Lord Browne’s report on tuition fees is a very mixed blessing

There are reasonable grounds on which to criticise Lord Browne’s proposals to uncap university tuition fees. But his rejection of a graduate tax is not one of them.

Under Lord Brown’s plan, students would repay the loans incurred for fees once they are earning more than £21,000 per year. So graduates will pay a portion of their income for the privilege of having gone to university – exactly like a graduate tax, except better for universities, which get some money up front for each student they teach.

Tuition fees are also better for students, since they impose direct accountability on teaching institutions. Universities will be under more pressure to offer attractive courses, innovate and improve to earn the fees of prospective undergraduates. Fees also avoid the problem of free-riding – the flaw in a graduate tax whereby students take their university education abroad, ducking any later obligation to pay. The most disadvantaged students, meanwhile, will pay neither the tuition fees, nor subsequent loans. The big problem with Lord Browne’s report is not in the mechanism it uses to develop new funding streams, but in the fact that it uses that mechanism as a pretext to slash teaching grants.

The argument for reform was always that universities needed more sustainable funding; it was never that universities should lose the vast majority of their subsidies. But the state now looks ready to withdraw support for teaching everything other than science, technology, engineering and maths.

Fees became necessary because greater numbers of people wanted to go to university and the costs were mounting. That is an argument for sharing the burden more equitably between individual graduates and the wider taxpaying public. It is not an argument for the state washing its hands of higher education. Lord Browne is right about fees as a long-term solution. It is a shame the government has sabotaged his plans with short-term, brutal austerity for universities.

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