A New Way To Fund Universities

08 Mar 2006

Letter from Tom Miers published in The Scotsman

Scottish Universities face a growing funding gap with their English counterparts, as you report in The Scotsman Investigation on 7th March. This is likely to grow as fees rise south of the Border, leaving our colleges less able to compete. We must indeed find new funds to avoid them becoming ’second-rate’.

But you rightly stress the political problems of introducing either top-up fees or a graduate tax here. Both concepts are flawed. Fees reward colleges for past performance rather than current teaching prowess, and may deter poorer students. A tax would surely be snaffled by the Treasury.

Instead, we should look to a new proposal by Ben Reilly of St Andrew’s University. Reilly suggests that each student should pledge a small proportion (1% or 2%) of their future earnings to their university, which could borrow against the income stream to generate current funds.

Universities would be rewarded for the quality of their teaching, since it would affect graduate salaries and therefore their income. What better way to encourage higher standards while solving the funding crisis at the same time? And students need no longer fear debt.

Tom Miers
Executive Director
Policy Institute
Queen Street