Wednesday, 22 September 2010

Signs of intelligent life in Scotland!

At last, the so far very muted debate on higher education funding in Scotland is starting to get interesting, stimulated by an article in today's Scotsman newspaper by Lord Sutherland, former Principal of Edinburgh University.

Until today, all we've heard has been the refrain, 'no fees for Scottish students', coming from the Scottish Government, with a few recent hints that funding pressures might lead to some form of graduate tax. Deep down, when they think about it, everyone can see that a continuation of the current 'no fees' policy is just nonsense, and in an era of tough spending cuts it will not prove sustainable - unless we are seriously willing to contemplate the closure quite soon of some major Scottish higher education institutions. However, I don't see that that is currently on anyone's agenda, though I would not be greatly surprised if the next few years gave rise to institutional mergers here and there.

As for the graduate tax idea, touted about both in England, and to a lesser extent up here in Scotland, that, too, should be rejected outright. For a start, it takes a while for payments of graduate tax to build up to meaningful sums, so institutions needing more cash now will be disappointed. Also, there are unresolved issues over who should pay such a tax, for how long, and on what terms. For instance, should the tax just go with the status of being a graduate, or would the payment depend on the subject studied, the class of degree, the university attended, or any other such readily observable indicators? We don't yet know any of this. Moreover, unless such a tax were introduced for the whole of the UK, Scottish students might evade it by simply moving south. Administrative aspects of a graduate tax also seem quite tricky, I think, though I daresay we could make it work if we were sufficiently determined. However, in the UK, as I noted in an earlier post, we don't normally collect taxes for a specific purpose, such as higher education, so how could we ever know that all the tax collected as graduate tax was truly passed on to the universities? And who would decide how much each institution got?

A further complication has to do with EU rules. As these stand at present, member states are allowed to discriminate within the state, but not at all between states. Thus if Scotland chose to operate, say, a graduate tax for Scottish-domiciled students, it could still choose to charge fees to English students. However, it could not legally charge fees to students from other EU member states, as they would have to get the same deal as Scottish students. But then how could we collect the tax from, say, a Latvian student? So in effect, Scotland could end up providing virtually free higher education to students from other EU member states. Not a great idea, surely?

And this is why Lord Sutherland's ideas come across as so refreshing. For he cuts through all the verbiage clouding the current Scottish 'debate' and comes right to the point, arguing for fees to be determined course-by-course by each institution, with no arbitrarily imposed cap. This is absolutely the right way to go. Contrary to popular opinion, evidence from various countries (e.g. Australia, the US) shows that fees have little impact on HE participation by disadvantaged groups. Other arguments often raised against fees are also not too hard to dispose of. Thus there is no need, in a well designed scheme, for fees to be paid up front, but universities can still get their money early by using the private financial markets - through bond issues and the like. There is no need to boost public sector indebtedness. Likewise, what students pay back can be made income-contingent, just as in the present very sensible English scheme.

With luck, therefore, Lord Sutherland's article plus the Scotsman's supportive editorial comment will give rise to a more intelligent debate about university funding in Scotland than we have witnessed to date.

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