What might cuts really mean for higher ed

John Naughton pointed me at this piece in the London Review of Books by John Lanchester on the great British economy disaster, which is long and thoughtful. Not to mention depressing and scary.

He covers the political and economic repercussions of the proposed cuts, and points out that the reason both main parties are being unspecific about cuts is because they will be so dramatic as to be 'electoral suicide' to spell out. Here he is at his scariest:

"Both parties have said that they will ring-fence spending on health, education and overseas development. Plug in those numbers and we are looking at cuts everywhere else of 16 per cent...

Cuts of that magnitude have never been achieved in this country. Mrs Thatcher managed to cut some areas of public spending to zero growth; the difference between that and a contraction of 16 per cent is unimaginable...

the guesstimate for the cuts, if the ring-fencing is enforced, is from 18 to 24 per cent. What does that mean? According to Rowena Crawford, an IFS economist, quoted in the FT: ‘For the Ministry of Defence an 18 per cent cut means something on the scale of no longer employing the army.’ The FT then extrapolates:

"At the transport ministry, an 18 per cent reduction would take out more than a third of the department’s grant to Network Rail; a 24 per cent reduction is about equivalent to ending all current and capital expenditure on roads. At the Ministry of Justice an 18 per cent reduction broadly equates to closing all the courts, a 24 per cent cut to shutting two-thirds of all prisons."

This is scary stuff. The problem is that an 18 percent cut is not distributed evenly. There are certain fixed overhead regardless of the size: you still need a central administration, IT systems, etc. And only politicians believe that this size of cut can be made by 'efficiency savings'. A degree of waste is inevitable in any system, as comedian David Mitchell argues in this soapbox:

If we accept Lanchester and the FT's arguments about the impact of these cuts then what might this mean in Higher Education terms? If the quote about no longer employing the army is right, then we can work out a percentage of the actual closure required to meet an 18 percent cut. There are 187,210 regular forces, of which the Army accounts for 105,500 - a whopping 56%. There are also 40,780 reserves, 105,270 cadets plus 86,970 MoD civilians. Let's say, for the sake of a rough calculation that these extras, which total 233,020 operate at half the cost of the full time regulars (this is probably overestimating and includes 53,190 Army cadets), so we'll halve the number (116,510) to give an Armed Forces total of 303,720. The Army proportion then comes down to around 35%. 

Obviously there are equipment costs associated with these, which are considerable in the Armed Forces, but we can assume that by saying 'lose the army' the FT commentator is including these and we could make a rough comparison with capital costs in Higher education. To effect a loss of that proportion in Higher Education would mean one or more of the following:

• Loss of all research only staff (according to HESA), and that would only give you 22%
• The Closure of all Welsh and Scottish Universities (actually because of devolution this would work out differently, but as a measure, this would account for only 16% of total students)
• Closure of all Russell Group universities (actually this only gives you around 20% savings, so you'd need to combine it with the above maybe).
• Removal of all (undergraduate and postgraduate) part-time study programmes (gives you 34% reduction in student numbers, but probably not equal reduction in costs).

I fully accept that these figures would be swayed by many different factors - for instance the Russell Group universities get a large proportion of their funding from other means such as benefactors, research, tuition fees, etc. 

The overall point I am trying to make here though is that when people talk about 18% cuts, these are not merely belt-tightening exercises. In order to realise those types of cuts you actually have to lose more staff, and make deeper cuts because there are residual overheads in the system. And cuts of this magnitude are unprecedented and when you put them into the kind of context we see above (can you really imagine closing all Russell Group universities?) then the scale of the problem becomes apparent.

I don't have any solutions (except don't do it), but I know we are in for tough times ahead...

Comments

[Electricchalk]

What do you think is the likelihood that some universities may take this as a cue to go private?

[nick]

These cuts are from proposed future spending, so presumably projects that have been promised but not yet delivered (ID cards, trident, new aircraft carriers for navy etc.) can be shelved/ postponed which will achieve some substantial 'cuts'.

Some of these cuts would be quite desirable IMO.

In HE i can't help think that any reduction in central funding will make an increase in student fees (and a dropping of the committment to achieving a 50% participation rate) all but inevitable.