02 Feb 2015
February 2, 2015

University Vice


University Vice-Chancellors (VCs) are calling for the £9k tuition fee to remain intact. They have plenty of sensible things to say about fee structures and living costs, and so forth.  They’re the experts in how to run our excellent universities well. And yet, because they fought hard against the introduction of tuition fees in the first place, for many people they look like they’re a vested interest – like they’ll defend the status quo whatever it is.

And, of course, everyone knows that ‘experts’ are almost always slaves to politics with a small ‘p’. With elected politicians, it’s fairly easy to determine what their political agenda is – this is far from the case with ‘experts’ who have careers, pay, reputations, world views to defend.

The VCs, though, do raise the critical issue of less well-off students. I don’t know whether their prescriptions are right, but there is this…

There is a terrible lie being peddled by pretty much every interest about how much it benefits people to acquire a degree. This is used to justify tuition fee levels, amongst much else. It’s been called the ‘opportunity bargain’ . The deal is that the government facilitates mass higher education and this serves the ‘knowledge economy’ – our society upskills and does the ‘brain’ work and we export ‘body’ work to China, India et al.

The simple fact, though, is that this ‘opportunity bargain’ doesn’t work. This is because the Chinese and Indians (to a lesser extent) and other formerly developing states have developed the capacity to do much of the ‘knowledge work’ too – and much cheaper.  In addition, many skilled jobs have been gutted using new IT and significant elements offshored. So while it’s true that the volume of high-skill work in the UK has in increased, the supply of graduates has increased far more.  Moreover, it’s the role of internationalized businesses to bid down the price of ‘knowledge work’ – that means paying much less in the developing world and, at home, driving down the benefits of having a degree.

There remains great competition for the ‘elite’ students – these are the top, say, 10% who will eventually run the organisations they’re recruited to.  Present starting salaries are routinely over £40k for such folk. But for most, the value of their degree as an investment will depend very much upon where they studied, then what they studied and how well they did.

Successive governments have routinely trotted out the figure that graduates earn around £150k over a lifetime to justify fee structures and all the rest. First, they never deduct opportunity costs – i.e. how much the person would have earned over that 3 (or 4) years  had they not gone to university.  Once you do that, you’re down to a hypothetical lifetime benefit of perhaps £90k. Now consider the debt the student leaves university with. £50k isn’t unusual, is it? So now we’re down to £40k for 40 years of work. Now tax it. So, really, the successive government position – on their own terms – is that it might earn you a few hundred quid extra a year if you go to university.

But even that figure depends on the daft idea that you’ll get the same return regardless of your university, course or grade. So of course it’s nonsense.

The harsh truth is that many, many graduates will earn LESS in their lifetimes because they went to university. Many will do jobs which were previously not done by graduates because of over-supply of graduates. Others will suffer because they enter professions, like computing and law, which have been segmented: a small number of hugely paid people moving up the ladder fast and many more being paid a fraction because their jobs have been reduced, through ‘digital Taylorism’ and the expatriation of high skill jobs, to operating from proformas on a screen (think bank loans, standard legal advice, sales and HR).

Instead of attending university, some of my constituents went straight into work through a programme with local employer Ineos. They were paid for the years they would otherwise have gone to university and accrued no debt. By the time their peers who did go to university joined the company these non-graduate entrants had well-exceeded the graduate staring salary. They acquired chartered membership of the relevant engineering body and moved up the managerial ladder as fast as graduates, if not faster.

Of course, these folk are not typical. But they point the way to a reality which many of my constituents understand. This is that for many schoolchildren, it is clear that they will earn much more over their lives if they enter the workforce at 18 and acquire skills which are ‘fitted’ for well-paid domestic employment, than if they attend a degree course at a university.

Of course, this is all part of a nexus of debates around social justice and the wider social role of higher education. But for now I simply want to flag that there is a driving need for teenagers and their parents to have much fuller access to what the likely returns will be from the particular course at the particular university they’re considering. That certainly isn’t in the interest of the VCs so you won’t hear them saying that.

The ‘knowledge economy’ is a misleading nonsense which helps mainly the elite few at the expense of the un-elite many. It’s time it was consigned to history as a basis for public policy, along with the idea that all graduates benefit financially from their degrees.

For those who fancy digging further, Ithere’s plenty of literature but I’ve drawn heavily from a very accessible and important book by 3 academics – Brown, Lauder and Ashton – called ‘The Global Auction’. The terms ‘opportunity bargain’ and ‘digital Taylorism’ are theirs or referenced by them. The book is much wider in its scope and anything which looks clever above is likely theirs, with any poor representation of their views certainly mines. The book is published by OUP, and it was published first in the New York in 2011.