Government must rethink its anti-growth tax on universities
4 min read
Andy Burnham’s speech at the Innovation Nation Summit in Manchester confirmed his determination to see economic renewal spread across the country, as he seeks a more hopeful vision of a unified nation.
Clearly, this is not going to be a quick win, nor a solo venture. UK universities stand ready to help deliver this vision as established public partners in every city and region, with a history of driving skills, opportunity, industry and innovation.
But to make this relationship a success, changes must be made. In recent years, the cumulative impact of contradictory decisions across government departments has put universities’ sustainability at risk, and consequently their ability to contribute to growth. The impact is undeniable, with redundancies and deficits increasingly common across the sector, with major Russell Group universities not immune to these challenges.
A more strategic, intentional style of political leadership must introduce joined-up decision-making between departments to harness major public universities as partners for re-industrialisation, economic growth and hope.
This should begin with halting the International Student Levy, an anti-growth tax conceived under the Prime Minister's predecessor. Justified as a cross-subsidy to fund critical student maintenance grants and skills, it will fail to provide a predictable, robust funding source for these vital areas and is already harming a critical export market for the UK.
A combination of increasing competition from other global study destinations, alongside restrictive policies and rhetoric from successive UK governments, has resulted in a steady decline in international student numbers. The levy is not serving students, while simultaneously stifling growth and damaging universities’ ability to invest in teaching and research, and would transfer critical resources from our regions into Whitehall – the opposite of Burnham’s ambition.
Preventing this harm is the first step. Looking ahead, we need an urgent review of the whole tertiary education sector, as the upcoming Milburn report will demonstrate.
The government has options to ensure it is investing in the skills and capabilities the UK needs, and in young people from all backgrounds, with all sorts of ambitions. It should ask questions about tuition fees, teaching funding, student loans, quality regulation, and the size and shape of the sector. It should also be braver and more intentional about the different types of high-quality institutions and qualifications we need, whether that be a degree, further education course, apprenticeship or direct route into work, as well as the policy, funding and regulation required to support different models of excellence across a broader sector.
Within this system, there remains genuine national interest in maintaining a strong university sector – not just because the UK will need more graduate skills. As major employers, innovators and civic institutions, universities like those in the Russell Group can help deliver, on the ground, government's ambitions for national renewal in every postcode.
In fact, they are already doing it, supplying exactly the kind of regeneration and resilience that Burnham speaks of. From Glasgow to Bristol, our universities are at the heart of efforts to transform urban spaces and uplift communities, whether or not the public realise it. They are creating new facilities and public spaces, offering micro-qualifications and upskilling, and providing healthcare clinics, museums, libraries and more.
With increased devolution on the cards, our combination of national – and global – outlook with local expertise could also be transformative.
Targeted investment in the very best university research and innovation already delivers outstanding return on investment to the taxpayer and pulls in significant private investment. A national framework that maintains this success story, complemented by devolved streams that benefit from local knowledge, will be crucial in bringing together Burnham’s triple helix for economic growth: government, business and academia.
These are big questions that deserve careful consideration and cannot be answered in one Budget next week. But this new government can start taking positive steps towards closer partnership with universities, which will bring excellent future returns for the country.
Libby Hackett is chief executive of the Russell Group
