Counting the cost

HEPI published today the outcomes of the annual Student and Academic Experience Survey, which they conduct jointly with the Higher Education Academy. It’s a really interesting survey, which allows comparison with previous years while also adding content to address current policy issues. You can read the survey here.

One issue which features prominently in the survey is student perceptions of value for money. There’s plenty in the survey about whether students think they’re getting value. Most don’t, it seems, but my experience is that the value of a university education stays with you for a long time – it isn’t a good which you consume, it’s an investment which stays with you. We’ll get more relevant data if we ask these students the same question in 40 years.

It takes a lot of these to make a building

All well and good, or not. But there’s another aspect of this question which I find fascinating. The survey asked students to identify their preference for what universities should spend less money on, in order to be able to reduce the cost. There were two clear favourites here: Spending less on buildings (49% of respondents) and spending less on sport and social facilities (46%).

This is a genuinely hard challenge for universities to address, for three reasons.

Firstly, let’s look at the money. Buildings last a long time, and money spent on buildings is regarded as being spent over the lifetime of the building. It’s not unusual to see the value of a building spread over 50 years. So the value in the accounts in any one year of a £50m new build is £1m. (If you use straight-line depreciation. Ask an accountant.)

Another way of looking at it is the cost of borrowing the money. Universities get good interest rates at the moment – 4% would be at the higher end. So the loan for the £50m building would cost about £3.8m per year, if we assume repayment over twenty years.

Now neither of these numbers - £1m per year, or even £3.8m per year – is going to make a big dent in a university’s cost structure. Even if a university was minded to reduce fees (and there’s lots of reputational reasons why they shouldn’t, and market data from students that shows that there’s no point), it wouldn’t make much impact in a university big enough to need a £50m building.

But, you say, perhaps universities don’t need the shining edifices of glass and metal which spring up all over campuses. What if they had plainer buildings? What indeed.

Few university buildings are truly high specification, in terms of the extravagance of the fixtures and fittings. But for the sake of argument let’s assume that the £50m building would cost £40m if it wasn’t so luxuriously specified, or if space was better used (now that’s more likely to be an issue, I will concede). This means that the university spends less money, but – for exactly the same reasons as I set out above, not as much as would be needed to make a dent in fees. An extra £200k - £700k per year – a 20% reduction on the cost of the building – wouldn’t mean a University could do much about fees.

And thirdly, the buildings are needed. The reason university campuses are building sites today is that many university buildings had become worn out and no longer functional. Without investment to renew and replace, campuses would become progressively less welcoming, and the impact on students and staff would be serious.

But all of these don’t add up to a good reason to ignore what students are saying: regardless of the reality of the costs of running a university, students don’t share the management’s perceptions about how to spend (their!) money. I think that the survey tells us another approach.

The survey shows that only 18% of respondents think that they definitely or maybe are given enough information about how fees are spent. But interestingly, 21% first years (who will have seen universities’ response to CMA strictures about information) feel that they have had enough information. If you know what the money’s spent on, it’s easier to come to a more reasonable conclusion about the proportionality of the cost.

It’s a baby step, but it’s a significant one (significant at 99% confidence, according to the report footnote). If universities want to address student perceptions of value, one thing they could do much more of is tell students where the money goes.

The inequities of university funding

My job takes me to a wide range of universities across the UK. This morning, at the University of West London, a poster caught my eye. It was the sort of poster that every university displays, encouraging NSS participation, and giving “you said, we did” messages – a catechism for the 21st century university. This one had an interesting call and response:

You said: “Timetabling should take account of students’ lives”
We did: We altered class times to have 10am or later starts.

I know what you’re thinking – lazy students – but you should stop. UWL’s student body is very different to the stereotypical university cohort. There are people living at home with their families, because they can’t afford to go elsewhere. There are an awful lot of students with pre-school age children. University is just one part of complex and busy lives.

The W5 catechism

In this context, later starts make sense. It isn’t about allowing for a lie-in after a heavy night out. It’s about enabling childcare to be sorted; family duties to be done.

So jolly good, perhaps you say, well done UWL. But what’s this got to do with funding?

Here’s the rub. The move to later starting time for classes is going against the grain. 9am is the norm; some universities permit 8am starts in exceptional circumstances. And if some universities start at 9, and others start at 10, then the university that starts later has fewer teaching slots available for use than its peer. Or to put it another way, you’ll need more physical space to accommodate the same number of students/classes with a later start.

So the university with a non-traditional student body will need to spend more on teaching facilities than one whose students are able to start at 9. And guess what – this split between traditional and non-traditional student bodies correlates pretty well with league tables and published hierarchies of universities. So the better you are perceived to be, the more chance you have of recruiting ‘traditional’ students. And the less you’ll need to spend on teaching them.

This isn’t the fault of the universities that can start teaching at 9. I’ve tried to lead efficiency and rationalising projects on teaching timetables more than once: the cost of empty space is real, and if you can use it, it makes sense to use it.

But it does mean that a fees-alone funding regime contributes to maintaining a hierarchy. And in this market-focused age, that surely represents a market failure which justifies government intervention.

Parliamentary scrutiny

Post general election there’s been an ‘emergency’ budget, a new government, elections of new party leaders (has anyone noticed this?) and parliamentary business back in full swing. (Albeit now temporarily suspended for party conference season.)

One of the manifestations of parliament being back in action is the announcement by the Business, Innovation and Skills Committee of an Inquiry into Assessing Quality in Higher Education.  This follows the policy proposals for a Teaching Excellence Framework and a forthcoming Green Paper on Higher Education.

In establishing the Inquiry, the Committee’s chair, Ian Wright, is quoted on the committee website as saying:

“Ministers say they want to develop new incentives to improve teaching quality, tackling what the Government sees as patchiness in provision. The Government faces a number of challenges in seeking to introduce a new Teaching Excellence Framework – not least the challenging timescale it has set – and the Committee will be involved in looking at how this policy area develops from an early stage. As a Committee, we want to scrutinise the Government’s plans for assessing quality in Higher Education, making sure that any new mechanism is effective and works to strengthen the UK’s world-leading university brand.”

All of this is positive – recognising the risks involved in the establishment of the TEF and stating an intention to work on accountability through the development process, not retrospectively.

This is also an area where the realities of the higher education sector work against the devolved nature of government. The sector shares values and habits which work across all of the UK nations, and, because of the dominance in scale of the English sector compared to Scotland, Wales or Northern Ireland, decisions about managing the sector in England have a knock-on effect on the devolved nations.  But HE is a devolved matter, so although the proposals about linking TEF to funding look like they apply only to English universities, they’ll have consequences for the other nations, whatever their governments may want to think. Where England goes, then other nations will probably follow, albeit using a slightly different road (think about driving from London to Bath using the A4 instead of the M4 –it may take slightly longer, but it’s probably also a more pleasant drive, if you enjoy that sort of thing).

Parliamentary committees have no direct power – they can’t direct a change in government policy, or themselves amend a bill – but they are part of the mechanism that helps draft and improve proposed legislation. So the inquiry is timely and important for the sector, to make sure that detailed concerns are heard.

The scope of the inquiry is on the Committee’s website, and for convenience (I’m all about saving you a click or two) here they are too:

The BIS Committee is keen to hear views and welcomes written submissions which address the following questions:

1 What issues with quality assessment in Higher Education was HEFCE’s Quality Assurance review seeking to address? 

2 Will the proposed changes to the quality assurance process in universities, as outlined by HEFCE in its consultation, improve quality in Higher Education?   

3 What should be the objectives of a Teaching Excellence Framework (‘TEF’)?  

a. How should a TEF benefit students? Academics? Universities?
b. What are the institutional behaviours a TEF should drive? How can a system be designed to avoid unintended consequences?
c. How should the effectiveness of the TEF be judged? 

4 How should the proposed Teaching Excellence Framework and new quality assurance regime fit together?  

5 What do you think will be the main challenges in implementing a Teaching Excellence Framework?  

6 How should the proposed connection between fee level and teaching quality be managed?  

a. What should be the relationship between the Teaching Excellence Framework and fee level?
b. What are the benefits or risks of this approach to setting fees?

The Committee itself is made up of eleven MPs – six Conservative, four Labour (one of whom is chair), and one SNP:

Member	Constituency	Local universities
Iain Wright (Lab) – Chair	Hartlepool	Durham, Teeside
Paul Blomfield (Lab)	Sheffield Central	Sheffield, Sheffield Hallam
Richard Fuller (Con)	Bedford	Bedfordshire
Peter Kyle (Lab)	Hove	Brighton, Sussex
Amanda Milling (Con)	Cannock Chase	Staffordshire, Wolverhampton
Amanda Solloway (Con)	Derby North	Derby
Jo Stevens (Lab)	Cardiff Central	Cardiff, Cardiff Metropolitan, South Wales
Michelle Thomson (SNP)	Edinburgh West	Edinburgh, Edinburgh Napier, Heriot-Watt, Queen Margaret
Kelly Tolhurst (Con)	Rochester and Strood	Greenwich, Medway Campus
Craig Tracey (Con)	North Warwickshire	Coventry, Warwick
Chris White (Con)	Warwick and Leamington	Coventry, Warwick

You’ll see that there is Scottish and Welsh representation as well as English, so an opportunity for some perspectives from the devolved nations to be heard. And also a fair spread of types of university in or near their constituencies, so there’s plenty of opportunities for lobbying by these universities.

The Inquiry is seeking responses by 30 October. These can come from individuals as well as groups, so this is a good chance to get involved in shaping something which will matter to higher education. Reformism in action.

A curate's egg

Higher Education Minister Jo Johnson’s speech to Universities UK this morning presages an interesting few months. He set the scene for a forthcoming green paper, with four broad themes.

Firstly, teaching excellence. The idea of a Teaching Excellence Framework was set out in July; we now know a bit more, but I’m not certain that BIS have a clear idea yet. On the one hand, they know their target: it’s the idea of students’ workload, with the Minister comparing a busy engineering student at Bristol with a drop-out humanities student at ‘a prestigious London university’.  And there’s the notion of a disengagement contract.

The Minister quotes Palfreyman and Tapper; it’s worth looking at the full quote (from Reshaping the University: the Rise of the Regulated Market in Higher Education):

The last item paints a grim picture indeed of ‘limited learning on college campuses’ based on an extensive research project funded by the US Social Science Research Council (this is not some hysterical polemic to be brushed aside by the HE establishment): students’ ‘academic effort has dramatically declined in recent decades’ from some 40 hours per week in the 1960s to about 27 in the 2000s, and the ‘faculty cultures and orientations’ of ‘the college professoriate’ has much to answer for, since they have struck a ‘disengagement contract’ with their students (along the lines of ‘I don’t want to have to set and mark much by way of essays and assignments which would be a distraction from my research, and you don’t want to do coursework that would distract you from partying: so we’ll award you the degree as the hoped-for job ticket in return for compliance with minimal academic requirements and due receipt of fees’; and on the Party Pathway through HE as some HEIs come to resemble country clubs see Armstrong and Hamilton 2013).

The words quoted by the minister are italicised; the whole sentence shows that the authors were describing a US study of a US issue. There may well be issues with teaching in UK universities, but I’m not sure that it’s right to raise the temperature by scare stories from across the Atlantic. And increasing the marketization of HE is precisely moving us towards a US model, not away from it.

That aside, there’s also a little bit of muddle between what they’re seeking to encourage. There’s speak of excellence in teaching, assessment, feedback and employment skills. From students being busy, and the Minister’s recollections of university life (Oxford, Balliol, Modern History) we also get an implicit elision to contact hours. So do we care about students being busy, or being in the classroom? They’re not the same thing.

And there’s an emphasis on information to applicants so they can see what they get (presumably KIS hasn’t done the trick). It’ll be good to see what this actually looks like when the Green paper is published; but there’s also a clarity that it’ll matter. Success in TEF will enable a university to increase its £9k fee in line with inflation. Ouch!

Second up is Widening Participation. The Minister has two issues in his sights: participation by black and minority ethnic students with a Caribbean background, and participation by white British boys from disadvantaged backgrounds. Participation by both of these groups is low, and I think that the focus is spot on in this regard. And there’s talk of better data to enable this to be understood (be still my beating heart!)

Third up, a blast form the past. Having spotted that alternative providers need validation to be able to award degrees, and that this presents a potential conflict of interest, there’ll be a consultation on ‘alternative options for new providers if they do not want to go down the current validation route’. Which sounds an awful lot like the return of the CNAA. The old Gray’s Inn Road building looks like rental office space now – I wonder if that could be used …

Parts of the speech are excellent

And finally, a level playing field. There’s a recognition that the current regulatory environment is complicated, with different levels of scrutiny for different types of provider, and, now that HEFCE funds universities less and students themselves fund more, a more limited range of sanctions are available to regulators. If you only have a nuclear option, you never use it, which isn’t good for regulation. Wales has got this a bit better – by having HEFCW oversee access agreements, there’s a more nuanced approach possible. I wouldn’t be surprised if HEFCE and OFFA went the same way.

Another aspect of a level playing field is recognising that entry to the market implies the possibility of exit from the market, and the promise of consultation on ‘measures to require all providers to have protection measures in place so that students who benefit from greater choice and diversity do not lose out in the event of provider failure’. An insurance bond scheme for universities? It’s an idea from the travel market, but the costs of securing provision elsewhere would be potentially large: I’ll be interested to see how the economics of this play out.

So lots to come, and some good and necessary issues flagged, but there’s still woolly and ideological thinking in there.

Value for money?

Earlier this week the BBC headlined a survey conducted by ComRes on their behalf which asked final year undergraduates three questions about their university experiences.  The headline figures were:

1 Which of the following comes closest to your opinion about your university education?
It has been value for money	521	52%
It has not been value for money	398	40%
Don't know	82	8%

2 To what extent do you feel that university has prepared you for the future?
A great deal	256	26%
Somewhat	576	58%
Not really	136	14%
Not at all	29	3%
Don't know	4	0%

If you could start university again, which of the following do you think you would do?
I would take the same course at the same University	458	46%
I would take the same course at a different university	181	18%
I would take a different course at the same university	166	17%
I would take a different course at a different university	117	12%
I would not go to university at all	34	3%
Don't know	46	5%

The headlines were clear – 40% of final year students didn’t think that their university education had been value for money. And with this being the first cohort to have paid £9k per year fees, that’s quite a story.

The sector response – if that is what a quote from the Chief Executive of Universities UK amounts to – was to defend universities’ record, drawing on the National Student Survey results.  Nicola Dandridge was quoted by the BBC as saying “The last national student survey reported that 86% of students were satisfied overall with their course. It shows that universities across the UK are responding to student feedback and working hard to improve the academic experience.”

The 2015 NSS results are set to be published by HEFCE on 12 August, and it’s a fair bet that many universities will be watching carefully not only because of their significance for league tables, but to see what effect the £9k fees have on student responses.

It seems very likely that there will be an effect: the ComRes survey broke down answers by subject of study and by region of university, and in Scotland, which does not charge fees to Scottish students, fully 79% said that their university education had been value for money, compared with 52% across all responses.

But there’s other interesting data too.  The third question is revealing: if they had their time again, only 3% of respondents would not go to university at all.  63% would go to the same university, with about a quarter of these opting for a different subject. 64% would choose the same subject, mostly at the same university.

	Same university	Different university
Same course	46%	18%
Different course	17%	12%

This tells me quite a different story – fewer than half of students made the right university/course choice; but most got at least one of the variables right.  So, much to be done on advice and guidance at application, but less of a panic, it seems to me, about the perceived value of higher education.  

Maybe the need to get this right will push post-qualification application back up the agenda.  If universities focused on the needs of students and learners rather than their own staff convenience, students might make better university and course choices, and so be happier. Just a thought …

Setting the boss's pay

The decision by Goldsmiths, University of London, to include a student member on its Remuneration Committee points, I think, to a new way of looking at universities' responses to student demands in the post-Browne era.

The increase in fees for home/EU undergraduates in English and Welsh universities has had much written about it, some by me. What is unarguable is that it has had an effect on universities. Some have seen increases in income, notwithstanding the reduction in HEFCE/HEFCW T funding. Some have seen falls in demand and in enrolment numbers, with a sliggish recoverey so far to pre-2012 levels.

All universities have sought to respond. Some have opted to invest in learning and student experience facilities  - new libraries, sports pitches, and the like. All things which can be addressed by capital spend.  Goldsmiths, we see, has also opted for increased transparency in relation to salaries of senior managerial staff. This is a move which many universities have tried to avoid: it will be interesting to see if other universities now follow suit. It's a cheap (although potentially very disruptive) student demand to concede.

These responses - investment in facilities; greater transparency - are no doubt commendable. But many student demands relate to class sizes and access to tutors. This is recurrent spending which is not so straightforward for universities to commit. I'll be keeping an eye on HESA data over the next few years to see whether student:staff ratios also fall.

Sorry for the absence of links. I'll put some in next week when I'm back in the office.

Context is everything

In an interesting debate on the Today programme this morning David Lammy argued strongly that contextual admissions, particularly by Russell Group universities, would be essential in helping to overcome structural inequalities in society. I thought some background might help to understand the argument.

Contextual admissions means the practice of taking into account, in deciding whether to offer a place at university to an applicant, factors other than the raw facts of a candidate’s exam performance. The logic being that an applicant who is getting ABB in A levels at a school with a very poor success record in exams has arguably demonstrated at least as much ability, studiousness and potential as a student who has got AAA at a school where 90% of students get AAA.

This is one of those arguments which appears differently depending on how close you are. If no-one in your school has done well at A levels previously, then you don’t have teachers who are practiced at coaching for A levels; you don’t have examples in the years above you of the habits of studying hard; and you don’t have peers within your class with whom you can study. I’d gladly subscribe to the abstract notion that if a student from this background has done really well, they’d have done even better had their background and school been different.

And now play the argument from the perspective of the AAA student who doesn’t get a place if the ABB student is admitted. The only direct comparison – the exam results – shows that one did better than the other. And the one who got ABB might well find it patronising to be treated on different grounds. Close up and personal, the issues can seem less clear cut: what is fair in the abstract has a whiff of rough justice when it’s two specific people.

That’s one reason why it’s been a controversial topic in education. Another is that entry grades are used by newspaper league tables as an indicator of quality. So the higher the average entry score, the better a university’s league table position.

I haven’t yet met an admissions tutor – in any kind of university – who doesn't want to take into account a student’s personal statement, or who doesn't want to recognise potential. A motivated student with slightly worse A levels is normally a much more interesting proposition than a high-achieving student who doesn't show any spark. The problem isn't that the staff in the ‘elite’ don’t recognise the issues.

So, if you accept that something should be done, what should that be?

Firstly, I think, take entry grades out of league tables. This would remove the perverse incentive to take ‘safe-but-potentially-uninteresting’ students. If you must have something there instead, calculate a value added score. Then you’re really measuring that universities do, rather than measuring, by proxy, the socio-economic characteristics of a university’s student population.

Secondly, get serious with improving all schools. There is a frightening disparity in achievement between state school pupils and those from private schools. Unless you believe that parental wealth correlates with the intelligence and ability of their offspring, this must relate in part to the quality and capacity of private schools. During the introduction of top-up fees in 2004, Charles Clarke, when accused of not being a socialist, retorted that if he was a real socialist he’d put all the money into pre-school education. And he has a point – if you’re going to solve social inequality by education, the earlier in someone’s life you start, the better. Affirmative action at age 16 plus is sticking plaster; a genuine cure should start years before.

Well, that's my two-penn'orth. I'll stand back now and watch the fireworks ...

Estimating dependency upon overseas student fee income

I posted yesterday on the impact on UK university finances of removing overseas tuition fees and, being at heart a numbers geek, I've been doing some more work with the data. I've now written a briefing note which you can find in the Resources page of my website, or download it directly here.

A headline finding to whet the appetite - over 80% of net UK university surpluses in 2012-13 can be attributed to overseas student fee income.  That's not just the total of the fee income, but the part of it which isn't spent on providing the tuition.

The arguments about student visas and the UKVI are a high-stakes game ...

MOOCs ado about nothing?

I've blogged before about MOOCs and whether they are the approach which will disrupt the traditional university business model. An article on the BBC website which I saw today adds an angle to the discussion.

First of all, what do I mean by disrupting the traditional business model? It’s like what Apple did to the market for CDs – they took a bundle of different technologies (mp3 players; the internet) and by selling iPods and setting up iTunes changed the whole business of selling music. Goodnight record shops. Ben Hammersley writes about this in his (very excellent) book, 64 things you need to know Now for Then. His argument (it kind of grows out of the different chapters in the book, rather than being explicitly stated) is that disruption via digital technology to an existing business model is inevitable – a question of when not whether.

At the moment MOOCs don’t seem like the disruptive model – there are real questions about non-completion rates, certification and standards on the one hand, and how to make it pay on the other (but see also my blog post about this, and the University of the People idea). And this is where the BBC story comes in.

Sean Coughlan reported in April about learning centres for people studying MOOCs. Basically, these are organised and facilitated sessions (classes, if you like) for people following a particular MOOC in a given locale, to meet together help them study. The article reported that there’s a much lower drop-out rate for students who attend a learning hub. And also, interestingly, that the classes become something else:

"When students are gathered for their Mooc classes it becomes a focus for other spin-offs, such as firms wanting to recruit staff or to get students involved in developing commercial projects."

This gives more options for ‘monetizing’ (to use the business jargon) the education process via MOOCs – if innovative companies or recruiters can find a way to gain economic value from a learning centre, they might pay, leading to more learning centres, more people gaining educational value from MOOCs, and possibly MOOCs becoming a realistic alternative to registering as a fee paying student at a university. It probably won’t mean the end of the motivation to go to a campus university for UK students (if that were the case the Open University would have taken everything over years ago) but it might tip the balance for some international students. And that would nibble away at a really important part of the business model for many UK universities.

Just a straw in the wind. For now.

Boom or bust?

Capital spending by UK universities has had a bit of attention in the past couple of weeks. I thought I’d look behind the headlines.

What were the headlines? Well, firstly the Russell Group’s claim, reported in the Times Higher, that capital spending plans by their members would boost the economy by £44billion over the next five years. Secondly, HESA’s data release showing the sources of funding for capital spend, picked up by the Times Higher (with a serious case of chart-junk) and by Registrarism.

The picture painted by the media is striking: confident institutions investing for the good of all, and looking to their own resources to replace lost public money. And jolly good too.

My dim-and-distant social science training made me want to know more, so I looked at the HESA data itself to see what was going on, using the most recent four years’ data. HESA report in nominal terms (that is, the actual pounds spent), so I used the ONS GDP deflator to convert the HESA data to constant prices, using 2009-10 as the base year. This is what the data then looks like:

So the real story is a decline in capital spending, with perhaps the stirrings of a revival fuelled by internal funds. This does suggest that the increase in income due to higher undergraduate tuition fee income is enabling institutions to invest more. Or to put it another way, universities recognise that increasing student expectations driven by £9k fees make increased investment necessary.

What also strikes me is the amount of loan financing: from £475m in 2009-10 down to £305m in 2012-13. At a time when interest rates are at historically low levels. Does this show a lack of confidence in the future? It’ll be interesting to see what the 2013-14 data shows this time next year.

Squaring up

The Higher Education (Wales) Bill 2014 has now been published and introduced at the Senedd, and it seemed like the pre-fight press conference for a heavyweight title fight. Well, maybe that’s bigging it up a little too much, but there was certainly some drawing of lines. Possibly in the sand.

The Bill and an Explanatory Memorandum were published on 19 May. They are both substantial documents: the Bill is 37 pages; the explanatory memorandum 148 pages. So there’ll be more to write and say about these as they make their passage through the Senedd. (A note for English readers: the Senedd is the Welsh parliament. The ‘dd’ in Senedd is pronounced like the ‘th’ in there. Now try saying Senedd – I suspect it’s the same root as Senate.) For now I want to concentrate on an apparent spat between universities and the government.

The Bill seeks to set out a new regulatory framework for higher education in Wales, following the tuition fee reforms introduced following the Browne review. Put simply, HEFCW previously controlled much of the resource for universities in Wales, and so had an effective means to influence universities’ actions. When most of the state funding flows via students instead, through tuition fees, HEFCW has no real means of influencing. And so the Bill seeks to give the government, via HEFCW, some powers which work in the context of fees, rather than those which used to work in the context of the block grant.

To quote from the explanatory memorandum:

35. In summary, as a consequence of the new tuition fee and student support arrangements, the financial relationship between HEFCW and institutions has weakened. Whilst the overall quantum of funding available to HEFCW has decreased the Welsh Government continues to make a significant contribution towards the cost of higher education provision in Wales through the provision of government backed tuition fee grants and loans. This shift in funding means that the current regulatory framework based on HEFCW’s conditions of funding will no longer function in the manner originally intended. The continued regulation of education delivered by or on behalf of institutions providing higher education in Wales is in the public interest. 

It’s important to note a particular difference between Wales and England. OFFA in England is autonomous from HEFCE. English universities’ access agreements were connected to block grant by a more attenuated mechanism than in Wales, where universities submit fee plans to HEFCW; approval of these by HEFCW is a condition of funding.

The Bill allows for automatic designation of providers with charitable status; reserves the most generous student support arrangements for automatically designated providers; requires automatically designated providers to have a fee and access plan agreed by HEFCW; and gives HEFCW powers to not agree such plans. Specific changes to the arrangements are the limitation to charities; making student retention a priority; and providing for monitoring of the proportion of tuition fee income spent on access arrangements (as it has been in England since the word go.)

So what’s the fuss about? Higher Education Wales (HEW) issued a statement which highlighted the need for institutional autonomy; identified a worry that the regime gave HEFCW disproportionate power compared to that exercised by students; and highlighted the use of subsequent regulation (the ‘negative resolution’ procedure) to set out much of the detail of the new system, making a response difficult.

The ‘negative resolution’ procedure is a variety of government regulation, deriving from the so-called Henry VIII clauses, which allow legislation without parliamentary approval. Essentially, they mean that the Bill identified areas where ministers make the regulations, which are valid unless the Senedd votes them down. HEW argued that the regulations should be subject to an affirmative procedure – that is, voted on at the Senedd before implementation.

It’s easy also to see why HEW might be suspicious. The Bill gives those inspecting quality (which will still be the QAA) or adherence to the financial code the right of entry to premises, and the right to inspect documents; and also provides that they should show identification on coming to the premises. (See paragraphs 117 and 150 of the Explanatory Memorandum.) If it looks like the police it’s easy to see why people think that it might be the police.

So what the other side of the argument? Simply put, higher education matters more in Wales than in England, in two senses. Firstly, Wales needs a more skilled population to create economic well-being. The guts of the Welsh economy were ripped out when mining, steel and manufacturing went in the 1980’s. A new economy can be found, but it’ll need a population with more skills than at present. Welsh universities have a job to do for Wales. And secondly, higher education represents a higher proportion of the Welsh Government’s spending and powers than for the Westminster government. Because the Welsh Government has a narrower remit than that of Westminster, then the areas it does control – and HE is a big one – represent a higher proportion of its spend. The RAB charge takes a bigger share of the Welsh cake than it does in Westminster.

And the fighting? Here’s an extract from the Senedd discussion (you can see the whole exchange at 1600 in the report):

Leighton Andrews (the former minister): I do not know whether the Minister has yet had the opportunity to read the very weak and conservative response from the vice-chancellors’ lobby today. To my mind, it borders on the hysterical. If he has not read it, I would urge him not to waste too much time on it. ... So, I would urge him not to pay too much attention to the murmurings of the vice-chancellors.

Huw Lewis (the current minister): I thank the Member for the Rhondda for those insights and comments. Yes, I have read the response of Higher Education Wales, which followed rapidly upon its receipt of today’s news, and I have to say that I was—well, it is almost a euphemism to say that I was disappointed in terms of the tone and the content, especially when you consider that, since the White Paper was published back in 2012, numerous conversations have been held between officials, Ministers and the sector itself. This response today is not worthy of the subject matter, and I would appeal to it to rapidly raise its game in terms of the level of input that we would expect, and that the public would expect. We really need constructive dialogue and engagement in order to get these issues progressed. In many points that HEW made today, it almost seemed to have disregarded all conversations that had gone before, and has suddenly woken up to the situation as it is. We know that it has had a great deal of time to think about this, and we need it, as an active and intelligent partner in the development of this legislation. Let us hope that this particular press release today does not signal the level of engagement that we might be able to expect from HEW.

That’s fighting talk! I’ll keep you posted as the bout begins.

Masterful guidance

The four UK higher education funding bodies have been working together on guidance for PGT recruitment teams on information for prospective applicants. Published so far by HEFCE and HEFCW; no doubt coming to Scotland and Northern Ireland soon. PGT, by the way, is Post-Graduate Taught – Master’s degrees by any other name.

The guidance looks very sensible, and is grounded in comprehensive research into the views of current prospective taught postgraduate students. What surprised me is how very basic some of the guidance is. For example, “Prospective PGT students are often balancing a broad range of commitments so information regarding expected attendance and assessment periods, if any, will help them assess whether study is possible for them”. Although obvious, this is a really important point, and I know that it needs making.

It also, I think, makes us ask a question about the role of PGT programmes in universities. (The guidance, that is, not the specific point about teaching times).  And that is, what are PGT programmes for? To a student, they can be the natural extension of an undergraduate degree, either for interest or as a stepping stone to research study. Or they can be a means to learn specific skills and knowledge for career development – either immediately after a first degree or later into a career.

And universities of course cater for both types. Sometimes both at once. But there are definite splits, with some university departments or research groups seeing a Master’s programme as a long and self-financing (sometimes!) interview process for a PhD, or as a means of creating acolytes for the professor’s research topics. To my mind the published guidance is giving a clear steer away from this type of approach – coaxing universities into more uniform ways of presenting PGT programmes, and thereby normalising and regularising the market.

Is this just the funding councils seeking something to do, now that undergraduate programmes are far more obviously subject to market rigours? That sounds a trifle paranoid, I agree. But there is a worry that, come September 2015, debt-laden new graduates will seek employment rather than further study, and a UK student on a full-time PGT programme may become a rarity. And if the sector is to try to seek government funding to support PGT provision at that or a later point, it won’t hurt to have got our house in order.

So there’s a bigger picture to the guidance: if the sector does all it can to make PGT provision readily available, then there’s a stronger case to government for supporting an important part of the UK offer.

The heart or the head?

Idealism and reality seem currently to be clashing in higher education, and the turbulence is bringing some interesting things to the surface.

On the one hand, there’s an idealism inherent in the notion of higher education, which sees it as a liberating force for the individual and society and that there is a moral duty to deliver the enlightened world which could arise if more people benefited from a higher education. And in the UK context, that strand of thinking was given a boost by the introduction of considerably increased tuition fees for undergraduate study in England in 2012. The notion that access to higher education should not be rationed by affordability, as well as provoking riots in Trafalgar Square, led to some radical initiatives, such as the Social Science Centre in Lincoln, which enables people to access a ‘free co-operative higher education’ and the Free University of Liverpool, which has now wound up.

And on the other hand, the gritty reality that the traditional form of higher education in the UK (ie full-time, attending a campus away from home) is an expensive business to deliver, with a spiral of expectation created by higher fees, a focus on the non-academic aspects of the student experience, leading to phenomena like the ‘athletics arms race’, on which Paul Greatrix has blogged, and a yearly cycle of what-more-have-we-got-to-justify-high-fees?. Sustaining a large sector, which employs over 450,000 people in the UK (HESA staff return 2012-13, table A), requires a lot of money. Which means you’re straight back to the argument about where the money comes from, who pays, and whether it higher education funding is more like a progressive tax or a means test which in itself acts as a barrier.

(This reminds me of a chant during a late-1980’s demo against student loans:

"Education should be free
For the sons and daughters of the bourgeoisie!")

The BBC flagged another interesting initiative – the University of the People. This claims to be free if people need it; to be online (but not dependent upon high specification technology); to be international; and, crucially, to offer US accredited degrees. If it is what it seems to say it is – voluntary, humanitarian – then it clearly sits with the heart not the head. And if it is offering proper degrees of a high standard, then it will surely attract a lot of students.

It’s too early to declare that this is the shape of things to come: the challenge of supporting a few hundred students online is different from the challenge of supporting tens of thousands, and the initial enthusiasm may wear off. But what if the University of the People accepted credit transfer from completed MOOCs? A lot of business models might be seriously disrupted, and the heart-versus-head question might become starker still.

Who Pays?

Q: What’s green, five inches long, and takes an hour to drink?
A: A grant cheque!

I was reminded of this student joke from the 1980’s by Universities UK’s establishment, announced today, of a Student Funding Panel “to consider the design of the current student fees and loans system in England, and to make recommendations on its future development.” The underlying story: universities know that the current system is unsustainable, certainly politically and possibly economically, and want to play a part in fixing the problem.

And it’s obviously a big problem. Before the 2010 election universities also had concerns about finances, but it was individual mission groups that did the lobbying, not the sector as a whole. Perhaps that is one lesson from 2010, Browne and where we ended up with the fees system. Long-term matters are too important to be left to the randomness of coalition negotiations, and universities speaking with one voice have a greater chance of being heard.

A lot was made on the Today programme this morning about the problem of cost to the public purse, so I thought I’d take a look at what the issues are. It isn’t as simple as finding the cheapest option.

There’s a long history to this question. Go back to the 1970’s and there were no undergraduate tuition fees. And local authorities provided grants to students at universities to cover living costs. By the mid 1980’s the effect of cuts in local government funding meant that student grants were worth less and less (hence the joke I opened with), and as a student you faced three options: rely on your parents or family for funding; get a job; or go into debt. Or all three, as I managed to do.

The introduction of student loans in the early 1990’s provided an alternative to relying on funding from families, which will have helped some people, but another problem was brewing. The UK Government was pursuing a policy of expanding higher education, but on the cheap, meaning that for some universities – and especially for the new universities – the amount of funding they had per student (the unit of resource) was declining.

To address this, tuition fees for home undergraduate students were introduced in 1998, at £1,200 per year. This means that state funding via the national higher education funding councils was supplemented by money from students themselves. (A cautionary note about devolution: different arrangements apply in some respects to the devolved administrations. Another post, another day, I’ll look at this in detail. But the underlying issue – how much do good universities need to operate, and who pays? – affects all parts of the UK.)

And a few years later it was clear that this hadn’t solved the problem. Students were still in debt and finding jobs whilst studying; universities’ finances were in a bad state. In 2004 the government again passed legislation, amidst much controversy, to grow the student contribution, to £3,000 per year. This took effect from 2006.

And then guess what? A few years later universities were saying that the problem still wasn’t solved. And they were right. Further student expansion had again eroded the unit of resource; and universities needed investment in their buildings and other infrastructure to keep standards high. Following much lobbying Lord Browne was asked to chair a group to think about it, make recommendations, and report after the 2010 election. Thus, supposedly, removing student fees and university funding as an electoral issue. Nick Clegg can tell you how well that turned out.

So what was the 2010 settlement? Dramatic reductions in direct state funding to universities, coupled with increased access to loans for living costs, and much higher maximum tuition fees. And, significantly, an accounting trick which took state-backed student borrowing out of the government’s current spending. This is what the current hoo-ha about default rates is about: estimates of non-repayment by graduates are higher now than they were when the system was introduced, meaning that it costs Future Us more than Past Us thought that it would. But this depends on forecasts based on current levels of graduate employment and salary, which are subject to change. Present Us doesn’t really know how much Future Us will pay. And some Present Us-es would like other Present Us-es to be the Future Us-es that pay more. While other Present Us-es think that Future Us shouldn’t bear the cost, but that Present Us should. And a lot of those Present Us-es are the Future Us-es that the other Present Us-es think should bear more of the cost. Clear now?

And now let me bring in an expert view. I was fortunate to attend, a couple of weeks ago, a debate organised by the Institute of Welsh Affairs. You can see the debate again here. The panel included Professor Nick Barr of the LSE, who knows more about the topic of student fees and loans than anyone else in the world. Probably. And he was very erudite on the topic. (In a nutshell: the 2004 system was well designed, the 2010 system cannot be described using words which are fit to write in this blog a least.) But what I thought was interesting was that he went beyond the economic into a political judgement: the reason universities need to be able to charge fees is that they can’t rely on governments to fund them properly. And looking at the history, you can see his point: four attempts to reform student and university finance, and none of them lasted for more than a few years. About the life of a parliament. Short-term solutions don’t work very well for long-term issues.

The hope is clearly to have a grown-up conversation about how to fund universities. The UUK panel has VC’s from old and new universities, and is inviting contributions from any interested parties. It is only focused on England, but will have an effect on Wales and Scotland. The Institute of Fiscal Studies, whose research underpins the launch, is on board. These are good signs.

But my prediction is for another fudge: a solution which works for a few years and then leaves a mess for the next parliament to deal with. Why am I so cynical? You can’t get consensus without all political parties coming on board. There’s an election coming, there’s the unpredictable factors of UKIP and the fall out for the LibDems following their tuition fee promise in 2010. Who’d believe a politician now about student funding? David Blunkett, as Education Secretary in 1997, cherry-picked from Lord Dearing's recommendations, which were presented as a coherent package. The current coalition cherry-picked from Lord Browne's recommendations, which were presented as a coherent package. Do we really think that third time round government wouldn't do just the same?

And the sad thing is that this really matters. To lots of individual students. To the quality and sustainability of lots of UK universities. To the prosperity of the whole country. I’ve no solution in this blog post. Perhaps another day.