Andrew Lilico: The reform of higher education

In September 2004 the Bow Group published a paper I had written (with the assistance of Karen Richardson) on the Reform of Higher Education. At the time it received quite a bit of press interest — e.g. here and here.  Since term is starting again, and since I believe that the arguments of the paper still largely stand, I thought I might summarize them for you.

I began by considering the rationale for state involvement in the sector.  It seems to me that this is always the first step — unless we understand why the Market or the voluntary sector is not best-placed or most appropriate to deliver goods and services, we will not understand what it is that government intervention is supposed to achieve, and hence are unlikely to develop optimal policy proposals.

  My view was that there were three proper reasons for being involved in Higher Education:

• The Externality Argument - Higher education delivers spillover benefits to society that go beyond the benefits experienced personally by the student.  Hence, compared with what is socially optimal, the Market is likely to under-provide higher education (fewer people will choose to go than is best for society).
• The Liquidity Argument - Higher education will typically be most valuable to people early in life, when their minds are most flexible and when they have the longest period post-education to reap the rewards.  But early in life people will not have had much opportunity to display their talents or trustworthiness to lenders, and so may find it difficult to obtain loans against their future human capital.
• The Glory Argument - An important role of kings, dukes, and other Great Men of the past was to act as benefactors and promoters of art and research and other goods provided through universities.  Since modern egalitarian government tend to tax away much of the surplus wealth that Great Men used in this way, for use in other socially important programmes such as health and income support, there would be a loss from reduced philanthropy if the government did not at least replace the philanthropy of these Great Men.

I considered and rejected a number of related lines of argument for government intervention:

• One virtue of higher education is its “consumption” value - it is fun to spend three years drinking and chatting with friends and engaging in communal-living adventures - and the social bonding such experiences provide may have some function as a kind of latter-day National Service.  Furthermore, it may well be personally improving in some spiritual, non-productivity-enhancing sense to read the works of great thinkers of the past.  I expressed these matters bluntly, but had no intention of denigrating them - these are good things about higher education.  But at that time it was not clear why they provided a reason for government intervention (though perhaps in the light of David Cameron’s interesting suggestion of National Citizen Service I should reconsider this view?).  It is a valuable bonding experience for young people to go to University, but it is one that, in this aspect, I felt at the time they could pay for.
• I also rejected the more standard technocratic/human capital arguments, according to which government intervention was good because education would improve the productivity of students in later life.  Standard studies suggest that the real rate of return to going into higher education, in terms of higher salaries later in life, is some 11-14 per cent.  But this is not an argument for government intervention - quite the reverse.  If going to university is such a good investment from the student’s point of view, there will be little need of government intervention to encourage more people to go.  Who will turn down an 11-14 per cent real rate of return?

My view was that the Liquidity Argument is largely unconvincing - the current credit crunch aside, liquidity constraints are largely non-existent in modern Britain.  The Externality Argument is important, but probably applies only to the very top performers.  The Glory argument is probably the main legitimate reason governments have always intervened.

My recommendation was for a different funding structure for Higher Education from either that proposed by the government or by the Conservatives at the last election.  I proposed:

• The top 10 per cent of A-level-age performers receive national scholarships covering their fees and maintenance.
• 2 per cent of scholarships are reserved for the universities themselves to assign to worthy cases outside the top 10 per cent.
• The next 23 per cent receive “soft” student loans to cover their fees and maintenance.
• Scholarships and loans might potentially be restricted to approved courses.
• Other students pay the full cost of higher education.
• Universities have freedom over fees, except to scholarship students.
• There is no cap on student numbers.

As the Bow Group Editor put it at the time in his summary:

"This scheme ensures that society derives the maximum benefit from any state investment in higher education. It enables poor but gifted students to make the most of themselves. By virtue of market disciplines, it keeps a natural (rather than an artificial) lid on student numbers. And, by allowing universities to set the fees charged, it gives our major academic institutions the freedom they crave."

Comments

[Graham Tasker M.B.C.S. C.I.T.P.]

Considering that the top 10% of A level students go into the Law, Medicine, economics or related courses and most of the next 25% will do the same, there fore this idea will kill science and engineering once and for all in this country. These degrees are the most expensive to run and therefore would cost the most. Any student would not wish to saddle them selves with this cost and would do other cheaper degrees. The universities would respond to this by closing science and engineering courses.

Also the scholarships and loans are for ‘A’ level students only. I went to university with an OND in Technology, no A levels, so an entry path which has produced some of the best engineers will be closed off. (These students would not be able to pay the fees and support them selves).

[Angelo Basu]

It may be that that problem could be solved by Dr Lilico's suggestion "Scholarships and loans might potentially be restricted to approved courses". This would enable the government to decide to allocate scholarships and cheap loans only for those wishing to pursue subjects which were considered as a matter of policy to be desirable. I query however whether the level of planning and forecasting that this would need might not be a form of social engineering too far. There would doubtless also be huge controversy (particularly amongst less technocratic Tories?) as to why eg historians and classicists should not be valued by the state. From the other end of the political spectrum, there would also be a potential attack that such social engineering might serve to stigmatise science and engineering as "for poor students" and entrench a suggestion that the arts were for an elite who could afford to study them. I could live with that (after all, the point of Dr Lilico's article is to look at only providing state funding where it is in the state's interest and on these terms, why should the government care if media studies degrees are filled by the wealthy if it is providing poor students with the ability to do the most practical subjects which have the potential to be most productive for them in improving their economic positions?).

Perhaps this was not intended, but I read the reference to top A level students as being a shorthand for "top qualified applicants for university". If it is read this way it would be possible for a standardised admissions test of aptitude to be introduced which was independent of A level, access course, GNVQ, OND etc route of entry in order to sort out the order of merit of applicants. This may also be desirable to separate out the purpose of grading in those entry qualifications (to show how well those courses have been done in absolute terms) from a test to provide a relative score compared with any given entry cohort. Entrance to higher education would therefore be on the basis of separate tests for subject knowledge (A levels etc) and aptitude.

[Graham Tasker M.B.C.S. C.I.T.P.]

Testing for ability is not the best answer with science and engineering. During my days as a member of staff at a university I remember an engineering student who on his exam results would get a first class degree, killing himself because he wired a plug wrong. This practical skills were useless.

[Angelo Basu]

There's not much you can do about testing practical skill though. There are lots of people around who could safely wire a plug or indeed have the physical skill to operate even quite complex lab experiments but who would not be capable of completing a scientific degree.

It does suggest a flaw in the whole approach to higher education in recent years to move away from the practical/academic split that the Polytechnic/University system had. If such a split were to be reintroduced it would be possible to have different criteria for entry to each side.

[Graham Tasker M.B.C.S. C.I.T.P.]

I would agree on the University / Polytechnic split, one of the biggest disasters to hit higher education was the conversion of polytechnics to universities. Also the chance killed of the progression path of OND to HND to Degree, taken by many engineers.

One of the biggest problem with the UK is to see science and engineering as a ‘Practical’ subject, any one who has done these subject knows that you require ‘academic’ rigger. (This is why many engineering students do a 36 hour week of lectures and practical), This rigger is often of a higher high quality than that required for an equilveant Arts degree, (Another resion that students do arts degree.). In my own disipline “Safety Critical Software” the room for error is very small, thus I require both practical/academic expertise. Get it wrong, I could wipe out a town or worse (A reactor blows up or a plain crashes). A far greater responsibility than most accountants carry and they get paid three or four times more. (Another reason not

[Angelo Basu]

I agree that engineering in particular is a practical subject, as are applied sciences. However, part of the dumbing down of the sciences and maths at school level has been to go too far this way in stressing ONLY the practical side in order to make the subject "relevant" and this can have the effect of losing the rigour needed to be able to do scientific study and work in practice. The move towards making arts subjects be examined by box ticking (ie making sure that the right phrases to fit a mark scheme are in a piece of work rather than looking to develop the ability to build an argument and analysis) is also stripping the Arts of their rigour.

The loss of rigour generally in education hinders both theoretical and practical understanding- if you don't have a rigorous theoretical intellectual framework you can't do the practical side other than at a very high level. Fine for producing Dilbert's Pointy Haired Boss, useless for producing anyone who can actually do anything whether scientific, business or artistic (eg the Tracey Emins and Damien Hursts are perfectly accomplished traditional Fine Artists and had to be before they could validly choose to do conceptual work).

[Mike Christie]

Until secondary education is sorted out then all this funding scheme would do would be to give free rides through university to a massively disporportionate number of private school pupils.

The secondary school system needs a radical overhaul, only when differences in pupils' socio-economic backgrounds have much less impact on their results than present could we possibly determine financial support through university on A level results.

Social mobility in this country is already at a low point, this funding idea could make it far worse.

Also, the decline in science graduates has its roots at age 14, when children choose GCSE subjects, if by then they do not have a scientific inclination then they won't study at GCSE, then hence not A level or onwards. The bright children who will go on to get good degrees are, by definition, not stupid. They are choosing subjects that they think will get them into the jobs they want to do, and the jobs they think will be well-paid.

The engineering and science communities need to do what they can to publicise the less glamourous and less visible opportunities in those areas into schools at an early age.