At the same time as revenue will drop [with the proposed cuts to public funding of much UK university teaching], even with the rise of student fees, costs will also be driven up inexorably. Universities are charities, and do not pay tax, but they do pay VAT, and this is going up to 20 per cent next year, enough on its own to blow a hole in the budget. There is talk of a compulsory employers’ levy to make up a deficit in the pension fund, which will also be expensive, and possibly very expensive. Many universities are going to be forced into spending more on fund-raising, but with no change to the tax regime for donations, they will all be competing for the same pot of money, spending more in an expensive beggar-thy-neighbour policy. Nor is sending alumni out into the world laden with debt going to increase their generosity in later years. Equally, costs will be driven up by the business of administering a complex fee structure, and complying with whatever directives come from the new super-quango the government sets up. Best of all, perhaps, it seems as though the government is going to cut the teaching grant before the increased revenue from fees starts flowing, risking a quite unnecessary short term funding crisis that could well doom many courses, and even institutions, that might otherwise be viable.
Welcome to the weird and wonderful world of British Higher Education policy.
In a completely free market, the humanities would clean up. Faced with a choice between an arts degree costing £8,000 a year, and one in science costing upwards of £30,000 a year, then history and philosophy would suddenly become very popular for everyone except those determined to work as scientists. But it is not to be. The natural cost advantages that the humanities enjoy will be erased by continued subsidy to the sciences, while the natural disavantages of the humanities – their lack of access to research money – will continue unchanged. [IAN PEARS]
The above is an excerpt from one of the best talks at the recent Why Humanities? Event at Birkbeck College, November 4, 2010, given by historian and writer Iain Pears: ‘How the Humanities? Taxes, banks, loans, and students’. You can now read the remainder of Pears' fascinating and enlightening talk at his website here. And you can find an audio recording of the talk linked to here, along with links to all the other contributions at this important event.