The government is looking for cuts to control a national debt rising at £5,000 per second. In December it found them when it reduced universities annual funding by £400 million. So it might seem like an odd time to be cutting off funding options.
Nevertheless this is what several ‘Ethical Investment’ groups are trying to do. Instead of simply looking for the best return on investment universities are now being pressured, as Queen Mary’s Ethical Investment Policy says, “to consider the social and environmental policies of companies”. So, for example, arms companies are out. In November, after a lengthy campaign, UCL sold its shares in arms manufacturer Cobham Plc whose share price had risen from 167.2p in June to 233.4p by November. It has since risen to 250.9p. Queen Mary’s has likewise adopted an ethical investment policy.
But this does leave the question of where the money is going to come from.
More government funding is out. Government debt has risen from 29% of GDP in 2002 to 37% in 2007 (when the credit crunch started) to 60% today. It is forecast to rise to nearly 80% in the next couple of years. By 2013 9p in every £1 paid in tax will be spent simply on paying interest on this debt. The taxpayer teat has been milked dry.
So do we ask students to pay more for the education they receive? Its estimated to cost a university, on average, about £10,000 per year to educate an undergraduate but any proposal to raise fees is controversial. The London Student website currently carries a photo of a student wearing a placard reading “No fees please” which is a bit like sitting down to eat in a restaurant wearing a sign saying “No bill please”. A recent proposal from the think tank Policy Exchange to raise tuition fees provoked a furious response from the University and College Union and the National Union of Students.
Of course, universities can always milk foreign students. Between 2000 and 2006 the number of international students in the UK increased by 48%. Fees range from £8,500 to £32,000 per year, a rise of between 1/3 and 1/2 over the last decade.
Of course universities should not be investing in companies engaged in criminal activity. But as the arms trade has been singled out as a target so far it is worth noting that most people are killed not with high tech weapons but with cheap weapons like the machetes which hacked so many to death in Rwanda.
But with the government’s pockets empty and students unwilling to pay more, the coming gap in university funding requires that some serious thought goes into cutting off potential revenue streams.
Ethical investment plans will only jeopardize Higher Education further.
(Printed in London Student, vol 30 issue 10, 01/03/10)