OECD REPORT CRITIQUE by Daniel Finn

The recent OECD report has been presented by the government, the educational establishment, and many journalists as the last word on third-level education reform. We have been told that the OECD is a fair-minded, non-partisan source, whose recommendations should be accepted without reservation. In fact, the OECD has a clear ideological agenda, and its report is a deeply flawed piece of work. It urges that the free fees scheme be abolished, that universities establish closer ties with business, that an Australian-style loan system be introduced. It can easily be shown that all these changes, if implemented, would have a deeply harmful effect on our education system, and Irish society as a whole.

THE NATURE OF THE OECD

First of all, it’s essential that we understand the nature of the OECD. It is not by any means a neutral body. The OECD is very much part of the neoliberal consensus that dominates the institutions charged with managing the international economy. It speaks with the same voice as the WTO, the IMF and the G8. Their mantras of privatisation and competition are applied to any subject. In particular, the advocates of neoliberalism demand that public services be sold off to private investors; that systems providing free health care and free education to all citizens should be replaced with a model where “consumers” are forced to pay.

Our government is one of the most enthusiastic European advocates of this agenda. This privatisation mania has already been applied to public transport. By choosing the OECD to produce this report, they knew that they would be sure to receive advice in line with their own ideological preconceptions and prejudices.

INDICTMENT OF CURRENT SYSTEM

The report does provide useful information about the failings of the current system (these failings were already known, but it is valuable to have them confirmed and summarised). It demonstrates that education is underfunded by comparison with other OECD countries: “Ireland’s investment into its education system as a whole is lower than the OECD average. In public expenditure it ranks only 25^th out of 30 OECD countries and with private expenditure added to public, 23^rd out of 27 countries for whom data are available.” Between 1995 and 2000, public expenditure declined from 4.7% to 4.1% as a proportion of GDP.

Along with this lack of funding goes an alarming class divide in access to education: “nearly 100% of the children of higher professionals and over 80% of the children of employers and managers enter higher education as compared with only around 20% of the children of employers and managers enter higher education as compared with only around 20% of the children of unskilled and semi-skilled manual workers … within the university sector the offspring of the higher professional group clustered in medicine, law, veterinary science and dentistry.” The situation is particularly bad for working-class Dubliners: “while Dublin provides 60% of all first degree places nationally it has itself the lowest age participation rate in tertiary education with the rate in central Dublin estimated at no more than 16%.”

This problem is compounded by discrimination against part-time students: “if the figures for the National College of Ireland are excluded, part-time numbers make up only 20% of total student numbers … part-time students are not eligible for maintenance grants and have to pay fees … discriminating between part-time and full-time students in this way creates a severe disincentive to students.”

Not only is this inegalitarian system unjust, it will also have damaging consequences for Ireland’s economy in the long run. All authorities agree that Ireland needs a highly-educated workforce. But a decline in the birth rate will see a major fall in student numbers unless barriers to access are removed: “HEA [the Higher Education Authority] projects an increase in the age participation rate to over 66% by 2015 but this will require a significant improvement in the staying on rates of pupils from economically disadvantaged backgrounds.”

FREE FEES

However, the policies suggested by the OECD cannot offer any solution to these problems; in fact, they will make them worse. Media attention has focused on the call for the abolition of the free fees scheme introduced in 1995. The report claims that “the free fees policy is inequitable because it provides substantial subsidies to students who families could well afford to pay tuition fees.” It also claims that “no evidence was produced throughout our review that the decision in 1995 to remit fees for first degree study had more than a limited, if any, impact on the disparity of participation rates amongst the different social-occupational classes.”

This is much too simplistic a view. The same argument was put forward when Donogh O’Malley abolished fees for secondary education; this move was also presented as a gift to the middle classes. At the time, it was very rare for the children of working-class families to reach Leaving Cert level. It took decades for this pattern to shift.

The same can be said of free fees for third-level education. But already, research by Patrick Clancy has shown that participation by the children of those in the low-to-middle income bracket, which had been declining, has increased since the mid-nineties. There would have been a more dramatic improvement if the abolition of fees had been accompanied by other measures to remove barriers to access, such as the inadequate grant system.

The argument that money to improve primary and secondary education, again advanced by the OECD report, can only be found by abolishing the free fees scheme, is totally false. This argument is an attempt to set different social groups at each other’s throats in competition for scarce resources, when they should be campaigning together for an increase in the education budget across the board. It’s quite right to say that the well-off should contribute to the education system: that’s what the tax system is there for.

THE AUSTRALIAN MODEL

The report also suggests as an alternative to fees the introduction of a Graduate Contribution Scheme. This is explicitly modelled on the Australian Higher Education Contribution Scheme (HECS); one of the members of the report team was John Dawkins, the former Minister for Education who introduced the HECS in Australia. The damaging social effects of this measure must be pointed out.

Before Dawkins became education minister, Australia had a free fees scheme similar to the Irish one. This was replaced with the HECS. At first, students were expected to pay 20% of the average cost of their courses; these payments would be deferred until graduates were earning the average wage. Subsequently, a “differential” HECS was introduced. Courses were divided into 3 bands. In all 3 bands, the amount students were expected to pay increased dramatically, to an average of 40% of costs (including research costs not related to teaching). Over time, the government reduced the income threshold below which graduates would not have to begin repayments as far as it possibly could without hitting benefit recipients (this would have meant taking money from itself - obviously a nonsensical policy). Repayment is now triggered when a graduate earns a measly 77% of the average weekly wage.

This has discouraged participation by students from working-class backgrounds, who are more likely to be “debt averse” because of personal experience of debt. Those who do reach third-level are saddled with huge debts for many years after graduating. Australian economists and financial papers now refer routinely to the so-called “Generation HECS” of under-40s who have been unable to buy their own homes because of student debts (this in turn pushes rent levels upwards). For a more detailed account of the Australian experience, see: http://www.ucdsu.net/newswire.php?story_id=161&results_offset=40

We should learn from this experience. When free fees were abolished in Australia, the move was accompanied by firm promises that the amount paid by students would be modest, and all possible steps would be taken to ensure disadvantaged students were looked after. But once the floodgates were opened, charges on students rose and rose (between 1995 and 2001, HECS charges rose by 70%), while the disadvantaged were left to fend for themselves. The prospect of massive debts has discouraged many from ever attending college, while those who do find their course choices limited by financial barriers, and are saddled with repayments that lock them out of home ownership indefinitely. It is scarcely believable that the OECD should claim that the HECS “has been market tested successfully in Australia”.

CORPORATE FUNDING

The experience of other countries should also lead us to question another suggestion for extra funding: that universities should develop closer ties with the private sector (for example, the report argues; “Irish tertiary education institutions are over dependent on public funding; less reliance on the state would make them more competitive”). In countries like Australia, Britain and above all the United States, the effects of reliance on private funding have been deeply harmful to universities. Firstly, private funding has not been a complement to government investment; rather, it has been an excuse for the state to cut its own spending.

Secondly, it has compromised the role of universities by allowing corporations a large say in what goes into courses. Academic courses should not be dictated by narrow corporate requirements; education does involve gaining qualifications that are useful for the workplace, but it is much broader than that. It is unacceptable that subjects considered “irrelevant” by business should be starved of funding or abolished altogether, as has happened in countries reliant on corporate funding. Thirdly, corporate funding has distorted research in many fields, as companies demand that universities carry out their research for them. In the US, this has led medical research to focus on areas that will be profitable to medical companies, while neglecting research of greater value to society. Worst of all, academic freedom has been compromised as companies demand the suppression of research findings damaging to their commercial interests.

ALTERNATIVES

In summary, we can say that the OECD report highlights the problems accurately, but offers “solutions” that will actually make things worse. Its dogmatic prescriptions have little to recommend them. Of course, this raises the question: what is the alternative? This question can easily be answered. The solution is to raise education funding across the board. Primary and secondary schools should be funded properly, the grants system should be revamped, and the free fees scheme should remain in place. The money to pay for such investment is there; what is required is progressive taxation.

It is often said that “public opinion” is hostile to increased taxation. This is misleading; it would be more accurate to say that the portion of the public which votes for the Progressive Democrats (a small minority) is hostile to increased taxation on their income and property. A minority should not be allowed to impose their will on the rest of society. If we want a world-class education system, we will have to insist that those who have benefited most from society’s wealth should accept their fair share of the tax burden.

See also:

http://www.ireland.com/newspaper/opinion/2004/1019/1292765641OPLYNCH.html

http://www.usi.ie/usi/asp/section.asp?s=211