University Fees

[Xenia]

I see that Lord Browne in his report may apparently suggest (Sunday Times today):

• rights for universities to charge fees of up to £10k a year rather than the £3200 or whatever it now is perhaps from 2012

• removal of cheap loans for children of the middle classes (presumably even if their parents are not prepared to help them)

• interest rate susidies on loans going up 2%

• students who go into high paid careers will have to pay back more than they borrowed perhaps capped at 20%

• and one which pleases me - parents will be able to avoid the graduate tax for their children if they pay the fees in advance. None of my older 3 children took out student loans as I paid as I wanted them to be in the same position when I graduated in the days when there were no fees paid by students.

However the report is not yet finished and he may recommend abolishing the cap on tuition fees and let the free market rule which may be wise.

"the greed of this whole bloated industry which caused the crisis and yet it is institutions such as universities, the NHS, schools etc etc etc which will suffer."

I disagree with your analysis. The NHS etc are getter less money than they used to, I agree with that. However, the level of money they were getting was unsustainable. It is pretty irrelevent what caused the recession: the truth is that NuLab were living on borrowed money and reality finally hit home.

Or did I misunderstand you and "this whole bloated industry" refered to the NHS which is the world's third largest employer (after the Indian railways and the Chinese army).

"But, the whole industry is interlinked (I freely admit though that I don't pretend to understand the ins and outs of it all though). However, it was the greed of this whole bloated industry which caused the crisis and yet it is institutions such as universities, the NHS, schools etc etc etc which will suffer."

Perhaps we should start closing RAE 4*-rated departments down on the grounds that the University of the Chip Shop was Unclassified. After all, the whole academic industry is interlinked. No? What about closing down surgical units on the grounds that homeopathy is bollocks and they both say they're forms of medicine. No?

If you can think of a means to stop a successful merchant bank paying bonuses on the grounds that a completely unrelated company in an adjacent industry that happens to contain the word "bank" needed to be bailed out, fire away. But it doesn't seem terribly sensible.

Northern Rock went bust because they issued more loans than they took in deposits, and filled the gap with money that needed to be paid back in one year. When those lenders demanded their money back, there wasn't any cash. End of. You can fix this by regulation, but if you limit the mortgages that can be granted to the deposits taken in less a capital adequacy provision, the mortgage market will look radically different. That's why the retail banks needed to be bailed out: they'd been borrowing short and lending long, and the people they'd borrowed money from shut up shop.

I had an exchange of letters with my MP and the treasury in which I said that NR should have been allowed to fail. Pay out the investor protection, and let everyone else see it as a horrible warning: the shareholders are toast anyway. NR had been paying high interest rates for a good reason: they were desperate for deposits (and the same goes, in spades, for the Icelandic scams banks). But Labour didn't have the nerve, and in the process of performing a similar rescue on another high-risk, low-competence operation (HBOS) managed to broker the near failure of a conservative bank (LTSB) that, bluntly, couldn't imagine that anyone could be as stupid as HBOS and therefore naively thought they were getting a bargain.

Meanwhile, the investment banks continued quite happily. They weren't bailed out.

"Perhaps we should start closing RAE 4*-rated departments down on the grounds that the University of the Chip Shop was Unclassified."

In effect, that is the consequences - yes. Less extreme, but still. Our department for example is actually a profit-making department and yet do staff receive bonuses for this? No, because a pay-freeze has been brought in across the whole sector. We just have to be grateful that the mutterings of redundancies which are banded around many other departments have not reached us, yet.

purits, perhaps we should bring in private healthcare then? I used to live in a country with mandatory private healthcare. Health insurance cost around 120 euros per month, per person (though this varied depending on age, family size, salary). For this 120 euros per month was a policy which had a 500 euro per year excess. You wanted an appointment with the GP? There was an 80 euro bill. You wanted a repeat prescription (e.g. for the pill), there was a 40 euro bill for simply asking the doctor to write out the prescription and another charge for getting the prescription filled out by the pharmacy. You went to the dentist, there was another bill. You had to have blood tests, ultrasounds, more bills. You only managed to claim on your health insurance after you'd already paid out > 500 euros in one year for your healthcare. The waiting lists for doctors appointments were just as long as any here and OK, they referred you to specialists quicker, but you were still going to have to pick up the bill. Now, you may argue that this is the real cost of healthcare, but the reason you paid through the nose for everything was because the health insurance companies were private companies with shareholders who needed to make a profit.

I agree that the money received was unsustainable, but the problem is that making cuts does not mean there will be less managers and admin staff, it means there will be less medical staff. The same goes for higher education. Remainds me of the episode of "Yes, Prime Minister" with the hospital full of managers and no doctors.

The other problem with cuts is surely the fact that there will then be less money to spend. Bring on the double dip recession which will just make the whole thing worse.

Cuts in jobs in the public sector (or anywhere) just means more money being paid out by the state in benefits and less coming in through taxation. Bonkers.

"Our department for example is actually a profit-making department and yet do staff receive bonuses for this? No, because a pay-freeze has been brought in across the whole sector."

Were a university to offer higher pay to net profit departments and lower pay to net loss departments (based, perhaps, on the percentage of cost recovery obtained from overseas students), I wonder what the UCU response would be? Perhaps bonuses based on either the RAE or one of the teaching quality assessments?

"I agree that the money received was unsustainable, but the problem is that making cuts does not mean there will be less managers and admin staff, it means there will be less medical staff."

I don't think you're right, but sadly, for the wrong reasons. In the specific case of hospitals, there's enough political pressure that means that the numbers of doctors will be maintained at the expense of management. Which means, of course, that jobs that are done well by someone on £25K who's been trained for six months will instead be done badly by someone on £50K whose eight years of training didn't include that task.