The Shoe Event Horizon

After yesterday’s  satisfying and enjoyable graduation festivities, it’s back to reality today with a clutch of scary news items about future cuts.

Vince Cable, the coalition Minister responsible for Universities, has revealed plans for Higher Education that include introducing a graduate tax and encouraging the growth of private universities,  the latter to be introduced at the expense of some current institutions which are to be allowed to go bankrupt. You can find some discussion of his speech in the Times Higher as well as in the Guardian piece I linked to earlier.

The graduate tax isn’t a new idea, but it does seem rather strange to be suggesting it right now. The proposal won’t lead to any significant income for universities in the short term so presumably either the government or the institutions themselves will have to borrow until the cash starts to flow in. But I thought we were supposed to be cutting public borrowing?

In fact, it seems to me that the announcements made by Cable are little more than a ragbag of ill-considered uncosted measures likely to do little but cause alarm across the Higher Education sector. Perhaps he would have been wiser to have kept the Ministerial trap shut until he’d actually worked out whether any of the half-baked ideas he announced were worth thinking through properly, as some of them just might be.

Apart from anything else, Vince Cable’s dramatic U-turn on Higher Education funding shows that the LibDem contingent have now been completely subsumed by the dominant right-wing, pro-market political stance of the Conservatives. In other words, we now know there’s no reason ever to vote LibDem again; they’re Tories in all but name.

I hope this year’s new graduates realised how lucky they’ve been to get their education before universities turn into Discount Education Warehouses, although I cling to the hope that the Welsh and Scottish assemblies might take a stand against if some of the worst aspects of the ConDem policy look like becoming reality in England, where the Tories live.

Meanwhile, the Royal Society has submitted its, er, submission to the ongoing debate about research funding. The headline in an accompanying article from the Times – which you won’t be able to read unless you give money to the Evil Empire of Murdoch – suggests that it could be “game over” for British science if the suggested cuts go ahead. Paul Crowther has done his usual fabulously quick job of hacking his way through the documentary jungle to get to the juiciest quotes, including this one:

Short-term budget cuts will put our long-term prosperity at risk.. The UK should maintain its breadth of research .. a flat cash settlement will be painful but manegeable; a 10% cash cut will be damaging .. while a 20% cut will be irreversibly catastrophic for the future of UK science and economic growth.

I’m sorry if I’m introducing a note of pessimism here, but I think we’ll be very lucky indeed if the cuts are as small as 20%.

And finally, not unexpectedly, the news this week includes an announcement that university staff are to have their pensions reduced and/or deferred and will have to pay more for the privilege. Employee’s contributions to the USS scheme will increase from 6% to 7.5%. For new members the pension will not be based on their final salary, but on average earnings. This isn’t a surprise as it’s been clear for some time that USS was actuarially unsound, but it’s one more sign of the forthcoming squeeze on academics, those of them that don’t get made redundant anyway…

Looking around for a bit of good news, I could only manage this. If you’re worried about the future of UK universities and scientific research then consider how lucky you are that you’re not Italian. Owing to budget cuts imposed by the Berlusconi regime, several Italian institutions will no longer be able to pay scientists’ wages. Responding to this situation the Italian premier replied with all his usual tact and intelligence:

Why do we need to pay scientists when we make the best shoes in the world?

Fans of the late Douglas Adams will be reminded of the following passage from The Restaurant at the End of the Universe:

Many years ago this was a thriving, happy planet – people, cities, shops, a normal world. Except that on the high streets of these cities there were slightly more shoe shops than one might have thought necessary. And slowly, insidiously, the number of the shoe shops were increasing. It’s a well-known economic phenomenon but tragic to see it in operation, for the more shoe shops there were, the more shoes they had to make and the worse and more unwearable they became. And the worse they were to wear, the more people had to buy to keep themselves shod, and the more the shops proliferated, until the whole economy of the place passed what I believe is termed the Shoe Event Horizon, and it became no longer economically possible to build anything other than shoe shops. Result – collapse, ruin and famine.

I see that Big Brother isn’t the only dystopian vision to have become reality, but perhaps Douglas Adams should have called his book The Restaurant at the End of the University?

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22 Responses to “The Shoe Event Horizon”

  1. Rhodri Evans Says:

    NIce quote from Douglas Adams, I’m going to have to re-read his stuff if he is as prophetic as it would seem….

    In principle I am not against private universities. Having worked in mainly private higher education institutes during my nine years in the US I can testify to the excellence of their education and research. Nearly all the top research universities in the US – Harvard, Chicago, Princeton, Caltech, MIT etc are private. Ditto the top liberal arts colleges like Swarthmore, Williams and Amherst. Of course, it costs about $40,000 a year presently to attend these places as an undergraduate, and my sister (who lives in the US) has just paid for her elder son to do 4 years at William & Mary College and her younger son is about to attend an even more expensive college – Providence College – this August for 4 years. One is looking at about $160,000 per child to send someone through college/university in the US.

    • In principle I am not against private universities. Having worked in mainly private higher education institutes during my nine years in the US I can testify to the excellence of their education and research….One is looking at about $160,000 per child to send someone through college/university in the US.

      Assuming—as is the case in the States—that many families can’t afford $160,000 per child, isn’t this per se a reason to oppose private universities? One has to look at the bigger picture. Your statement seems to me along the lines of “The food was really good at the banquets Idi Amin hosted, so Uganda in the 1970s must have been a great place to live.”. Yes, the food was good and yes there are private universities of high quality. But at what cost, and to whom? In both cases, the brunt of the cost is borne by those who can’t benefit.

    • Rhodri Evans Says:

      Phillip,

      I am not sure about Chicago (where I worked for 6 years), but Swarthmore offers full scholarships. You are offered a place based on your academic (and possibly other) ability, and if your family cannot afford the $40,000 a year then Swarthmore will pay. The tuition you pay is thus means tested. Swarthmore can afford to do this as it has a huge endowment, per student it is even larger than Harvard’s.

    • Hhmm…I can’t reply directly to the post I want to, so I am replying to the closest one which allows me to. We’ll see where it ends up. I’m replying to “Swarthmore offers full scholarships”.

      If it is as you describe, then fine. However, this is not always the case, and is probably an exception. Many scholarships are based on ability, which means if you’re smart then it’s OK but if you’re not then you have to be rich. Also, some places have scholarships which require some work to be done.

      I spent a couple of weeks at college in the States before returning to Germany. I had a full scholarship from various sources (some from the company where my father worked (not uncommon in the States; bad luck if your father works elswhere), some from the college based on “ability” (with no stipulation to work). I remember once sitting in the cafeteria after lunch, chatting with a fellow student, while another fellow student was cleaning the tables. It just ain’t right!

    • Rhodri Evans Says:

      Phillip,

      I know there were students at Swarthmore who were on full scholarships who did not need to work as part of the scholarship. There were students who chose/had to work to help pay their fees, but as I say the college’s scholarships were means tested. Once you had gained admission to Swarthmore (not easy) – it was determined how much of the fees you could afford based on your family’s income. For those who could afford to pay all the fees themselves, no financial assistance was given, but for those bright students who could not afford the fees, full scholarships were given. Most students lay somewhere inbetween.

      Anyway, we have got a little off-track as to one of the main points of this discussion – what happens to Higher Education funding in times of financial hardship? Personally, I think Higher Education should be funded by the Government, and that it should be a higher priority of the Government than many of the things that money is spent on. “Defence” forms far too large a fraction of Government spending, and personally I would save money here on such ridiculous activities as the occupation of Afghanistan.

      But, clearly private universities/colleges work, otherwise the US universities would not dominate the lists of the best universities in the world. Also, one could argue, that with such a financial outlay to get a degree in the US, the students work harder and are more committed to their studies….

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  3. Apart from anything else, Vince Cable’s dramatic U-turn on Higher Education funding shows that the LibDem contingent have now been completely subsumed by the dominant right-wing, pro-market political stance of the Conservatives. In other words, we now know there’s no reason ever to vote LibDem again; they’re Tories in all but name.

    I am not that informed on the LibDems in the UK, but haven’t they always been pro-market? Isn’t that one of their defining points, the “liberal” referring to free enterprise? (In contrast to the Tories, they emphasise personal liberty as well, i.e. free love as well as free enterprise.)

    • Bryn Jones Says:

      Where the Liberal Democrats stand on the left-right political spectrum is very interesting. The party was unclear about its position for many years, but it often campaigned from a left-of-centre perspective. For example, it argued against the invasion of Iraq, in favour of a less unequal society, and against students paying university fees.

      The Liberal Democrats were formed in 1988 by the merger of the old Liberal Party and the Social Democratic Party. The Liberal Party had in the 19th century been the centre-left opponent of the Conservative Party. It formed a very radical government in 1905, but was eclipsed on the left by the growth of the socialist Labour Party from around 1910.

      The Liberal Democrats have now gone into government with the Conservative Party in a coalition committed to massive cuts in public spending, of about 25% over 4 years in most government departments. The coalition intends to shift the balance of the British economy from state-funded services to free-market provision.

      For a left-of-centre social liberal like me – meaning a liberal with a very strong belief in social justice and equality of opportunity – the change in emphasis of the Liberal Democrats’ policies is astonishing. It seems almost a different party.

    • Bryn Jones Says:

      And as far as I can tell, the Liberal Democrats’ interest in free love did not extend to policy particularly: it seems to have been confined to the private lives of some of its senior members.

    • Bryn, you missed out recent history where all three parties – Conservative, Labour and Lib Dem – admittied **before the election** that there would have to be large-scale cuts to public expenditure. The only difference was the timing and that was mainly down to trying to find some differentiation as part of the electioneering.

      Its nothing to do with different points on some left-right political spectrum, its more to do with the fact that we are in one hell of a mess and there are not too many options. Throw in the fact that the Government is a coalition (which means some compromise) and I think you will see that Vince Cable is trying to do his best to open up the discussion by airing some of the possible options now.

      • telescoper Says:

        Des,

        I’m not sure I agree with your analysis; the main parties conspired to keep the facts about the nation’s financial situation largely off the agenda during the election. I suspect the Conservatives are delighted to have an excuse to impose draconian cuts on the public sector, not for reasons of the current economical situation, but because they think that’s a good thing to do in itself. Also, as today’s Guardian reports, one side effect will be billions flooding into the coffers of private companies scavenging around the corpses of public institutions.

        It is true that the public finances are in poor shape, but a lot of the talk sounds to me like hysteria. Look, for example, at the chart at

        http://ukpublicspending.co.uk/uk_national_debt_chart.html

        and you will see that the national debt as a percentage of GDP is not at a high level historically speaking.

        Peter

    • Also as far as I have found out most of our debt is NOT held by international markets and is not up for renogiation for a good 10 years or so – i.e the risk of interest rates sky rocketing due to loss of confidence in our ability to pay off debt is not likely. So we could pay off the debt over a longer time period more gradually and ease the transition to less dependence on the public sector. Instead we have the tories, with the lib dems seeming to be going along with it (wont be voting for them again) determined to massively cut back the public sector as a matter of principal.

    • Bryn Jones Says:

      I would argue that the change in the stance of the Liberal Democrats has occurred over a few years, with the recent policy commitments following the formation of the coalition government being merely the most dramatic. I last voted Liberal Democrat in the May 2008 London elections, and decided not to vote for them in the European parliamentary elections in June 2009 because of the rightward drift.

      The finances of the United Kingdom are indeed in a very poor state, but the apparent lack of appreciation of the damage that will be caused by 25% cuts in the spending of most departments is alarming. Very significant spending cuts and tax rises are indeed necessary to eliminate the annual budget deficit. However, the deficit will be eliminated mostly by spending cuts, rather than some moderate balance between cuts and tax rises, and on a short time scale. 25% cuts will destroy many basic functions of the state that many people depend on. I see little appreciation of this. I see no heavy hearts.

    • Hmmm, note sure I follow. You appear to be saying that we are not in such a bad state because the last time the debt was so bad (as a % of GDP) was in 1972 – which is 38 (yes 38) years ago. And before that it was even worse despite tha fact that the period was dominated by two world wars and their recovery periods (~1920-1970). Next, you will be telling me that we never had it so good….

      • telescoper Says:

        Des,

        I’m not belittling the problem, but I am saying that we’ve been through things like this (and indeed much worse) before and we survived. There’s no need for all the alarmism this time. Sure, belts need to be tightened, but there’s no need to think of this as some kind of Armageddon. That’s all I’m saying.

        Peter

  4. Bryn Jones Says:

    I was able to watch Dr. Cable’s speech on television (broadcast on the B.B.C. News channel). He talked about general principles and discussed some more specific proposals without actually announcing firm commitments. He did not commit to a graduate tax, merely indicating it as a preferred option for Lord Browne’s inquiry into the funding of higher education to consider.

    My own view is that a graduate tax would be fairer than the current system of part-payment of tuition fees by students. A central concern I have is that the present system deters potential students from financially poorer families from going to university, because of fears that they would accumulate large debts but would have no guarantee of later employment paying comfortable salaries. A graduate tax would substantially lessen this problem.

    There are some potential problems with a graduate tax that would have to be avoided were such a system introduced: (1) there would be the gap of several years between the introduction of such a system for undergraduates and income from graduates that Peter wrote about; (2) there would have to be some mechanism to prevent graduates who move overseas from escaping their repayments (this would have to work equally for students from other European Union countries who study in Britain); (3) protection would be needed against future governments taking the income from graduate taxation to pay for general government spending rather than keeping it allocated specifically to higher education.

    The part of Dr. Cable’s speech that disappointed me most concerned the possibility of allowing private universities to be created to compete against existing insitutions in an even freer market in higher education than we have at present. The central problem here is not over private versus the not-quite-so-private existing institutions: the problem is even more competition. Britain already has a vast number of universities, about 160 when I last counted, most of which do very similar things in various localities, and some of them do similar things in the same localities. There are already significant financial threats to the survival of some of these institutions, threats which would become much greater with a contraction in national student numbers due to spending cuts. To create even more competition in an overcrowded, overcompetitive, contracting market would drive even more universities to the wall.

    Presumably new private universities would not accept funding from the state (as is now the case with that rather odd insitution the University of Buckingham)? Or would they be able to compete against existing universities for state funding for teaching and research? If the latter, the available funding for universities would be spread even more thinly – and the new institutions would not be private.

    Another silly idea suggested by Cable is to allocate places in particular universities to the top students from each school. The intention behind this is highly laudable, to provide fair access to the “best” universities to people from disadvantaged educational backgrounds. However, a scheme of this kind would have to be highly prescriptive: the state would have to tell universities which schools to select from and how.

    Fair access to universities is vitally important, but access should be meritocratic: those candidates who obtain the highest examination results should be able to get into the universities of their choice. This does not happen at present, at least as far as access to a very few (only two?) institutions is concerned. But meritocracy must be the goal.

    Dr. Cable may be motivated by positive intentions, but he really must think through the consequences of his ideas in detail before changing policy. Forcing through fundamental reforms on a system which is currently under extreme pressure following years of massive expansion without equivalent increases in funding could cause chaos.

  5. It’s a really bad idea, laying the foundations of truth upon money/market forces.

  6. I’m making a big assumption here, but don’t graduates tend to get jobs that on average pay more than non-graduates, thus sticking them into higher tax brackets?

  7. telescoper Says:

    Huw,

    Some do, but not everyone does a degree in order to get rich, and it’s certainly not the case that all graduates are higher-rate taxpayers ..

    ..and not everyone who’s rich has a degree.

    But I take your point. Also, if we wanted to design a system to drive UK trained people overseas then the graduate tax is a good plan. Get your degree for free then move abroad where you won’t have to pay the graduate tax…

    Peter

    • “Degree for free” just becuase the fees are somehow paid! You obviously dont have any children who have gone through University. The fees are the easy part of the equation…..

    • telescoper Says:

      Des, no I don’t have kids. I was excluding the cost of living, because living is costly regardless of whether you are doing a degree….

      ..and I also appreciate the fact that not all students have parents that can afford to support them at University.

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