Tuition Fees: The Law of Unintended Consequences

The law of unintended consequences, sometimes defined as “a perverse effect contrary to what was originally intended (when an intended solution makes a problem worse), such as when a policy has a perverse incentive that causes actions opposite to what was intended.” (thanks to Wikipedia there) has swung into effect on the governments university tuition fees plans.

Back in November 2010 we were being told that tuition fees were rising to provide additional funding for universities, in part to fill the gap left by a reduction in government funding. To quote the BBC web-site on the matter:

“Much of the proposed fee rise, up from the current £3,290 per year, will replace funding cut from universities in last month’s Spending Review.”

Now, it seems that someone has made a mistake, with the Minister of State for Universities and Science (who, we assume, should know what he’s talking about) quoted as saying “If graduate contributions end up higher than £7,500, we would reluctantly be forced to find savings from elsewhere in HE [higher education].” or in other words, if universities decide to raise their fees to the maximum level to offset the cuts the government has made, the government will be forced to make more cuts to cover the cost.

As well as being a quite bizarre example of badly thought out legislation, what does this say about the qualifications and experience the current government has, and are they truly capable of making the correct financial decisions in these tough times? A flagship economic policy that makes the situation worse is not a good sign.

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