Seasonal thoughts

For someone who has worked in and with universities for all of their adult life, I have a real difficulty in counting academic years. If I’m told that someone started their three-year degree in 2012, I have to use my fingers to work out when they’ll graduate (July 2015, just to show that I can do this). The UK academic year doesn’t match any of the other ancient years – it isn’t related to quarter days, it doesn’t tie in with tax and government budget years; there’s no connection with the change from Julian to Gregorian calendars.

The roots seem to be more practical – the year starts after harvest. The picture I have in my head is much like Bruegel painted, with jolly/oppressed (take your pick, really) villagers bringing in the harvest, as a literal matter of life and death. Once the harvest was in the bag, other things could take place. And hence the UK academic year which starts in September/October.

This (and legacy of imperialism) seems a plausible explanation for most countries' term dates – in the Southern hemisphere, January/February starts are usual; in the Northern, September/October are the norm. But there are interesting exceptions – Japan and Pakistan begin in April, Finland in July. Russia starts in September with the wonderful Knowledge Day.

In the UK an autumn start is not universal. Several universities allow a February start (within the contact of a September norm) and the University of Buckingham, which as an entirely privately funded university sits outside of many mainstream UK practices, starts with the calendar year.

The harvest is no longer an overwhelming part of everybody’s calendar in the UK. Not many of us have actually reaped what we’re sown (at least not literally); and less than 1% of UK workers are in the agriculture and fishing industries. So does it make sense to start in September? Christmas and Easter holidays are awkward for a semester system, and a different start time could make it easier to schedule teaching, and therefore supportive of better learning. A different start to the year could also allow for post-qualification admissions to become a reality, which would help with widening participation and remove the lottery of clearing.

But be warned – it isn’t something that can be done by one institution acting alone, as Tokyo University found out in 2013:

Speaking after a meeting of the presidents of national universities on Wednesday, Todai [Tokyo University] President Junichi Hamada said there were too many hurdles to overcome and that shifting the start of the academic year could not be done by one institution alone, but required a change in Japan’s education system.

So the only rational answer is for everyone to help with the harvest, as before, and come back to university in September with a real appreciation of the opportunity to learn in comfort.

Season’s Greetings to you all!

Top of the Class

Here's the REF analysis you won't have seen yet. The results are in, and it seems that Wales has the cleverest academics, followed by Scotland, England and Northern Ireland.

Using average GPA across all submissions from universities and institutions in the four countries, the results are:

Wales - 3.035
Scotland - 3.028
England - 3.022
Northern Ireland - 2.954

Marginal, for sure, but clear at three decimal places.

Cymru am byth!


[Edit, 22 December: just to clarify, this is a bit tongue-in-cheek. The REF doesn't really prove this; at best it proves that the tactics of universities in Wales were marginally better than those in the other four UK nations. And it probably doesn't really prove this either, it simply demonstrates that with large numbers of universities there's a regression to the mean. I'll be posting more on REF, with more data and analysis, in the New Year. Once it ceases to be fashionable.]

An Alternative point of view

The National Audit Office report on Financial support for students at alternative higher education providers has generated a lot of media coverage in the past couple of weeks – both from industry and social media. Here’s links to the Guardian’s coverage; the BBC and the Times Higher; and also a brief piece by Emily Lupton on Wonkhe. The coverage ranges from £5m mis-spending to a whopping £50m potential risk in your super soar-away Guardian. So what’s really going on?

First up, what are alternative providers? An alternative provider is any college which offers higher education, but is not part of the ‘normal’ state-funded, QAA-regulated, HESA-data-submitting established universities. So the term includes established and well-recognised institutions such as the University of Buckingham or BPP University (relatively new name but a long, long heritage) as well as lots of smaller colleges, some of which have sprung up in the last few years. (I should add for clarity that there are no adverse comments about either Buckingham or BPP in the NAO report.) I blogged a while ago about which institutions use UCAS, and a lot of the entrants and exits from that marketplace are alternative providers.

Alternative providers aren’t all for-profit – the term covers colleges run as charitable trusts too. Courses lead to awards made either through powers that they have gained themselves through the recent more open procedures run by BIS; made by national awarding bodies; or lead to awards validated by universities, or franchised from universities.

The story arises from the opening up of access to Student Loans Company (SLC) funding for students at alternative providers – up to £6k fees, and also for living costs. And this is what the NAO was investigating.

There were four main findings:

“EU students at some alternative providers have claimed or attempted to claim student support they were not entitled to” – this is the £5.4 million mis-spending reported by the media. And 83% of the wrongful claims came from student at just 16 alternative providers.

“Dropout rates at 9 alternative providers were higher than 20% in 2012/13” and “20% of Higher National students recruited by alternative providers and claiming student support may not have been registered with the qualification awarding body in 2012/13”. The NAO takes this as evidence that some students aren’t really motivated to learn – that is, they may be registering as students only to access loans.

“Between 2012 and 2014, BIS suspended payments to 7 providers and their students owing to concerns that providers had enrolled students onto unapproved courses” and “a lack of clarity has existed within BIS and its partner organisations about which courses were approved for student support.” This points to procedures designed (or at least operated) by BIS and the SLC which didn’t check eligibility before lending money.

“In 3 cases, BIS suspended payments to providers or their students where it had concerns that the providers had supplied incorrect information about student attendance.” The point being that it was the SLC making payments, but without the powers necessary to assure itself of the correctness of the payments.

Does this mean that alternative providers are a Bad Thing? That was certainly the unspoken view behind a lot of the Twittersphere commentary. I don’t think that it does.

It does mean that some of the providers audited almost certainly are doing bad things, and it almost certainly means that some of the people who signed up for courses at some alternative providers were doing it for the wrong reason. But a very few students also enrol at ‘normal’ providers for the wrong reason. And they’re often caught, like these ones, and dealt with. (A quick note about the 83% at 16 providers which the NAO cited: the alternative providers market is very skewed, with a few very large providers and many very small indeed. 83% of students at alternative providers, selected on any basis at all, are mathematically almost certain to come from a small number of providers. Just saying.)

But I do think that there is a problem here, and it’s the failure of regulation which this represents. There wasn’t until September 2014 a single comprehensive list of courses at alternative providers which were approved for access to SLC funds - this makes checking very difficult. There weren’t systems which shared information at the right time between bodies to make it possible to spot and stop problems. There wasn’t the right authority to oversee new providers in a timely fashion. These are all foreseeable problems, the sort of problems which universities have been dealing with for years and which sector groups – Universities UK, the Association of Heads of University Administration (AHUA), the Academic Registrars’ Council (ARC) – are well placed to advise upon.

The reasons for this?  Too little time spent on thinking things through; a government in a hurry; a coalition government, meaning that plans had to be compromised; and a civil service which was distracted by pressure to find savings. And underlying this the great truth that higher education is a long-term process, with outcomes only known sometime after the event. The same is true for higher education policy – act in haste, repent at leisure.

Master's in Finance

Nobody could have been surprised that the Chancellor announced loans for postgraduate students in today’s autumn statement. But the details that we know deserve a bit of consideration.

1.3% of the available postgraduate loan

First, the announcement – an income-contingent loan, at real but better than market rates, of up to £10k, available to people under 30 starting a taught postgraduate course from 2016. Subject to consultation and details. The modelling suggests an interest rate of RPI+3%, which isn’t a bad rate. Repayment would be thought the existing Student Loans Company mechanisms, with repayments starting at £21k salary, with 9% of salary above £21k taken as repayment.

This has been a long time coming – the NUS and universities have been campaigning for a while, and since the introduction of the higher fees in 2012 it was clear that there would be a pressure on Master’s degree enrolments when people were graduating with substantial SLC debt.

One interesting aspect is the age limit. Prior speculation had been that the loans would be available only for STEMM (science, technology, engineering, mathematics and medicine) subjects. That they will be available for all subjects is a victory for humanities and social science lobbying, but the age cap may have been a necessary corollary: the loans are intended to be self-financing.

Also of interest is the question of possible discrimination. If it turns out that the loans are not self-financing (and we know how robust RAB calculations are in relation to student loans) where is the justification for stretching the Equality Act protection of age?

PG loan stuff on p56, interestingly the assumption is that this will cause PGT numbers growth rates to drop. https://t.co/TGLfbJFoSN
— David Kernohan (@dkernohan) December 3, 2014

David Kernohan spotted in the Treasury’s underlying calculations that the loans are also predicated on a slowing of the rate of growth of PGT students – from 2% annually to 1%. My guess is that this is necessary to make them look self-financing over a sufficiently short timescale: if growth is larger, sooner, then the up-front cost will hurt Treasury. If there’s a cap on PGT numbers in four years’ time remember that you read it here first!

What will the repayments feel like? If we assume someone earning £24k per year, then with just an undergraduate degree and associated loans they’d be repaying £22.50 monthly on a gross monthly salary of £2000. And the same person with a Master’s degree would pay £45 monthly on the same gross salary – a marginal rate of 2.25%, and the size of a monthly contract for a flashy mobile phone. A first-degree holder earning £36k per year would pay £112.50 on a monthly gross salary of £3,000; the same person with a Master’s degree would pay £225 per month – a marginal rate of 7.5% and more like the monthly repayments on a car. So, progressive taxation, up to a point, and also noticeable by the individual.

It’s important though to bear in mind that current students are already paying: whether it’s borrowing from parents and family; saving for a couple of years; or working during study (or all of the above). It’s unquestionably a good thing that these loans will be available, but at £10k they won’t pay the full costs.  It’s an amelioration of financial problems, not a complete solution.

It’ll also be interesting to see whether this becomes an election issue: will the other parties promise to do this also, or does it become an uncertainty. My guess is that Nick Clegg will not want to talk about this: too many bad memories for him!

Countering terrorism in universities

The Government has now published the Counter Terrorism and Security Bill which includes provisions that enable the Home Secretary to require universities to take steps to counter radicalism.  I'm just commenting here on what the Bill seems to mean for universities - there's lots more in it than this!

Three relevant powers are in the Bill.

Firstly, the bill places a general duty on "specified authorit[ies]" (which includes universities) in the exercise of their functions, to "have due regard to the need to prevent people from being drawn into terrorism."

Secondly, the Bill gives the Secretary of State the power to "issue guidance to specified authorities about the exercise of [this] duty"

Thirdly, the Bill gives the Secretary of state the power to "give directions to the authority for the purpose of enforcing the performance of that duty" which "may be enforced, on an application made on behalf of the Secretary of State, by a mandatory order."

So, the Home Secretary gets to tell universities what to do.  With a power to seek a court order to do so.

There's two angles to this.

In practice, it means that the Home Secretary is likely to instruct universities to ban certain speakers from campus; and instruct them to report students about whom they have concerns.  Neither of these is uncontroversial.

It is also, of course, an encroachment on universities' autonomy. I couldn't fined a clause that limited the range of matters on which the Home Secretary could give guidance. Is the curriculum out of bounds?

The relevant clauses, by the way, are in Part 5, Chapter 1, sections 21, 24 and 25,. And the usual disclaimer: I'm not a lawyer: this is offered as commentary.

All of the blogs that I've written so far ...

I thought an index of posts it might be useful – I haven’t really got the archive sidebar working as well as it should, and over the months there have been some posts which people tell me they’ve found quite interesting.

Title	Outline
March
Welcome and why	The ‘Sweeping leaves’ metaphor explained
The disruption that is to come	The impact of social media on teaching practices
Bigger is better?	On scale and professional service costs in UK higher education, using HESA data.
Big data, small budgets	How to get more from the data you already have, without spending a fortune
Dealing with uncertainty	Three ways to stop the future sneaking up on you unnoticed
Student Power	A history lesson, plus the Manchester economics students and their demanding behaviour
April
Eight things a new line manager should know	Or, things I wish I’d known when first I started managing staff
The customer is always right	About the OFT reviews of competition in UK higher education
Don’t tell him, Pike!	About information for applicants and students, and how to get it right
Happy Birthday, Janet	About how to make shared services work
Why are students so hard to count?	About management information and student numbers, and not getting confused
Who pays?	On the funding of higher education in the UK
Say hello, wave goodbye	What UCAS data tells us about the rise of alternative providers
May
The heart or the head	Idealism and free higher education
Masterful guidance	On frameworks for information about taught postgraduate degrees, and why this might matter more than you think
Operational Effectiveness	How lean thinking and Standard Operating Procedures can make a big difference
Squaring up	Ructions in higher education governance and funding in Wales
June
Boom or bust	Capital spending by UK universities
MOOCs ado about nothing	On MOOCs and how they might be challenging existing models for higher education
Knowing trust	How to make a collaboration work
Risky business	Analysis on the dependency of UK universities on overseas student fee income
Estimating dependency on overseas tuition fee income	Further data and analytical work on this topic, with a link to a download
Context is everything	On contextual admissions to universities, and two things to do to really help widening participation
July
Setting the boss’s pay	On student power and remuneration committees
Small things can make a big difference	A really whizzy technology which might help free up space in universities
Room at the top?	On gender balance (or in fact, the lack of it) in University senior management teams
The money lenders	Problems with plans to sell student debt to universities
August
Doctor, doctor!	Patterns of doctoral study in the UK, and why it’s like the Football Premier League
The American Dream	On the adoption by UK universities of US style academic job titles
On regulating student behaviour	How competition law changes mean a change to the nature of the student contract
A desire to learn	Do universities forget that motivating students is part of their brief?
Should I stay or should I go now?	Patterns of student movement within the UK – or why England and Scotland have sustainable HE systems, and Wales and NI do not
September
Academic Dinosaurs?	How alternative providers are, and are not, challenging ‘traditional’ universities
Occupational hazard	Tips for dealing with a student occupation
Independent thinking	The impact on research of Scottish independence
It’s very complicated	Globalization and language skills in university management teams
Do universities really not care about students?	A rebuttal of a cheap article in the Telegraph
Neverendum? Neverlegislatum!	How university governance and management has lessons for the post-referendum UK political scene
This sporting life	Universities and sports sponsorship
October
QAA? Armageddon outta here!	All about the consultation on future QA arrangements
Counting them out and counting them back in again	How graduation explains (almost) everything about university administration
Key Performance Indicators	Explaining KPI’s, and why staff-costs-as-a-percentage-of-income is so important
A fine romance	On the University of Sheffield’s abolition of library fines
November
KPIs #2 - EBITDA	EBITDA – Earnings Before Interest, Taxation, Depreciation and Amortization - demystified
Scottish Governance	On proposed Scottish legislation about university governing bodies

In compiling this I remembered the range of subjects I’ve covered. I hope you’re finding them useful. Let me know if there’s a topic you’d like to see!

Scottish Governance

Recently the Scottish Government released a consultation document on University Governance. The BBC and other media picked up on this, headlining the proposals for elected chairs of governing bodies. (You can see the BBC story here, and the Scottish Government consultation document here.) The proposals are interesting and worth a bit of reflection. And certainly exciting for policy and governance wonks.

There are six specific proposals for consultation.

The first is the replacement of Privy Council functions, in respect of university governance, by a committee accountable to the Scottish Parliament, and comprising the same individuals who are consulted by the Privy Council currently on university governance matters.

The rationale is that this will speed things up and introduce an element of public scrutiny. In university folklore the Privy Council is very slow indeed and a reason often cited why universities can never change their charters and statutes or instrument and articles of government. In practice the Privy Council is now pretty quick on straightforward changes, but it’s a fair observation that previous changes in approach have not been subject to the same scrutiny. (My recollection is that the relaxation of regulation which enabled universities to slim down their charters was as a result of ministerial fiat, and not legislation, but I may be wrong).

The second proposal is for an expanded definition of academic freedom, building on the current UK definition (academic staff shall have freedom within the law to question and test received wisdom, and to put forward new ideas and controversial or unpopular opinions, without placing themselves in jeopardy of losing their jobs or privileges) by adding that academic freedom includes “the freedom to encourage the exploration of new ideas”.

I find this a little odd. Is this a bid to make enterprise feel a bit more normal as part of the academic endeavour, and encourage income from inventions, patents and the like? That might be a fine thing, but it's hardly an issue of academic freedom. If the Scottish Parliament really wanted to secure academic freedom then they could look at the legislation in New Zealand. I'll post on academic freedom another time.

The third proposal seeks to confirm the role of the Principal as Chief Executive Officer. This looks like a tidying up provision, bringing clarity to who should be accountable for public funds. But it also asks what title should be used, if not Principal, for this role. To my mind, if it looks like a Vice-Chancellor and sounds like a Vice-Chancellor, then it probably is a Vice-Chancellor. Are they hoping to make Principals into Presidents on the US model? Or is this just a distraction?

The fourth proposal is what got the headlines. And it isn't half as exciting as it sounds: the idea is not for popular (or in fact unpopular) election, like Police and Crime Commissioners. It is for a process of job description, search, shortlisting by interview and then election by academic staff and perhaps external stakeholders. Having been involved in the appointment of chairs of governing bodies, I know that it's tough to find the right person and persuade them to do the job. I'm not sure that adding a public election will lead to better outcomes.

The fifth proposal is for governing bodies to include two students, two staff members, two members nominated by Trades' Unions (one from academic and related staff; one from administrative, technical or support staff);and two alumni. The Trades' Union category is, I believe, novel; it will be interesting to see the reaction to this.

Finally, the sixth proposal is for academic boards to be confirmed as the supreme academic decision making body in a university (echoing the bicameral approach typical of chartered universities); that other than the Principal and Heads of School, all other members should be elected from amongst the university’s staff; that elected members must be a majority; and that the total size should not exceed 120.

This is, I think, quite radical. Combined with the other measures, it makes the Principal the CEO but builds in an academic check-and-balance against a university drifting from an academic mission as perceived by its academic staff. This might be seen as a move to reinforce standards, but could also be a way to guarantee conservatism within a university. Universities have found many ways to resist change. Read the Microcosmographia Academica if you need convincing of this.

FM Cornford - he of the Microcosmographia Academica

How will these proposals go down? Universities Scotland is against them:

We urge careful appraisal of whether government action now will enhance universities' implementation of the principles which are at the heart of our autonomy and success.

Which I read as a circumlocutory way of saying 'get stuffed'.

Whereas Ferdinand von Prondzynski, Principal of Robert Gordon University and chair of the 2012 Review of Higher Education Governance in Scotland welcomed the report, according to Chris Havergal in the Times Higher, as completing the work of the review.

Watch this space for next steps.

Higher Education KPIs #2 – EBITDA

I posted a couple of weeks ago about staff costs as a proportion of income. Another performance indicator which has become common in Universities over the past few years is EBITDA.

No, not an obscure Scrabble word (although BAITED for 9 points is do-able with the same letters), but an acronym for a financial indicator, which helps you understand the underlying financial strength of a university.

Earnings
Before
Interest,
Tax,
Depreciation and
Amortization

There’s some jargon in there. Let’s unpack it a little.

Earnings is just what it sounds like. Total income minus total expenditure.

But, accounting isn’t as easy as looking at what’s in your wallet at the end of the day. It’s about keep track on real cost and values of assets and income, and recognising that there’s a difference between what you use once and once only and what keeps being usable. (So, I’ve just had a cup of coffee. The coffee granules are gone and used; the mug I can wash and use again.) And that‘s where some of the other terms come into play.

Interest means interest that is payable on debts owed. It’s a cost, for sure, but it’s a cost that can vary because of decisions taken by the borrower (how long do you borrow for? Fixed or variable interest rate? Secured or unsecured? Wonga or the Co-op?). So interest payments don’t necessarily tell you much about financial strength – but they might tell you a lot about the financial acumen of the management team.

Tax, sad to say, is similar. Not for universities – there isn’t often a university tax scandal (but see here for an exception!) – but remember that EBITDA is from the commercial world. And then think of Starbucks and Amazon and realise that tax, if you’re rich and powerful enough, is optional. So tax costs measure the skill of your accountant.

Depreciation and Amortization are both accounting concepts.

Depreciation is a way of measuring the value that’s left in an asset which is reusable. Imagine a whiteboard in a classroom. The lecturer can write on the whiteboard, get value out of it for teaching, and then wipe it clean at the end. It’s got value, but it hasn’t been used up by the class. But over time, it becomes less clean: people use the wrong marker pens; the shiny surface dulls with being cleaned too often. After a few years you need a new one.

This gives a problem if you want to measure how much the whiteboard costs for a particular class. If you put all of the cost against the first class in which it is used, that class seems expensive, and the continuing value of the whiteboard isn’t recognised. If you only charge the cost to the class where it finally needs a replacing, then again it isn’t right: the wear and tear occurred over years, not in one hour. And so you take the cost of the whiteboard and allocate it, a bit at a time, to the activities for which it is used.

Now in accounting this is done over time, so if the whiteboard cost £50 and is estimated to have a lifetime of five years, then you charge £10 per year, for five years, as the accounting cost. (You still need to pay up front, of course – as I said, accounting isn’t about what’s in your wallet but about true costs and values.) Critically, there is judgment involved in how depreciation works. And every university will have accounting policies which set out the rules of thumb applied.

Amortization is a similar concept, but refers to the cost of intangible assets. (A white board is tangible – you can see it, and if it drops off the wall onto your foot it will probably hurt. A university’s reputation is intangible: it can fall without hurting anyone straightaway: the pain take a while to appear.) Universities do have intangible assets – intellectual property, for instance. Again, there’s judgment involved in identifying how much specifically to allow for amortization.

(As a cheery footnote, the mort in amortization is the same as the mort in mortgage, and both come from the medieval French mort=death.)

So EBITDA is a measure of earnings which is free of financial and accounting wizardry. It’s a very Gradgrindian measure, for fans of Dickens. Or for fans of twentieth century politics, it’s like Sir Alec Douglas Home and his matchsticks.

For universities it has become a favourite of funders and regulators. HEFCE use it to decide whether a university needs to get permission to borrow (take a look at Annex C): if a university’s total financial commitments are more than five times its average EBITDA then written permission from HEFCE is required for the borrowing. And so it has a practical consequence, which helps to explain why university governing bodies are interested in it. EBITDA is defined for HEFCE’s purposes by BUFDG (link downloads a word document). Quite a technical subject!

EBITDA can be a cash amount (useful if you want to see if you’re over the HEFCE ratio) or it can be expressed as a percentage of income. An EBITDA of £1m might be brilliant if your turnover is £5m, but if your turnover is £100m then perhaps you’re running a little close to the wire.

Disclaimer: I'm not an accountant. If you want to understand EBITDA then the above might help. If you want to pass a CIPFA exam read a CIPFA textbook!

A fine romance

An interesting item on the BBC website today – the University of Sheffield has abolished library fines for students.

The BBC rightly identifies this as stemming in part from the OFT’s advice against academic penalties for financial debts. And it also speaks to the growing recognition that students are customers (see also Goldsmiths’ decision to have a student member of its Remuneration Committee.)

But there’s a small sting in the tail – students have to bring the book back when someone else wants it, and won’t be allowed to borrow any more books until they do. So it isn’t quite a free-for-all, and the students will still need to learn to share. Although students in plural may be king (or queen), a student in the singular still needs to do what they’re told. The student contract isn’t quite dead yet.

I’m filing this under ‘straws in the wind’. There’s clearly a changing relationship between a university and its students, and some benign changes like this will occur, as well as some which may seem more threatening.

Key Performance Indicators

Look on the webpages of almost every university, tucked away sometimes in the ‘About Us’ pages, and you’ll find a section on KPIs – Key Performance Indicators. I thought it might be useful to write a bit about what they are, and why they matter. In this post I’ll also go into a bit of detail about one common KPI – staff costs as a percentage of income.

A performance indicator simply means a measure of how you’re doing. So, if I’m typing, words per minute might be a performance measure. But so might typos per sentence. Or proportion of screen-breaks properly taken. Performance indicators are quite easy to come up with (although, as a game, making up performance indicators does get pretty tedious after a while).

Now think about all the things that go on in a university (or any other organisation, for that matter), and that can be measured, and you’ll see that a full list of university performance indicators would be huge. And so Key Performance Indicators are those chosen for particular monitoring.

Chosen is an important point here. There’s no absolute list of what matters to an organisation: it is a judgment about strategy and circumstances. There are KPIs which are measured by university regulators (funding councils, research councils etc), and they do tend to get measured by universities, but it is a choice that universities make. Sometimes a pretty obvious choice, but a choice nonetheless.

The choice is made by governing bodies, on the advice of the VC and colleagues in the senior management team. And the choice tells you about what’s important to the University. If a university is trying to improve its student experience, it might have staff:student ratio as a KPI. Or proportion of space of the highest standard. Or NSS results. But if it has a financial focus in its strategy (for investment, or to ensure sustainability) it might choose income per student (or cost per student).

The other jargon term is metric. That’s the actual value associated with a Key Performance Indicator. So for my words-per-minute typing KPI, the metric at the moment is about twenty. And the typos-per-sentence is about two. Could do better! And that’s the point – there’s often a target (or a range) associated with a KPI and metric. I’d like to type with fewer errors and more words per minute. So using a KPI I can measure my progress.

So that’s the theory. Let’s take a common university KPI – proportion of income spent on staff – and look at that in more detail.

The definition is straightforward. Take a university’s total income and its total spend on staff, both of which are in the annual financial statement, and divide the latter by the former. So if my university’s income is £100m per year and staff costs are £55m per year, then the proportion of income spent on staff KPI has a value of 55/100, or 55%.

Here’s two charts which show the KPI. They’re both drawn from 2012-13 HESA data. The first is a scatter plot, where each university is represented by a single dot.

This shows that for most universities, staff costs are in the range of forty-something to sixty-something percent of income, with an average around fifty-something percent. It also shows there are some outliers – some very large institutions, with turnovers of over one billion pounds (and I do hope that the Vice-Chancellors report that to their governing bodies in the style of Dr Evil); and some smaller institutions with much smaller (3% and 14%) spend on staff. These latter are instructive: one is a small consortium institution, and doesn’t directly employ many staff at all; the other is a university with a huge geographical spread and lots of costs associated with teaching over this area. It shows why the choice of KPIs depends on the specific circumstances of the institution. This probably isn’t a very useful KPI for those particular institutions

Now let’s see a different chart, using the same data. This is a bar chart where the institutions are arranged from left to right in ascending order of turnover. That is, the bar furthest to the left is the institution with the smallest turnover, the bar furthest to the right is the institution with the largest turnover. The height of each bar shows the proportion of income spent on staff.

This is more like a range of mountains – a few really high peaks and a few deep valleys, but most are around the 45%-55% range. What’s interesting here, I think, is that there’s no obvious economy of scale – larger institutions don’t seem to have a significantly lower proportionate spend on staff. This is counterintuitive.

So why does it matter? Staff costs are unlike other costs for a university. Firstly, they are long term. Once you’ve employed someone then you need to keep paying them, month after month, and to stop paying them involves effort and more expense. Secondly, they increase on a regular basis. Pay increases incrementally for many, simply by the passage of time as you go up the pay scale; there are pay increases every year through negotiation with Trades Unions; and on-costs – pension contributions and national insurance contributions – go up not down, particularly at the moment. A pound spend on employing someone this year becomes more like £1.05 next year, and so on. To employ someone is to make a commitment. 

And if you’re managing an institution, you need to know about this. If you have to find money each year for a rising staff bill, then you have fewer opportunities for other things – equipment, buildings, training costs, IT, library books, student bursaries and scholarships. So an institution which can manage its staff costs has more opportunities. And when there’s a large increase – a hike in pension contributions, or a big pay award (they did used to happen!) then institutions with a large staff cost as a proportion of income get hit hardest.

There can’t be an absolute target, of course. Some subjects cost more to teach than others – for instance clinical subjects. Some subjects need a lot of equipment, which keeps the proportion of spend on staff low because lots of money is spent on kit. And institutions make choices about how they operate which make an impact – for instance, having small tutorial groups.

There’s no moral to this tale: if you have a high proportion of staff spend, and know why, and it fits with your strategy, maybe that’s fine. And too low a proportionate spend and maybe your institution isn’t doing things as well as it might – universities are people businesses. But the one number does help you understand quite a lot about an institution’s plans and how sustainable it is (that is, how resilient to shocks, or how much scope for investment it has). And if you’re accountable for the institution, or deciding who to give more resource to, those are good things to know.

Counting them out and counting them back in again

One of my current clients is preparing for a graduation ceremony, which got me thinking. It’s been my view for some time now that many features of academic administration in universities can be explained by graduation: that is, they all work towards the task of making sure that the right student walks across stage with the right name called out to get the right degree certificate, and dressed in the right robes for a good photo.

Two proud graduates ...

Let’s take this in parts.

Firstly, the right student. So that’s about recruitment and admissions, that’s about enrolment, module selection and assessment, and that’s about keeping tags through a student record system on who a person is and whether they’ve passed the exams.

The right name called out. Well, that is also about a student record system, but it’s about knowing the student – which name do they actually use; how do you pronounce it; how do you make sure that the person reading the name out sounds like they’ve actually heard of them and aren’t surprised to see them there. So it ties in with things done to make sure that a student actually feels at home in the university and that someone knows them. Often the departmental office...

The right degree certificate. This ties into programme approval; any professional or statutory accreditation; making sure that the programme and the modules are all set up on the record system so that the transcript is easy to produce; and making sure that the credentials of the degree are all correct. Although a degree is really about the education, the validity of the certificate and transcript are really important in the instrumental uses of an education which students do care about.

The right gown and photo. This is about making the day memorable, so that the student leaves with fond memories; so that their family and friends get a good impression; so that there’s a tangible reminder to show proud grandparents; and so that the student (no, the graduate!) feels a lasting connection, and will stay in touch. With the alumni office. So that they might come back to give talks about their career, mentor current students, give money, leave legacies, and also say good things about the university whenever they get the chance.

I think graduations are great, as they’re one of the few days when everybody in the room is glad to be there. They can be wonderfully uplifting, with sudden displays of love and happiness and all manner of human frailty revealed. They are also, more prosaically, a significant milestone in the journey of a student.

And perhaps that’s the point I’m really getting at here: all of the different processes and functions in a university add together to make a student journey, which is a big part of their life story. It’s pretty important stuff, and seeing and recognising the joins and the connections makes it a better journey. So go to graduation and enjoy it; help out in marshalling the procession. But also think about all the steps necessary to get the right student the right degree with the right name read out and the right photo. And think what could be done to make it better.

QAA? Armageddon outta here!

Yesterday’s announcement – on the HEFCE webpages but on behalf of HEFCW and DELNI and in parallel with the Scottish Funding Council – has caused more than a few ripples of excitement.

What’s the news? A request for feedback from the sector, to inform the specification of a tender for quality assurance for higher education. If that doesn’t sound significant, let me tell you that it is. First, some background.

The 1992 Further and Higher Education Act provides (para 70) that the Funding Councils “shall … secure that provision is made for assessing the quality of education provided in institutions for whose activities they provide, or are considering providing, financial support …”. Each Funding Council has a Quality Assurance Committee, comprising people with sector experience, to advise on how to undertake this work.

If my memory serves me right*, in the early stages HEFCE did some assessment of standards work in-house (the Academic Audit Unit), and a sector body – the Higher Education Quality Council (HEQC) – developed methodology for assessing and assuring quality at a subject level. And in 1997 the QAA was established to bring it all together.

An opportunity for a new logo?

And so the consultation and tender exercise is giving notice that the status quo is up for renegotiation. No doubt with pressure from some such as the Russell Group for a ‘risk-based’ approach (‘leave us alone, the metrics show that we’re fine!’) and, with an equal lack of doubt political pressure from different quarters to address perceived issues such as contact hours and value for money

And so this is a fight about university autonomy and about marketization. Part of the rationale for establishing HEQC and QAA (both bodies owned by the HE sector, like UCAS and HESA) was that if the sector didn’t do something, government would impose an OFSTED style inspectorate. And since one of the crowning glories of UK higher education is that our academic standards are high, this would be a problem. Universities need autonomy to set and maintain these standards, so the argument goes.

And marketization? Well, applicants to universities, almost by definition, don’t know much about the content or value of the programme they’re seeking to join. In the OFT’s view, they are much less sophisticated as consumers than the universities with which they are making a contract. So an assurance regime which is more like consumer protection – guarding against rogue traders – might be considered appropriate. There’s a lot of public money and private individual debt at stake, so these aren’t concerns which can be dismissed flippantly.

There’ll be a lot of debate and discussion. The Wonkhe post by Mark Leach is a good resource with links to various statements and also in the comments. Which is where, by the way, the Armageddon word came from: #QAmageddon being the hashtag of choice …

It pays to read the legislation carefully: “assess the quality of education.” Who defines quality and its indicators, that’s the question. And the outcomes will matter for the sector.

*Edit 9 October. My memory didn't serve me right! Academic Audit Unit became HEQC; HEFCE continued with TQA until QAA took over. Thanks to Mike Ratcliffe @Mike_Rat for the correction. We need the equivalent of rock family trees ...

This sporting life

I noticed that a couple of 'my' teams are sponsored by universities.  Ospreys by Swansea University (and also by Neath Post Talbot College); the Cardiff Devils by Cardiff Metropolitan University. And a client I'm currently working with sponsors Ealing Trailfinders RFC. Some universities evidently see a benefit in a connection with sport.

Student sport also matters. I confess that this only became clear to me some way into my career in universities - as a student the closest we got to sport was avoiding the Three Tuns when the Athletics Union were there. It just made for an easier life. But some universities make sport a big part of their student offer, and gain considerable kudos (witness Loughborough's continued pleasure at their students' performance in commonwealth games. They'd be almost as good as Yorkshire if they were both allowed to enter independently.)

(Sponsored by Swansea University. Disturbingly!)

So what's going on? We clearly aren't heading for US-like community engagement with university sport. Excepting the Oxbridge boat race, which is an institution, student sport only rarely gets coverage outside of the universities concerned. You don't get 30,000 people turning out to see the university side take on another university.  

I see it as basically about marketing, but there are some benefits for the students too.

Some universities sponsor sports teams to reinforce a local brand. I remember hearing one VC talk about his university's sponsorship of the local League Two football club. Objectively, this wasn't as strong a sporting side as the town's rugby or cricket clubs (supporters of the club in question may think I'm talking cobblers...). So the sponsorship wasn't about association with a successful brand. But the football club had a much stronger appeal amongst the local community, so sponsorship helped cement the idea that the university, like the football club, was a local institution for local people. Great for breaking down barriers to participation. 

For some universities sponsorship works to help make relationships. A box at a sports ground gives somewhere to entertain guests of the university, and like it or not, entertaining is a necessary activity for a university. Engendering goodwill matters. And here the quality of the entertainment is clearly a factor: the better, or more recognised, the team, the better a box at the ground will be. This is one of the ways that a premiership club can be a real asset for the town or city in which it is based.

There's also an element which is about the facilities provided to students. If studying at the university can be associated with great facilities for sport (and the opportunity to try new sports) then it might just be the factor which sways an applicant's decision. And the benefit is no doubt real to the students who take part, forging friendships and helping them to find a part of their character which perhaps they didn't know about. That's what university is meant to be about, isn't it?

These identifies can run deep. When Imperial left the University of London, a significant issue to address was whether its medics could continue to play in the London medics leagues. People can give a lifelong loyalty to a particular university sports club, and attempts to change anything can run into resistance: witness the campaign to maintain Cardiff Medics teams within the BUCS structures, which featured national petitions and press coverage.

So sport can't be ignored. But it also highlights a problem for universities: sport speaks to a particular group of students - 'traditional' full-time undergraduates. It's been a long time since this was the only type of student. How do you find something that can appeal to all?

Until this question is answered, expect to see more university logos on shirts, on hoardings and in programmes at sports grounds. The one thing that sports and universities have in common are league tables, and they're not going away any time soon.