Funding in Higher Education and Economic Growth in France and the United Kingdom, 1921-2003

Abstract

The UK 2004 Higher Education Act generated important debates about the relationships between higher education (HE), economic growth and social progress. The range of positions expressed in relation to the increase of annual tuition fees raises crucial questions about the public and private funding of higher education and its individual and social economic benefits. Such controversies have a strong resonance in France where discussion about HE underfunding has already emerged. This article seeks to inform these current debates by combining economic and historical perspectives within a quantitative approach. The analysis of new historical series on funding and development of UK universities since the 1920s and the comparison with similar data for France has put into evidence a long-term link between HE funding and economic fluctuations. In both countries, the expansion in university resources was not linear and may be related to the impact of long economic cycles on public funding. Moreover, in the UK case, private funding periodically increased in order to replace diminishing public funding, rather than taking the form of additional resources. In consequence, private funds did not provide an overall rise in the universities’ income. The considerable fluctuations of funding, combined with a more consistent growth of enrolment, led to a recurrent mismatch between resources for and access to higher education. This can explain the wide fluctuations of resources per student over the period and the current underfunding situation. Such historical trends question whether, in the future, increased fees will be a substitute for public spending. Or will variable fees be combined with even greater increases in public funding as part of a national project to support HE students from all social backgrounds and to boost expenditure per student?