CSR 2010: Terrible result, but the game’s not over

This is not the time to cry over spilt milk, but those who wanted higher fees have got what they wished for. The snag is that scenting an easy win, the Treasury has taken the fee hawks at their word. The overall Department for Business, Innovation and Skills budget will decline by 25 per cent in the Comprehensive Spending Review period; university funding will be cut by a massive 40 per cent by 2014-15, based on the expectation that graduate contributions will “broadly offset” reductions in the teaching grant.

This leaves the door open to another (and highly questionable) suggestion in the Browne Review that whatever remains in the teaching grant may be used only to fund strategically important and vulnerable subjects (identified by the UK Commission for Employment and Skills).

At a stroke, the coalition government has effectively transferred responsibility for the future funding of teaching to students and graduates. Whether they like it or not, universities will have no option but to charge students much higher fees to make up the shortfall in funding. In these circumstances, there will be a race to the top, with the coalition’s support for social mobility in higher education an obvious casualty.

The Browne Review entered new territory in describing the public funding of teaching as a subsidy rather than an investment. The CSR adopts this approach. As a result, the government has abandoned a cornerstone of the 2004 Higher Education Act and the Dearing report. Both regarded graduate contributions as being additional to substantial levels of state funding. From 2012, students, graduates and their families will be expected to take on much higher loans in order to replace funding formerly provided by the government.

MPs (although they may not realise it yet) will have to defend much higher fees on the doorstep, not because more investment is being provided for universities or to improve the student experience, but because the Treasury has decided to tackle the deficit by cutting public funding for higher education.

The irony is that the government will have to borrow huge sums to fund higher fee loans, but only their long-term write-off costs will appear on the Treasury books. This will allow the government to claim that the deficit has been reduced, even though universities, students and graduates will be left to pick up the tab.

MPs who want fees to stay at their current level should pay careful regard to the CSR, not in terms of what it may presume about the student-support system, but rather in terms of the reductions it applies to the future funding of our universities. This decision more than any other will dictate future fee levels.

In addition, capital spending has been knocked for six and the Higher Education Investment Fund will be restructured to “incentivise universities to increase commercial interaction between the research base and business”. Even the mild sighs of relief as a result of the science and innovation budget being protected in cash terms need to be qualified. In practice, this means a cut.

The CSR also assumes that there will be an increase in the efficiency of the science budget, saving £324 million a year by 2014-15 – savings that will be “reinvested” in the science budget!

Measures to increase “the focus on excellence” also have a depressingly familiar ring. The Treasury and BIS are apparently dead set (against all the evidence) on an even greater concentration of research funding – and less bang for their diminishing bucks in terms of leverage.

Perhaps in all this there is one lesson for the sector: the science lobby limited the damage with a public display of unity. The same cannot be said of our universities. Some hard lessons need to be learned, especially about the merits of providing the Treasury with funding “solutions” on a plate. These solutions were never going to deliver additional funding: they were always going to lead to the substitution of public investment by private contributions on an unprecedented scale.

The game is not over yet. The coalition partners have still to agree the real deal on student support. If the latter widens the gap between fee income and the CSR, universities owe it to the students of tomorrow to reopen discussions on the CSR settlement. To do otherwise would likely undermine social mobility and the student experience. This is one thing on which the sector can surely agree.