RAB herring

This is a blog about planning, regulation and funding, not policy. Policy is what Ministers think they want to achieve. Planning, regulation and funding are something rather different.

So Willetts in the Higher is not really the core of what I am interested in, but I'm going to blog anyway, because I'm still fresh and eager about this whole blogging lark.

I expect that, in the future, as the data accrue, the policy debate will be about the RAB charge for individual institutions. One reason why we were not able to accept Browne's ingenious idea of a levy on higher fees is that it was indiscriminate and did not reflect the actual Exchequer risk from lending to students at specific universities.

 Here's a case in point where I predict that the Minister's policy interest will founder on the rocks of practicality. Of course the data to make a start on calculating those institutional RAB charges already exist at the SLC. The time series isn't long enough to give a complete picture, and if it were it would relate to the graduates of the 70s and 80s, who entered a rather different labour market, but the individual RAB charges are perfectly calculable. We even know what the calculation will tell us.

We all understand that the LSE's graduates will incur a lower RAB charge than UEL's. We all know that UEL's will incur a lower charge than Leeds Met's. The difference between LSE and UEL is partly - perhaps entirely - down to the greater social privilege of the LSE's students at the point of entry. The difference between UEL and Leeds Met is partly - perhaps entirely - down to higher wages in the London economy as compared to Leeds. Easy! But what can we do with these data?


Even if we could adjust our data to account for graduate's entry characteristics, we would have a further problem. Part of the individual career benefit you get from going to an elite university is an excellent education. The other part is made up of connections you make, prestige which rubs off on you and suchlike. The first might represent a public good (we all benefit if our ruling elite is well educated), but the second is clearly a public disbenefit (we all suffer if our ruling elite excludes well-educated and able people who went to unfashionable universities). How could we determine the balance between these two kinds of benefit in individual career trajectories, and hence in institutional RAB charges?

Perhaps thinking of the RAB charge as the subsidy to the University will help clarify this. If you are subsidising LSE by £10m, UEL by £20 and Leeds Met by £30, this in itself tells you nothing unless you also know how much value you are getting for that money. Which of these universities is contributing the most towards Government priorities? In practice, of course, each will be contributing to a greater or lesser extent towards many priorities. UEL is doing more widening participation work than LSE, and probably training more teachers too, but is LSE making a greater contribution to the economy? Who knows? If you know cost but not benefit, you cannot calculate value.

So when Willetts gets his institutional RAB charges he will find they tell him nothing that he doesn't already know, and that he can't work out what to do with them.