Should Universities face funding cuts in this time of crisis?

20 February 2010

Yes – Rob Leadbetter

I wish that I could believe those who are predicting economic recovery, but to argue that the country is starting to return to its former heights is about as clear-sighted as a mole with astigmatism looking through a telescope from the wrong end.

The economy has recovered as much as any sane person would expect from the policy of quantitative easing, but this does not signal a return to economic health. It seems likely that just about every sector of the economy is going to have to make cuts; education especially.

If anyone had thought about the possible effects of quantitative easing as much as they should have, they would probably have drawn the conclusion that £200 billion is likely to cause a rise in inflation. This week inflation rose to 3.5 percent.

Is this a sign of recovery then, or just the expected result of throwing a lot of cash at the economy and hoping something will turn up? Angela Merkel spent much of 2009 predicting a steady recovery for Germany, but at the end of last year and in the first few months of 2010, their economy has faltered. Other EU countries such as Greece, Spain, Portugal and, to some extent, Ireland, are also facing big fiscal challenges which is likely to erode the value of the Euro, and make our trade with the Continent more expensive.

In the same breath as announcing the increase in inflation, Mervyn King said that he expected it to fall again soon. The inflation increase also fails to distract most people from other economic indicators, such as the fact that, according to the Office of National Statistics, public sector net debt was £740.6 billion at the end of December 2009. That is 52.5 percent of the GDP, and it takes only a little mental strain to work out that that figure is over Gordon Brown’s own ‘sustainable investment’ limit of 40 percent. Following this through, it seems quite clear that the government is going to have to make cuts regardless of whether or not the economy actually starts to recover.

There are also very important political factors to take into account. Well, one really: an upcoming election. It is almost certain that after the election whoever is in power will take the opportunity to tighten the country’s belt. This being the case, it seems very likely that universities and other educational institutions will have to face cuts. And so they should.

There are too many people in university education currently studying for degrees that will not give them any new skills, but which simply delay them entering the job market by a few years. This is clearly desirable for a government when unemployment levels are rising, but it is also expensive, reduces the value of the very few ‘real’ degrees left, and will only produce a disillusioned generation of overeducated waiters.

Education is not alone. Other vital services will be cut. The government is currently trying to convince the country that the NHS will not lose out on spending, but this does not add up with the recent announcement made at Addenbrooke’s Hospital last week that costs have to be cut by 15 percent this year.

In the face of cuts to the NHS, even if they are not yet being admitted openly, and with the costs of a war in Afghanistan while there are still difficulties over providing the necessary equipment for soldiers, it seems rational and sensible that universities are one of the first things that will have to cut down.

This is not to say that education is less valuable, but that less valuable pseudo-education is probably irrelevant during a recession that is far from over.

No – Julia Rampen

From earthquake science to the discovery of microscopic motors, the University of California, Berkley, has long been American public education’s finest jewel.

Yet in the last few months, it has been teetering on the edge of precipitous decline. The reason? Sharp cuts in state funding. The budget crisis in California is, perhaps, particularly acute. But the damage Berkeley faces should be a warning to us all.

This is firstly because universities are a good investment. From the amount of debate that surrounds university funding, you might assume that it consumes a large portion of public expenditure. You’d be wrong.

In 2006, as a percentage of GDP, the Organisation for Economic Co-operation and Development (OECD) average for public expenditure on higher education was 1.0 percent. In the UK, it was only 0.9 percent. (data from the Universities and College Union). That’s compared to 25 percent on healthcare and 10 percent on defence.

Of course, any funding is too much funding unless it produces results. So what does Britain get back? In purely economical terms, a government estimate put the UK universities’ economic output at £59 billion a year, or 2.3 percent of the UK’s GDP.

We also have other reasons to value our universities. They act as hubs for debate, culture, entertainment and enterprise, while student populations breathe life and prosperity into small towns like Durham or St. Andrews.

Indeed, the good reputation of our universities has enabled them to attract innovative people from around the world – who also pay large sums for the privilege.

As this might suggest, we need to understand our universities in their global context.

The rise to power has always been accompanied by innovation, whether it was the development of the stock exchange in Amsterdam and London, or the discovery of nuclear fission. By contrast, a major cause of the Soviet bloc’s collapse was its failure to catch on to microelectronics.

Gordon Brown said himself in 2006 that, ‘With China and India turning out not just 4 million graduates a year to Britain’s 400,000, but also more computer scientists, more engineers, and more technicians, we can no longer afford to write off the talent or waste the potential of any young person.’

Universities are more than just glorified apprenticeships. If we ever want to pay back our national debt we need universities to produce graduates who are pushing at the frontiers of research.

There are also social reasons to protect universities from cuts. For a start, the cuts would lead to a two-tier system, as newer universities with smaller assets would be disproportionately disadvantaged. Furthermore, new limits on places cause universities to demand artificially high grades. It’s applicants from deprived areas that will lose out.

Finally, government cuts give Russell Group universities new ammunition for their demand to lift the cap on fees. Just as the doors of Cambridge are finally opening for state-school pupils, financial considerations threaten to push them shut.

It makes little sense to cut funding to universities. Hence the motivation behind the cuts itself must be called into question. From a political perspective, universities make a soft target for cuts. The majority of students are only in university for three or four years.