The money lenders

It does rather seem that David Willetts won’t stop being universities minister. The BBC reports today on the idea, promoted by said former-minister on Newsnight yesterday, that universities take on some of the student loans debt. This will reduce the RAB charge for Treasury (and therefore make student loans more affordable for the public purse) and also make it easier for universities to argue that they could charge higher fees if the Treasury is insulated against the risk.

I was struck by two particular quotes from the BBC write-up.

Here’s the first:

The costs of the debt - currently assumed by officials to be between 30p and 40p in every £1 that it lends - are paid by the Treasury.

The italics are mine.  Did you see the word “assumption”? This is an accounting question, and it’s all about what, today, we think that graduates will be doing in 20-30 years’ time.  Do we really have confidence in these assumptions? On that time horizon we’re almost into personal jet packs, holidays on the moon and ten hour working weeks (I wish!)

And here’s the second:

Cambridge graduates have a 4.3% unemployment rate in the first year out of study; for Staffordshire leavers, it runs at 13.9%.

My italics again. We know about the first year’s outcomes. But we need to know about 20-30 years’ time. Think how much the structure of the economy can change in 20 years. I don’t know for sure what skills are needed then. (Though I would agree that a Cambridge degree probably gives you a head start for reasons other than the quality of education …)

I don’t deny that the Treasury has a real problem to contend with – you can’t ignore or wish away accounting conventions. But to make up long-term policy on the basis of short term economic data seems slightly dangerous to me – like a farmer in Somerset changing from wheat fields to rice paddies on the basis of a rainy week in April.

For a more uplifting take on accounting here’s Monty Python’s money programme (opens in YouTube) …

Room at the top?

The BBC reports today on NUS Scotland's call for more women on University governing bodies.  That's an important component of decision-making, but another angle is the make up of the executive team in a university.  I've been looking at the gender make-up of university executive teams - a day going through institutional websites.  I'll post more in due course (there's lots of data to look at) but here's a first finding:

For each UK institution, I identified the top team - usually identified as the group which meets weekly/fortnightly and advises the VC; or as the team within the Vice-Chancellor's office - and counted the number of men and women, including the VC/Principal.  I didn't differentiate between academic and professional service (eg Finance Director, Registrar) roles.

I couldn't identify the team for every institution.  There's 131 institutions represented in the data above; for the remaining 30 institutions I couldn't identify the top team from the university website.  The mean proportion of women on executive teams is just short of 1/3; there's not much difference between this and the national averages for English, Scottish, Welsh and Northern Irish universities.

The data doesn't show equality - if there was no gender bias there'd be a normal distribution curve.  But equally it doesn't say anything about any given university, or the intentions of Vice-Chancellors.

Small things can make a big difference

In most universities I’ve seen there’s a problem with using space efficiently, and one of the issues is the small meeting room which each department has “because it’s never possible to book a centrally controlled one when you need it.”

I saw technology in use today which, in its small way, knocked my socks off.  The blurry photo below (sorry for picture quality) is one of the room controllers outside every meeting room at the Life Sciences Hub Wales.

It’s got a touch sensitive screen like a tablet device.  It shows the bookings for the room; allows a user to book the room there and then for a quick meeting; and updates automatically (its connected to the central scheduling system). So you can see if a room is free; make a booking there and then (or online, automatically).  And when a room is in use the border glows red not green, so you can see from a distance whether the room is busy or free; even better, you can use the screen to find an empty room instead. And book it there and then.

Fantastic. It would take investment for the network infrastructure and the timetabling/scheduling system. But it removes the uncertainty about a room’s usage, and also the need for the printed weekly/termly timetables which are pinned to the door of many university classrooms.

Technology in itself doesn’t solve problems, but it can create possibilities for people. And I bet that once users are confident that they will be able to find a room, the pressing need to ‘keep control’ of the departmental meeting room will fade.  Technology here really could help with efficiency.

So should every university go out and install these? Not necessarily – the business case would depend on the specific rooms, usage, space costs, and a host of other things. But they might help change the language, from “centrally controlled room” to “easily bookable room”.  And once that’s believed, change can really happen.

And they do feel very Star Trek. I’ve seen the future. In Cardiff Bay. And it looks like it might work.

[For the record - I've got no connection with the company that makes these. Other similar ones might well be available.]

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 ...

Risky business

It’s horror show time again as immigration controls on international students, and alleged fraud in some components of the student visa system, hit the headlines: here’s the Times’ Higher’s take on the statement by the Immigration Minister yesterday, and here’s the BBC’s.

There’ll be acres of newsprint (and amps of webpages? what’s the digital equivalent of ‘acres of newsprint’?) on the details of the story, and I’m not going to try to compete in this blog post. But I do want to pose a hypothetical ‘what-if’ question. What if overseas students stopped coming to the UK? Specifically, what would happen to university finances?

Well, obviously, there’d be no overseas fee income. And this amounted to over £3.5 billion in 2012-13. That’s no small beer. But equally, there’d be no costs associated with teaching those students, so it isn’t as simple as taking £3.5 billion off universities’ income.

The TRAC data give us a way to estimate the underlying effect. According to HEFCE’s latest TRAC figures, non-publicly funded teaching in 2012-13 brought in an income of £3.281 billion and the full economic cost of delivering that teaching was £2.466 billion. This means that the teaching cost about 75% of the income; or, conversely, that about 25% of the income was a direct contribution to institutional surpluses.

Of course that’s a sector average, and the detail will inevitably vary across individual institutions, but it’s not bad as a first estimate. I used this proportion to model what would have happened to 2012-13 university surpluses if there’s been no overseas students, no overseas fees, and no costs to teach those students. (That is, I took the 2012-13 reported surplus for each institution, and subtracted from it 25% of the overseas fee income for that institution).

The chart shows the results. The vertical axis is the number of institutions in surplus or in deficit; the left hand bar shows the actual 2012-13 data; the right hand bar shows the modelled data without overseas fees or costs.

So as things stand, 19 out of 161 institutions which report to HESA had a deficit in 2012-13. If there hadn’t been overseas fees and costs, 63 out of 161 would have shown a deficit. The net total surplus in 2012-13, across all institutions, was just over £1,083 million. Without the contribution from overseas fees it would have been just under £206 million.

Now, as Patsy the horse said to King Arthur, in Monty Python and the Holy Grail, when they had just seen Camelot, “it’s only a model” (link opens in You Tube). The real world would not be like this, and there’s lots of reasons why the estimate I’ve made wouldn’t be specifically right. And the likelihood of all overseas recruitment simply stopping is very low indeed, I would say. But the model reinforces a hard truth.

And that hard truth is that uncertainty about overseas student recruitment is a very real and quantifiable risk for UK universities. A financial risk but also, let’s be clear, a risk to the reputation of the sector and the experience of student and staff in the universities. The presence of overseas students broadens UK students’ horizons, by enabling them to learn alongside people from other cultures and backgrounds; and universities are more interesting and cosmopolitan places because of overseas students. Long may it continue.

Let’s hope that the specific issues raised by James Brokenshire and the BBC Panorama programme are resolved. And let’s also hope that the politics of immigration, and the politics of the coalition government and electoral cycle, don’t conspire to damage a really important feature of UK higher education.