Rah Rah Rah, We're Going To Smash The Oiks!

Last week the delightful Aditya Chakrabortty of The Guardian reviewed the government's plans for funding Higher Education. I won't bore you with the technical details, but essentially they were going to fund expansion (largely through private providers of the kind currently suspended for immigration fraud and low standards) by selling off future student loan payments to banks.

The only problems were that 1) so many students weren't paying back their loans that the whole loans-for-fees system isn't saving the government any money and b) even with a massive discount, banks weren't biting. The whole idea is ridiculous: flogging off a major income stream for a pittance, even on their own terms. I wrote to my MP Paul Uppal, the HE minister's private parliamentary secretary, asking him if he could explain how it would all work. He replied with a very courteous letter essentially saying 'er…no, but I'll write again if we think of anything or if the sale doesn't go ahead.

The sale isn't going ahead. Vince Cable, who as Secretary of State for Business obviously oversees HE funding and policy, has declared that the sale is off, leaving a £12bn hole in the projected budget. My hunch is that they'll close it by ending the expansion of student numbers.

So this is the background to Chakrabortty's declaration that the sector is itself in disarray, with market-friendly managers and senior academics wrecking proud institutions like King's College London.

pushed into a marketplace, the managers of higher education don't really know how to act. So they ape each other, pass off what they are doing to what's left of the staff as the new wisdom – and pay themselves vast sums for wrecking one of the few sectors in which Britain leads the world. The result in all its strategic confusion and grasping anxiety is the university version of The Thick of It: from bean to cup, those HE bosses fuck up.

Not that I have a single critical word to say about the enlightened leaders of my own dear Hegemon. I don't want to end up like Thomas Docherty, suspended by the University of Warwick for 'sighing' and  'irony'. Apparently academic bitchy resting face is now a disciplinary issue.

But fear not. The true madness has just descended on us. The deposed minister for HE, David Willetts, has been privately advocating a work of staggering genius. Discovered by Newsnight's Christopher Cook and presumably a government attempt to float the idea, Willetts wants to dump student debt on individual universities.

The idea's simple. You borrow from the government. That debt is then sold to the student's university on graduation. That's the debt that they couldn't sell to the banks, you remember. Then the student owes her debt to her alma mater.

A few problems arise. Firstly, are either the government or university finance offices capable of even managing the process? I can't even get my finance department to pay a visiting speaker £30 in travel expenses, so I have my doubts that it will successfully negotiate the (enforced?) purchase of discounted financial instruments.

Secondly, loading universities with their students debts is guaranteed to lead to fewer courses populated by richer students. Imagine the recruitment department looking at a forty-year old single mother from a minority community applying to study social work or education. Women earn less. They have career breaks, often to have children. School teachers, nurses, social workers and other useful people earn very little compared to the bankers who even steal from the government which bailed them out. The average company CEO, it turns out, is still male, 54 and an Oxbridge graduate (and therefore very likely to be white, too).

Any sane university trapped in the logic of depending on student loan repayments would turn away the poor, the old, the ethnic, the female and the altruistic. It would shut down the courses which lead to socially useful jobs, because they pay less. It would also shut down the expensive courses, like the sciences.

And then we turn to geography. Imagine being a university serving a community of poor, often BME people. The local employers pay the minimum wage or are public sector employees. Unemployment is high. Would you provide courses enabling the poor locals to better themselves? Of course not: because we all know that unemployment and low pay aren't a function of individual fecklessness or bad luck. They're a deliberate strategy designed to provide a pool of desperate workers (keeping wage inflation down) and to increase shareholder and executive pay at the expense of the workforce.

Willetts claims that loading universities with their students' debts will make the institution work harder to make those graduates more employable. This is economic illiteracy or – worse – deliberately deceptive. It implies that employability is solely a matter of personal qualities and education is a private good, when it remains inescapably true that there are (and have been since 2008) more unemployed people than there are jobs, and until the financial recovery becomes an economic recovery, this will continue to be the case. So it doesn't matter if you have 'appropriate' qualifications bursting from every orifice, or your university has showered you with skills, courses and internships, many graduates won't get a job.

Cook points out that six 'top' universities are keen on the whole idea. Of course they are. Getting a degree from the Russell Group, particularly Oxbridge, Imperial, UCL and a couple of others, is like winning a Golden Ticket (though Willy Wonka's distribution of tickets is much, much fairer than elite university entrance, which is largely predicated on parental wealth and private education: as an aside, Piketty's Capital points out that the average parental income for Harvard undergraduates is $450,000 p.a. – feel the egalité). So these 'top' universities, drawing their intake from the global elite, can be pretty sure that most of their students (of course some will dedicate their lives to low-paying, altruistic work) will be earning massive salaries simply because of the name on their degree certification, let alone the social capital acquired along the way. They won't even have to shut down the Medieval Icelandic courses, because institutional prestige will smooth those graduates' paths.

Those VCs are rubbing their hands together with glee, because there's another little bonus coming their way. They can point to their students' economic successes as proof that they have little risk attached to income, and raise their fees massively, thus excluding more of the Great Unwashed. If you're going to become a derivatives broker, £50,000 debt is chicken-feed, a quarter of the price of your latest Lamborghini. So is £100,000. So let's party!

Meanwhile, in the rust-belt, poor old Poly will have progressively shut down sculpture, art, and music, then media and film, then languages (if any still existed), then English. Before long, history, politics and sociology will go. Pretty soon only nursing, law and business will exist outside the sciences. At some point the finance director will point out that sciences are expensive and the students aren't getting well-paying jobs. Then the league tables will point out that legal and business jobs depend on contacts and prestige degrees, while the nurses have stopped paying back their loans. Before long the whole place will quietly shut down with barely a whimper of regret from anyone in authority. A (perhaps the) major source of pride, regeneration, cash and enlightenment in the region will be gone and nothing will bring it back.

This will not be an accident. This is the plan. As I've said over and over again since I started this blog many years ago, successive government long-ago decided that they work for the financial elite. Rather than looking at the industrial situation in 1960 or whenever and work out how 60 million people will earn a living, they decided to concentrate on shareholder profits. This meant crushing wages, reducing labour protection, reducing social security and engineering an economy based on low-paid, low-employment, low-skilled services. This necessarily requires a smaller, meaner state because while most of us can't and wouldn't avoid our taxes, corporations can and do. The grotesque sight of Russian oligarchs paying the Tories £160,000 for a game of tennis with Boris Johnson illustrates this strategy perfectly. Why pay millions in taxes, governments say to these people, when you can pay the Party a few hundred thousand?

Higher and Further education are key to this strategy. They don't want, or at the very least don't care about widening participation. They don't think the poor deserve or are capable of succeeding at HE, and they define success solely as personal financial gain (except for their own kids, who will be privately funded to study wonderful courses I'd love to take such as Medieval Icelandic, safe in the knowledge that they'll never be exposed to the cold winds of the job centre). My students, and their kids, can sod off to an Amazon warehouse and be grateful.

Other, better analyses of this crackpot scheme are here, here and probably all over the net.

Which takes me to the title of this post, derived from the chant of Footlights College when they meet Scumbag College in University Challenge.



It was funny then. Now it's policy.

Lucky there's an election in 10 months eh readers?

Your Uppal round-up

Hi everybody. As it's a while since I updated the world with the activities of my local MP, elusive millionaire fantasist Paul Uppal, here's a bumper edition. You'll laugh, you'll cry, you'll vote to throw him out in May 2015. 

Firstly, Paul's previously noted hilariously unconvincing photo-opportunity following the budget has attracted the attention of better-known satirists than I. Here's Private Eye's take on George's Beer and Bingo debacle:

Insult of insults, they don't even deign to mention who the 'next man' is. But we know, readers. We know. Incidentally, I haven't seen any mention during the Beer/Bingo coverage of the long-standing working-class suspicion of the continuing links between the Conservative Party and the brewing industry. There were even songs about it. Here's Paddy Ryan's 'The Man That Waters The Workers Beer':



THE MAN THAT WATERS THE WORKERS BEER
Now I'm the man, the very fat man,
That waters the workers' beer,
Yes I'm the man, the very fat man,
That waters the workers' beer,
And what do I care if it makes them
  ill,
If it makes them terribly queer,
I've a car and a yacht and an
  aeroplane,
And I waters the workers' beer.

Now when I makes the workers' beer,
I puts in strychinine,
Some methylated spirits and a drop of
  paraffin,
But, since a brew so terribly strong
Might make them terribly queer,
I reaches my hand for the water tap,
And I waters the workers' beer.

Now a drop of good beer is good for a
  man
Who's thirsty and tired and hot,
And I sometimes has a drop for myself
From a very special lot;
But a fat and healthy working class
Is the thing that I most fear,
So I reaches my hand for the water tap
And I waters the workers' beer.

Now ladies fair beyond compare,
And be it maid or wife,
O sometimes lend a thought for one
Who leads a wandering life,
The water rates are shockingly high,
And meths is shockingly dear,
And there isn't the profit there used
  to be
In watering the workers' beer.

And if you've ever tasted Banks's beer (where George and Paul did their gruesome duet) you'll understand where the song comes from.

Anyway, that's enough of the comedy. Paul next popped up on Channel 4 News during a piece on why Asian voters aren't turning to the Conservatives. The obvious answer ('Paul Uppal') sadly wasn't featured, but after a quick chat with Paul's dad (presumably no non-relatives could be found to endorse him), we got some words of wisdom from the great man himself. And what words they were! In perhaps the most audacious instance of inclusion and revisionism in political history, Paul found a way to claim that Enoch Powell, his notoriously racist predecessor in the constituency, would have been pleased that Paul is the MP. You could have knocked me down with a feather. Enoch Powell predicted race war if immigration into the UK wasn't stopped (he later went to Northern Ireland to represent the unionists who'd immigrated into Ireland by force, demonstrating a keen sense of irony). To claim him now as some kind of kindly integrationist is beyond bizarre and into the realms of dishonest. Personally, I'm very pleased that Tory voters in the area are now prepared to vote for an Asian candidate. I just wish a) it wasn't Paul and b) they'd consider not voting Tory. But to appropriate Powell: breathtaking. To mix ethnic cultural references: that's chutzpah on a grand scale.

Finally, Paul also has a job as Parliamentary Private Secretary to the Minister for Higher Education, presumably a reward for his bravery in voting for £9000 tuition fees despite having a majority of 619 and a university serving the economically disadvantaged in his constituency. A while back, I wrote to him asking why the government hasn't projected HE funding streams beyond 2016, a break with normal behaviour. My suspicion – shared with education guru Andrew McGettigan and many of the experts I spoke to at an HE leadership event recently – was that it's simply because they have no clue and have given up. Instead, they've savagely reduced the teaching grant and slashed the support funding for disabled students, which I think we can all agree is the mark of a competent and classy administration.

Anyway, Paul wrote back saying that he couldn't currently answer my question and would get back to me later on. (In case you don't know: MPs have to respond to sensible letters from constituents and more people should take advantage of this). Teasing aside, this seemed perfectly acceptable to me: there wasn't any indication of slipperiness. A few weeks later, a substantial letter arrives.

The first paragraph is the normal waffle about HE being a paradise:

The principal aim of our reforms was to put higher education on a sustainable footing for the long-term. Our universities are now well funded and this is driving up the quality of the student experience while helping to stimulate economic growth. What is important is that we have protected our world-class higher education system; we have not deterred students from participating in HE and we have increased the participation of those from lower income backgrounds. 

Then we get on to the details.

As you are aware, the government has announced its intention to realise value for the taxpayer through sales of English pre-2012 income contingent student loans. The loan book will be sold in a series of tranches over a number of years. The first tranche of loans is expected to be sold by the end of financial year 2015-16. However the decision to proceed with first sale has not yet been taken. As is normal with transaction of this type there will be a value for money assessment made before each sale. 

'Realise value' of course means selling the student loan debt off to financial institutions. It automatically incurs a massive loss because the banks will calculate the non-repayment rate, build in a profit and offer the government a price far less than the face value. But it moves a debt figure on the government current account to an entry on the income list – essentially exchanging a reliable future income stream for the equivalent of a payday loan. As you can probably tell from the undertone of this paragraph, there's a considerable amount of uncertainty about whether the government actually can flog off the loan book. As non-repayments approach the 48% level at which the whole student finance model becomes economically pointless, the banks reckon it's a dog and aren't queuing up. 

The department will ensure that sales from the pre-2012 ICR loan book represent value for money to the taxpayer. A refined model has been developed to provide an accurate forecasts of future repayments. This will be used by government and purchasers to assess the value of the loan book. In reaching a sale decision, careful consideration will be given to the comparison between the value of the sale and the value of retention. 

We'll have to trust Mr Uppal about the value-for-money model because he doesn't provide it and I presume it won't be made public at all. Let's hope that their model is better than the one which led to the disastrous Royal Mail giveaway (disastrous for us, not for the Tory donors who snaffled up the shares at a bargain price before flogging them on at a huge profit). 

Current market conditions are favourable and BIS advisors have confirmed there is potential interest from a range of buyers in investing in the loan book. This has informed the estimates of potential proceeds of approximately £12 billion over a five year period. It has been calculated that the additional outline of loans for the expansion of students numbers over the forecast period will be more than financed by proceeds from pre-2012 loan sales. If the sale of the loan book does not go ahead or does not provide the expected receipts, The Treasury will need to consider the impact on public sector net debt. This will be a wider consideration of the state of the public finances, but will include the affordability of higher student numbers.

I'd love to know what makes him think market conditions are favourable. Graduates aren't repaying their loans because the country is in a deep recession; jobs are low-paid and often part-time, and because graduates are filling positions previously open to non-graduates. We are running a low-wage economy, quite deliberately. Labour did it, and the Conservatives are extending it, because their primary concern is corporate and elite profit, not sharing the wealth.

The second half of that paragraph bothers me. The Conservative Party recently removed student numbers from the existing university sector and transferred them to the private HE sector to kickstart it: not to improve the quality of education but an ideological act designed to damage existing institutions which are viewed in Conservative circles as Marxist enemies of freedom. An astonishing range of institutions appeared as if by magic, some of them very flaky indeed, and overloaded the student finances to such an extent that an emergency cap then had to be re-introduced. Now the cap is supposedly off again but nobody I've spoken to knows what on earth is happening. Clearly that last line refers to the possibility of numbers being cut again - and we all know that unfashionable former polytechnics like mine will be hit hard, while private and elitist universities will be protected.

Moving on:

The higher education finance projections are aligned with other areas of government expenditure in not going beyond the final year of the current spending review period, 2015 to 16. These reforms mean that higher education institutions on how well funded; this has been sustained through recession and is driving up the quality of student experience. Students now have a greater stake in their learning and their future but can expect to be protected should they go on to learn low incomes and do not repay their is loans in full.

I'm not entirely convinced by the argument that projection are in line with government methods. Universities are large, complex organisations which require stable and predictable funding arrangements, as governments have long understood. At the HE leadership seminar I attended, one finance director described the HE funding model as OK for universities but bad for the country, and I can understand their perspective. The system is in fact an accounting ruse, not a policy. After all, university funding has actually dropped (fees don't increase in line with inflation, other funding streams have been abolished) and been shifted from the state to the individual. 

I find the last couple of lines particularly depressing. I really resent the idea that students need £50,000 of debt to feel that they have a 'stake' in their education. It fails to recognise the innate benefits of higher education, and denies that students understand their education as contributing to the public good. Instead, it implies that education is simply a means to individual enrichment: the custom mentality writ large. 

I'm pleased that Mr Uppal took the trouble to write a substantial reply to my letter. I remain troubled, however, by both the economics and the ideology contained within. I hope you all write to your MPs asking for further enlightenment – and vote accordingly.

Update: HE finance expert Andrew McGettigan has unearthed the contradiction between this letter and what MPs were told. Read it all here.

Just another Monday…

Good afternoon all. Apologies for the late appearance of my daily dispatch from the educational front line.

The big news of the day is the government limiting student loan increases to 1%, well under the rate of inflation. This means of course that universities will have less money with which to buy equipment, maintain their estates and staff classrooms. Students will also have less money on which to live, which will hurt local economies, particularly in communities heavily dependent on students. It's just another part of the Tories' war on the most vulnerable: it's tax cuts for the rich and funding cuts for the very poor.

This is of course economic madness. Give the very rich more money and they'll invest it, or hide it. Give people with not much a little more and they'll spend it: students can't save, they spend their money on kebabs, clothes, ecstasy tablets and occasionally books, benefiting the local economy. But the government got its sums massively wrong when they decided to lend students £9000 per year rather than £3000 (hugely overestimating repayment rates), so charging students more is actually going to cost taxpayers more! This is a damaging and reactionary attempt to ameliorate the damage.

And of course we're still going to spend £25bn on new nuclear weapons. Household essentials!

As for the rest of the day - bit of teaching, a good deal of apocalyptic rumour-mongering (not from me) about our department, and preparation for tomorrow's class on J. G. Farrell's very good novel Troubles. Published in 1970, it depicts the dying days of Ireland's Protestant Ascendancy in the run-up to the Civil War through the allegorical medium of a decaying hotel populated by marooned – and utterly bonkers – toffs under social and political siege from the lower classes, Catholics and 'Shinners' (Sinn Féin activists) whom we rarely see. It's all focalised through the perspective of the Major: English, kindly but utterly bewildered by the Ascendancy and its enemies: he represents the despairing English, imperialists with little comprehension or interest in Ireland. As William Gladstone put it, Ireland's tragedy is that 'the Irish never forget and the English never remember' (though of course it's not in the past to be remembered: the Irish on both sides of the border live with the consequences of imperialism daily).

The other fuss today is the Chris Huhne and Vicky Pryce sentencing: he prevailed upon her to take his speeding points, then they lied about it for ten years after Pryce determined to bring down her unfaithful husband when he deserted her. They both got 8 months' prison for perverting the course of justice. The core of the affair, I guess, is hubris: both parties were ambitious, driven people for whom the law is a minor inconvenience compared to the great deeds they thought they were doing. Since politics became a profession, it's attracted strange people and made them worse: it's rare to find a well-adjusted person given that the higher echelons of political life demands obedience, permanent surveillance, moral perfection and no space for spontaneity, privacy and family life.

These people have the same problems as you and I, to which is added a rather dangerous sense of being on a mission, a lust for power (in many cases). For some, this leads to risk-taking: didgy deals, influence peddling, or baroque sexual activities. Some – like Huhne – develop a Messiah complex. Others are more straightforwardly greedy, selfish or corrupt. Others are place-seekers and some are in it just to do good, but find themselves bound and gagged by tactical consideration, party machinations or simply the need to 'get on' in a system designed to produce enough warm bodies to win votes without fuelling the cynical and destructive pages of newspapers with stories of 'splits', 'gaffes' and the like, not independent thinkers.

Huhne reminds me of Al Capone in one very narrow sense: a man with few personal charms who nonetheless behaved as though only his interests mattered is brought down by a tiny crime from his distant past, rather than some grand crime. That's the thing with Visionaries: they never worry about the little things which will come back to bite you. I don't think the other parties should be celebrating this story: their ranks all contain the arrogant, the weak and the pushy and the stories will keep on coming.

Should Huhne and Pryce have gone to jail? Lots of the commentary now is couched in terms of 'what a tragedy' or 'what a waste of public resources'. Well, lots of people go to prison for lesser crimes without it being called a tragedy - because they're neither rich nor famous. It is true, however, that the prisons are over-full and the sentences aren't likely to affect their future behaviour very much. The only reason I can see for a prison sentence in this case is the deterrent effect: it shows the rest of us that the rich and powerful aren't exempt. Except, of course, they are: Huhne and Pryce are the morsels tossed to the crowd while the meat continues to be consumed by others. Take the BAe corruption case from a few years ago: the government intervened because it would damage ongoing arms deals between the UK and Saudi Arabia. BAe, owned and then subsidised by the British government, bribed Saudi royals millions (perhaps billions) to buy BAe weapons. When it looked like the game was up, the Saudis complained to Blair and the trial was cancelled. That's the point at which I lost any residual faith in British justice. It's always been corrupt and arbitrary, but here we had a government openly acting on the principle that the law didn't apply to the rich and the powerful.

More recently, of course, we had HSBC, the bank which was so happy to work for drug cartels and terrorists that it actually widened the cash desks in Mexico to accept bigger bundles of blood-stained money. Did anyone go to prison? Of course not. HSBC paid a 'settlement' which means nothing more than a fee to carry on regardless. Meanwhile, street drug dealers get banged up for long, long sentences.

Hope you don't depend on your student loans…

The Labour government commissioned a report into the Student Loans Company's disastrous failure to, well, provide student loans to students last year. It found that

…only 46% of the applications last autumn were fully processed by the start of the term, compared with 63% in 2008. As the crucial date approached, calls from students soared, with 4m made in September.

Despite having a target of no more than 14% of calls left unanswered, some 87% went unanswered that month. Between February 2009 and this January, only a fifth of calls were answered in 60 seconds, with 56% left unanswered.

On average, it took more than 12 weeks for an application to be processed in 2009/10, compared with more than nine weeks in 2008/09, when local authorities were in charge.

Now, the chair and chief executive have 'resigned', which usually means that they've been sacked without losing benefits and will probably receive compensation.

Still, it's a good result, and not suspicious at all. It would be deeply cynical to think that their departure was delayed to make the new Tory government look good. Meanwhile, start saving up, because

 a damning report by the National Audit Office found that the system was at "substantial" risk of being hit by delays again this year, when it is expected to deal with twice as many applications,