Bring back Augar and put students first to offer hope: UPDATE Augar speaks out

UPDATE: Augar Speaks out

Today, Friday 8th May 2020, Philip Augar broke cover and commented on the financial crisis in our universities in the Financial Times. With 'The time is ripe to reform UK university finance' he acknowledged that "Covid-19-related disruption may now mean that such a fee cut would be too destabilising".  He is looking to a new post-COVID-19 world and he must be listened to. The likelihood of the government's response to his report last year diverging far from its recommendations looms.

Augar has offered alternative options for funding Universities in his article for the Financial Times today (8th May 2020). His input is welcome at this time and the government should be bringing him into the fold again. TEFS has argued for a comprehensive review of university finances that goes well beyond simply looking at students and fees with:

"Therefore, a working group involving students (such as NUS), staff (such as UCU) university managements (such as UUK and others) and the government must work now in advance of the spending review."

Augar has now addressed issues such as 'cross-subsidy' and the impact on STEM subjects, but we need to go further to reform the whole system.

On fees, he recommends "freeze fees for a further five years and ramp up the teaching grant for strategic subjects". This is probably the only pragmatic thing the government could do at this point. However, he fails to mention maintenance grants for the least advantaged. With unemployment rising fast, there will be many more students caught in this inequality trap. This is a major consideration where the impact on social mobility will be massive (see TEFS 8th May 2020 'Social Mobility in crisis: A 'Pardoner’s Tale').

His observations on low-quality degrees will not go down well in some quarters with "there is a clear misalignment between the subsidy and the economy’s needs." His observation that the "government funding and subsidy for loans " writes off more on social studies subjects than on maths, computer science or engineering" will bring a fierce reaction. Yet science is costly and a key driver for an economy that is reliant on many technology advances. Also, the environmental crisis will not go away and new ideas are needed urgently.

Augar's approach is the only one we can take at this point. The COVID-19 crisis uncovered a sorry tale of cross-subsidy of science using international student fees. This is now not an option. Augar is right in his demand that:

"In future, university research needs to be funded openly, generously and strategically, not partly via the back door."

Original Post:

The plight of students and their families has already reached a critical level as the prospect of releasing people and the economy quickly from the lockdown recedes. The examination halls might be empty of students, but there should be some hope in the air. There must be a phased release organised to minimise the further spread of Coronavirus and even more deaths from COVID-19. The longer-term effects are only just emerging, and people will be preparing for the worst. Those families with some capital behind them will be planning effectively. However, most will be at the mercy of the rising tide of economic failure. An increasing number of students will find their world collapsing as part-time jobs dissolve into thin air along with their family’s income and jobs. The full impact is not fully realised yet, but the summer will see a lot of calculations and life-changing decisions. This is a plea to the government to focus on making sure all students have the confidence and capability of continuing next year. This means deciding now that everyone gets an equal chance. UK Universities will remain resilient if students turn up and a temporary loans system is in place to compensate for the downturn in international students. But the emphasis must be on supporting students and maintaining resources in universities to make this happen. The government must act with greater urgency and set up a working group involving students, staff and university leaders. Philip Augar has the contacts and understanding and might lead this with a wider and more urgent remit.

TEFS reported last week (TEFS 24th April 2020 ‘Competition or bust in Higher Education: a zero sum game’) that there were too many competing views on how to support universities facing the crisis and a zero-sum game must be avoided.

On the same day Times Higher Education (‘Help students more to win £2 billion bailout, says ex-HE minister’) reported calls for a more student-focused approach. Former Higher Education Minister Lord Willetts was quoted as saying that universities needed a “pitch in terms of students interests, not simply as universities as institutions” if they were to convince the government. This approach was reinforced by a more recent university minister, Chris Skidmore, in an attack on the Universities UK (UUK) plan (‘Package of measures proposed to enable universities to play a critical role in rebuilding the nation’ (the full report sent to the government is ‘Achieving stability in the higher education sector following COVID-19’) that “reverted back to a golden triangle narrative” with its priority placed upon the move to grab two times the QR from REF over the next twelve months. This is a plan that is both naïve and totally out of step with the government dealing with a massive and urgent crisis. Instead, Skidmore is right in suggesting “one way…to get more sympathy from the Treasury is to look at it from the point of view of young people and students”.

What does this mean in terms of supporting students?

The first thing to do is to define the scale and extent of the problem emerging for our students. But there is probably a genuine lack of understanding across those running the system. This understanding will only improve through genuine cooperation across university managements, staff, students and the government. Such a task force should be set up with urgency and it should focus on student support.

It is clear to any observer that the current situation in our universities is being driven entirely by a projected loss of income from student fees. This will be particularly problematical for those that rely upon a high proportion of students from outside of the UK (see TEFS 17th April 2020 ‘The loss of non-UK students leaves many universities out in the cold’). These universities will require some finance in the shorter term to ride out the storm until things improve and this will last at least for the coming academic year.

In relation to students from the UK, the situation is more fluid. But one thing is clear, support students and families and they will be able to turn up this year. This is especially the case for those with jobs, low incomes and from less well-off families. It should be obvious that more students will find themselves in hardship as unemployment soars amongst their families.

Two major effects are expected in the coming academic year.

Both effects will mean that students considering university may be forced to defer offers until they are in better financial circumstances. Equally, there will be students who are unable to return to their studies until the storm has blown over. University administrations will need to address both of these scenarios as requests for information and help rise in the coming months.

Firstly, the projected unemployment levels will eat into the income and confidence of many families who have hitherto had little experience of financial hardship. This means that a substantial number of families will be unable to support their children at university in the very near future.

The most recent Office for National Statistics (ONS) unemployment data, posted on 21st April 2020, was encouraging with “unemployment rate for the three months to February 2020 was estimated at 4.0%, largely unchanged compared with a year earlier and 0.1 percentage point higher than the previous quarter”. But we now fear the next posting on 19th May 2020. In the meantime, an authoritative study of unemployment in both the USA and the UK was just published this week and will have sent shivers down the backs of our leaders.

With ‘US and UK labour markets before and during the COVID-19 crash’ (National Institute Economic Review No. 252 May 2020) the authors, David Bell in the UK and David Blanchflower in the USA, looked at comparisons to previous downturns. In the wake of the Thatcher ‘experiment’ with monetarism in the early 1980s, the unemployment rate hit around 12% with over 3 million unemployed (‘UK unemployment tops three million’ BBC News 26th January 1982). It was exceptionally stressful for those of us who remember looking for employment in those times. But it could be far worse now. Bell and Blanchflower estimate that “the unemployment rate in the US is around 20 per cent in April”. Although the latest ONS data is still in the pipeline, they estimate that in the UK “unemployment will rise by around 5 million workers from 1.34 million to over 6 million by the end of May”. This is a staggering figure that is likely to match that of the great depression of the 1930s. Between 1929 and 1933, the USA unemployment rate rose to 24.9% and to 15.4% in the UK. Soon the UK rate could hit over 20% very quickly from the current 4%.

Secondly, there are already many students who find that their families cannot support them fully or at all. These students rely on loans and part-time jobs. The simple fact is that most of their jobs are in the hospitality and service sectors. Without this income, students will calculate that they cannot embark on a university course this year or indeed continue with one. With ‘Impact of Coronavirus measures on the working student: The nudge that breaks the camel’s back’ (16th March 2020) TEFS considered the immediate effect of the crisis on students who rely upon some income from part-time jobs. Now, with the crisis in full swing, we will need to look to how students can cope without a regular income. The likelihood is that they will find they cannot easily cope. In November 2019, TEFS with ’The cost of equalising the HE experience’ calculated that the widespread extent of part-time jobs amongst students means that an injection of around £1.1 billion per year would be needed to bring the number of hours worked in term-time down to below 10 hours per week. The scale of the support needed now is therefore all too evident.

Add to this the ONS data released today, ‘Deaths involving COVID-19 by local area and socioeconomic deprivation: deaths occurring between 1 March and 17 April 2020 in England and Wales’ that showed the poorest areas have been hit hardest. Some areas with the greatest deprivation were seeing rates as high as four times higher than the England and Wales average. These families will have multiple problems piling up fast.

What is the government’s thinking?

This is still somewhat obscure at the moment for most aspects of the crisis. The longer-term way out is not clear and planning beyond the immediate needs has not been revealed. Some indication about how Higher Education will be viewed was reported by the Financial Times with ‘Universities’ plea for £2bn bailout falls on deaf ears in Treasury’ (23rd April 2020). This has sent Universities UK back to the drawing board. But more light was shone on the situation with evidence given to the Education Select Committee by the Education Secretary, Gavin Williamson, on Wednesday. The online evidence session (‘The impact of COVID-19 on education and children’s services’ is available to view on Parliamentlive.TV) was over two hours long and covered a wide range of educational issues at all levels for the minister to consider. There was support pledged to disadvantaged children, but the laptops promised would take some time to deliver. On higher education the emphasis was on stability for students, safeguarding research resources and recognising the role providers play in local communities. But the vital need for urgency was missing. On the delay in a government response to the Augar review, it was indicated that an initial plan was for it to be published alongside the next comprehensive review, itself badly delayed due to BREXIT. But now the spending review has been pushed back even further and any response will still be linked to it. It seems that ‘ Waiting for Augar…….’ (see TEFS 1st March 2019) has become an endless wait.

In the meantime, there will be those with radical solutions entering the fray. David Kernohan of Wonkhe described today ‘How do we get to a loan?’ that echoes the comments by Gavin Williamson to the Education Select Committee on Wednesday. However, Kernohan says that loans should be issued on the “condition that providers commence the 2020-21 academic year in January 2021, and the 2021-22 academic year in November 2021”. This idea may gain some traction as the route out of lockdown becomes a terribly slow one. But as an insider who taught at universities for many years, I suggest that it will be a hard pill to swallow. The universities that are laying off staff now could come to greatly regret this.

More urgency is needed.

A clear conclusion arising from the various views around is that more urgency is needed to avoid a catastrophe. The notion that students and universities have some time to wait over the summer should be binned now. The government must press on with a spending review as soon as it can. In the meantime, support for universities must be viewed with greater urgency. However, the emphasis must be on support for students and families as the main objective. Then on providing loans to offset the loss of international student income. This will concentrate on the root causes of the sustainability of our universities first. It is also an opportunity to ensure that every student gets an equal chance. But all of those concerned must work in partnership and not in isolation. Therefore, a working group involving students (such as NUS), staff (such as UCU) university managements (such as UUK and others) and the government must work now in advance of the spending review. Perhaps Philip Augar should return to the fold to lead this operation with a wider and more urgent remit.

Mike Larkin, retired from Queen's University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics. He has served on the Senate and Finance and planning committee of a Russell Group University