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Fairness, Social Mobility & HE Markets

October 12, 2016

To follow the last post, I thought it might be worth making a few points based on Theresa May’s second speech to the Conservative Party conference.

May set out a vision of a meritocracy, a country ‘that works for everyone’, where if you ‘put in the hours and effort you will be rewarded’.

The emphasis was on fairness – a word repeated 15 times in the speech –  and establishing a single, clear set of rules so that people could know how to get on in life.

May recognised – in a way that Osborne and Cameron had failed to do – that Britain is plagued by a sense that theworld works well for a privileged few’ but that the majority have seen their opportunities and standards of living decline in the last decade.

In this way, May tapped into common complaints about the apparent decline in social mobility. A crisis in the rules of the game of wealth accumulation (housing and pensions, primarily) that has underpinned the post-war social settlement.

This is sometimes described as a problem of intergenerational equity but I think it’s more accurate to see it as breakdown affecting the formation and reproduction of the middle classes.  (I see this point as complementing Chris Dillow’s discussion of ‘May’s Challenge to Marxism’ – it is in the interests of capital to also seek ‘the defence and stability of the social order’).

More speculatively, what might May’s change of tack mean for higher education given the supposed centrality of higher education in improving life chances?

If May is consistent then I would expect to see a shift away from the idea that competition (with easier market exit and entry) will drive up quality and a move to shore up (or impose) standards so that ‘university means university’.

It’s not enough for there to be a single set of rules governing social mobility, those rules must be clear. That imperative runs counter to the consumer faced with an overwhelming choice of courses and institutions.

May announced a more interventionist policy with a bigger role for the state here, citing utility markets as a contender for reform.

That’s why where markets are dysfunctional, we should be prepared to intervene.

Where companies are exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right.

Is there a more complex pricing structure than the HE fee-loan regime? What you borrow is not what you repay.

Moreover, from a certain perspective (that of the lender), the HE market looks dysfunctional with a large amount of misinvestment or even over-investment if you buy the analysis of groups like the Chartered Institute of Personnel and Development.

So I would now expect a more interventionist approach through the TEF and less inclination to let the market determine high quality courses.

If, as Amber Rudd announced, international students are going to be given clear signals about poor and high quality courses through the visa system, then I would expect something similar for Home students – probably through access to student loans.

Going back to Milton Friedman, the idea of a loan-funded system of higher education was always about the access to the professions (vouchers are appropriate to fund general boosts to citizenship and leadership).

The formation of human capital was meant to trump natural ability. I expect to see more questions and concerns about whether HE courses are imparting the skills and knowledge that warrants government loan support.

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