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Terence Kealey: Leave our funding alone, Lord Browne

It's not students who should be taking to the streets over higher education finance – it's vice-chancellors, argues Terence Kealey

How odd that it was the good bits of Lord Browne's report that provoked the riots. The students have no legitimate grievance. It is the vice-chancellors who are in trouble. They are the ones who should have taken to the streets.

Someone has to pay for higher education. The burden could fall either on the taxpayer or on the graduate. Students want the taxpayer to bear the burden because – rationally – they want others to subsidise them. Students understand that, on graduation, most of them will join the middle classes. And they also understand that a disproportionate share of taxes is paid by the poor (indirect taxes are heavy and socially regressive) and by the rich (who, being rich, pay lots in direct taxes, which is why Whitehall loves bankers' bonuses).

So students will naturally want to shift the costs of higher education onto the other two classes of society.

But the Coalition Government believes that, because the prime beneficiaries of higher education are the graduates, they themselves should pay for it in fees (deferred, income-dependent, time-limited fees). The Coalition's critics – labelling the working classes as preternaturally debt-averse – invoke the spectre of social injustice, but the provisions in Browne's report relating to the Office for Fair Access (OFFA), and the continued rise in working-class participation since the advent of top-up fees, address that issue.

For vice-chancellors, however, Browne – and the Coalition's response to it – are worrying.

Fees will still be capped (at around £7,000 pa), so once £3bn has been cut from the Government's budgets, the older universities may not enjoy an increase in income (see the Oxford vice-chancellor's letter on his university website). Meanwhile, the vice-chancellors of the newer universities worry that potential students will question their value for money. So, Professor Les Ebdon of million+, the new universities' association, said that a market in fees would "damage participation".

Yet the real anxiety for vice-chancellors comes towards the end of Browne's report, where he proposes a comprehensive restructuring of the government agencies of higher education. There are six agencies on which Browne has designs: the Universities and Colleges Admissions Service (UCAS), the Student Loans Company (SLC), the Higher Education Funding Council for England (HEFCE), the Quality Assurance Agency (QAA), the Office of Independent Adjudication (OIA) and the OFFA.

Browne wants to subordinate the SLC to UCAS, which would then act as a one-stop-shop to coordinate both the admission of students to universities and the processing of their loan applications. The justification Browne gives for, effectively, fusing UCAS and the SLC into a new body which he calls Student Finance is that, currently, each body requires students to fill in a separate form.

This is a suspiciously weak justification. If, as Browne claims, students are thus deterred, why does he simply not ask the two bodies to design a joint form? But Browne has a deeper, coercive, plan for Student Finance.

Browne wants to fuse the other four bodies, HEFCE, QAA, OIA and OFFA into one new entity, to be called the Higher Education Council.

Why? Despite losing £3bn from its teaching budget, the HEFCE will retain a vast, multi-billion budget because it will still fund the Research Assessment Exercise (now Research Excellence Framework) as well as the STEM subjects (the teaching of science, technology, engineering and maths will remain subsidised), so a standalone HEFCE would remain fully viable.

Nor does Browne justify merging the QAA into his new body. The difficulty with the QAA is that it monitors only processes, not outcomes, so it has failed to address the two fundamental problems of British higher education – namely degree inflation and inadequate contact times of the publicly funded sector. But how would merging the QAA into another body address those failures?

As for the OIA, the HEFCE already stretches every rule of corporate governance by being, under the 2006 Charities Act, the sector's regulator as well as its funder. Yet Browne wants to diminish independent regulation further by folding the OIA into it. Surely Offices of Independent Adjudication should be, er, independent? Like ombudsmen?

It is with OFFA that we finally get an unvarnished insight into Browne's thinking, because he believes that too few working-class children get to university. So he is going to force the universities to scour the inner-city estates for them. How? He proposes doing this by withholding money. It is on page 45 of his report that a dread phrase recurs: " ...a condition for institutions to receive the costs of learning through the Student Finance Plan... It will be a condition of receipt of income from the Student Finance Plan that institutions ..." Browne, in short, wants to use Student Finance to control the universities. He will withhold money, for example, not only over the working classes but also to "... require all new academics with teaching responsibilities to undertake a teaching-training qualification accredited by the HE Academy."

So there we have it. As the market in higher education widens, so Browne wants to toughen its central direction. By restricting access to Student Finance to universities that are endorsed by bureaucrats from the HEFCE, QAA, OIA and OFFA in the new Higher Education Council, Browne will control them.

Markets should be regulated, yet the current regulatory bodies in British higher education do not lack sanctions. They lack respect. Nobody trusts that the QAA, OFFA et alia actually effect positive outcomes, only that they drive their bureaucratic simulacrums.

And inasmuch as the central bureaucracies do effect virtue, it is only because they are themselves subject to scrutiny. Empower them within a Higher Education Council, and they will become monsters.

The writer is vice-chancellor of the University of Buckingham