Richer cities send more students to university. Scrapping tuition fees is unlikely to change this

A 2015 march against tuition fees. Image: Getty.

Should a university education be free to all? Or should graduates pay for the benefits of their education? Another election, another chance to debate university tuition fees.

Both Labour and the Green Party have vowed to abolish fees completely and reinstate maintenance if elected on the 8 June. Currently students in poorer cities are less likely to attend university – but would scrapping fees change this?

Using Higher Education data  we can see the likelihood of young people in each city choosing to study for a degree. There is a lot of variation, as the map below shows.

Click to expand.

Young people in Cambridge and London are most likely to go to university, with 48 per cent and 42 per cent respectively of their 18 year olds choosing to study for a degree. By contrast, only 19 per cent of Hull’s 18 year olds went to university. Similarly low participation levels were found in Barnsley (22 per cent).

The richer a city, the more likely young people will attend university. A clear pattern emerges from the data, showing a positive relationship between average earnings of city workers and university participation.


The perception, based on this picture, is that university fees are a barrier for people from lower income backgrounds. So abolishing fees, a seemingly progressive policy, should in theory increase university attendance of lower income groups.

But the evidence isn’t clear about the impact of fees on students from poorer backgrounds. There are a couple of indications that scrapping them is unlikely to close the participation gap.

The last tuition fee rise didn’t lead to lower participation of poorer students. At a national level (city data is only available to 2011). the 2012 increase in fees slowed the annual increase in university applications. But crucially, there was no widening of inequalities as a result. Research by UCAS showed that “differences by background reduced” from 2011 to 2013: this suggests fees did not deter poorer students as was expected. That said, it’s not yet clear what the impact of the 2015 removal of maintenance grants has been.

Research from the IFS suggests scrapping fees would be regressive, benefiting medium and high-earning graduates. This is, because student loan repayments are linked to earnings, it is high-earning graduates who pay back the largest amount of their loans. Removing tuition fees and offering maintenance grants would mostly benefit them, as poorer graduates repay much less in the current system.

The barriers to access are complex, and it isn’t clear whether abolishing tuition fees will do much to close the gap in university attendance. Combating differences in education attainment from an early age, improving career guidance and mentoring schemes all have a role to play in supporting people from poorer backgrounds to go to university.

Rebecca McDonald is an analyst at the Centre for Cities, on whose blog this article first appeared.

 
 
 
 

“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.