Higher Education
Robert Skidelsky
Hansard | Wednesday, June 14, 2000

My Lords, I shall do my best to match the lightening speed of the noble Baroness, Lady Uddin. Debates in Parliament on the state of public services nearly always revolve round a single topic- money. Certainly, that has been the major theme of our discussion today. This threnody for impoverishment has been coupled with another- that is, the lament for vanished independence. Universities and their teachers complain of a growing weight of regulation, and I endorse everything that my noble friend Lord Renfrew said about this earlier in the debate. They are constantly being assessed for their research and teaching capacities, sometimes, it seems, by methods borrowed from Stasi, but which, in reality, are the methods of bureaucracies the world over. According to the results of these researches, money is allocated by organisations known only by their acronyms.
 
I should like to stress particularly the connection between underfunding and independence. Underfunding and over-control are not separate; they are twin sides of the same coin. That connection has to be understood if we are to make further progress in the discussion. The brutal truth is that a cash-strapped paymaster is always a hard taskmaster. The increased control is directly connected to decreased funding as governments try to squeeze more value for money out of a shrinking unit of resource.
 
Worse still, if the Government pay, why should they not tell universities who to admit and what to teach? In future, grants to so-called elite universities are to be tied, so we are authoritatively told, to their success in achieving the Government's preferred social mix.
 
The Chancellor's recent clumsy attempt to make a class-war issue of the Oxford selection system compels us to focus on the real issue in the debate as I see it - that is, not money but independence. Should universities he regarded as autonomous institutions or as agents of the state? This question is constitutional; it is about the way power is distributed in our society. The question, "What is to be done?" matters less in this instance than the question, "Who is to decide what is to be done?". For anyone who stands for university autonomy, for anyone who believes that in the institutions of civil society lie the best protection of individual freedom, there can be only one answer. Universities must wean themselves off their present dependence on the state. That also happens to be the surest way of replenishing their coffers.
 
What does this involve in practice? It means, above all, that universities would set tuition fees at any level their markets could take. The right to charge a market price for one's services is a fundamental condition of a free economy and a free society. It was only in the communist world that such rights were systematically denied.
The predictable response to this is that any step in this direction will deny young people from poor families access to university education. There is something in that argument, but there is also a great deal wrong with it from an economic point of view. There is no reason why the borrowing power of poor students should be any less than that of better off ones. A university degree confers an earnings advantage which accumulates to £400,000 on average over a working lifetime, irrespective of parental background. To secure such a return on most investments one would have to borrow about £100,000. By comparison, to borrow £30,000 for an investment in a university education is an astoundingly good buy.
 
Of course, that is not the end of the story. For various technical reasons, banks would need to be insured against the risk of default, and both the Government and the universities might wish -I would support this- to provide bursaries to cast the passage of poorer students into university life. Governments would also continue to finance research of national importance. All that I take for granted. Simple changes in the charity laws would enable the universities to tap large additional sums of private money -the lack of which was lamented by the noble Lord, Lord Baker- as they do in the United States.
 
However, none of this will come to pass unless some universities are prepared to go to the Government and say, "Unless we can agree a new constitutional settlement between the universities and the state, we will renounce the block grant altogether and resume our freedom of action." A bold step. Integral to any such settlement the universities may seek would be a "charter of freedom", which would include the right to set fees without penalties – I emphasis, ‘without penalties’ – the right to retain absolute control of their own admissions, and the right to regulate their own standards.
 
Will any of the universities have the courage to do this? Probably about half a dozen of the top universities would do it if they could agree on a policy, agree to pool their resources and agree to launch a massive appeal for what I would call an ‘Independence Fund’. Unless some such effort is made, the universities will never escape from their present state of slow strangulation.
 
My object in saying this is not that half a dozen of the best universities should go into the private sector, but to force the Government to understand what should be the proper relationship between the state and the university system. It is one thing to sell one’s birthright for a mess of pottage but when the mess is too mean to nourish life, it is time to start remembering what one’s birthright was and to start on the difficult task of reclaiming it.