What I’d like to see less of in 2012

December 21, 2011

I had barely nominated David Eastwood for Bright Green Scotland’s Dick of the Year award when, as if I’d summoned a daemon from the west midlands, an article of his appeared in the Guardian education supplement. Don’t underestimate this man; he is the embodiment of all that is wrong with higher education. He bans student protests on campus. He sits on the board of USS pensions, screwing over academics across the nation. He suspends student union officers for protesting against Lib Dems in their free time. He takes a cavalier attitude towards his staff, not only those striking over pensions, but also cleaning staff, paid poverty pay whilst he himself takes £419,000 (page 42 – by my reckoning that’s more than the British Prime Minister and the US President combined) back to his rent-free house which recently had over 200 grand spend on it in a refurb. He sat on the Browne review panel. This really is a man who acts like the CEO of a corporation, who sees higher education as a commodity to be bought and sold, and universities as private businesses, not public instruments for social change.

This article is further evidence of that fact. Bizarrely comparing policy-making to both croquet and sausage-making, Eastwood pines for the days when laws were put together behind closed doors “with university leaders, mandarins and ministers locked in serious, often fierce, but apparently seemly debate”. Notice here he refers to ‘university leaders’. I presume he means people like himself, not students or staff. Clearly he thinks the stakeholders in higher education have no place at the table when discussing policy which directly affects them. We must not only keep policymaking away from the people, but even away from their representatives, according to Eastwood, “legislation would finally pass, on the rare occasion it was necessary, without parliamentary debate boiling over.” Oh heaven forbid we’d have a debate in Parliament!! Obviously etymology isn’t his strong point.

And yet, despite holding a certain disdain for democracy, Eastwood still claims that there is a consensus “that students should contribute more and the taxpayer less to the cost of higher education.” Few could see the mass demonstrations in the streets and honestly call it a consensus. “Make no mistake” he writes, “both political sides committed before the election to legislating Browne”. Laughably, he can’t seem to be able to conceive of anything more progressive than New Labour’s higher education policy, as if the Tories and New Labour represent the two sides of the debate.

“A few, sometimes too few, sought to make workable policy – notably, and laudably, the minister for higher education, David Willetts…” David Willetts will go down in history as the man who destroyed higher education in theUK, and rightly so. Notice that Eastwood implies that the alternative – education provided and funded by the state – is unworkable. Apparently he just can’t understand how to make taxes higher, or to just collect all the tax we’re already owed, and invest the extra revenue in education. How that would work is just beyond his comprehension. Never mind that that’s what happens in most of Europe. Never mind that free education of a sort still remains in Scotland. It’s unworkable, can’t be done.

Apparently fees aren’t even important! It’s ok if they put a price tag on your education, and if you end up repaying your debts for the rest of your life, because none of the fees are up front. “There are no upfront fees,” says Eastwood, “and the repayments are proportionate to income, which is a proxy of sorts for personal benefit.” You know what else is proportionate to income? Income tax. In fact income tax is more progressive than that, because you not only pay a proportion of your income, but you pay a higher proportion of it if you earn more. So the people who benefit most from society end up paying more for society’s higher education. Sounds fair to me.

Don’t let anyone tell you that the fees arrangement is progressive. Student support is incredibly important, as Eastwood argues, and arguably in practical terms substantially increasing student support could have a more positive impact on students’ lives than getting rid of fees. But there is a wider point to be made here. By taking away public funding for higher education in such a dramatic way, Browne and the government are making the ideological point that education is not an instrument for social change, it’s not an institution built and provided by society for its own betterment, universities are not repositories and generators of knowledge and expertise, and they’re not even merely a way to address the needs of the job market and promote growth. By funding education from students’ pockets, the government is setting a precedent for higher education to be provided privately. Education is now not a right but a privilege. It is now not part of the core activity of the state, but instead something that can be done entirely separately from it. We’re even seeing some HE institutions not being subject to public procurement laws because so little of their funding comes from the public purse. The fees aren’t important just because they cost students money and because they put students off attending university. They’re important because they’re replacing public funding, and they represent the commoditisation of education.

According to Eastwood, the people who make these kinds of arguments don’t really care about or understand education. They just want to use policy debates for less noble, transient purposes. “Higher education is truly too important to be left to the ideologues.” Eastwood wants to deregulate fees, he wants to commoditise education, he wants education policy to be formulated behind closed doors without representatives of the stakeholders, he can’t understand how higher taxes would work, and he has the gall to call his opponents ideologues. The man has no shame.

Eastwood can’t even address the very legitimate arguments made against the Browne review. He implies that the majority disagree with it because they jumped to conclusions before it was released, and then dismissively throws together all the different reasons someone might disagree with the recommendations of the report, as if those who “want a wholly publicly funded system”, those who are convinced Browne wouldn’t work, and those who “want a system where the interests of institutions win out when they come into tension with those of students” are the same and can be dismissed in the same way. An article which addressed all of these concerns might have been worth reading. This one wasn’t, unfortunately.


Is privatisation inherently wrong?

July 28, 2011

Hell yes.

Last night I was at a very well-attended community meeting at Meadowbank Stadium, where local councillors were invited to explain what’s happening around the plans to privatise £1bn worth of public services at Edinburgh City Council. I say well-attended, but I mean well-attended by the public, not by the councillors. All the back-office functions like HR, revenue and benefits, council buildings maintenance, cleaners etc are all involved in these plans, along with environmental services including bin collections and looking after Edinburgh’s award-winning parks. That’s an awful lot.

If you haven’t heard anything about these plans then you’re not the only one. There has been little to no effective consultation of the public, and even Gary Peacock, the Liberal Democrat backbench councillor who attended the meeting, didn’t seem to know anything about the details of the plans. Indeed although the Labour group and the Green group have consistently voted against the privatisation of services, really the only people that have been keeping track of the developments and holding the council leaders accountable for these plans have been the trades unions. It’s not the councillors who are standing up for the interests of the people; that duty has fallen to trades union organisations like Unison and PCS, who I’d urge you to support. The SNP, despite being one of the larger groups on the Council, couldn’t find anyone to attend this meeting, or the last one on the same topic about a month ago.

Anywho over the past week I’ve been asked several times what’s so bad about privatisation, so I thought I’d put a post together on the topic. I took a quick look at it a couple of months ago but it’s worth revisiting. Let’s have a list:

1) The efficient private-sector is a myth. There are only a small number of ways in which private companies can run a public service more efficiently. Let’s have another list:

  • Reduce the quality of the service
  • Sack people
  • Pay their employees less
  • Hire less qualified staff
  • Reduce working terms and conditions

If the private company is being more efficient in other ways (so let’s say they change supplier and buy a necessary product at a lower price), then those options are also open to the government in-house, and the privatisation isn’t necessary. What privatisation essentially does is pass the service onto a company where the trades union representation isn’t as good, so they can treat their staff worse than they could get away with if they did it in-house. I don’t think that’s what the people want.

I’ve said it a million times before, but there are 2 types of efficiency. The one that private companies are concerned with is money earned vs money spent, whereas the one that government should be concerned with is money spent vs quality of the service. There is a real danger when you privatise services that you get a race to the bottom, where companies are willing to compromise on the quality of a service in order to slip through the cracks in procurement processes that aren’t tight enough, and thus get awarded public contracts.

Remember too that a large proportion of the money the government pays will go straight into the pockets of shareholders rather than towards paying for the service. That’s another huge layer of inefficiency which doesn’t seem to get recognised often enough.

2) It takes control of public services away from your representatives. Now if you’re not happy with a public service, you can go to your councillor and tell them, and because it’s carried out by the council, they can try to change the service. Once the service is privatised, you go to your councillor and complain about it, and they’ll send you to go and talk to a private company, and they’ll more than likely tell you to sod off, because they’re carrying out the service as it was defined in their contract, and as long as they’re doing that they’ll get paid, so they don’t give a monkeys if you’re happy with it or not. Privatisation takes the control of resources away from democratic structures. So does capitalism by the way, but there you go. The heads of the IMF and WTO aren’t elected. There’s a very specific part of this which I think deserves its own point.

3) Contracts limit democratic control over a service. Due to European tendering law, once the specification for a contract has been written, whichever company can fulfil that specification for the lowest price has to be chosen. Whilst on paper this is a good idea because it helps to prevent government corruption, in practice it is terribly limiting, and companies can often sneak through the gaps in the specification if they’re not written tightly enough, as they often aren’t. That’s why the University of Edinburgh banks with RBS, because its ethical investment policy didn’t form part of the specification when it went out to tender, and so it was legally obliged to choose RBS, to the dismay of many of its students.

It’s also not unheard of at all for private companies to stick to the exact letter of their contractual agreements, even when a higher level of service would clearly be overwhelmingly in the public interest. So as a hypothetical example whereas a school caretaker working for the council would clear the whole playground of snow, a private company might choose to just clear a path from the gate to the front door in order to stay within its contractual obligations whilst saving money. Any subsequent changes to the contract are met with huge charges.

4) There’s no guarantee that the terms of the contract can be met. As we saw with the trams fiasco, a company can claim to be able to complete a project with a certain amount of money, but then realise that they can’t do that. The council is then left with a choice, either they can give more money to this company to finish the job, or they can have a half-finished job that’s no use to the public, but which has cost the public lots of money. The threat of bankruptcy, which according to capitalist theory keeps standards high, is completely useless in this situation because it’s not just the company that loses out, it’s the people. In the case of the privatisation plans in Edinburgh, the City Council estimates it can save £90m, but what is the guarantee that they’ll be able to do so? And if the company runs out of money, where are they going to turn to to get more?

5) Private companies with dodgy records can be given contracts. Even just in these privatisation plans in Edinburgh, companies have slipped through the net and been allowed to continue in the procurement process, even though they’ve been found guilty of negligence causing workplace deaths, even though they’ve taken part in price-fixing. These companies don’t care about the welfare of their staff or the public, they care about money.

6) It’s a reactionary redistribution of wealth towards the rich. Public services primarily benefit working and middle class people because they’re the people that rely on them the most, and they’re the people that benefit from the jobs that are created by the provision of that service. Privatising that service not only risks its quality, but it also means that a big chunk of public money is taken from the pockets of the people and placed straight into the bank accounts of the rich shareholders in that company. On a small scale that’s not especially objectionable, but when privatisation is as hegemonic as it has been in the UK since the dawn of New Labour, it represents a systematic redistribution of wealth to the top.

7) Corruption becomes very real. When representatives are involved in the awarding of contracts for millions of pounds, corruption suddenly becomes a very real prospect. Not so long ago in the US we saw private prison contractors paying judges to send more kids to juvenile detention so that they’d make more money. This is the kind of thing that becomes a possibility when you start putting profit before the provision of service.

8. Privatisation is often a 1-way street. If and when it becomes obvious that a service would be better run in-house by the government, setting it up as a public service again can become impossible, because you’ve got to hire a tonne of staff, set up all the infrastructure all over again, and the cost of doing that is so prohibitive that you have to stay with the privatised arrangements, even if it’s a bad deal for the public, and the whole time you’ve got a private company that’s going to make the process of renationalisation as difficult as possible, because it’s in their financial interest to do so.

There are some situations where using private companies is understandable and possibly even beneficial. Situations where there’s a one-off job that needs doing, that requires special expertise that the council doesn’t have, and where it’s not practical to do it in-house. I’d argue that there are other ways to do those jobs, such as using central government resources and sharing them between councils. But even if you accept that premise, in this case we’re talking about privatisation of services which are already run perfectly well in-house. It’s not an extra burden that the council’s not able to deal with.

And there are plenty of examples of privatised services gone wrong. The trams in Edinburgh, BT in Liverpool, the Southern Cross nursing homes, the Elsie Inglis nursing home in Edinburgh, and the national rail service are just off the top of my head. The NHS is one of the most efficient health systems in the world (pdf)*, and is ranked #2 overall, and yet the government still wants to privatise huge swathes of it. It is ideological, not in the best interests of the public.

* I originally wrote “the most efficient health service in the world”, but that was based on 7 data points which isn’t exactly fair (HT Ian). It’s difficult to know for sure because I can’t find any papers on it, but the NHS comes 9th overall according to the WHO in 2000, and I think we spend less per capita on healthcare than all of the countries ranking higher, except for Japan. That would indicate to me that we’re probably 2nd to Japan in terms of efficiency. But the point remains, as the services near the top like Norway and Sweden, which spend a fairly comparable amount on healthcare, are almost entirely nationalised systems, and others that aren’t nationalised are very heavily regulated. Switzerland is also at the top, but it spends almost double what the UK does on healthcare.


A look at RUK fees

July 20, 2011

I think I’m gonna have to change the title of this blog. More and more I’m just talking about lefty stuff. I had a quiet afternoon yesterday so I wrote a bit of a ranty response to the Scottish Government’s proposals to raise fees for RUK students. This is it:

On 29th June 2011, Michael Russell, Scottish Cabinet Secretary for Education and Lifelong Learning, made an announcement in Parliament on the future of Higher Education in Scotland. Following that announcement, a consultation document was issued containing more detailed information, and asking for responses until the 2nd September. Anyone can respond to the consultation so feel free to print one off and send it in. The proposal at the moment is to raise the cap on fees for students from the Rest of UK (RUK) so that universities can set their own fees, up to a limit of £9,000 per year.

Russell begins his statement by claiming that Scotland will not follow England by putting an unmanageable debt burden on its graduates, and yet, for around 15% of its graduates, under these plans Scotland will become by far the most expensive place in Europe to study for a degree. He says, and I agree, that “the Scottish election established a clear consensus that tuition fees – upfront or back door – are not the right solution”. It was widely suspected during the NUS Reclaim Your Voice campaign that the Scottish Government, whoever won the election, would have to raise fees for English students, but no one was speaking about £9,000 fees. The figures that both Scottish Labour and the SNP were talking about were around £6,500, and I accepted that, albeit uncomfortably. Whilst higher education should be free and funded through a more progressive system of raised income tax, without tax-raising powers the Scottish Government would have to take money from other public services in order to fund university places that should rightly be funded by Westminster.

In both his statement to Parliament, and the consultation document, Mr Russell claims that the main purpose of this proposal is to maintain the current levels of cross-border flow of students, thereby protecting university places for Scottish domiciled students. That is clearly not the case. If Russell’s main objective were to keep that flow at the same level, then he would have looked at the situation from the students’ perspective, and realised that with a typical 4-year Scottish degree, these proposals will make it much more expensive to come to a Scottish university than to study in England. Even before taking into account an extra year of maintenance loans, a degree in Scotland will cost £36,000, as opposed to £27,000 in England. That contrasts with the action taken in 2006, which kept RUK fees in Scotland lower than fees in England, even taking the 4-year degree into account. Far from merely protecting places for Scottish students, these proposals will reduce the number of RUK students coming to Scotland through aversion to debt, and I don’t think that’s what was established as the consensus of the election. Clearly Mr Russell’s work behind the scenes with Universities Scotland has given him an institutional view which doesn’t reflect the reality of decisions that students make when applying to university.

Perhaps most worrying about this statement and accompanying document is Mr Russell’s feigned naivety about the level of fees that Scottish universities will charge RUK students. He hopes that the average fee in Scotland would be lower than in England, around £6375 per year. This number is based on pure speculation, and we’ve seen the effects of such wishful thinking south of the border, where students were told that £9,000 fees would be the exception rather than the rule. That was false in England and it’ll turn out to be false here too. The universities where the majority of RUK students go (Edinburgh,Glasgow,St Andrews, etc) see themselves as world-class institutions, and so will charge world-class fees if they’re given the opportunity. If Mr Russell is happy with the £62m that a £6375 average fee will raise, then why not set the fee level there rather than allowing Scottish universities to take more money from students’ pockets?

Another worrying aspect of these plans is that allowing variable fees will create a market in education and introduce free market forces to the Scottish higher education sector. This is an undesirable aspect of the change south of the border which the Scottish Government should reject on principle, given that it will force some students to choose their university based not on their own ability, nor on the suitability of the course, but on the amount of debt that they will be forced to accrue over the course of their studies. Mr Russell appears to have been turning a blind eye to the fee level announcements at English universities, and assumes that increased competition will drive fee levels down, when in fact as we’ve seen it has only driven them up.

Interestingly these announcements are characterised as much by what is not present as by what is. There is no mention whatsoever of the effect the new undergraduate fee levels are likely to have on postgraduate fees and international fees. These are unregulated markets, and it seems unlikely that universities will continue to charge £5,000 per year for a postgraduate taught programme whilst undergraduates pay £9,000. That will yet further restrict access to postgraduate education to those who can afford to pay large amounts of money up front.

There is also no acknowledgement of the fact that it appears Scottish students travelling to England to study will be charged up to the full £9,000 per year maximum, forcing students to choose between what may be the most suitable course for them and a large amount of debt. These plans not only fail a significant proportion of graduates in Scotland, but they will also fail those Scottish students who choose to travel to England.

Perhaps the only silver lining to this announcement is the fact that extra revenue from the increased fees will be divided across the whole sector rather than going straight to the universities who take more RUK students, and I welcome the fact that NUS Scotland will have input into those decisions. Whilst this may be less beneficial for institutions such as the University of Edinburgh, it also means that there is much less incentive for an institution to take an RUK student in place of a Scottish student, and it will prevent the gap widening between the ‘usual suspects’ and other higher education institutions. There are, however, implications for the assumption that universities will charge only £6375. If the increase in fees will replace the current teaching grant, then that fee level will only cover £4,555 of a gap left by a grant ranging from £6,000 to £15,000, depending on subject area. The rest, presumably, will come out of the centralised funds from the current teaching grants, but given the uncertainty around how much each institution will receive from that central pot, institutions will be unwilling to risk receiving less funding for those places than before, and so they’ll charge the maximum amount they can.

The proposed changes will create a precedent for a system whereby the Scottish higher education sector will be funded based on free market forces rather than on need. The Parliamentary statement is in my opinion either deliberately misleading in claiming that the fees will maintain the current level of cross-border study, or deliberately naïve in claiming that universities will charge only £6375, and I think Mr Russell should be ashamed of it. A much better policy would be to put fees at a set level around the £6375 mark, make up the rest of the current teaching grant from central funding, and then divide any leftover funds across the whole sector, using some of it to support Scottish students who travel to England to study. That would prevent Scotland from becoming the most expensive country in Europe to get a degree for a large number of its students, it would help to prevent free market forces coming into the Scottish sector, it would maintain current levels of cross-border study, and by Mr Russell’s own arithmetic it will raise an extra £62m for the sector. Whilst it will mean that in Mr Russell’s terms the policy is not ‘future proof’, in any case the cap in England has been set at £9,000, so it should never be necessary to raise fees above £6,750 in order to save Scottish places. Regardless, I hardly think that administrative ease should be the basis of a policy which costs students so much.