Autumn statement: for and against Osborne's higher education plans
The university vice-chancellor: "The freeing of controls is a landmark moment for the sector"
"It is easy to get caught up in discussions about affordability and implementation, but the real headline in the chancellor's autumn statement is that Christmas just came early for a future generation of students. Higher education is a fundamental good for both the individual and society, and any effort to make it more accessible to a larger number of people should be applauded.
"Speaking as a father, I am pleased that when my children start thinking about going to university they will have a much better chance of entering higher education, and will be much more likely to get a place at the university they want to study at, with their likelihood of success being dependent solely on their academic ability.
"Speaking as a vice-chancellor, we will now have a true market in higher education, with all the joys and sorrows that come with it. But competitive, innovative providers who genuinely care about the future of their students and graduates should have absolutely nothing to fear from that.
"Yes, there are some question marks over the mechanisms of how this will all work in 2014-15 – the Higher Education Funding Council for England (Hefce) will have to provide some more detailed guidance on this fairly soon. I admit I do still have some concerns over the future financing of higher education through the sale of student loan books. I also have questions about the sustainability of the system; after all, these proposals only take us up to 2020.
"However, we have time to consider how we can put higher education funding on a more sustainable footing in the longterm. I am one of several vice-chancellors who have been working with the mission group University Alliance to develop proposals to finance the system in a more sustainable way for the future. There are alternative models out there, and the lifting of the student number cap gives us an added incentive to explore them.
"It also gives us an incentive to revisit the question of legislation. Perhaps the biggest issue that still remains for me is quality. The government was very clear on this point: providers cannot expand at the expense of quality. Most providers will remain absolutely committed to providing the best possible experience for students, but it still requires further thought. The current funding gap at the Department for Business, Innovation and Skills is a rather painful reminder of just how quickly expansion can occur – will our quality assurance checks and balances be able to keep pace?
"All unanswered questions aside, this announcement heralds a significant shift in the government's position around the value of higher education, and for that it should be warmly welcomed. Many of us have worked hard to make the case that more high quality graduates will drive economic growth, and that a mass higher education system will benefit our society. It seems that our arguments have finally found some resonance.
"The freeing of controls is a landmark moment for the sector and I for one am glad that a little bit of ideological policymaking has prevailed at last."
John Vinney is vice-chancellor at Bournemouth University – follow him on Twitter @VCJohnVinney
The academic dean: "Like any borrowing bubble, this is bound to lead to a crash"
"The student loan book is considered a government asset, just like Marble Arch or the 4G spectrum. It can be sold to raise capital to fund short-term spending. Yet in the case of the loan book sale proposed in George Osborne's autumn statement, the spend will be the borrowing of more money to fund bigger student loans. This future borrowing is, for the moment, unlimited.
"All the evidence suggests that the new loans will have a greater rate of non-repayment than the pre-2010 variety. The taxpayer might ask whether systematic borrowing to fund the sale, at a loss, of subprime loans to profit-making private companies, looks less like mainstream accounting or more like the taxpayer as the victim of Ponzi-like chicanery. It is borrowing in the taxpayer's name to sell off future tax intake to the private sector. It is a situation that, like any borrowing bubble, is bound to lead to a crash.
"As yet there is little detail on this proposed sale. However, in a report written in 2012 by Rothschild's bank advising the government on such a potential move, it was proposed that in order to make a sale attractive to private finance a certain degree of profit would have to guaranteed either by a synthetic hedge (effectively a government subsidy to investors) or raising the interest rates on repayments.
"Against all expectations, George Osborne also announced that the cap on student numbers in England would be abolished from 2015-16. As an interim measure an additional 30,000 places would be made available for the next academic year 2014-15.
Recruitment trends since 2010 have demonstrated that, despite government hopes, there is little incentive for the best universities (with a balanced portfolio of research and postgraduate students) to expand their undergraduate operation.
"Student numbers have already been shifting between universities as the reforms make it easier for applicants to change institutions once A-level results are known. Despite this, many institutions have not been able to meet their student number controls for the 2013 intake. In this context a further 30,000 places followed by years of unlimited expansion looks either disingenuous or a heroic assumption.
"We can expect numbers at private colleges, funded by the public loan book, to explode in such a scenario, raising questions about the quality, relevance and rates of repayments related to such courses. Willetts can claim this as a great investment in higher education, aiming at participation rates that even Tony Blair could not achieve. But this is surely the wrong way to fund the educational infrastructure of a knowledge economy.
"The Russell Group of universities has argued that this is spending money on the wrong thing: privileging an expansion of places over the quality of provision. On the one hand, we might read their response as a question: "If the sector is to be flooded with loose, unsustainable money, where is our share?" On the other hand, they have a point. An increase in the science budget, whose cash settlement has also been declining in real terms, would do more for innovation, growth rates, and GDP than guaranteeing the profits of private providers such as Pearsons International.
"Universities should not accept this gift horse without conducting a full dental examination. George Osborne has given universities what they have wanted for some time: the abolition of the student number cap. He plans to achieve it by pumping up a giant debt bubble, putting borrowing at the heart of the system, and kicking the can down the road for the inevitable day when the vice-chancellors of tomorrow will be left to carry it."
Martin McQuillan is dean of arts and social sciences at Kingston University – follow him on Twitter @mgmcquillan
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