Which is the best pre-election higher education briefing?

It’s snap election higher education briefing season – should you be voting for the Institute for Fiscal Studies Briefing Note or the HEPI Election Briefing?

There are strengths and weaknesses to both major contenders, but if you are preconditioned to prefer one team over the other your choice is probably already made. And the same goes for these briefings.

Big reforms

On the face of it, the IFS would be expected to have a clear advantage. We’ve been used to seeing them “mark the homework” of each Chancellor of the Exchequer in their budget coverage – but the HE coverage isn’t quite in the same ballpark.

The IFS have examined “the two big reform packages that are currently on the table” – if you’re reduced to counting on your fingers here you’re not alone. We’re looking primarily at the Labour HE plans (based on the IFS Annual Report from September 2019) and the Augar Review of HE (based on the IFS “observation” from May 2019). The Augar review package, to the best of our knowledge, is very firmly not on the table during the election.

They do take a very quick look at “skills wallet” plans from the Liberal Democrat (cost depends on how it is regulated, noted as being “less generous”), the Brexit Party plans to axe interest on student loans (around £3.5bn), and the Green plans to end fees and forgive existing student debt (a cool £70bn).

Last Augars?

Having very much done Augar to death in the earlier part of this year, and with the vanishingly small likelihood of it forming a part of Conservative election promises – most readers will focus on comparisons between the existing system and Labour plans. Even if you haven’t read the Annual Report, the findings will not be unexpected.

Labour’s plans as currently understood cost more than the current model – at a conservative estimate an additional £6.5bn each year for full time undergraduates – plus a further £500m each year to bring back maintenance grants. This figure has fallen slightly since 2017, as the post-election raise in the repayment threshold has added around an additional £1.5bn each year. The ONS mandated changes to the accounting of student loans mean that the Labour proposals now feel less expensive – previous (“baffling”, the IFS call them) arrangements flattered the existing approach.

You’ll note the “full time” in there – this gives away that the plans are costed on a like for like basis. One reading of the Labour plans is around at least a partial move away from full-time three year model towards a system of lifelong learning – the total of six years of funding availability would not be taken all at once. Whether this is achieved by social pressure or student number caps it would have an impact on headline figures, and on where the changes would have most impact – but without more detail it is impossible for anyone to accurately model.

Other income

HEPI, meanwhile, approaches the fees and funding issue from a student rather than a government perspective – noting their polling with YouthSight that suggests young people do not have a strong preference between the existing £9,250 and Augar recommended student fees of £7,500. Both briefings note the fall in institutional income between 2018-19 and 2022-23 of 11 per cent in real terms if the Augar recommended (and politically expedient) freeze in fee levels continues.

You’d also have to look to HEPI to find thinking on research funding and internationalisation – key sector issues with a national economic impact. The briefing notes the government-commissioned independent review of international collaboration post-Brexit, which recommends alternatives to Horizon Europe were the UK not to participate, and notes the impact of international students in cross-subsidising research – though their is a more nuanced story to be told regarding cross subsidy in individual institution.

What doesn’t get a more than a glancing mention is the DARPA-like body or additional research funding announced in the Queen’s Speech – which was taken by many to represent (alongside Chris Skidmore’s innumerable speeches on the issue) the central thrust of Conservative election commitments in this area. As the first signs of a (whisper it) post-Haldane research funding approach, I am surprised not to see more coverage.

On international students we see a repeat of the HEPI/London Economics/Kaplan research that suggested a single cohort of international students brings a net positive income of over £20bn to the UK (rather fancifully also rendered as “more than £31 million per parliamentary constituency” – you can’t just divide by 650, surely?)

Three conclusions

HEPI caution that the 2019 election “like previous elections, could have a dramatic impact on the higher education sector” – whereas the IFS situate the question more explicitly in policy history: “Higher education funding has been subject to near-constant reform over the past 20 years and more seems likely to come”.

Change then, is the order of the day. Despite the odds being on a Conservative majority and thus likely very little policy change at all. The IFS notes that Augar would increase the complexity of the system, whereas Labour would decrease complexity but radically change incentives, with a possible perverse effect.

And a note of political realism from HEPI:

Most major changes to student fees and loans have not previously appeared in an election manifesto. Moreover, some recent past manifesto commitments on higher education have not been delivered.”

My conclusion is that neither briefing is an essential read – especially if you have been keeping up with reports from both organisations over the year. The IFS modelling of the Labour proposals is good as it goes, but limited in assuming a close alignment to the current shape of the sector. The stuff on Augar is at this point merely a historical curiosity. HEPI mentions Augar only in passing, and is stronger (if slight in this particular publication) on international and research aspects. So very much no overall majority.

One response to “Which is the best pre-election higher education briefing?

  1. The IFS describing the Green Party’s proposals to write-off outstanding student debt as “adding £70bn to the national debt” is very skewed.

    There is no impact at all on the National Debt of writing-off outstanding student loans. It is instead a decision to forego £70bn or so income over the next 30 years or an average of £2.3bn per year (though relatively little in the next Parliament given expected earning trajectories of those who graduated after 2015). It can be achieved with no impact whatsoever on the public finances if the loss of this revenue stream can be replaced with an alternative £2.3bn per year revenue stream (say 2p on the higher rate of income tax).

    I can’t think of any other current spending pledge which the IFS chooses to articulate by summing the expected impact over the next 30 years and simply adding it to the national debt…

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