Deficit: is it really a crisis?

I was fortunate to have the opportunity to participate in a round-table discussion last term with Warwick’s Chancellor, Richard Lambert, on the issue of higher education funding. In the meeting, Lambert claimed that the NUS’ proposal of a “graduate tax” as an alternative to raising tuition fees was infeasible because the funds from such a tax would take years to “feed into the system”. “There is a crisis now,” he told us.

This statement got me thinking.

Because of the assumption that “there is a crisis now”, millions of dollars are set to be eliminated from the national higher education budget. Both main political parties claim that massive cutbacks in spending across the public sector are essential to cut Britain’s budget deficit – which, admittedly, with public debt levels at over 68 percent of GDP, is an issue that needs to be addressed. But does it really need to be addressed this quickly? Is this “crisis” really so immediate it requires a nearly £1 billion cut to higher education funding?

In trying to answer my own questions, I came to the conclusion that nobody in government has argued convincingly why the crisis is so important to solve now; rather, it seems to be taken for granted – by everyone, in government and out of it – that there is a crisis and that the only way to solve it is to take a machete to every area of public spending. Reasoned debate over the issue has been replaced by election-year posturing over which party can cut spending the most.

The cuts will have drastic and lasting effects for this country, its economy, and especially its education sector. Britain’s universities are some of the best in the world, and until the introduction of tuition fees, some of the most accessible for students of any background. The impending funding cuts risk throwing all of this out the window, and therefore should be subjected to serious consideration – unlike the hastily implemented cuts about to be imposed on us by the Government.

One obvious and immediate consequence of the funding cuts is, unfortunately, that tuition fees are likely to rise, perhaps quite drastically. Another consequence is that both teaching and research quality are likely to fall, with budgets for study being constrained and staff being made redundant.

It seems that those in power have failed to seriously consider the end results of this chain of events. They claim that a rise in tuition fees will not deter students from underprivileged backgrounds from attending university – indeed, that nobody will be deterred from attending university, even faced with the prospect of dramatically higher fees. This claim is, frankly, preposterous. The report by Universities UK that is its basis even says that tuition fees above £5,000 would deter prospective students, and even a £5,000 fee would act as a deterrent if student loans were capped at £3,000 and students forced to borrow from the private sector. Simple common sense would substantiate this – how could the prospect of graduating with tens of thousands of pounds’ worth of debt not be a deterrent to anyone interested in pursuing higher education?

Having lived for most of my life in the USA, I have seen firsthand the effects of outrageously high tuition fees (indeed, the amount students are asked to pay for education in the US is one of the reasons I chose to study in the UK – it’s cheaper here, even paying international fees). Many of my friends in America will graduate with debt to the tune of £100,000 or more, and some of my friends were unable to attend university at all because fees meant education was inaccessible. Such a situation only perpetuates the gap between rich and poor and the profound inequality that is a defining characteristic of American society. This, I fear, is the bleak future we are in danger of sleepwalking into here in Britain.

This brings me back to my original point. With such drastic consequences the likely outcome, public spending cuts should have a sound rationale behind them, and should be pursued in the least harmful way possible. I would argue that Britain’s level of debt, while high, remains similar to that of other countries in the Western world, including the US, France and Germany. None of these countries is committing to cuts as dramatic as Britain’s – indeed, President Obama promised last week to create 1.5 million jobs in the next year and to invest heavily in education and health as a way to protect these vital sectors and continue stimulating the economy as the world struggles to emerge from recession. Why is Britain’s policy approach so radically different from our foreign counterparts’? Why shouldn’t the cuts to public spending be spread out over a number of years so as to alleviate their ill effect on our country?

The Government’s proposed cuts need to be seriously questioned – before it’s too late.


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