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Mike Freer MP: The state must stop distorting the market, and allow world class universities the freedom to expand

Freer MikeMike Freer is the Member of Parliament for Finchley and Golders Green.

Is our Higher Education policy Frankenstein’s Monster? By bolting together a centralised state system that treats all universities as equals, and a funding system that puts the financial burden on graduates, we have built a hybrid freak that is the worst of both worlds. Students are now consumers, acutely aware that they will be paying for their degrees once they graduate, but they are entering a market place that has been left unreformed despite the major change in the way higher education is funded. Like all state-dominated markets, it is skewed, and serves neither the needs of students, employers or the wider economy.

A degree at the University of Oxford will soon cost students £9,000 a year, whilst London Metropolitan, some 118 lower in the rankings, also has courses that cost £9,000. This is a market place where the best degrees in the world costs the same as one from an institution where 1 in 5 students drop out. The problem is compounded by rationing places at the strongest universities, thereby supplying students to the weaker ones and guaranteeing them an income of £6,000 per student. The weakest universities are left with little incentive to improve and students have limited opportunity to vote with their feet.

The Government’s reforms will make students more demanding - as they will have to, eventually, pay for the education they receive. No longer will they accept a couple of hours of tuition a week and limited numbers of lectures. They will want to know what they will get for their money and what their chances of employment will be after graduation.

However, by removing the cap on fees, we would allow our world-class universities the freedom to expand.  If a degree can be shown to deliver a high-earning career, let the university charge what they believe it is worth in the market. Those who are bright, but may be reluctant to take on the obligation of fees, can be cross subsidised, as they are in Harvard where 60% of undergraduates pay less than full fees.  

In turn, this expansion would remove the crutch from weak universities who would be forced to sink or swim. If they fail to improve their teaching, their course completion rates and graduate employment rates then they should be merged with successful institutions or closed. In the schools sector, the Government is saying that good schools should be allowed to expand and the poor ones taken over or closed. Sadly in higher education the exact opposite is happening.

The rationale behind the Government’s reforms to higher education funding was that the cost should be borne by graduates once they had started earning, rather than by the taxpayer. But the reform is incomplete if students are not paying what their degree is actually worth. There remains a dishonesty that school leavers are encouraged to go into higher education in order to secure a good career, but that service is not being supplied by all universities.

The solution is for the state to stop distorting the higher education market and let our successful universities bring in more students. If our universities are to remain world-class, then we have to give them the freedom to take students purely on merit, not demand they make up for schools’ failure to provide social mobility. Released from these constraints, a free-market higher education sector would deliver both a better service for students and a better skilled work force for the country.


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