Oxford and Government Funding

Michaelmas 2010

I am writing to share with you some thoughts about our University in the wake of the Browne inquiry into higher education funding and the government's Comprehensive Spending Review.

In my Oration at the beginning of term, I spoke of UK higher education being "up in the air". Even after the publication in rapid succession of the Browne review and the CSR, that remains true to a significant degree. However, we do know that far-reaching changes to the UK HE system are on the way and that we must begin the crucial task of discerning the future for Oxford. This will be necessarily the subject of wide discussion in the collegiate University and I hope that my reflections here may make a useful contribution to that unfolding debate.

One thing that is certainly not up in the air is Oxford's unwavering commitment to remain a global centre of outstanding teaching and research. We are stewards of a great history and we must bequeath a great future. So, if we are clear about the end, we need to consider carefully the means.

Academic pre-eminence for us rests on twin pillars – teaching and research. As I have argued previously, they are mutually reinforcing; the quality of one relies heavily on the quality of the other. There is no way that the CSR cuts of forty per cent to the non-research budget for higher education can be construed as good news. But amid the understandable gloom, the maintenance in cash terms of funding for research and science budgets is welcome and the prospect of an increasing focus on research excellence may be helpful to Oxford.

More of what the CSR heralds will become clear in the coming days. The same should be true of the Browne review, which is currently the subject of intense political debate. As with the CSR though, there are already a number of things that can help to inform and shape our planning. The first is that the review represents a significant piece of analysis and broader thinking about higher education funding and that in itself is something to be welcomed. It also accepts two important principles at the heart of Oxford's own submission to the inquiry: a more flexible system of fees for teaching, and a commitment to needs-blind access for undergraduate study, free at the point of provision.

The difficulties come, as so often, with the detail. Put simply, the money the state would make available in loans to support the higher fees envisaged under Browne would be largely recycled from the deep cuts to the teaching grant that flow from the CSR. This means that, if fees were raised to £7,000 a year – a figure that has featured prominently in Browne and in government comment – no additional income would come to the University.

The review does hold out the prospect of fees rising above £7,000 but, even if approved, much of the extra money (at least as envisaged under Browne) would go into a national levy, not to the University. From the perspective of the student, a significant share of his or her initial investment in an Oxford education would be spent elsewhere. At a university like Oxford, working, thinking and, yes, competing in an increasingly global context, does this make sense – either for a prospective student or the institution?

Our own submission to Browne envisaged a locally-based loan scheme, in which an institution would be able to retain the income from increased fees, provided it could demonstrate that funds were available to provide generous bursaries and other support, in order to ensure that money was not a barrier to student entry.

The full cost of teaching an undergraduate student at Oxford is currently estimated at about £16,000 per year, which means that when the contribution made by tuition fees and public funding is subtracted, the annual shortfall per undergraduate every year of their Oxford career is about £8,000. The reality is that current proposals – the combination of Browne and CSR – do little to significantly narrow the gap and, in some variations, actually increase it.

The same combination, it must be said, is no friend of the Humanities, where the proposed cuts to teaching grants come on top of a number of other acute challenges. Oxford places great value on the richness of its scholarship in the Humanities, which is honoured throughout the world for its quality and for the contribution it makes to wider society.

It is clear for all these reasons that, under any future funding regime, the collegiate University is going to have to do all it can to find additional resources. If we believe strongly that the tutorial system is the best way to nurture maturing minds, we are going to have to find ways of making it more financially sustainable.

Philanthropy has a key role in this endeavour. The enormous generosity of our alumni and friends is fuelling the success of the Oxford Thinking campaign (close to the milestone of a billion pounds) and suggests that a good deal more is possible in future, with a significant focus on student support and funding for teaching.

These are all things that we will need to think through carefully but promptly in order to contribute effectively to the shaping of a new future for Oxford and for higher education funding in the UK.

One of the most energising things about my first year in Oxford has been to witness the strength of the hold it has on the hearts and minds of so many alumni, friends and supporters. That gives me confidence that we can remain right at the forefront of the world's universities, and that our teaching and our research will continue to help shape and influence the world for the better for centuries to come. That is Oxford's mission; we must fulfil it.

Andrew Hamilton
October 2010