Who gains from the great university scam?

Higher education is big business. Over half of UK young people now attend university, meaning the target first set by Tony Blair 20 years ago has finally been reached. And according to a 2017 report for Universities UK, once you count the (mostly borrowed) money students spend on subsistence, tertiary education generates some £95 billion for the British economy, more than the entire legal sector, the advertising and marketing sector and air and spacecraft manufacturing combined. 

This is true across the country, but its impact is especially noticeable in post-industrial regions. According to a 2017 report, the University of Liverpool alone contributed £652m in gross value added to the Liverpool city region in 2015/16, and supported one in 57 jobs in the region.

Some 11,000 jobs are either directly funded or supported by spending associated with the university — and the University of Liverpool is only one of 5 or more institutions (depending how much of the area you count) offering graduate and post-graduate courses in the Liverpool area, meaning the total sum is even greater.

As well as generating jobs and supporting whole industries catering to student life — from nightclubs and cafes to housing rentals – higher education is shaping the very landscape of the cities in which it thrives. As this 2015 report from UCL’s Urban Laboratory shows, universities are increasingly actors in urban development:

“Driven by competition (for reputation, staff and students) in an international marketplace, and released from financial constraints by the lifting of the cap on student fees, [universities] produce locally embedded variants of global higher education models. These assume physical and spatial form within the parameters of distinct, but increasingly similar, city planning and urban regeneration contexts defined by an ‘assemblage of expertise and resources from elsewhere’.”BY THE SAME AUTHOR

Some of the money that flows into and through universities and out into local economies of course comes from overseas students, endowments and the like. But to a great extent, these dependent industries, revamped urban landscapes, former factories converted to student accommodation, ancillary services and so on are funded either directly — via government subsidies to higher education — or indirectly, via government-backed student loans.

Though academic research is still heavily subsidised by government via the UK Research and Innovation body, the proportion of direct funding to students has shrunk even as that taken on by students as loans has grown. A January 2019 research briefing from the House of Commons Library stated that the cash value of higher education loans is estimated to be around £20bn by 2023-24. The report also acknowledged that only about half of the money borrowed will ever be repaid, estimating that “The ultimate cost to the public sector is currently thought to be around 47% of the face value of these loans”.

The total cost to the public sector, the report continues, is roughly the same as it was before the funding model changed to scrap maintenance grants and increase tuition fees. That is to say, as the proportion of direct government funding to higher education has been reduced, there has been a corresponding rise in the amount of student debt that will never be repaid and which the government will eventually have to cover.

This money is in all but name a form of government subsidy, funded by government borrowing. But it is counted differently. The briefing notes in passing that “This subsidy element of loans is not currently included in the Government’s main measure of public spending on services and hence does not count towards the fiscal deficit.”

That is to say, billions of pounds are being borrowed by government for disbursement in the higher education sector, and the government already knows much of this will never be paid back. But the money is no longer counted toward the fiscal deficit, as it has been nominally privatised in the form of loans to individual young people.

One might argue that this is unimportant provided the higher education sector is delivering value to those who are nominally its customers — the students. But in 2018, the ONS reported that only 57% of young graduates were in high-skilled employment, a decline over the decade since the 2008 crash of 4.3 percentage points.  The ONS speculates that this could reflect “the limited number of high-skilled employment opportunities available to younger individuals and the potential difficulties they face matching into relevant jobs early in their careers”.

Nay-sayers pointed out, when Blair first introduced the tuition fees and the 50% graduate target, that the law of supply and demand suggests employers’ willingness to pay a “graduate premium” in wages as graduates become more plentiful. In 1950 only 17,500 youung people graduated from university; but when 1.4 million of them do so, as reported by the House of Commons this year, can they really hope for the same graduate premium?

Results so far suggest that many of them cannot. In a hard-hitting article last August in the New Statesman, Harry Lambert spelled out further the way in which the marketisation of higher education under the Blair rubric has also incentivised grade inflation.

Cui bono, then? Arguably less the students, graduating in ever greater numbers with ever less valuable degrees, than the cities in which they live for three or four years to study, and which have in many cases experienced a renaissance due in large part to the post-Blair expansion of higher education.

In 1981, after the Toxteth riots, Lord Howe advised Margaret Thatcher to abandon the entire city to “managed decline”. In a letter only made available to the National Archives in 2011, following the 30-year rule, Howe wrote:

“We do not want to find ourselves concentrating all the limited cash that may have to be made available into Liverpool and having nothing left for possibly more promising areas such as the West Midlands or, even, the North East. […] I cannot help feeling that the option of managed decline is one which we should not forget altogether.”

Today, Howe’s words remain only as a bitter memory: the regenerated Liverpool city centre hums with tourists, students and shoppers. The Albert Dock area, reimagined from shipping and warehouses to office buildings, shops and leisure, is beautiful, vibrant and popular.

Much of this regeneration has come via the higher education boom. In Liverpool and elsewhere, successive governments have used the higher education sector more or less explicitly as an instrument of regeneration. In effect, government-backed student loans have become part of this: an off the books subsidy for depressed post-industrial areas, that have thus been partially rescued from the threat of Thatcherite “managed decline” and reinvented as hubs of the “knowledge economy”, all funded by government debt.

But a conflict of interest lurks beneath this picture. If we work on the assumption that the main beneficiaries of the higher education industry are supposed to be students, then it follows that institutions delivering shoddy teaching and useless degrees should be allowed to fail, as word spreads and students go elsewhere. But what if the main beneficiaries of this industry are in fact the cities regenerated with the borrowed money those students spend there?

In that case, from a policy perspective, the quality of the courses delivered will be less important than that the students continuing to arrive in their thousands, bringing their borrowed money to the region and spending it on accommodation, lattes, printer paper, fancy dress hire and all the other essentials of student life.

If the aim were indeed less the introduction of market forces than the use of students as a covert form of subsidy, we would surely see market distortions. In order to head off the threat of young people abandoning poor quality higher education, and entice them into shouldering their allotted portion of off-the-books government borrowing, the “graduate premium” would have to be maintained.

And indeed, since Blair’s student attendance target was first introduced, we can see that instead of using market forces to drive up quality the government has conspired with employers to cartelise the world of work. A growing number of roles that were once accessible via on-the-job training have — by government fiat if necessary — been rendered degree-only. Nursing is the classic example, but in 2016 this was even expanded to include the police,  a move so unwelcome in the force that this year Lincolnshire Police Force launched a judicial review against the policy. 

The victims in this situation are the students, who have come of age at a time when to have any hope of snagging a job they are more or less forced to leave their families and shoulder an enormous debt burden — over £50,000 each on average according to the IFS.  They must do so to acquire a degree whose value for money is declining, but which they cannot do without in a cartelised employment climate in which higher education is obligatory even as the grades it confers count for ever less. 

Not only is the government paying for today’s elderly care (and banker bailouts) with borrowing that will fall on tomorrow’s taxpayers, but young people are also being forced to take on huge personal loans to fund degrees; degrees that are less useful as preparations for adult life than as a conduit for indirect subsidies for regional regeneration.

To make matters worse, the government knows that much of this borrowing will never be repaid, which will leave tomorrow’s taxpayer on the hook for yet more billions. It is an accounting fiddle on a gigantic scale, which penalises young people by first saddling them with loans, then devaluing their education, and finally by hiding government borrowing that future taxpayers will somehow have to meet.

Young people already live with the suspicion that overall public sector borrowing is running up a tab today that will be their burden tomorrow. The situation is far worse than they think.

This article originally published at Unherd

Why liberal feminists don’t care

A society that venerates health, youth and individual autonomy will not much enjoy thinking about birth or death. We are born helpless and need years of care until we reach the happy state of health and autonomy. At the other end of life, the same often applies: the Alzheimer’s Society tells us there are some 850,000 dementia patients in the UK and that this will rise to over a million by 2025 as life expectancy continues to rise.

If we are reluctant to dwell on the reality of human vulnerability at either end of life, we are unwilling to give much thought to its corollary: that (somewhere safely hidden from the more exciting business of being healthy, youthful and autonomous) there must be people caring for those who are unable to do it themselves. Someone is wiping those bottoms.

Traditionally, this job of caring for the very old and the very young has been “women’s work”. To a great extent, it still is: the OECD reports that, worldwide, women do between two and ten times as much caring work as men.

In the UK, this tends in statistics to be framed as “unpaid work”, a sort of poor relation of the economically productive type that happens in workplaces and contributes to GDP.

Carers UK suggests there are around 9 million people caring for others in the UK part or full-time, of whom up to 2.4 million are caring for both adults and their own children. Women carry out the lion’s share of this work: 60% according to the ONS. Full-time students do the least and, unsurprisingly, mothers with babies do the most. Older working women carry the heaviest load of people in employment, with those in the 50-60 bracket being twice as likely as their male counterparts to be carers whether of a vulnerable adult, a partner or a child or grandchild.

Second-wave feminism pushed hard against the pressure women experience to take on this work of caring. Within this variant of liberalism, caring work is routinely framed as a burden that imposes an economic “penalty” while harming the economy by keeping skilled women away from the workplace. The OECD report cited above states: “The gender gap in unpaid care work has significant implications for women’s ability to actively take part in the labour market and the type/quality of employment opportunities available to them.”

The implication is that, once freed of this obligation, women can then pursue more fulfilling activities in the workplace.

So what does this liberation look like in practice? According to a 2017 report by the Social Market Foundation, women in managerial and professional occupations are the least likely to provide care, as are people with degree qualifications. The number working in routine occupations who also donate more than 20 hours a week of care in their own homes is far higher than those in intermediate or professional occupation.

In other words, higher-earning women are to a far greater extent able to outsource the wiping of bottoms to less well-off people, who are themselves typically women: 90% of nurses and care workers are female.

These women are then too busy to wipe the bottoms of their own old and young, who are sent into institutional care. Such institutions are typically staffed by women, often on zero hours contracts, paid minimum wage to care for others all day before going home to do so for their own babies and elderly. The liberation of women from caring is in effect a kind of Ponzi scheme.

This is a problem for our liberal society, for two interlocking reasons. Firstly, the replacement of informal family-based care with a paid, institutional variety renders caring impersonal, in a way that invites cruelty. Indeed, cases of care home abuse are well documented – see herehere or here – and the number is rising: the CQC received more than 67,500 in 2018, an increase of 82 per cent over the already too high 2014 figure of 37,060.

It is difficult to see how this could be otherwise. Caring for those who are physically or mentally incapacitated is emotionally testing even when we love those we care for. An exhausted worker on a zero-hours contract, paid the minimum wage to perform more home visits than she can manage in the allotted day, is unlikely to have a great store of patience to begin with, let alone when faced with a refractory “client”. The entire system militates against kindness.

Secondly, and relatedly, it turns out that the informal, traditionally female networks in which caring for the young and old once took place were actually quite important. Those networks also ran church groups, village fetes, children’s play mornings – all the voluntary institutions that form the foundation of civil society.

When caring is treated as “unpaid work” and we are encouraged to outsource it in favour of employment, no one of adult working age has time for voluntary civil society activities any more. If the number of people caring informally for relatives is waning, replaced by institutional care, so is voluntarism: between 2005 and 2015 alone there was a 15% drop in the number of hours donated (ONS).

The result is loneliness. Almost 2.5m people aged between 45 and 64 now live alone in the UK, almost a million more than two decades ago. Around 2.2 million people over 75 live alone, some 430,000 more than in 1996. In 2017, the Cox Commission on loneliness described it as “a giant evil of our time”, stating that a profound weakening of social connections across society has triggered an “epidemic” of loneliness that is having a direct impact on our health.

Several generations into our great experiment in reframing caring as a burden, we are beginning to count the cost of replacing mutual societal obligations with individual self-fulfilment: an epidemic of loneliness, abuse of the elderly and disabled in care homes, substandard childcare. A society liberated from caring obligations is, with hindsight, a society liberated from much that was critically under-valued.

What is the alternative? Some would prefer a more communitarian approach to caring for the old and the young. Giles Fraser recently wrote on this site that caring for the elderly should be the responsibility of their offspring:

“Children have a responsibility to look after their parents. Even better, care should be embedded within the context of the wider family and community. […] Ideally, then, people should live close to their parents and also have some time availability to care for them. But instead, many have cast off their care to the state or to carers who may have themselves left their own families in another country to come and care for those that we won’t.”

These are strong words and there is much to agree with, but the barest glance at the statistics shows that in practice what that means is “women have a responsibility to look after their parents”.

If we are to count the costs of liberating society from mutual caring obligations, we must also count the benefits, as well as who enjoyed them. Society once encouraged men to seek worldly success, underpinned by the imposition of an often-suffocating domestic servitude on women.

Liberalism blew this out of the water by declaring that in fact both sexes were entitled to seek some form of worldly activity and fulfilment. It is not enough to point to negative side effects of this change and say: “Someone needs to be resuming these mutual caring obligations or society will disintegrate.”

To women well-accustomed to the widespread tacit assumption that it is they who will pick up those underpants, wash up that saucepan, pack that schoolbag and so on, this sounds a lot like a stalking-horse for reversal of societal changes that, on balance, most of us greatly appreciate. In truth no one, whether liberal or post-liberal, wants to confront the enormous elephant that liberal feminism left in society’s sitting room: the question of who cares. Who, now that we are all self-actualising, is going to wipe those bottoms? There are no easy answers.

This article first published in Unherd

The Somewheres are beginning to organise

Yesterday I attended the SDP’s party conference. The rump of the party that merged with the Liberals to become the Liberal Democrats has enjoyed something of a revival in the last year under William Clouston, who has led the charge to reinvent its social-democratic platform along distinctly post-liberal lines. The party is a minnow compared to the big hitters of conference season, but the conference was important. Here’s why.

With very few exceptions, the party’s leadership do not live in London. Its strongest support base is in Yorkshire, notably around Leeds where the conference was held. Clouston himself lives in a village in the North-East. In his closing remarks, he apologised to delegates for the fact that the next meeting will be in London. Where most of the big parties now talk about the need to take note of the perspective of people outside the capital, within the SDP the reverse is the case.

The party leans centre-right on social issues and centre-left on cultural ones. Broadly speaking, it stands for family, community, nation and a robust welfare state, and bears some similarities to ‘Blue Labour’, Maurice Glasman’s project to bring issues such as family and patriotism back into Labour politics. But whereas Glasman’s project was to a significant degree driven by metropolitan intellectuals, the SDP is not driven by London voices or perspectives. This is also perhaps why the SDP has to date had little cut-through in media terms despite numerous polls that suggest widespread support for a combination of redistributive economic policy with small-c social conservative values.

Movements that articulate concerns or perspectives widespread in the UK population outside major cities have in recent years often been traduced in the media as ‘populist’ or even ‘far right’. But while several speakers at the conference inveighed against identity politics and ‘political correctness’, the SDP is not reactionary. The first motion to carry was one to amend the party policy banning non-stun slaughter to one regulating it, both in the interests of religious tolerance but also to avoid far-right dogwhistles. Clouston himself referred in his speech to a ‘decent populism’ that seeks to return the common concerns of those outside major cities and the liberal consensus to mainstream political discourse.

The watchword was ‘community’ and ‘solidarity’. A key theme emerging from the speakers was: what are the proper limits to individual freedom? Where is it more important to consider the needs of a group? Who pays the price for ‘double liberalism’, and how can we mitigate those costs?

For some considerable time, politics has been something done by Anywheres (Goodhart) and more done to the Somewheres. Efforts to rebalance this have tended to be treated as monstrous aberrations that must be contained, whether with disparaging media coverage or more government funding for some client-state scheme or other.

But looking around on Saturday, my sense is this may change. The Somewheres are beginning to organise.

House price fetishism: the Tory paradox in a nutshell

Ever since Thatcher introduced Right to Buy, and then Blair super-heated the housing market with a combination of cheap loans and mass immigration, home ownership has become ever more of a sticky wicket for the Tories. On the one hand, Tory voting has historically been associated with home ownership: people with something to lose are typically more conservative. On the other hand though, in order to sustain the pleasantly rising house prices that keep the core Tory base contented (and the cheap money flowing, as people remortgage to pay for extensions, kids’ university fees or whatever) it becomes ever harder for younger generations to join the home-owning ranks of the putatively Tory.

Mulling this over, it struck me that there’s a second, more profound way that the late twentieth-century transformation of homes into part loan collateral, part asset class, part status symbol has left conservatism with a dilemma. A couple of years ago I wrote a piece about the way Brexit was functioning as a proxy war within the Tory Party over which the party valued more: free market dogma or social conservatism. I think my analysis still holds, and indeed that the only thing that has changed is that social conservatives are now losing, and leaving the Tory Party in droves. The housing issue, it seems to me, encapsulates the nature of this conflict in a nutshell.

Here’s why: if you see your house purchase primarily as an asset class, you’re not buying with the intent to settle and make a home there. You’ll do the place up, sell it on and move. No need to get to know the neighbours, form networks, get involved in community activities. Probably best if your kids don’t put down too many local roots or it’ll be a wrench for them to leave their friends. Homes-as-asset-class is the quintessential Anywhere (Goodhart) mindset, that treats a place as a set of resources to be consumed, developed, improved, but which are ultimately that: resources. Not networks, not reciprocal obligations, not really a home. Conversely, if you buy somewhere as a Somewhere, with the intent to put down roots and make a home there – to be there for the rest of your life or at least the foreseeable future – you can’t really treat your home as an asset class because it’s about the least liquid asset imaginable. OK, if house prices rise you’ll benefit a bit in theory, because maybe you can take out a loan against the imagined gain in value of your house but again, that’s only really meaningful if you’re planning to sell.

Now, I’m   being a bit reductive but returning to the Conservatives, your Anywheres are all for free market liberalism – and your Somewheres are all for social conservatism. For many years, the two managed to coexist well enough within the same party, united – perhaps – by a broad consensus (for different reasons) that taxation and public spending should be restrained. But if the issue of European Union membership has been the most visible evidence of that truce collapsing, the breakdown both predates and is more profound than ‘banging on about Europe’ would suggest.

We’ve reached a point now where the demands of the free market are becoming ever more inimical to the needs of the kind of settled community that nurtures and values social conservatism. The kind of worldview that values the free market understands a house as primarily an investment, and invests him or herself in the local community in proportion to that understanding – ie lightly if at all. This is profoundly at odds with the kind of worldview that places value on continuity, community, a sense of place and tradition. Thus while both these groups may place a value on home ownership, it is for radically different reasons: and these two strands of conservatism are increasingly at odds.

Fundamentally, the Conservative Party has acted for some decades as though free market ideology were compatible with a belief in patriotism, conservative social values and a healthy civic society. It is becoming increasingly apparent that this is no longer the case. The profound sociocultural conflict and difference in outlook – and hence spending behaviour, political assumptions and fundamental approach to life – emblematic in the difference between a Somewhere who wishes to buy a house as a home, to live in and care for within the context of a rooted and socially-engaged local existence, and an Anywhere who wishes to buy a house as an investment, with the aim of moving on once it is financially viable, encapsulates this irreducible fracture. It is increasingly apparent that the Conservative Party cannot serve both. It is also increasingly apparent that, if one group has to go, it will not be the Anywheres. So the question is: who will speak for lower middle class Somewheres, when – as is now inevitable – they begin to flex their political muscles somewhere other than the Tory Party?