Last year, the Labour Party in the United Kingdom faced a dilemma. They needed to get elected, and to do that, they needed people to vote for them. Nothing wrong with that, except in higher education the UK faces a dilemma. Everyone knows the system’s in shambles. Everyone knows it will require painful choices to fix. But nobody wants to pay for it. It’s hard to cut that kind of Gordian knot without annoying people, and that interfered with the goal of getting elected.
So, the Labour Party did what any savvy politician would do. It punted — announced no policy, made sympathetic noises to the sector, and let’s face it, that was a low bar after the Tories, and then kept their head down to well after the election.
The election is almost 18 months ago now, and we now have some sense of what labour policy towards the sector is going to be. Last month, it finally published a white paper on post 16 education, which received at best a muted reaction from the sector.
With me today to discuss the white paper and its likely effects is Debbie McVitty. She’s the editor at Wonkhe, a higher education website, which is in many ways a spiritual sister to us at Higher Education Strategy Associates, and she’s written reams on the current UK situation and how the white paper will or won’t affect it.
I won’t give you any spoilers on this one today. Let’s just listen to Debbie.
The World of Higher Education Podcast
Episode 4.9 | Does England’s Newest Higher Education White Paper Actually Change Anything?
Transcript
Alex Usher (AU): Debbie, thanks for joining us. Before we get into the white paper itself, can you sketch out where English higher education is right now? What’s working, what’s not? What are the big issues that have been shaping the sector over the last few years?
Debbie McVitty (DM): Well, thank you for having me. I think, for me, the thing I really love about working in higher education in the UK—and I guess England for the purposes of this conversation—is that it really is like a tale of two sectors. You can look at it through both ends of the telescope and come up with completely different answers to that question.
On the one hand, we’ve got this incredibly strong, world-leading sector. Every year, more students register for higher education degrees. We’re making really good progress on inclusion and bringing in more students from low-income backgrounds. Those students are, generally speaking, pretty satisfied based on the available data. They’re having a good experience, they’re getting great jobs afterwards, and universities are working hard with their communities. All of that is true.
However, it’s also fair to say this is a sector that feels like it’s tipping into crisis—and there are a few reasons for that. One is funding. The amount universities are allowed to charge for undergraduate degrees has remained fixed for many years now, so the purchasing power of that number has really eroded. Obviously, the sector has also come through COVID, which was a major challenge, and students are now suffering from cost-of-living pressures that are deeply affecting their experience.
Beneath those headline positive numbers, you can see a real divide emerging. Some students are still doing well because they can draw on family income, while others are really struggling—working more, finding it hard to stay engaged with learning. And I think you can see that happening across the system.
All of this is happening within a political environment where universities have, frankly, felt like a bit of a political football. They seem somewhat at sea in the current politics, which I think reflects a broader trend across Western societies. But it has left many institutions feeling as though they have to justify their very existence in a way they simply didn’t have to a decade ago—and that, I think, has really knocked their confidence.
AU: These issues have all been around a long time. From what you’re saying, there’s not much that’s really new here—it’s been a long drift to where we are now. So why a white paper now? Is this about solving an actual problem, a perceived crisis, or does Whitehall just need to show that it’s doing something about higher education?
DM: Well, this white paper was brought forward by the Labour government that was elected last year. They came into office after a long period of political turmoil in the country. I don’t know how many of your listeners follow Westminster politics closely, but we had a series of very odd prime ministers and several national crises.
So, Labour came in last year inheriting a seriously challenging economic environment—but also with a strong sense that, as they put it, “politics had to be handed back to the grown-ups.” One of their key priorities was to get the economy moving again and restore growth. And they recognized that not just university education, but all forms of post-compulsory education are absolutely central to that goal.
So the question became: do we have the right skills in the right places? That’s the challenge this white paper is trying to address. It’s a flagship policy for this Labour administration—not just about higher education, but about all education after age sixteen. In England, that includes A-levels, vocational equivalents, university education, adult learning, and apprenticeships.
The goal is to bring all of that together into something more coherent—something that can actually deliver on national economic and social priorities. So there’s a real rationale for producing a white paper now. And, of course, some of those long-standing higher education issues got swept into it as well, because this was the political opportunity to finally take them on.
AU: So— is it coherent? The paper came out, what, about ten days ago? What does it actually propose? Which of the sector’s challenges does it tackle, and which does it politely sidestep?
DM: Well, there was a lot of debate leading up to this white paper about what would be in it and how it would land with the sector. And, just for the sake of time, I won’t go into all the parts that aren’t about higher education—partly because they’re less relevant to your listeners, and partly because they’re not really my area of expertise.
But it was clear from the outset that the government wanted something substantial from higher education. The problem is that universities are autonomous institutions, and traditionally, if you want them to do something, you either give them funding to do it, or you change the regulatory framework so that they’re compelled to act. In this case, there’s no new public money—certainly not enough to make significant changes—and there’s only so much you can do through regulation.
The regulator, the Office for Students, is still relatively new—it was created in 2017—and the sector has found it challenging to navigate. So, you don’t want to overreach in that space either.
What we’ve ended up with, then, is a white paper built around a few core priorities. Some of them draw on ideas that have been circulating for years, including from a major review of higher education held several prime ministers ago. The government is trying to bring those threads together—particularly around funding reform and creating more “stackable” or modular forms of education so people can dip in, study, leave, and return later.
There’s also an emphasis on financial sustainability. The paper suggests that universities need to collaborate more—share services, coordinate across institutions—and that this could help address financial pressures. The problem is, there’s no clear mechanism to make that collaboration happen; it’s more a statement of aspiration than a plan.
A distinctively Labour feature is the focus on regional coordination. The paper says universities should contribute directly to regional economic growth by working with other education providers to map skills and innovation gaps and fill them together. Again, that’s a coherent idea, but without mechanisms or funding, it’s hard to see how it’s implemented.
So overall, I’d say there is a coherent vision here—it’s just that there’s a delivery gap between the ambition and the tools available to achieve it.
And then, as with any big government policy document, there’s this incredibly long tail of miscellaneous bits and pieces—fixes to smaller issues like franchised provision, where one provider delivers education validated by another. You get the sense that someone at some point said, “What else are we doing? Let’s just throw it all in.” That’s where you get that “doing something” effect.
Strip away those extras, though, and there’s still a clear, coherent agenda underneath it all. In fact, I’d argue the white paper would have been stronger if it had left out some of those unnecessary bits.
AU: We’ve talked about generalities so far, but I want to get into some specifics—and the one I really want to start with is tuition fees. Now, England has a set of tuition fees that are almost incomprehensible to the rest of the world. You see sentences in policy papers like, “We need more public money in higher education; therefore, we should increase tuition fees.” That makes no sense anywhere else in the world, but somehow it does in England.
So, explain how that works—and what the current proposals about tuition fees actually mean.
DM: Right. Okay. So here’s how it works in England. When you apply to university—or to any higher education qualification—if you’re accepted, your tuition fees are paid upfront on your behalf. You don’t pay anything at the start. The maximum fee is currently about £9,750—it was originally £9,000 and has gone up slightly with inflation over time.
You only start repaying after you graduate, and only once you’re earning above a certain salary threshold. Once you cross that line, you pay a fixed proportion of your income above the threshold each month, and you only do that for a set number of years. In effect, it’s not far off being taxed a bit more once you reach a certain income.
Because of that, higher education in England is quite accessible—at least in terms of the upfront costs. Everything is underpinned by public finances. So, if the government wants to increase funding to universities—what we call the “unit of resource,” or the amount of money universities receive per student—the easiest way to do it is to raise the fee level. The student doesn’t pay anything more upfront, but universities receive more income.
The problem is that, in practice, no one’s entirely happy. Students feel they’re paying through the nose for their degrees. Universities say they’re still not getting enough to cover the real cost of delivering high-quality teaching. And from the government’s perspective, a large portion of the student loan money is never repaid, meaning the public purse ends up carrying a significant burden.
So, what we have is a brilliantly devised system that technically works—but doesn’t fully satisfy anyone. It’s a bit like democracy in that sense: it’s imperfect, but it’s very hard to think of a better alternative.
AU: And the current proposal to increase tuition fees in line with inflation—is that going to make things better or worse?
DM: It will definitely make things better for universities, but not by as much as the government would like to suggest. Universities have been struggling with the erosion of fee values for years, but fees are also a very politically sensitive issue in the UK. Every time the government raises them, there are major student demonstrations—I was on one myself back in the day.
There’s a widespread perception that higher education is becoming more expensive and less accessible, so raising fees is always a risky political move. But if fees aren’t adjusted, their real value just keeps shrinking—especially when inflation is high—and that creates all sorts of problems for universities trying to maintain quality and services.
AU: Right—and what about the levy? They’re putting a levy on international students, which means that institutions in London and the South—those most popular with international students—will end up paying more. So who actually gets that money?
DM: That money will go into a central pot, and an as-yet-undefined portion of it will be used to provide grant funding for students from lower-income families, particularly those studying in subjects the government deems high priority.
That’s a good thing in principle, because the real barrier to higher education access in this country isn’t tuition fees—it’s the cost of living while studying. Students can take out maintenance loans, but those often aren’t enough to live on. Many students rely on paid work or financial help from their families to get by. So any additional grant support is welcome.
However, the international student levy is extremely unpopular with universities. From their perspective, recruiting international students is one of the key ways they contribute to the national economy—and effectively taxing them for doing so is, in their view, bad policy.
AU: One area that surprised a lot of people was the lack of any mention of university finances—or the possibility of a bailout. UK universities have had a tough couple of years. Some perhaps overbuilt or overspent, and now many are running deficits. We’ve even seen two universities in Southeast England essentially merging. So why the silence on bailouts—or even the possibility of one?
DM: Yeah, this is a really interesting area. The thing that often gets reported is the regulator’s assessment of the financial health of the sector, but to make sense of that, you have to understand what it actually means for universities to be running a deficit.
Universities in the UK are autonomous institutions. They draw on a lot of public money, but they’re not state-owned, and the government has no legal responsibility to ensure they survive. The previous government was quite clear on this: if a university can’t recruit enough students, then it’s not delivering what’s needed and, therefore, doesn’t deserve to remain open.
That said, we’ve long known that if a university were to literally fail—to become insolvent—the consequences would be enormous. You’d have major knock-on effects for the local community, and immediate questions about what happens to students and staff. Thinking through all of that would be a much bigger political headache than simply helping an institution stay afloat a bit longer.
In practice, what really matters for most universities is their relationship with private lenders. As long as a university maintains a good relationship with its bank and has a credible plan for returning to financial sustainability, it can weather a few years of deficits.
Over the past year, the government has asked the regulator to work more closely with universities in financial difficulty to help them stay on good terms with their lenders—developing those credible business plans and taking the necessary steps to stabilize. In some cases, that might mean encouraging mergers or shared operations, though that’s not exactly what happened with the recent mergers in the Southeast.
Ultimately, I think the government has decided it would rather manage these problems quietly behind the scenes than be forced into a public bailout. The moral hazard of doing so—of signaling that the state will step in if things go wrong—would be extremely difficult politically.
AU: You make the point that institutions are legally autonomous and the government doesn’t have responsibility for them. But at the same time, this document gives a lot of new powers to the Office for Students—over quality, recruitment, and finance. There seems to be a tension there, right? Is this really about ensuring accountability, or is it about gaining tighter political control over universities?
DM: I think that tension between accountability and autonomy always exists—and it can often be a productive one. But it’s also something that both universities and governments sometimes use to avoid taking responsibility for their respective roles.
In the best version of that relationship, universities step up to their accountabilities before they’re forced to, and the government takes responsibility before political pressure demands it. But given the financial circumstances we’re in right now, we’re not seeing much of that proactive behaviour from either side.
AU: So, how much of this is really about exerting control? Labour wants universities to work more closely together but doesn’t seem to have the tools to make that happen. Is what we’re seeing in the white paper really about trying to acquire those tools—and, in effect, lessen autonomy?
DM: Right, yes. I think that’s a fair interpretation. The white paper is absolutely about coordination—getting universities to align more closely with government priorities, especially around skills and regional economic growth. But without direct funding levers, the only tools left are regulatory. So yes, in practice, it does mean tighter oversight through the Office for Students.
That doesn’t necessarily mean the government is trying to micromanage universities, but it does reflect a desire for more control over outcomes—without explicitly saying so. It’s a subtle shift: autonomy remains in principle, but accountability mechanisms are being designed to steer behaviour much more directly.
I don’t think it is actually about control. The challenge is that, over the past decade, the higher education sector has become much more diverse, with many new providers now falling under the regulator’s umbrella. On balance, that’s a good thing—it means more institutions are held accountable. But it also means that some of the assumptions and expectations that applied to traditional, publicly oriented universities don’t translate neatly to newer, independent providers.
Many of these newer institutions are investor-funded. Their accountability is, in part, to shareholders rather than just to the regulator. That changes the calculus for how much regulation you need, because the incentives are different. Publicly oriented universities, for example, are often registered charities, whereas private institutions are registered as for-profit. So, yes, tighter regulation is needed in some areas, and public universities can get swept up in that.
All governments want a degree of control, of course—but I don’t think this white paper is about delivering tighter political control over universities.
AU: Okay, so let’s talk about the best-case scenario. If all these reforms take hold, is English higher education better by 2030 or 2035? Is this set of proposals really meeting the moment? Will it make the system measurably better?
DM: You know, to some extent, my livelihood depends on the answer not being what I’m about to give. But honestly, if you locked me in a room and wouldn’t let me out until I gave my verdict, I’d say I don’t think it will. I think we’re going to end up pretty much where we are now.
When I look at the agendas around collaboration and coordination, I can imagine a few mergers—maybe a couple more federations, which could be interesting—but for the most part, institutions will still be doing what they’re doing now, just perhaps in a slightly more secure or efficient way.
We’ll likely see some regional groups emerge; one already has in the Northeast, which is great. But fundamentally, we’ll still have a very diverse set of institutions delivering a diverse range of programs and facing the same old challenges—questions like: Are you producing job-ready graduates? Are you sufficiently attuned to your communities?
And those are good questions. They’re about public accountability, not just regulation. Universities should always be asked them. But I don’t see anything in the current white paper that will really move the dial on those issues unless the government doubles down on creating meaningful incentives to drive change. Universities aren’t suddenly going to start doing this stuff at scale on their own—they simply don’t have the capacity or resources to do so.
AU: Debbie, thanks so much for joining us today.
DM: Thank you so much.
AU: And that just leaves me to thank our excellent producers, Tiffany MacLennan and Samantha Pufek, and of course you, our readers and listeners, for joining us. If you have any questions or comments about this week’s episode, please don’t hesitate to get in touch at podcast@higheredstrategy.com.
Join us next week when our guest will be Dan Levy, Distinguished Professor of Education at the State University of New York at Albany. We’ll be talking about his book A World of Private Higher Education.
Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
