Starmer drops free education, Wales turns away from England and PGR funding gets fudged

For some reason the 2nd May 2023 has proved to be quite a day for followers of all things student finance - with developments over Labour’s policy for England, Labour’s policy for Wales and England’s policy on PGRs.

David Kernohan is Deputy Editor of Wonkhe

Jim is an Associate Editor at Wonkhe

It’s not something that many will be surprised by, but following this mornings’s Henry Zeffman piece in The Times Labour leader Kier Starmer all but confirmed that free university tuition will not be in the next Labour manifesto – citing the “different financial situation” as the rationale behind the shift.

Speaking to the BBC, Starmer said:

We are likely to move on from that commitment because we do find ourselves in a different financial situation…We are looking at options for how we fund these fees. The current system is unfair, it doesn’t really work for students, doesn’t work for universities.”

Labour will “set out a fairer solution” in the near future, he said, and added that he did not “want that to be read as us accepting for a moment that the current system is fair or that it is working”.

Some have been trying to work out the reason for the timing here. My guess is that over a Bank Holiday, content for the front of the Times was thin, a couple of its journalists will have pitched HEPI’s polling in the context of consistent rumours about the pledge, and so Starmer has been bounced into one of his now numerous “facing down the left to demonstrate economic competence” moments a tad early.

Whether we actually get any detail on an alternative policy in the “near future” remains to be seen.

The story emerged on a day that HEPI polling found that just 28 per cent of students saw the abolition of fees as their preferred option, with a plurality of those surveyed (38 per cent) supporting fee reductions. Though the cause of free higher education is popular with activists, this popularity does not appear to extend to the wider population.

Back in 2017 the policy – associated with former leader Jeremy Corbyn – was widely seen as driving the so-called “youthquake” in student votes for Labour that led to Theresa May’s tweaks to graduate repayment, to the DfE review of fees and funding, and eventually to the Augar report.

Opinion overall does seem to be turning against the current model of funding – both as regards fees (and more importantly for many students) maintenance loans. But it was notable that Starmer appears not to even have the bones of an alternative ready. There is no sign of consensus on an ideal way to fund universities in England in an environment where both students and providers are struggling, any more than there is a consensus on how best to regulate or plan higher education.

With so much of Labour’s current messaging focusing on economic growth, it does feel likely that the party would argue that universities – as drivers of skills development, research, and innovation – need a better funding settlement in the round. What this morning’s news suggests is that graduates will continue to shoulder at plenty of this burden.

The “gordian knot” problem I was discussing here for the development of a fairer system is that thanks to Michelle Donelan’s stealth changes to loans from September, something that sounds attractive (lower interest rates and a longer repayment period so more pay off in full) is actually a very expensive bung to rich men in their 40s. Dare Labour try to explain that?

Interestingly, at least in Wales, the answer to that question is yes, at least in part. Education Minister Jeremy Miles has announced that Wales will not adopt what is to become “Plan 5” for the repayment of student debt – instead retaining the 30 year term, higher repayment threshold and higher interest rates:

The UK Government’s regressive reforms benefit the highest earners and worsen the position of middle and lower earning graduates… they reforms the highest earners and worsen the position for middle and lower earning graduates. Women are also disproportionately affected. We certainly shouldn’t be asking teachers, nurses and social workers to pay more, while the highest earners pay less. I can therefore announce today that we will not move to the system adopted in England but will retain the current system.”

As usual with Wales we don’t get any accompanying figures on how much that decision is costing, and whether Wales’ generous student finance system might (eventually) have to give a bit – but it is at least a decent run at an alternative to and critique of Plan 5 that’s been eerily missing from the Labour shadow team in England.

Whether the Welsh Conservatives – or indeed any Conservatives – cotton on to the “Wales is charging student higher interest rates” angle also remains to be seen, but it may give some confidence to counterparts in England that the money about to spent on the interest rates bung might be better spent on maintenance, the unit of resource or, well, almost anything.

Meanwhile PhD students have been waiting for a while to find out what the headline stipend level will be for 2023/24 – and they won’t be thrilled.

UK Research and Innovation (UKRI) has announced that it won’t be restoring the previous practice of implementing the previous September’s ONS CPI-H inflation rate of 8.8 per cent, and instead will be recommending/mandating a YOY increase of 6.3 per cent – and will reduce the number of new studentships that start in 2023 to 2024 and 2024 to 2025 to pay for it.

There’s two ways to look at the increase level. One is that inflation has been so volatile as to make basing increases on a 12-month old measure of inflation is daft – which is why (for example) last it could have increased by 2.9 per cent YOY, but under pressure went for 13 per cent instead.

That’s a frame game where you assume the baseline you’re working with is right and you then argue over inflation measures and results v predictions. Another is to point out that cumulatively, the announcement means a 20.3% increase since 2021/22. It’s effectively saying it was accidentally too generous last year, which for obvious reasons isn’t quite the wording from UKRI’s People and Culture Champion Melanie Welham:

Postgraduate research training makes a significant contribution to developing the expertise that underpins the UK’s ambitions to be a leading research and innovation nation.

Today’s announcement demonstrates UKRI’s on-going commitment to supporting doctoral students. This step is part of our long-term efforts to ensure that the UK remains one of the best places for postgraduate students from all backgrounds to undertake research training.

Another way of looking at it all might be to ask “what do PhD students actually need to live or thrive on”, and sadly the accompanying “New Deal” work that is published today doesn’t really go there. The abandonment of the previous-September anchor, with no announcement on rationale other than the implication that it’s a fudged trade-off, feels like a problem.

What this does all confirm is that for UKRI at least there is a direct trade off between student numbers and maintenance support. There will be fewer opportunities for PhD students but more of them will be able to eat, etc – a reality that few seem to be prepared to contemplate in the debate about number controls over undergraduates in England.

One response to “Starmer drops free education, Wales turns away from England and PGR funding gets fudged

  1. Finally Labour have realised urinating huge amounts of money away on relatively useless university courses is pointless, perhaps they’ll also look at Bliars 50% legacy too?

    Much as UK universities operate in a ‘for profit’ (for reinvestment? don’t make me laugh!) way, whilst claiming to be ‘not for profit’, we’re often not making the best use of the monies brought in as it is. And with huge and still growing administrative bureaucracies (of managers) whilst cutting the needed admin staff who support Academics and Students I can’t see that improving quickly, but then where else would the ‘useless in the real world’™ graduates who’ve failed ‘in the real world’ find jobs?

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