The Covid-19 crisis and its economic fallout is pushing our heavily marketised and increasingly financialised universities – many of them already vulnerable – closer and closer to the edge. The sector desperately needs a bailout, but without intervention to transform and democratise universities, institutions risk maintaining the worst aspects of their current approach.
A decade ago, sweeping reforms to higher education were carried out. Student fees were tripled in England to a maximum of £9,000-a-year (the highest of any public universities in the world), costing students – and the Liberal Democrats – dearly. Built into the changed fee structure was the principle that funding should follow individual students. Universities, now financially dependent on how many students they could attract, would compete in a new market. This competition meant institutions doing more and more for less. Reduced teaching grants, combined with a demographic dip in the number of 18-year-olds, meant this competition was particularly fierce, with few benefits for education as a whole.
To attract students, universities went on building sprees, expanding campuses upwards and outwards. The sector’s debt trebled to £12bn from 2010-20. Glossy new buildings were paid for, in part, through multi-million pound private finance agreements. Today, the pandemic means these buildings lie mostly empty, ghostly temples to neoliberal gods.
When these policy changes were announced in 2010, the Conservative-Liberal Democrat coalition government promised to ensure sustainable funding for universities, world-leading teaching standards, and fair access for students. Now that the dust has settled, we can say with some confidence that none of these promises were fulfilled. The higher education sector is over-leveraged and under-funded – trapped in a frustrating debt cycle in order to compete for new students. Universities focus on brand-building, often spending millions per institution on marketing. A proliferation of mystifying metrics, promising to measure “quality teaching”, do nothing of the sort.
As for world-leading, UK universities have just suffered their worst-ever rankings in the global league table (falling for the fourth year in a row). One reason for this drop is a decline in the staff-to-student ratio at 66 of the 84 top-ranked universities. While the QS league table shouldn’t be treated as exhaustive, it is indicative of a troubled sector.
In the case of the last promise – ensuring access to all – universities appear to be faring better than predicted. The fall in working-class students that many anticipated £9,000 fees would cause has been avoided, with the important exception of a significant fall in part-time students (who tend to be older and poorer than their full-time counterparts). However, lifting the cap on student numbers has led to market consolidation by older, more elite institutions. While this might appear a positive development – more students are able to attend such institutions – it has put intense pressure on smaller, more locally-focused institutions, many of which have closed departments.
The race for student numbers means universities have to do more with less funding. This has caused the sector to become increasingly dependent on private finance. The terms of private finance agreements for capital expenditure have tied universities to an expansionist agenda that would be unsustainable in good times but which Covid-19 has made simply impossible.
With student numbers – both domestic and international – likely to significantly reduce ahead of the new academic year, universities face an estimated funding gap of £2.47bn. To date, little has been offered by the government – save for existing funding being brought forward.
Universities have responded to the funding crisis in a predictable manner: hiring freezes, effective cuts to temporary teaching posts and graduate student teaching jobs, with restructures and redundancies on the horizon. Precarious workers – cheaper to hire and cheaper to fire – will not have their contracts renewed. Thousands of jobs are already at risk, with worrying announcements made at Liverpool, York, Birmingham, Manchester, Nottingham, Oxford, Newcastle, Glasgow, Warwick, Goldsmiths, SOAS, King’s College London, Durham, Kent, Sussex, Exeter, and Roehampton, among others.
At Goldsmiths, a hiring freeze for the lowest-paid teaching staff has been announced, meaning effective redundancy for 472 employees on temporary contracts. The teachers in question make up around seven per cent of Goldsmiths’ wage bill, but perform around 40 per cent of the teaching. At the University of Essex, where I work as a graduate teaching assistant, it is likely that fixed-term posts will not be renewed, meaning hundreds fewer posts available next academic year. Across universities, it is likely that a second wave of cuts and redundancies will be made once effective allocation of funding via student fees is apparent.
Job cuts at this level aren’t just a problem for the thousands of workers made unemployed and cast out into a particularly hostile jobs market. They will also cause an intensification of work for the lucky few who remain. At a time when more staff are needed for socially-distanced teaching in smaller classes, cutting posts makes little sense. It will also mean a loss of expertise and the removal, in many cases, of optional modules for students, who’ll still be paying the same high fees.
Many of these decisions are being made behind closed doors, with little input from campus trade unions. Since the vast majority of universities are public and publicly-funded institutions, this lack of oversight should concern us all. Unlike the vast majority of large-scale public institutions, universities have democratic structures and their governing bodies normally include staff and student representatives.
These democratic structures, have, however, been ossified by a decade of intense financialisation and marketisation, and an omnipotent market logic. The scope of democratic-decision making has been reduced by the terms of private loan agreements that demand universities avoid running deficits. At Sussex, a loan of £100m taken out in 2017 commits the university to running a cash surplus of over £12m every year until 2044. The University of Essex has an agreement with its creditor, Lloyds Bank, that it will not run accounting deficits of more than £0.5m for more than three years in succession. The future of financialised universities is not shaped by a belief in the value of education, or the true needs of the economy, but by loan conditions benefiting private banks in opposition to the common good.
The government has already spoken of mergers and the selling off of university land and buildings. Common Wealth – a progressive think tank specialising in democratic public ownership – is one of several voices reminding vice chancellors that, contrary to a decade of market fundamentalism, there is an alternative.
In our report, Public Higher Education for the Public Good: Addressing the Covid-19 Crisis, we call for immediate action to be taken to stop the intense competition for students and to protect jobs. In the long-term, the sector must be sustainably funded through progressive taxation, with teaching block grants replacing student fees. We must not allow loan terms that tie the sector to a damaging cult of expansion or that allow private companies to profit from decades of public investment. This must go hand-in-hand with a democratisation of the sector, including the reinvigoration and extension of democratic governance structures. Campus trade unions must be involved in setting budgets, during and after the crisis, and exorbitant vice chancellor and senior management pay must be curbed.
It’s time to end a decade’s experiment in marketisation, and replace it with something truly sustainable and open. To reimagine higher education not as a private benefit but as a public good. As Raymond Williams once put it, we should have to produce a special argument to limit education rather than a special argument to extend it.
Amelia Horgan works with the independent think tank Common Wealth. Her first book, Lost in Work: Escaping Capitalism (Pluto Press) is due out next year.
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