Universities on Life Support
Without emergency funding, British universities are at a real risk of collapse — something that could lead to thousands of job losses and local economies in crisis. The government can't let this happen.
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Marketisation and underfunding have left higher education in a crisis. (Photo by Dan Kitwood/Getty Images)
Higher education is perhaps Britain’s last truly world-leading sector. In many towns, not least those ravaged by deindustrialisation, universities function as social anchors, generating tens of thousands of jobs and reams of secondary economic activity. It is bitterly ironic, then, that successive governments have decided to expose the higher education sector — an unparalleled public good — to the same market rule that laid waste to leading industries of old.
This failure of the market experiment in higher learning lies at the root of the current crisis facing universities across the country. More than 60 institutions are making cuts and threatening redundancies, over 2,000 jobs are on the line so far, and we believe three universities are at severe financial risk.
To appreciate just how broken our higher education system is, consider the surprisingly far-flung cause of an industrial flashpoint over redundancies earlier this year. Back in February, Nigeria’s Central Bank allowed the country’s currency to depreciate against the dollar. The devaluation was part and parcel of a worsening economic crisis, hitting the Nigerian working class hard, and, due to the perversities of an ever-more marketised higher education sector, it threatened the livelihoods of our members working in the North East of England, too.
Just days after that monetary decision taken in Lagos, Northumbria University’s vice-chancellor announced he would be cutting staff costs by £12.5 million, threatening potentially hundreds of compulsory redundancies. In an email to staff, the VC was open about the logic of the cuts: the Nigerian Naira had been ‘significantly devalued’ twice, accelerating a drop-off in international student numbers, so jobs had to go.
UCU members at Northumbria balloted for strike action and successfully beat back compulsory redundancies, but the episode demonstrates the catastrophe of the ‘market’ in British higher education. New Labour’s introduction of tuition fees in 1998 turned students into sources of revenue, forcing universities to compete for them — a situation dramatically worsened by the trebling of fees more than a decade later.
Today, we have the worst of all worlds. With income from domestic tuition fees degraded by inflation and without an increase in public funding to plug the gap, the arena in which universities are compelled to compete most aggressively is international student recruitment. Nearly every British university now heavily depends on revenue from extortionate fees — sometimes north of £40,000 annually for undergraduates — charged to students from overseas. Thus, we have ended up in an absurd position where the livelihoods of university staff can rest on the whims of foreign exchange market fluctuations.
Nevertheless, the scale of the crisis does not absolve vice-chancellors of blame. The sector might have been dealt a bad hand in recent years. But too many vice chancellors played that hand catastrophically and — worse — actively lobbied for the current model. They have doubled down with reckless gambles on capital spending, ridiculous satellite campuses, and finacialised pyramid schemes while reducing spending on staff and keeping many thousands of workers on precarious contracts.
Indeed, bosses at institutions including Goldsmiths, University of London and the University of York are currently using the cover of a national crisis to needlessly attack jobs, despite themselves being in good financial health.
Last week, we called on the Labour government to intervene with an emergency rescue package, providing public funding for universities in genuine financial peril. Crucially, jobs must be protected across the sector. In any circumstances where an injection of cash is required, it must come with strict conditions stipulating it be spent in the first instance on staff, preventing any further redundancies.
There are many important reforms that we need to see in higher education. Stripping out the damage done by marketisation is paramount. But beyond this, an elite higher education sector cannot be sustained, nor its decline stemmed, in the absence of new public funding. We all want to see Labour deliver on its core missions of growth and national renewal. That means they will have to invest.
Looking past short term measures to address the current crisis, we need permanently increased public funding for higher education. Without doing away with the tuition fee-based funding model altogether, the structural issues driving crisis in universities will remain unresolved. All the while, our students continue to be burdened with eye-watering debts just for partaking in higher learning, while staff continue to be burned out and exploited.
Scrapping tuition fees and properly funding the NHS should not be pitted against each other; they are not zero-sum. With marginal increases in taxes on wealth and profit, Labour could easily do both and more. If we are to truly harness opportunities for a decade of national renewal, Labour must invest directly in a sustained way across the public realm. As in higher education, so in society at large: real change won’t come with regulatory tweaks, and it won’t come by sticking to a broken economic model.