Deterioro del valor de los activos

As the Thorneycroft resignation testifies, there were already concerns in the 1950s about the growth of public expenditure. Hennessey quotes a memo from Brooke, a senior Treasury official (later Sir Norman Brooke, secretary to the Cabinet) to Bridges, the head of the civil service, expressing his surprise that ‘the great increase in public expenditure and the substantial change in its pattern, which has come about in the last five years in consequence of their [government] policies in the field of social services’, had not been accompanied by a review of the longer term implications (Hennessey, 2006). In 1958, the Select Committee on Estimates prompted the Plowden Committee, whose Report, Control of Public Expenditure (HM Treasury, 1961), suggested a radical change in the way government estimates of future expenditure were arrived at. The essence of the Report was the recommendation that a formal process be introduced for assessing the public expenditure implications of policies five years ahead. Implementation brought a wholly new rigour into the establishment of priorities. First, it established a committee, the Public Expenditure Survey Committee (PESC), to control the process; second, it recommended the establishment of a Cabinet-level minister in the Treasury, the chief secretary, to take charge, under the Chancellor, of public expenditure; third, it laid down that the beginning of the process was a Cabinet decision which set a public expenditure target against which individual bids for new expenditure had to be judged; and finally, it established the mode of a departmental bidding process. Over the years the ceiling against which this bidding took place was normally fixed at between 40 per cent and 42 per cent of national spending: in 2008–09 it had risen to 43.2 per cent (Crawford et al, 2009).

The prime architect of the PESC machinery was Sir Richard (Otto) Clarke, the civil servant responsible for public expenditure in the Treasury and for the universities’ budget. At its meeting in January 1962 Clarke addressed the UGC, congratulating it on the scope and thoroughness of its quinquennial report but warning that ‘the scale of university finance was now such that decisions could no longer be taken by Treasury ministers on their own but had become the responsibility of the government as a

whole’ (UGC, 1962). This was a coded message that the special relationship with the Treasury was at an end. Now the arbiter of public expenditure in a new competitive process, the Treasury could no longer itself be the budget holder and, by implication, the advocate in a bidding exercise. Almost overnight it had become the impartial inquisitor of higher education expenditure and the relentless proponent of devices to restrain departmental spending within a pre-decided public expenditure target.

The institution of the new PESC machinery cut across negotiations the UGC had been having with the Treasury since 1960 about the need to accept an expansion of student numbers to 170,000, and dealt with the recurrent and capital grant implications. The timing of capital grants was particularly important to ensure building starts to accommodate increased numbers in 1962 and 1963. By January 1961 the UGC had secured some improvement in capital grant for 1962–5 but no acceptance of student number targets beyond 150,000 at the end of the 1962–7 quinquennium. In his address Clarke warned that the government was facing enormous demands from the health services and the roads programme, that GDP would not rise above 2.5 per cent annually, and that any increase in public expenditure above between 40 and 45 per cent of national expenditure (the Cabinet fixed the PESC target at 42.5 per cent) could only be paid for by politically unpopular tax increases. In March, the Chief Secretary to the Treasury, Henry Brooke, reported to the House of Commons that ‘considerations of economic policy, which are, of course, right outside the scope of the [UGC’s] responsibility, have made it necessary to depart from the Committee’s recommendations’ (Berdahl, 1962). Although the actual settlement for recurrent resource up to 1967 was only a little less than the UGC’s bid, the crucial issue was that the 170,000 figure had been deferred until 1973–4, a year later than the end of the following quinquennium. The public response was immediate, prompting debates in both Houses of Parliament. In the Commons Gaitskell, the leader of the Labour Opposition, described the government’s action as ‘discreditable in substance, dishonourable in presentation and deplorable in its consequences’, while Lord Longford, the Opposition spokesman in the Lords, called for the removal of Treasury control over the universities (Berdahl, ibid). For a government already in political difficulty, what was most damaging was the fact that many of the speakers against the decision were from the Tory party. In response it quietly reversed its decision later in the year and transferred Henry Brooke in a reshuffle. More significant about the event, however, was the fact that the universities’ budget was no longer ring fenced, that it now had to fight its corner with other national needs, and that a new powerful piece of policymaking machinery – which could superimpose its decisions, unless overturned in Cabinet, on the aspirations of whatever authority, whether the UGC or, later, secretaries of state for education – had been introduced.

The Robbins Report and the future financing of higher education