Don’t believe T.I.N.A

One of the prevailing myths of the current debate about how education is funded is that ‘there is no alternative’ to increased tuition fees and cuts in public funding.

Other nations, however, have adopted different paths for their higher education and research systems. Countries such as Finland and Norway, for example, continue to combine high levels of public spending with high levels of student access and equity. And despite the global financial crisis, national governments, such as those in the United States, France and Germany, have increased HE public funding as a vehicle to stimulate wider economic growth. This article summarises recent international comparative research on affordability and accessibility in higher education and on responses to the deficit in the public finances. It argues that the UK Government’s HE proposals – trebling tuition fees and cutting public funding by 40% – is not the only policy option.

Affordability and accessibility in comparative perspective 

A recent study of 15 countries undertaken by the Canadian research group Higher Education Strategy Associates (HESA) classified England and Wales as one of the most expensive public HE systems in the world. In a report published in October, England and Wales were classified 11 out of 15 in the overall affordability rankings – with only USA, Australia, Japan and Mexico ranked as less affordable.1 The country rankings were derived from a composite of six different measures of affordability including education costs, living costs, grants, loans and tax expenditures (one of the ranking measures – net cost after tax expenditures – is listed as table 1).

Table 1: Net Cost After Tax Expenditure Rankings
Source: Usher and Medow, Global Higher Education Ranking 2010, p23

Country Net costs after tax expenditures Median income % Median income Rank
Australia $17,618 $23,017 76.54% 13
Canada $9,959 $26,623 37.54% 8
Denmark $5,229 $22,929 22.81% 2
England and Wales $13,772 $24,652 55.86% 11
Finland $5,641 $21,010 26.84% 4
France $6,395 $20,660 30.96% 7
Germany $3,352 $22,020 15.22% 1
Japan $24,376 $22,790  106.96% 14
Latvia $5,258 $13,646 38.53% 9
Mexico $8,020 $4,615 173.80% 15
Netherlands $8,111 $28,032 28.93% 5
Norway $6,276 $26,623 23.57% 3
New Zealand $9,328 $19,265 48.42% 10
Sweden $6,056 $20,716 29.23% 6
USA $18,369 $26,990 68.06% 12


Of course, these affordability rankings are based on the current system of loans, grants and public subsidies for teaching. The authors speculate that the implementation of the Browne report will ‘move the UK out of the middle-band and towards the very high-cost band that the US and Japan inhabit’.2 It would also represent ‘the single largest one-year increase in net costs anywhere in the world since mass higher education began… Nothing on this magnitude has ever been contemplated before’.3

The Canadian report chimes with a UCU analysis of the OECD’s Education at a Glance 2010 indicators. Based on a pre- Browne assessment, UCU found that increasing fees to £5,000-a-year would be enough to give England the ‘unenviable tag of supplier of the world’s most expensive [public] degrees’.

The Canadian HESA report also challenges the notion that there is no alternative to high tuition fees. Finland – with no domestic tuition fees – tops the poll as both the most affordable and accessible system of higher education, closely followed by Norway. These countries are ‘models for the international community when it comes to accessibility and affordability’ and exhibit ‘high rates of access, high attainment rates, extensive programmes of both loans and grants, and student bodies that are reasonably reflective of broader society’. One of the reasons for this is that many of the Nordic countries continue to invest considerable amounts of public funding in their HE systems.

International responses to the economic crisis 

The centre piece of the UK coalition government’s response to the deficit in the public finances is to slash public spending. In higher education, this amounts to a 40% cut over a four year period, including a possible 80% cut in the core teaching budget. How does this compare with other countries? It is true that a number of other administrations are also targeting HE for public spending cuts (e g at state level in the USA and at the provincial level in Canada). However, a recent report commissioned by Universities UK shows that more national governments are maintaining or accelerating pre-recession investments in higher education (e g the Netherlands, Sweden, India, China and South Korea). Moreover, some of the UK’s main competitors (e g at the federal level in the USA and Canada, France, Germany and Australia) are increasing public sector funding to HE as part of an anti-recessionary economic policy. Various funding approaches have included developing infrastructure through building programmes, financing student expansion and participation and strengthening initiatives in research.

Some have argued that the UK coalition government is using the deficit in the public finances as a cover for an ideological assault on all forms of public provision, including higher education. Commentators have pointed out the similarities with the policy agenda adopted by the Canadian federal government in the 1990s. During the 1990s the Canadian government also responded to the cyclical debt/deficit problem with deep and permanent cuts to public services. For example, in his 1995 budget, the Finance Minister, Paul Martin boasted that his cuts would mean that programme spending as a share of GDP would be reduced to its lowest level in the post-war era. Major cuts were made to Canada’s unemployment insurance program and to federal transfers to the provinces (which fund education, social services and health).7 Unsurprisingly, the impact on the higher education sector was devastating. Overall funding levels declined by more than 12%, even as enrolments rose. Tuition fees skyrocketed by 126% between 1990 and 2000 and the number of full-time academic staff fell by about 10%.8 Canadian trade unions have told us that this is not a policy agenda to emulate; on the contrary, it should be a case of ‘Beware the Canadian Austerity Model’.

Developing an alternative agenda 

Before the proposed cuts were announced in the spending review, UK public on higher education as a proportion of GDP was already one of the lowest in the OECD see table 2. In our submission to the spending review UCU has put the case for maintaining the current level of public spending on higher education in terms of GDP, and increasing the proportion of UK public expenditure on higher education to the OECD average when conditions allow. In the interests of access and affordability, tuition fees should also be abolished, instead charging large employers, who benefit from the plentiful supply of graduates, a Business Education Tax, generated through increasing the main rate of corporation tax to the G7 average of 32.87p in the £.10 Over the coming period UCU will continue to argue that ‘there is an alternative’.

Table 2: Public expenditure on higher education institutions as % of GDP 1998-2006 ie 2006-7.
Includes private expenditure on institutions subsidised by public funds.
Source: OECD, Education at a Glance (series), table B2.4 (Data for earlier years was not in a directly comparable series).

UK USA OECD average
% % % % % %
1998 1.01 0.97 0.43 0.83 1.07 1.06
1999 1 1 0.5 0.8 1.1 1
2000 1 1 0.5 0.7 0.9 1
2001 1 1 0.5 0.8 0.9 1
2002 1 1 0.4 0.8 1.2 1.1
2003 1.1 1 0.5 0.8 1.2 1.1
2004 1.2 1 0.5 0.8 1 1
2005 1.1 0.9 0.5 0.9 1 1.1
2006 1.1 0.9 0.5 0.9 1 1
2007* 1.2 0.9 0.5 0.7 1 1


Series Navigation<< Subprime education? Lessons from the USAEMA abolition: triumph of dogma over evidence? >>