Nick Hillman is David Willetts’s special adviser. In a personal capacity, he has reviewed The Great University Gamble for wonkhe.com, who are also running a poetry competition for a copy of the book.
VENUE CHANGE for tonight & Monday 20th
The Bartlett (UCL) is holding a series of three seminars in May on the theme of Future UniverCities.
I am delighted to feature on the second panel alongside Beth Parry, Mike Raco and Jan Toporowski. This will take place on Monday 20 May at 6pm and will address the theme of
‘ Structures: Governance, Finance and Accountability’
Venue: GO7, Pearson Building, Main Campus (Gower Street).
See Below for venues.
The events are open but registration is essential.
Tickets for all three events can be booked here.
Details of all three seminar panels below.
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Nick Ratcliffe has emailed to point out a typo in Table 12.1 (p. 160) of The Great University Gamble. My thanks to him.
The data in that table should read:
Increase in loans for fees and maintenance + 4.3
Cuts to HEFCE budget for UG teaching – 3
Increase to maintenance grants +0.6
TOTAL INCREASED OUTLAY +2
Which results in
Increase in RAB as a result of higher loans +1.33
Cuts to HEFCE budget for UG teaching -3
Increase to maintenance grants +0.6
TOTAL DECREASE IN EXPENDITURE -1.07
Goldsmiths, University of London is hosting a public meeting against austerity on Thursday 16 May.
Venue: Room 137 in the Main Building
Time: 6pm
I will be speaking alongside:
- Aaron Kiely, NUS Black students’ officer
- Rachael Maskell, Unite national officer
- a Save Lewisham Hospital Campaign speaker
- Romayne Phoenix, Coalition of Resistance
Further details and directions can be found on this facebook page for the event.
The Bartlett (UCL) is holding a series of three seminars in May on the theme of Future UniverCities.
I am delighted to feature on the second panel alongside Beth Parry, Mike Raco and Jan Toporowski. This will take place on Monday 20 May at 6pm and will address the theme of
‘ Structures: Governance, Finance and Accountability’
Venue: GO7, Pearson Building, Main Campus (Gower Street).
See Below for venues.
The events are open but registration is essential.
Tickets for all three events can be booked here.
Details of all three seminar panels below.
In light of today’s announcement that UCLan will not be proceeding at the moment with its planned transformation into a company limited by guarantee. Here is my post from November on the motivations behind the original idea. It was largely about separating the ‘Preston operation’ from what is going on in Cyprus, Sri Lanka & Bangkok. And you might well ask, ‘What is going on in Cyprus, Sri Lanka and Bangkok?’
In an internal announcement last week, the University of Central Lancashire (UCLan) told staff that it was altering its group structure as of 1 August 2013 and had applied to the Secretary of State, Vince Cable, to dissolve its current corporate form, a statutory ‘higher education corporation’, at that point and move assets, undertakings and staff into a new company limited by guarantee, UCLan Group. Hefce have also been informed of the intended changes. Last summer a similar process was used to dissolve Leeds College of Music into Leeds College of Music Limited a subsidiary of Leeds City College.
Around 20 higher education institutions in England use the private form of a company limited by guarantee, including London School of Economics, London Metropolitan (tellingly) and indeed all the former polytechnics that were under the aegis of the Inner London Education Authority.
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A story in today’s Daily Mail quotes a ‘senior’ Treasury source on the student loan scheme:
‘The Treasury are all over this and are extremely worried about the viability of the system. They are taking a very long-term view but their estimate for non-repayment keeps going up. It is not helped by the recession, which means graduate incomes are going to be lower than they hoped.’
The Mail misinterprets the headline statistic as ‘4 in 10’ students may default. But one cannot default on student loans – the 40 per cent figure reflects an estimate of the total write off on outstanding loan balances which is scheduled to occur 30 years after graduate repayments fall due. For those who started their studies in 2012, this is likely to be 2046.
That is, on average for every pound lent, the Treasury apparently expects to get back only 60 pence after 30-35 years (in net present value terms).
My book, The Great University Gamble, which treats this issue in detail, went to press when the official figure for this estimate was 32 per cent. It is now openly acknowledged to be 34 per cent but will climb as the economy and graduate salaries stagnate.
This figure matters for two reasons:
- first, if it climbs above 40 per cent then whether the new funding regime actually saves money on its own terms becomes moot.
- second, because of the way the accounting works an estimate of the non-repayment written off in e.g. 2046 is set aside now as an impairment. If this figure continues to climb over the lifetimes of the loans, then it will be up to future governments to do something about it and the current lot who introduced the new regime may begin to look irresponsible.
Update
To clarify, the Treasury maintains a hedge against the BIS models. It charges BIS / Student Loan Company RPI + 2.2 interest for the borrowing used to back the student loan scheme. This is higher than its own current cost of borrowing. The ‘break even’ point referred to above is therefore for the HE budget rather than the government. And under the 2012 innovations, students and graduates themselves face real rates of interest – 6.6 per cent in 2012/13 for those who started last September.
Clarificatory Note
The nominal value of aggregated, individual, outstanding balances written off in e.g. 2046 is NOT the estimated loss on the scheme.
The loss on the scheme – non-repayment rate – is loans issued set against repayments received in net present value terms (ie with interest and inflation factored in).
Apologies for the low level of activity on this blog of late – I have been finishing off my book for Pluto Press, The Great University Gamble: money, markets & the future of higher education.
It will be out in April and can be ordered here.
As a co-organiser of Big Ideas, we will be holding an evening event to coincide with the launch on Tuesday 30th April at the Wheatsheaf, Rathbone Place, London.
The topic will be more general than the book: ‘What do we want from Higher Education?
The Great University Gamble has now been published. It is available direct from the publishers, Pluto Press. More information here.
A new article on university bond issues has appeared in the latest issue of Research Fortnight.
It revisits ground I wrote about in Autumn 2011 to consider the bond issues last year by Cambridge and De Montfort.
Bonds promise to make more credit available to universities at a fixed cost; the risk is that the minimum size needed for a public offering might encourage overreach. The impact of a bond issue on a university will depend on the soundness of its investment strategy and how good governance is ensured with long maturities.
Most readers of my blog should be able to access the article via an institutional subscription (you may need to contact your research office or equivalent for the passcode).
Update
In unrelated news, DMU has now launched a KFC BA in business management. Unfortunately, it’s only open to employees of the fried chicken joint.
Critical Education 