The Coalition's changes to the university funding system has cost them six times more than they had initially aimed to save in, the Independent recently reported.
Thinktank Million+ condemned uncapped university tuition fees, saying it has caused a loss of 30,000 undergraduate applicants between 2010-11 and 2012-13. The report suggests that some of the direct and indirect benefits achieved as a result of higher education investment-enhanced employment and earning outcomes for individuals as well as a better skilled workforce-will be lost.
It states: 'Overall the Treasury will contribute £1.166bn less to the funding of the smaller 2012-13 cohort of students overall compared to the 2010-11 cohort of students. This saving is driven primarily by the shift away from the provision of HEFCE teaching grants towards increased loan-supported tuition fees.
However the reduced higher education participation rate in 2012/13 and changes to the funding system will in the long term cost the Treasury approximately £6.268bn'. These long term costs include £3.445bn in reduced expected earnings and employment outcomes and £2.823bn in lost taxation revenues at undergraduate and postgraduate level.
This report signified that, as a direct result of the Government’s decision to reduce the deficit by holding off on higher education investment and instead passing the buck onto students, the next generation will simply not be able to afford a higher education and therefore their skill level will be insufficient to warrant a higher salary.
The salary threshold was raised to £21,000 to accommodate higher loan repayments which could result in students either deliberately avoiding obtaining a higher wage or simply not being able to get one due to the mass influx of graduates. This, in turn, will mean that the Government will see a huge loss in taxation revenue over the coming years-all in an attempt to reduce the current deficit.
A Department of Business, Innovation and Skills spokesperson said: “This report does provide a useful contribution to a debate where there is much variation in estimates of the cost of borrowing. Some come out higher and some lower than the Government's estimates.”
However those who have opted to venture into the world of work instead of obtaining an expensive education have come against their own battles in the form of Government-backed work-placement schemes which, according to the Court of Appeal, were declared ‘legally flawed’ following the Poundland case of Reilly v Dept. Work and Pensions.
Sarah Ditum of the Guardian said: “The appropriate remuneration for people who are working in Poundland is a wage paid not by the taxpayer but by Poundland. Poundland gets the benefit of Reilly’s labour, after all. The taxpayer gets… nothing.
“[Iain Duncan-Smith] was incredulous at claims that working without recompense from the employer was equivalent to slave labour: “She was paid jobseeker’s allowance by the taxpayer to do this.”
For the moment we’ll put aside that a 24-year-old female jobseeker from the Midlands (the key demographic that pertains to the current unemployment figures) was accused of thinking that a shelf-stacking job was beneath her by a 58-year-old upper-class male who currently earns £145,000 per annum.
The reason so many were perplexed by this story was that Reilly was asked to work for a private sector company to earn her jobseeker’s. To be ‘worth one’s salt’ derives from the Latin sal dare which refers specifically to soldiers of the Roman Empire who were either paid directly in salt or provided a salarium for the cost thereof. It was not the case that the soldier would fight in battle for the Roman Empire only to be paid by a third party through indirect taxation revenue.
When asked about the 1,692 people who applied for the eight jobs at a coffee shop in Nottingham in a radio-show with LBC’s James O’Brien, Duncan Smith said: “There are jobs there, it’s not easy and people have to keep looking. The reality that people are looking for jobs is a positive point to make for young people’s determination to find work.”
After the 1992 White Paper when the ‘new’ universities were created supply to the industry increased, according to a recent article, and helped to create the potential for a ‘new generation of polytechnic-style institutions teaching vocational skills’.
In the space of 20 years, the industry seems to have turned full circle with a UK version of the US Ivy League, the Russell Group, well established. The question we must ask is have we created a classic two-strata society with the best jobs going to the graduates from the select institutions and an educated proletariat scampering around for the limited vacancies?
This country’s next generation is stuck between a rock and a very hard place. Do we provide free labour to private-sector companies at the cost of the taxpayer to earn our soon-to-be-capped benefits (benefits that were introduced as a result of mass unemployment and high levels of poverty) or do we choose to spend nearly £30,000 on an education which won’t even guarantee a job at Poundland at the end of it?