Initial thoughts on the Augar Review

The Augar Review of Post-18 Education was published today. Excellent summaries can be found on Wonkhe and elsewhere. My initial thoughts on its recommendations are below.

Overall, it’s a highly thorough, thoughtful and evidence-based report. Weighing in at 216 pages, it’s packed full of statistics and charts and has made a real effort to get under the skin of the systemic pressures on institutions that drive the behaviour of the sector. The recommendations are similarly nuanced and costed rather than seeking to hit the headlines.

Most of the recommendations are good. Most importantly, Augar has grasped the nettle of the market distortions created by a fee cap above the cost of delivery of many courses: it creates a false incentive to create more of such courses, regardless of whether they are what students want or employers need. By cutting the fee cap to £7,500, maintaining the average unit of resource per student and directing it better to where costs really fall, this should lead to a rebalancing of courses.

I’ve already seen some in the sector leap to defend the current cross-subsidy. This would be a mistake. The idea that government should knowingly overfund a particular activity, in the hope that some of the surplus will be spent on something else it really wants (high cost subjects) instead of properly funding the high cost subjects directly flies against all principles of public financial management, not to mention common sense. A dogmatic approach on this issue could damage the sector’s ability to credibly argue for maintaining the unit of resource on average.

There are many other positive recommendations. Restoring maintenance grants for poorer students, a lifelong learning loan allowance, the abolition of ELQ restrictions (in conjunction with the lifelong loan allowance) and reducing financial barriers to access Level 3 and Level 2 qualifications would all do much to help upskill the existing workforce. The cut to inflationary interest rates for student loans while studying is welcome, though does not go far enough.

The call for the abolition of foundation years was surprising, but appears to be backed by the evidence. One suspects the new foundation years at Oxbridge may be amongst the ‘rare exceptions’ permitted, alongside medicine. More broadly, the focus on improving the quality and funding for FE is clearly a move in the right direction, after decades of being the poor cousin. Some of the recommendations in this area seem less complete, with more reference to further research or establishing joint committees – though that may be because the landscape is more complex at Level 4 and 5 and not susceptible to being solved purely by funding changes.

The headline measure, the cut in fees to £7,500, will make little difference to most students. Indeed, with the reduction in the repayment threshold to £23,000 and the delay of write-offs to 40 years rather than 30 years, most graduates will pay more, and do so well into their 60s. The benefits of this change are not students, but the broader economy (by reducing the market distortions favouring low cost courses) and the system as a whole, by reducing the cost of courses written off.

As such it will do nothing to reduce the unpopularity of fees, nor the side-effects of marketisation that have seen sky-rocketing numbers of unconditional offers and rampant grade inflation. This is not Augar’s fault: its remit was set firmly in the context of a high fees and marketised system. But if the recommendations are implemented, a median graduate earner will face an effective marginal tax rate of 40% for their entire working career, sapping away their disposable income and ability to achieve critical life milestones, particularly getting on the housing ladder.Via the tuition fee system, since 2011 the Conservative government has overseen the biggest expansion of income tax increases since the 1970s: Brexit aside, it’s no wonder we’re being punished at the polls.

It’s hard to know how much of Augar will be implemented, given the political situation. Very little in the short term, one suspects, with parliamentary numbers as they are. But the weight of evidence in the report may see many of its sensible suggestions finding their way into future government policy or into manifestos. That may not be such a bad legacy.

Overall, Augar is a professional, well-evidenced and technocratic review, with a wealth of sensible recommendations that deserve to be implemented – but it does nothing to address the toxic unpopularity of fees, nor the negative side effects of marketisation.