They forgot to pay

Pre-reading questions

Reading 1

What is your opinion of the British educational system?

How high do you think are the standards of teaching in Great Britain?

The gloom over Britain's universities

There's a solution to the disaster of Britain's universities, if only the government had the courage to grasp it

Britons have got used to de­cline. They do not expect to see their country wield much economic clout, political influ­ence or military power these days. But they still retain intel­lectual pretensions: they tend to think that, even if they aren't much good at turning cleverness into cash, they can match any other nation for inventiveness, culture and sheer brains.

If that isn't already an illusion, it will be soon. Britain's uni­versities, the nurseries of the next generation's brains, are be­ing ruined, and the government is doing nothing to stop it. Its long-promised review of university finance was put off from last year to this; then it was expected to be published this month; now it is billed for sometime next year.

It is easy to put off addressing the problems of higher edu­cation. When firemen go on strike, people get burned. When lecturers go on strike, students get to stay in bed longer. But, as Lord Baker said in a speech on the subject last year, "when great institutions decline they do not suddenly fall over a prec­ipice, they simply slide down the slope, a little further each year, in a genteel way, making do in their reduced circum­stances, like a spinster in an Edwardian novel." He should know: as education secretary in the 1980s, he was in part responsible for the disaster.

Labour and Tory governments of the past four decades have agreed that higher education should no longer be enjoyed only by a small elite, but should be available to the masses. Ac­cordingly, successive governments raised the proportion of teenagers going to university from 5% in 1960 to 35% now. But they failed to fund this expansion properly. Instead, in order to ensure that more students went through the machine at little extra cost, the government took more and more control of stu­dent numbers, the universities' income per student and thus the quality of education the universities could provide. So, at a time when nationalised industries were being privatised to al­low them to raise more capital and respond to market signals, the universities were subjected to a system of centralised state management that allowed them to do neither. The conse­quences have been dreadful.

Labour has failed to stop the rot. Student numbers, which levelled off briefly, are rising again, and Tony Blair wants 50% of 18-30-year-olds to get some higher education. The regular­ity with which the government promises, and then delays, its funding review, demonstrates that it regards the current sys­tem, and the alternatives, as equally dreadful.

The central question for a government trying to reform uni­versity funding is whether the taxpayer should bear most of the costs (as in Britain and elsewhere in Europe) or whether the individual should (as happens in America and, to some ex­tent, in Australia). Placing the burden on taxpayers as a whole would be reasonable if it could be demonstrated that the benefits from one person's university education were felt mostly by society as a whole, rather than by the individual. But that does not seem to be the case. While the social benefits from higher education are debatable, the individual benefits are clear. Getting a degree makes you richer. According to the OECD, in Britain, university graduates earn around 17% more, on average, than non-graduates.

The answer is to cut universities loose from the state. Let them charge fees, as American universities do, and let the stu­dents pay. As well as shifting the cost burden from taxpayers to individuals, this solution would have three added benefits. First, it would help determine how many people should be go­ing to university: Mr Blair's 50% seems to be drawn out of a hat, and some of those who think about education policy, such as Alison Wolf, professor of education at London Univer­sity, doubt that his ambition makes economic sense. Second, it would bring more money into universities: America spends 2.3% of GDP on higher education, compared with 1.1% in Brit­ain, and most of Europe's universities are in similar straits. Third, it would allow universities to manage themselves: the uniformity which Britain's centralised funding system encour­ages - with former polytechnics trying to be mini-Oxbridges­ - could give way to something more like California's system, where higher education ranges from short, cheap, vocational courses to a full-blown academic degree, and where universi­ties and colleges have the freedom and incentive to specialise.

But the minimal (£1,100 this year, or $1,700) means - tested fees which the government introduced in 1998 were not pop­ular, and the idea of raising them to anything like the levels needed to cover the cost of a student (£10,500 a year, says Im­perial College) has aroused still more hostility. There are con­cerns, especially on the left of the Labour Party, that higher fees would discourage poor people from going to university. Rich kids' parents would pay, and poor children would find it difficult to borrow from banks to cover the costs of their ter­tiary education.

Access for all is an important issue; but a fees-based system can accommodate it. Australia introduced a state-run loans scheme to cover much of the cost of a degree. Graduates pay their loans back only if they earn reasonably high incomes, so students need not be put off by the fear of what happens if they don't get a good job. Since the new system was intro­duced in 1989, the social make-up of Australia's student base has not changed, which suggests that if carefully managed, fees need not put off the poor.

But aside from Labour's ideological worries about fees, raising them poses a political problem. Britain's middle classes are used to getting a free university education. Parents fear their children's pleas, especially when it may be pointed out that Sophie's mummy and daddy aren't mean enough to make her take out a horrid loan. And Labour fears the middle classes, who brought it to power, and who are getting increas­ingly grumpy as the tax burden rises.

No government enjoys making people pay for what they once got free of charge. But if Mr Blair does not opt for fees his grandchildren will not thank him. Institutions are easier to de­stroy than they are to build.

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