From the issue dated March 21, 2003
Britain's Sinking Fleet of Universities - Institutions
have become less elitist and more financially
troubled
By KATE GALBRAITH
London
Carrying signs that proclaimed "Tax the Rich to Fund
Education" and "War on Fees, Not Iraq," some 20,000
students poured through London's streets in December
to protest the possibility of tuition increases at British
universities.
The month before, professors and university staff
members were on the streets, beginning a scattering of
one-day strikes over what they said were inadequate
cost-of-living allowances in London, one of the most
expensive cities in the world. To dramatize their
predicament, several strikers donned the academic
robes of vice chancellors and handed out peanuts
outside City University, where the rally started.
The demonstrations have had different aims and
different participants, but they all focused on one
underlying issue: unsustainable cost pressures among
British universities.
Across the system, even at top institutions like the
University of Cambridge, class sizes have grown. Many
residence halls, classroom buildings, and laboratories
need modernization. The reason is straightforward:
Britain's university system, once geared toward children
of the elite, has undergone a phenomenal expansion in
the past 40 years -- particularly since 1980 -- to
accommodate a broader swath of society. But
government financing, the major revenue source for
even the top universities, has not nearly kept pace.
"When the British higher-education system was small,
when it was elite ... you could fund it," says Sheldon
Rothblatt, a professor emeritus at the University of
California at Berkeley and a former director of its Center
for Studies in Higher Education. Now, he says, "You've
got a money problem."
Change may be coming. In January, the Labor
government released a plan to confront the problem.
The plan, which has been approved by Parliament, calls
for increasing spending on higher education by 6
percent a year. It will allow institutions to raise tuition,
which is capped by the government, from the current
$1,760 for British students to $4,800.
But the plan -- which applies only to English universities,
not Scottish ones -- has met with a mixed reception.
Students are furious about the planned tuition increase,
which they say will deter applicants from poor families.
Administrators and faculty members, who have
reservations about some of the plan's details, question
whether the extra money from the increase will be
enough to reverse the slide in quality.
But all agree that something must be done to shore up
Britain's crumbling university system, before even the
best institutions lose their ability to compete in an
increasingly global marketplace. The troubles are
prompting some leaders here to question the system's
basic structure -- asking not only how to make
institutions less reliant on the government, but even
whether individuals, rather than taxpayers, should pay
for the benefits of receiving a university degree.
From Elite to Inclusive
The origin of the financial squeeze, which mirrors
problems elsewhere in Europe, lies in the transition to a
system of mass participation. In the 1960s, about 6
percent of young adults entered higher education in
Britain. Now, through the efforts of successive
governments to improve access, the participation rate
for 18- to 30-year-olds in higher education stands at 43
percent. That is still short of the Labor government's
goal of having half of all young people participating in
higher education by 2010. In the United States, 51
percent of 18- to 29-year-olds have participated in
higher education.
The expansion has had two main problems. First,
despite its implicit goal of overcoming the class divisions
that have historically plagued Britain, the outreach has
benefited people on the top of the social ladder more
than those at the bottom. "The fraction of students from
the lowest income quintile hasn't budged in 40 years,"
says Nicholas Barr, a professor of economics at the
London School of Economics and Political Science.
"Expansion has been terrific ... but it hasn't improved the
socioeconomic mix."
The second and more visible problem is that
government financial support for universities has not
matched the system's expansion. In 1999, Britain spent
just 1.1 percent of its gross domestic product on higher
education, less than the 1.6 percent weighted average
for the 30 industrialized countries in the Organization for
Economic Cooperation and Development, and
considerably below the United States' 2.3 percent.
Nearly three-quarters of the British funds come from the
government. But the spending per student fell 37
percent in real terms between 1989 and 2000.
Unlike the United States, which has a diversified system
of public and private institutions, virtually all the British
universities rely heavily on the government for funds.
Rodney Eastwood, director of policy and planning at
Imperial College, says 30 percent of its $610-million in
total revenue in the 2002 fiscal year came as a single
grant from the government's Department for Education
and Skills; 40 percent came from research sponsors,
with the government being the biggest of those, followed
closely by medical-research foundations; and 12 percent
from student fees.
By comparison, in the United States, Stanford
University's total $2-billion annual operating budget was
much more diversified: research sponsors accounted for
about 35 percent, the endowment for 18 percent, and
tuition fees for 15 percent.
Few universities can cover their costs entirely from
student fees and education-department handouts alone.
That produces a mad scramble for research money,
which is awarded on the basis of universities' scores on
the Research Assessment Exercise, a government
evaluation of universities' research strengths that is
done every five years or so. Most of the institutions
score poorly on the tests and consequently they get few
grants.
But even the top institutions that burnish their
international reputations by monopolizing research
handouts face problems. "Places like us have always
lost money on project-sponsored research, because the
sponsor never pays the full cost," says Mr. Eastwood.
"And they never take account of the fact that you need a
laboratory that has to be run adequately, and the fact
that the roof's just about to fall in." (So – there are no
provisions for indirect cost recoveries in Britian!)
As a result, some of Britain's top institutions are seeing
red ink on their financial statements. The University of
Cambridge is projected to run a deficit of $18.6-million
this fiscal year. The elite Imperial College reported a
surplus last year, but its financial statement did not
include capital costs and infrastructure maintenance.
Taking those into account, says Mr. Eastwood, the
college lacks [$48-million] a year in needed funds. Sir
Richard Sykes, the rector, has calculated that it loses
$4,480 teaching each undergraduate each year.
As rising enrollment collides with limited money,
educational quality has suffered. Perhaps the most
powerful measure is class size. "We've gone from 10 to
12 students per member of staff in the early '80s to a
situation where it's up to almost 20 per member of staff,"
says Paul Cottrell, assistant general secretary of the
Association of University Teachers, a professional
organization and trade union. Lecture halls are
overcrowded; seminars are too large; and personal
attention, from grading papers to writing letters of
recommendation, has dwindled.
Some universities have resorted to cutting faculty
members to stay in the black. At the University of Keele,
academics narrowly staved off more than 30 job cuts
this year. "Every year or two we've had a need to cut
staff or close courses," says Peter Fletcher, a professor
of computer science and president of the local chapter
of the teachers' association.
Academic salaries, too, have been affected by the
financial squeeze. In the past 20 years, says Mr.
Cottrell, "our member salaries have hardly kept pace
with inflation." Starting salaries are now "less than a
driver of a London Tube train would be earning."
That bodes badly for the future, he says. "We predict
we'll have more and more problems in getting good
people -- and increasingly see people heading off to
bigger salaries in the United States and elsewhere." In
the United States, the average salary for all faculty
members is $64,455, according to the American
Association of University Professors, compared with
$52,000 in Britain. Indeed, many of the brightest may
have made the trans-Atlantic jump.
Britain was formerly a pioneer in physics; now it has not
had a Nobel Prize in the field since 1977.
In Search of Solutions
As universities have felt their competitive edge slipping
away, the clamor for more government funds has
increased. British officials finally responded in January
2003, when the new education secretary, Charles
Clarke, introduced a long-awaited policy for English
universities.
The plan would increase support for the universities by
$5.9-billion, much of it for research, by 2005-6,
according to an estimate by Universities UK, an
association of vice chancellors. It also will allow cashstrapped universities in England to raise fees to $4,800
a year starting in 2006, provided that an institution
shows the government that it is striving to recruit
students from underprivileged backgrounds. Students
would pay the fees after graduation, in contrast to the
current system of upfront payments. To help the poorest
students, the government will also provide grants worth
up to $1,600 per year.
Although some university officials say the extra money
being proposed isn't nearly enough -- it is less than half
of what Universities UK sought -- the offer of new funds
has been welcomed. Mr. Eastwood, of Imperial College,
says it would go far in dealing with the backlog of capital
investment and infrastructure. But others say that the
plan ties too much of the money to specific research
projects, and that the support will go largely to the top
universities, neglecting the others.
"We estimate that there won't be any substantial
increase in the funding for teaching. ... That's our
greatest cause for concern," says Roderick Floud,
president of Universities UK and vice chancellor of
London Metropolitan University.
Far more controversial has been the planned rise in
tuition fees. Universities around Britain have been
quietly relieved by the prospect of extra revenue, but
students have loudly denounced the policy.
Many worry that higher fees, even if they are paid after
graduation, would deter yet more poor students from
attending a university. "Students will be faced with a
decision to apply to Cambridge or to another university
which is cheaper," says Paul Lewis, president of the
University of Cambridge Students Union. Already, he
says, "there's a perception of elitism and exclusivity"
around Cambridge and the University of Oxford. "What
the government is doing is turning that myth of elitism
and expense into a reality."
Mr. Barr, the economist, who helped influence the
government's plan, supports the tuition increase. "The
political difficulty is that the person in the street feels
[higher education] ought to be free and somehow thinks
it's morally wrong to charge for it," he says. "But I think
as with loans, if you bring in the right system, don't bring
it in too fast, explain what you're doing and why, over
time attitudes will change."
Although the infusion of public money is expected to
help, several experts on British higher education argue
that it won't do enough, and that universities need to
rethink the way they do business. Mr. Rothblatt, the
professor emeritus at Berkeley, argues that the British
system as a whole places far too much emphasis on
research. "What has to be given up is the notion that
every institution has a research mission," he says. "They
are the most costly -- you need the facilities, libraries,
laboratories, you need to fund research, you need to
give plentiful time off. ... Public taxation won't do it
anymore, in any country."
Mr. Rothblatt advocates a differentiated system, like that
in the United States, where some institutions choose to
focus on teaching liberal arts or applied subjects such
as engineering, and others on research -- together with
more private financing.
Meanwhile, as they struggle to stay afloat, British
institutions are trying to wean themselves from total
dependence on the government. Several are merging to
cut costs -- London Metropolitan University was formed
last year from a union of the University of North London
and London Guildhall University. The University of
Manchester and the University of Manchester Institute of
Science and Technology plan to merge in the fall of
2004. A proposed merger between Imperial College and
University College London collapsed last year after
protests from faculty members.
Other strategies include wooing more international
students, who pay higher fees. The London School of
Economics and Political Science, where full international
undergraduate fees are $15,350, has been particularly
successful. Fund raising among alumni -- a staple of
America's elite institutions -- is also catching on, but
gradually.
Mr. Eastwood, of Imperial, which is just launching a
fund-raising campaign, explains: "A lot of people will be
a lot reluctant to give money because they'll say, 'My
taxes paid for this. Why should I pay?'"