Ideological Browne review will end up costing taxpayer more

University funding hit the headlines again over the weekend, with Nick Clegg and Vince Cable insisting tuition fee increases will be capped – Clegg even suggesting his u-turn over his pledge to scrap fees “had to be done due to the financial situation the country was in”. Yet new research out today reveals the Browne Review, if implemented, would not ease this “situation” but instead end up costing government an additional £3 billion a year.

Vince-Cable-Nick-Clegg-wearing-goggles At a time when the government is eager to cut spending, their policy on universities, which will cost money not save it, can only be seen as ideological. The government will pay fees up front, with students indebted to the government for decades.

Left Foot Forward has already highlighted the unfairness of the propsals, which will result in bankers faring better than public servants such as teachers. The new revelations, however, show them not only to be unfair but proposals that will not reduce the deficit in the short-term, as Andrew Harding on the 2me2you blog shows:

Annual government spend on HE funding

	Current	Browne
Core funding	£7,478,145,985.80	£1,637,700,686
Fees maintenance	£10,824,313,850.00	£19,740,390,000.00
Total (core + fees)	£18,302,459,835.80	£21,378,090,686

Estimated additional cost to govt. of Browne model, for each academic year: £3,075,630,850.50

The blog cites the Higher Education Policy Institute in support and concludes:

“This analysis makes a mockery of any argument that could be made that suggests that reform of Higher Education funding is necessary or required by a need to save money. It does not save money – it costs money, which could be spent more fairly on increasing the core teaching resource.

“This analysis suggests that Vince Cable has lied to parliament, to the press and to his own party.

“And this analysis casts doubt on the commitment of the coalition to their own stated aim of deficit reduction. This reform is clearly a purely ideological move, attempting to reform Higher Education along market-driven lines with no proven benefits and several clear issues, not least the additional costs to young people.

“And can we really afford it? Apparently so.”

http://twitter.com/jordanbhall/status/28696524888 Jordan Hall

RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more: http://bit.ly/9Rg7TT reports @shamikdas
http://twitter.com/2me2you2me/status/28697279782 2me2you

RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more http://bit.ly/clmCzR – featuring a certain yours truly
http://twitter.com/dkernohan/status/28697395860 David Kernohan

RT @2me2you2me: RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more http://bit.ly/clmCzR
http://twitter.com/haymoncollins/status/28697837029 haymoncollins

RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more: http://bit.ly/9Rg7TT reports @shamikdas
http://twitter.com/jordanbhall/status/28697937690 Jordan Hall

Once again its ideology, not necessity, which drives Tory gov's policy. Shame on lib dems for supporting it http://bit.ly/9Rg7TT #browne
http://twitter.com/shamikdas/status/28700457540 Shamik Das

My latest @leftfootfwd articles: On tuition fees http://bit.ly/9Rg7TT #Cleggsongs http://bit.ly/c0wDT9 and school sport http://bit.ly/ce9pzg
http://twitter.com/amyebutterworth/status/28701021130 Amy Butterworth

RT @dkernohan: RT @2me2you2me: RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more http://bit.ly/clmCzR
http://twitter.com/bradleyphipps/status/28701816009 Bradley Phipps

RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more http://bit.ly/clmCzR
http://twitter.com/mattlodder/status/28702342798 Dr. Matt Lodder

★ " Ideological Browne review will end up costing taxpayer more:
University funding hit the headlines again over… http://bit.ly/bXolMc "
http://twitter.com/lord_browne/status/28707239497 Lord Browne

Mwah ha ha ha ha! RT @leftfootfwd: Ideological Browne review will end up costing taxpayer more: http://bit.ly/9Rg7TT reports @shamikdas
http://twitter.com/jruddy99/status/28707438323 John Ruddy

RT @leftfootfwd: Lib Dem U-Turn on tuition fees actually ends up costing Government more http://bit.ly/clmCzR Increases deficit
http://twitter.com/yorkierosie/status/28707644114 yorkierosie

RT @jruddy99: RT @leftfootfwd: Lib Dem U-Turn on tuition fees actually ends up costing Government more http://bit.ly/clmCzR Increases de …
http://twitter.com/imstillred/status/28708491387 Keith White

RT @jruddy99: RT @leftfootfwd: Lib Dem U-Turn on tuition fees actually ends up costing Government more http://bit.ly/clmCzR Increases de …
evidence based? really?

Wrong. Whilst its true that a 3bill cost is incured as a result of Browne. The risiing value of students loans yields 9billion- net costs being admonished as the government is taking on an asset. Granted, that relies on a series of assumptions, but frankly so does your model- you’ve just decided its doesn’t fit your argument to include them.
tehdai

9bn before 2015? No? Well, it’s nothing to do with deficit reduction, then.
Mr. Sensible

Clegg and Cable are trying to backpeddle on this.
http://refusingthedefault.blogspot.com/ cim

The odd nature of student debt is quite an advantage here. Because the fees at the low end (£7k, say) end up so high that just about everyone – a tiny minority of the highest earners excepted – will be getting a significant fraction of their loan written off, and because the monthly repayments don’t depend on the amount owed but only on income, there’s no incentive not to take a place with £12k fees instead, which means there’s no incentive not to charge £12k. Browne admits that it’s unlikely that most graduates will fully repay their loans, after all, which makes it essentially a graduate tax. The richest graduates will fully repay the loans, but they’ll spend a lot more money on doing so than the average graduate spends on not doing so, so I don’t have that much of a problem with it.

I really quite like Browne’s student funding proposals:
– massive net increase in the money provided to the HE sector
– most students only pay a fraction of the cost of their education themselves, except for the very richest who pay the full amount, with the difference made up, in a sufficiently obfuscated way to confuse the Tories, through general taxation
– increased grants to students, increased student loan availability
– student loan repayment terms made (on balance) more favourable to graduates than the current terms
– financial support available to part-time students (this is hugely important!)

I’m much more ambivalent about the deregulation of home undergraduate numbers, which I think will considerably shake up the HE sector in a very unpredictable way. I don’t know whether it will be good or bad in the long term.

To describe it as “ideological” is I think wrong – it’s dressed up in the ideological language of free markets and reduced government control (and those it does provide), but the actual effect of it will actually be quite redistributive.

Cable, I think, has spotted that Browne actually amounts to a significant backdoor increase in HE funding, which is why he’s talking about limiting fees to £7k (at which point the advantages of Browne to the HE sector largely disappear, and the government costs don’t change much)
http://www.stephenwigmore.blogspot.com Stephen W

Uhm, you’re wrong. Lending to students is taking on an asset, the same way as lending to banks. It will appear on government debt, but not as part of the deficit. This is different to a graduate tax where we just pay out the money and then get it back later through taxes. Admittedly the difference is largely an accounting trick, but that’s how it is standardly labelled.
Niccolo

Ideological? The Browne review was commissioned by the former Labour government…
http://twitter.com/dkernohan/status/29568747584 David Kernohan

@dr_neil maybe Margot James has been reading LeftFootForward http://is.gd/gFarh
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