewed market incentives for school-leavers by subsidizing university educations, the one in eleven graduates who are now unemployed might not be in this situation.