аЯрЁБс>ўџ :<ўџџџ9џџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџьЅСq` №П(bjbjqPqP .4::g %џџџџџџЄ       xє№ № № 8( < lќЖ\ \ "~ ~ ~ ~ ~ ~ {}}}}}}$ВhќЁ ‹~ ~ ‹‹Ё  ~ ~ Ж‹ ~ ~ {‹{  ~ P №S6ђ№Щ№ ›{Ь0ќЋ l~ |њЦРl,_~ ~ ~ ЁЁЛT~ ~ ~ ќ‹‹‹‹lll„№ lll№ 4R"t      џџџџ How the Coming Universities’ Funding Crisis Poses Tough Decisions for Scottish Government Margaret Cuthbert Jim Cuthbert June 2009. Recent events at UK level highlight the funding crisis about to hit Scottish Universities: this article outlines the nature of the tough decisions on higher education which the Scottish Government will then face. First, on 1st June this year, the head of Imperial College London made a call for the privatisation of the leading research universities of Oxford, Cambridge, Imperial, London School of Economics, and University College London. His basic argument is that the continued research excellence of these institutions is vital to the UK’s economic prospects: but that these institutions had no chance of retaining research excellence within the confines of the current system of state funding of the university sector in the UK. This is particularly the case when, in the current allocation of core research funding, some key institutions were receiving increases which were less than inflation. Second, there is the question of the cap on fees paid each year by students in universities in England and Wales. The current cap is Ѓ3,145, and the government has committed to maintain this level until 2013. However, a number of factors suggest that the cap is likely to increase sharply when it is changed – and that the change might in fact take place before 2013. A report last year for the government recommended the scrapping of the cap on fees. This has been supported by the Russell group of universities, the 20 leading UK higher education institutions, and the Reform Think Tank. The five year review of the cap is currently underway, and it is difficult to see how the government could ignore its findings if this review were to recommend an early increase. Also relevant are the current prospects for public expenditure as a whole in the UK. It is clear, from the analysis of a respected body like the Institute for Fiscal Studies, that Alistair Darling’s most recent budget significantly understates the public expenditure crisis facing the UK and therefore the gravity of the cuts in public expenditure which are going to be required over the next few years. Before considering the implications of all of this for the Scottish University sector, it is worth recapping on the Scottish background. True to its Manifesto commitment, the SNP administration scrapped the previous graduate endowment scheme, so that eligible Scottish domiciled students and non-UK EU students studying at Scottish universities pay no fees themselves: instead, the Student Awards Agency for Scotland pays the fees directly to the institution, at an average amount of Ѓ1,820 for each undergraduate. Despite this lower level of fee contribution in Scotland, the Scottish Government has made the commitment that they will put in sufficient funds so that spending levels in universities in Scotland do not fall below those in England and Wales. As from April 2009, the Scottish Government has top sliced 11.4% of the total higher education funding allocated by the Scottish Funding Council into a Horizon Fund to address specific government priorities. As a result, core research funding has been reduced below what would otherwise have been the case: and two universities, Strathclyde and Stirling, had their core research funding cut, prompting the union which represents higher education staff, the UCU, to call for this issue to be looked at again. It is recognised by virtually everyone that the continued excellence of the research carried out in key parts of the Scottish university sector is essential to the future of the Scottish economy. But the developments outlined above pose major threats to this. Almost certainly, the call by the head of Imperial College presages, one way or another, the development of a premier league of research universities in England – which will be able to out-compete Scottish Universities in staff, money and facilities. The review of the cap on fees in England will inevitably lead to an increase – which will call into question the ability of the Scottish Government to maintain its commitment to funding parity with England. And all of this is against a background of what will be extremely severe cuts in public expenditure, from which public funding of the universities will not be able to escape. Unless something is done, it is very unlikely that the excellence of research in parts of the Scottish higher education sector can be maintained. So what are the options? All of the options are unpalatable: and we must stress that we are not advocating any particular option. But in the face of the current crisis, it is right that the government and the public should start thinking about the possible alternatives. Different approaches, not all of which are mutually exclusive, are as follows: One is to re-open the question of student fees in Scotland. This would be particularly unwelcome, given that the abolition of fees was a flagship policy of the Scottish Government. More importantly, the relative distribution of income in Scotland compared to England shows that a much higher proportion of the population in Scotland are in low income families: fees are therefore likely to have a more serious adverse impact on access to higher education in Scotland. Another option is to rethink the priorities as regards what the higher education sector is actually for. Higher education fulfils a number of quite different functions: it provides a broad “liberal arts” type exposure to a large section of the population. It provides vocational training in a wide range of important professions: and it provides training in, and undertakes performance of, advanced research. Have we got the balance right between these different functions? For example, are we putting too many people through highly specific training, such as media studies, for which there is no or little market in Scotland, when perhaps a more general liberal arts education could actually better equip many students for a range of careers. Are we providing enough encouragement to young people to take up courses which are important for the rebuilding of the Scottish economy, like maths and engineering and the hard sciences. Are we right in encouraging almost half of each cohort of young people through the existing form of higher education, particularly when drop out rates are as high as 9% in Scotland (compared to 7.1% in England). Once decisions have been taken about what higher education is actually for, do all the functions need to take place in conventional universities? Do the liberal arts and vocational type functions all need to be carried out in institutions which, theoretically, are all at the forefront of advanced research in their fields. Or would not it make more sense to go back to something like the pre-Major era, when there were some specialist higher education institutions which avowedly concentrated on excellent teaching or specific subject areas? Are we spreading our limited resources too thinly across all universities, and thus preventing Scotland maintaining and developing a core of international centres of excellence. Another option is the rationalisation of institutions – or the possibility of encouraging more flexible movement of students between existing institutions, so that a student might do basic course work in an institution close to home before moving to a centre of excellence for his or her specialty. This sort of flexibility would not merely reduce the costs of institutions but would also reduce the financial burden on students. Universities always complain about their inadequate funding levels. This time, however, they are not just crying wolf: the crisis which is emerging is very real. Difficult decisions are going to have to be taken, and these are going to affect most of our young people. One thing that will be vital is that decisions about higher education structure and funding are taken in a broad context: we need an integrated policy for higher education and economic development: what will be fundamental is that the economic policy creates an environment in which the ideas, people and products emerging from our centres of research excellence can find a home.     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