Going into Labour

As the Labour Party gathers in Brighton for its annual conference, Martin McQuillan reviews its policy options for universities.

Officially the Labour Party is still in policy review mode when it comes to higher education. In reality the window on reflection and consultation is closing quickly in advance of the next election in 2015. Hence the raft of think tank reports, from Million+ to the Institute for Public Policy Research, that appeared in the first half of 2013, which all attempt to catch the eye of the Labour leadership as they formulate the party’s higher education policy. There is also the question of the present policy statement on tuition fees in which, through a linguistic convolution, the Labour leader Ed Miliband has declared that if his party were in government now they would reduce the graduate contribution to £6,000 but that this does not necessarily represent a post-election commitment.

Traditionally higher education has not been a doorstep issue for political parties. However following the discomfort of the Liberal Democrats over their breaking of their solemn pledge on tuition fees, Labour strategists will feel that there is political capital to be made here. They have to decide how big an issue to make higher education in the run-up to the next general election. This will be couched in terms of an access and social mobility agenda for the aspirational that want to see their children go to university. However, in reality, the privileging of higher education as an electoral topic will be about the low politics of reminding voters of the broken promises and compromises of the Lib Dems in government.

The National Union of Students is also considering challenging Lib Dem incumbents in university towns. This needs to be balanced against the distinct possibility that Labour may be in coalition with the Lib Dems after the election.

If Labour feels that there is enough leverage in higher education as an electoral topic, the debate will revolve around the question of fees. However, in a certain sense, this is the least of the issues facing the Labour higher education team. Whether the headline figure for fees is £9,000 or £6,000 is mostly immaterial for both students and universities. If Labour party policy favours the continuation of the student finance scheme that it first introduced under Tony Blair, then little will change for the sector. There is a psychological difference between £6,000 and £9,000 fees but, in terms of repayments on income-contingent loans, the figures are still of the order of a working lifetime of debt and the seeming bounce in university applications this year suggests that £9,000 fees are not in themselves a deterrent to access. Such a policy may make loan default less likely and so the system more sustainable in the long run but a Labour-run Treasury would have to make up the missing £3,000 by some other means. Is it likely that this would be paid for out of general taxation? What conditions would a future Labour government put on that additional £3,000 to incentivise other policy objectives?

There is no indication that, should Labour win power, it will do anything other than follow its previous policy of aligning universities with a business and growth agenda and simultaneously seeking continued differentiation within the sector. Vice-chancellors might find that the missing £3,000 comes with a considerable range of caveats and policy objectives designed to encourage the sector to segregate according to mission. The sum may even have to be underwritten by universities themselves on terms dictated by the historic creditworthiness of their graduates.

Other options on reigning in the cost of the student finance package include differential interest rates between loans for fees and maintenance, between different subjects, and between academic and vocational degrees. As the actuarial data set on repayment grows, any government that retains the present system is likely to introduce greater sophistication and distinction in loan rates.

This is to assume that a future Labour administration would be in a position to compensate universities for lost tuition fee income while keeping its pledge to stick within coalition spending limits from 2015. George Osborne’s recent spending review suggests that the higher education budget would be likely to see a cut of £1 billion before 2017. This is not to mention the possible impairments to be found for the currently unsustainable fees and loan system from within the Department for Business, Innovation and Skills.

With money tight after the election and every penny of public spending to be forensically scrutinized, Labour will have to decide how much of a play it wants to make of higher education. The path of least resistance would be to continue with the current system of £9,000 fees. After all it was New Labour which set up the Browne review and which passed the bill in 2008 to enable the sale of the student loan book to third parties. However the present Labour leadership is likely to want to distance themselves from both their own policy inheritance and their electoral opponents.

The more significant issue for universities is what a Labour higher education White Paper would look like. Given all the other challenges they will face should the party enter government, the current shadow higher education minister Shabana Mahmood and her team are likely to get only one shot at a higher education bill. This will involve the question of fees (but on its own that could be dealt with by a single vote in parliament). However it will also have to outline a strategy for cleaning up the confusion left by the coalition’s failure to legislate on private providers and the regulatory framework. As the Tories always intended, a future Labour government would be faced with facts on the ground that will be difficult to unpick even if they wanted to. The status of Higher Education Funding Council for England, the Quality Assurance Agency, the science budget and research assessment are unlikely to receive much electoral airplay beyond the higher education policy wonk community.

Whatever policies Labour chooses to adopt, I would not expect the party to show its hand until much closer to the election. The party will not wish to have any proposals on expenditure exposed to significant scrutiny far in advance of an election. So do not expect anything from this party conference other than generalized assertions of Conservative incompetence and Lib Dem duplicity. Labour still have time to come up with a bold higher education policy that presents a master plan for the role of universities as part of a national education system and the wider post-recession economy. This may involve a greater proportion of the higher education budget paid for out of general taxation or an entirely different mode of funding such as a graduate tax or a lifelong learning passport. At some point, a future government thinking about the good of the nation’s finances beyond a single parliamentary cycle will have to legislate against the spiraling costs of the loan book.

The higher education agenda represents a great opportunity for Labour to distinguish itself from the austerity consensus of the coalition while highlighting their opponents’ discomfort. In so doing it could go a long way to honing Labour’s growth and investment, training and jobs, high skills and education, one nation electoral message. The question that remains to be answered is: how bold will the party be? We are unlikely to get an answer in Brighton.

Martin McQuillan is Dean of arts and social sciences at Kingston University.

This text first appeared as the ’8am Playbook’ on 22.09.13 for HE: policy and markets in higher education, published by ResearchResearch.com
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