Once again the government has shown that it is completely out of touch with public concerns about university student finance. Firstly they failed to understand that, for many poor families, if something is called a 'loan' then they will see it as a loan however many times you try and persuade them it is some form of graduate tax. As such this is bound to impact on access to university for some poorer students.
Now a recent survey by The Times suggests that three quarters of universities plan to raise student fees for undergraduate courses to near the ceiling of £9,000 per annum. Furthermore Leeds Metropolitan University is the first of the 'new' universities to announce that it will set fees at £8,500 per annum close to the cap. This blows a complete hole in the government’s idea that price competition between universities would drive down fee levels – all it has done is drive them up. Only ministers could have thought things would be any different from this even though they were repeatedly told otherwise
Universities have clearly judged that the level of fees a university charges is often seen by teachers, students, parents and universities themselves as a surrogate for 'quality', and however many times you tell them this might not be the case they won’t believe you. No evidence about teaching quality reviews etc will convince them otherwise. Also. past experience with the raising of university fees suggests that the universities may well be correct in their judgement.
I think the basic problem here for the government is the ideological position of many right wing Conservative MPs, who have a touching faith in the potential impact of market competition but fail to see the almost complete lack of rationality of many consumers. Go to any supermarket and you will see tins of branded products sitting on a shelf next to the supermarkets' own product which is being sold at half the price of the branded good. When asked why they buy the branded good at twice the price people usually say something like 'because it is better', but then can’t provide any rational evidence as to what makes it is better. Do you think they are going to take any chances with their kids' education by buying what they will perceive as 'cut price' goods?
Clearly ministers and civil servants don’t understand either university cultures or the concerns of students and parents, but are blinded by a false economic orthodoxy. I am sure this latest news will disquiet Liberal Democrat MPs even more than they are already disquieted and I still stick to my original question (see Public Finance passim) - are student fees the coalition’s poll tax?
Malcolm Prowle is professor of business performance at Nottingham Business School and a visiting professor at the Open University Business School
