Higher education has been hit hard in the British spending review, with funding to be reduced from £7.1 billion to £4.9 billion by 2014-15. Reports suggest that their low-tech subjects may have their funding cut entirely. The fee increases flowing from the Browne report will presumably make up most if not all the losses.
In Australia HECS successfully transferred costs from taxpayers to students/graduates with no loss of graduate numbers. It will be interesting to see how these UK changes go, as the cuts are much larger and quicker than anything seen here.
This financial crisis is not having the political consequences I expected two years ago, or what our unlamented former leader predicted in his Monthly essays. In Europe, it has become a crisis of social democracy. Their bloated welfare states were in bad financial shape before the financial crisis struck; now they simply unable to cope.
In the United States the Republicans, who when Obama was elected looked set for many years in the political wilderness, now look like they will soon be back in charge of the Congress. Unlike the European centre-right leadership, however, I see few signs that the American Right has regrasped reality and has a responsible plan for extracting the US from its disastrous fiscal position.
In Australia, it’s not clear that the financial crisis greatly changed the ideological dynamics either way. We are still in a centre-left phase of the political cycle, but it started well before the financial crisis and was not enhanced by it, with the right gaining seats in the 2010 election.
We will be spared the social division that eventually flows from resizing unsustainable big government.