Monday, 30 May 2011

Cost v's Investment

Inspired by my son's blogs on higher education, I decided to re-visit a subject that I spent many years pursuing with Local Authorities, Government Departments and Funding Bodies. It was the question of do we see things as costs, or as investments?

In a list updated on the 25th May 2011, more than 90 universities in England have revealed their plans for undergraduate tuition fees for 2012 (more than three quarters of the total). More than two-thirds of these want to charge the £9,000 maximum fees for some or all courses. The rise in fees has come about because of the cuts in teaching grants. The University and College Union (UCU) is opposed to these cuts, and at its Annual Congress last weekend warned that the UK could become "yesterday's country equipped with yesterday's skills". The UCU leader said that "it is ignorance that is the expensive option, not education". They see the present Coalition Government as a "fundamental threat to everything we stand for as educators".

Cambridge University Library
Now, I always like to set out my stall before proceeding, so that there's no confusion as to where I'm coming from. I believe in free education for all - from the nursery to the university.

I applauded the Scottish Parliament when on the 28th February 2008, they approved the Graduate Endowment Abolition (Scotland) Bill, which restored free higher education in Scotland. I agreed with the Scottish Education Secretary, Fiona Hyslop when she said, "We believe access to education should be based on ability to learn, not ability to pay".

With the Government's determination to provide ever more places for ever more students, cost is going to be seen as a worrying factor. Perhaps this is at the heart of the problem - the emphasis is on quantity, where it should be on quality. Too many universities and too many students, with too many second-rate degrees that major employers are not looking for, and don't want. Perhaps more people would be better off taking advantage of the proposed 250,000 vocational apprenticeships over the next four to five years, rather than thinking of university.

Having less universities, but ending up with 'smarter' ones is hardly new thinking I know, and probably is opening a can of worms, but it will begin to address the subject of cost. Wales is placing a cap on student places at Welsh universities, which is being met with some concern by the NUS Wales, who's President has said, "Thousands of able and qualified applicants will miss out on university places this summer, and the introduction of a cap on students numbers will do nothing to alleviate the anxieties that so many learners and their families have about this issue". They also feel that the cap will be hardest on those from less affluent backgrounds. Now, normally I'd be the first to jump to the defence of those from poorer backgrounds having the same opportunity that others have, but this could be a red herring. As in Scotland, we're talking about the "ability to learn" as meriting a place. To give the impression that there's no quality outside of the 'affluent society', is an affront to thousands of people.

More quality (not elitism) rather than quantity makes it easier to consider the value of free education for all. "But it can't be afforded", I hear the cry ringing around the corridors of power. Nonsense. It's a question of Government priorities. Quality education should be seen as an investment in our future - this means spending now for future advantage or benefit. It should not be just seen as a present day cost, without any thought for the future. All major businesses have succeeded because they have invested now, for future gain. I've said that Government priorities dictate where money is made available. Take war. Iraq cost £9.24 billion. Afghanistan up to last year (and remember we're still there) has cost £11.1 billion, with the Ministry of Defence stating that last year in Afghanistan the bill was around £4.2 billion. This means that nearly £12 million is being spent every day in that country. The former London Mayor, Ken Livingstone has said that the cost of the war in Afghanistan "would have funded free tuition in English universities for ten years".

Don't tell me that it can't be afforded. It's ideology and short-termism that is preventing it from happening. It's a myopic view of cost rather than the panoramic view of investment that's the problem. Remember the words of the UCU President Sally Hunt, "It is ignorance that is the expensive option, not education".

"An investment in knowledge pays the best interest". - Benjamin Franklin

Prison Yard
It's not just education where there is the battle between cost and investment. It covers many fields, not least in the criminal justice system.

Let me give a simple example from work that I was previously engaged in. My organisation had a contract with the National Offender Management Service (NOMS), to work with local Probation Service offices with around 200 offenders a year being released from prison.

Because Probation Services do not tend to work with anyone sentenced to under twelve months, our clients being released had served a great deal of time in prison for their crimes. The value of our service contract was say £40,000 per year, which I constantly had to justify in terms of value for money to the local Probation Service, rather than as investment which brings benefit as a whole to the criminal justice system.

Look at figures and costs to show what I mean. Take the number of 200 clients in a year. Let's take a small number of 10% (i.e. 20 clients) of the most difficult, damaged people, who have a recidivist history for violent crimes, and who as a result get 'sent down' for years at a time. Because of the nature of their crimes, when caught, they have to be tried at Crown Court before a Judge and jury. These trial can cost around £30,000 each time. Magistrates Courts can be 10 times cheaper, but this is largely due to the fact that Magistrates are volunteers and only receive out of pocket expenses. Crown Court is the only option for a large number of cases. A successful prosecution takes place, and the defendent is sent to prison. Each prison place costs upwards of £45,000 per year.

Now, each person being tried at Crown Court (cost £30,000) and been sent to prison (cost £45,000 per year) has cost £75,000. Let's say that our work with 50% of the 20 clients (i.e. 10 clients) has successfully kept them out of Court, and out of prison [and our success rates were higher than that], the total saving to the Criminal Justice System is £750,000 in the first year. All this from an outlay of £40,000. This is a net benefit of £710,000.

If you focus on cost, you'll look at the £40,000 and ask can we afford it. If you focus on investment, you'll look at the £750,000 and say that this is worth it. Cost v's Investment? It's a no-brainer!

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