Metal Mickey wants your job!

An interesting – worrying? – story this week about robots replacing humans. Foxconn, a Chinese company which makes products for Apple and Samsung (and possibly others) has replaced 60,000 workers with robots. Which probably isn’t great news, economically, if you work on a production line.

There’s a growing amount of speculation that the age of the robot may soon be upon us – here I cite in evidence the BBCs Will a robot take your job? article last year. But surely universities are safe from this kind of thing?

Not coming to a University near you

Don’t be so sure. Walking, talking, robots probably aren’t going to be lecturing any time soon, but a different sort of robot is having an impact. Georgia State University in the US of A has started using a chatbot – a computer programme which independently ‘talks’ to users via text – to handle queries from incoming students. Claiming to answer more than 99% of student queries, the chatbot, called Pounce, has been helping more than 3,000 students apply for financial aid; apply for accommodation and enrol in courses. In its first month of operation.

This is clearly a big thing. If the communication channels for conversion, admission and enrolment can be augmented by such technology, many universities will want to replicate this, and not only across the Atlantic. Speed and quality of response matter in converting an applicant to a student. And this directly impacts on universities’ success, so we can expect to see this grow. And if you have Pounce you don’t need so many people on the phones or at the help desks.

Pounce is a “product of artificial intelligence and supervised machine learning” according to the blurb from AdmitHub, its vendor. Its answering questions which cover a range of standard issues, but can come from left field:

everything from “When will I get my scholarship package?” to “Can my dog live in the dorm with me?”, according to the blurb. 

There are lots of other university situations where this sort of transaction happens. Exam time, submission of coursework; library and IT rules, graduation ceremonies. Universities are guiding students through all sorts of procedures, and a capacity to answer questions naturally, quickly, reliably and trackably, any time of day or night, is bound to be appealing to university managers. Where admission goes, other services will follow.

So it seems that, for some professional service staff at least, Metal Mickey might not want your job. But Hal from 2001 - A Space Odyssey might.

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.

Vote early ...

Its election time! On 5 May, amongst all of the voting across the UK, the elections for the Welsh Assembly take place. What’s on offer for higher education in Wales? It’s a devolved matter, so policies can (and do!) differ from the other UK nations. I’ve read the manifestoes so you don’t have to: here’s your cut-out-and-keep guide, in strictly alphabetical order …

The Senedd Building in Cardiff Bay

Firstly, a piece of context. Tuition fees are different in Wales to the other parts of the UK. The Welsh Government funds part of the tuition fees for Welsh-domiciled students attending university anywhere in the UK. And as a decent number of Welsh-domiciled students go to university in England, this means a lot of Welsh Government HE money is funding English universities. Which causes a bit of a stir. The policy looks unaffordable, although the government denies that there’s a problem. But in any event a commission (the Diamond review) has been established to look into it and report just after the election. Where have we heard that before?

The Welsh Conservatives have six manifesto commitments relating to higher education:

• Establish an HE institution focused solely on initial teacher training and educational research.
• Reform tuition fee support, introducing a ‘Student Rent Rebate’, offering undergraduates timely and sustainable help with university living costs. 
• Reduce student debt by exploring the viability of compressed degrees studied over two academic years. 
• Encourage the growth of part-time, distance and flexible course options.
• Develop links between local employers and the Further and Higher Education sectors. 
• Continue to back Coleg Cymraeg Cenedlaethol, and explore a revised remit.

School education is one of the major campaign issues in Wales, which explains the focus on ITE. The fees policy is to stop the fee subsidy, and instead support living costs.

Welsh Labour make but two explicit commitments in relation to higher education:

• A new funding body for Higher and Further Education in Wales 
• A better package of student support than that on offer in England, based on the recommendations of the Diamond Review

The first arises from policy already on the cards, via the Hazelkorn Review. By making it a manifesto commitment, it will be harder, should Labour return to power, for the policy to be opposed by Universities or traded in coalition negotiations. And the second is the sound of a ball being kicked into the long grass.

The Welsh Lib Dems make commitments about universities, innovation and research; and also in relation to student support and HE funding:

• Creating a database of Research & Development at Welsh universities to encourage collaboration between Higher Education and the private sector. 
• Expanding investment in Knowledge-Transfer Partnerships to transfer academic knowledge smoothly to real-life businesses' projects. 
• Providing additional finance for universities to support more expensive subjects such as engineering and computer science and tackle gender imbalances in student recruitment. 
• Establishing a Wales-wide alumni network for European and international students who have studied in Wales, and Welsh students who have studied abroad, as part of a broader Diaspora Strategy to develop international business links.
• Introduce a Student Living Support Grant for all Welsh students registered for a first undergraduate degree at a UK university, including part-time students, payable on top of the existing means-tested Assembly Learning Grant, replacing the Tuition Fee Grant. 
• Require universities to adopt a 'Fair Access Agreement' outlining measures to broaden access and improve student retention. 
• Pay the full tuition fees of care leavers. 
• Protect hardship funding for the most vulnerable students. 
• Introduce an Employability Enhancement Bursary to support students on postgraduate courses at universities in Wales and appropriate work placements that emphasise employability skills. 
• Protect funding for Higher Education in Wales, and increase funding for HEFCW.

There’s no shortage of policy there. Like the Conservatives, there’s a focus on living costs not tuition fee subsidy.

Plaid Cymru make longer, and more grammatical, commitments for higher education:

As a matter of principle we believe that higher education, as a public good from which we all benefit as a society, should be free at the point of learning and paid for through general taxation. However, as the Diamond Review has already identified, unilateral action by Wales alone is not financially sustainable. 

We will reform student finance so that Welsh domiciled students who work in Wales after graduation will receive £6,000 per year during the first five years after graduating, up to a maximum of £18,000. This will ensure that our best and brightest have the opportunity and incentive to stay or return to Wales after completing their studies. 

We want to make Welsh universities attractive and successful institutions, and we will allocate funding to HEFCW to close the growing funding gap between Welsh and other UK universities. This substantial increase in investment will be conditional on a commitment, through a national compact, to better reflect the needs of Wales at national and regional levels in their research programmes, their investment in impact and innovation, and in addressing Wales’ most pressing knowledge and skills gaps. 

Supporting our young people in widening their horizons is also important for Wales. We will for the first time provide student financial support for Welsh-domiciled students enrolling as undergraduates in universities outside the UK, on similar lines to the recent pilot in Scotland. 

We will also expand our support for Erasmus+ so that more of our young people get the opportunity to study for part of their degree or work placements elsewhere in the European Union. 

We will support post-graduate study through a new postgraduate fund for loans to Welsh domiciled students. These loans will be income contingent long-term loans at preferential interest rates.

Again, a different approach to Labour on tuition fees; and a significant emphasis on student mobility.

Finally, UKIP also have plenty to say:

The number of young people studying at university is at an all-time high, as are the costs. Yet, according to the Chartered Institute of Personnel and Development, 58.8 per cent of UK graduates are in non-graduate jobs, a percentage that was exceeded only in Greece and Estonia. 

UKIP will encourage students to choose careers that will help fill the current skills gap, both to benefit Wales and to set our young people on the path to a solid, prosperous career. We will also support expansion of the Welsh higher education sector, which remains a success story for Wales, with an emphasis on teaching STEM subjects and quality of research.

UKIP is also concerned that, as a condition of our EU membership, we are currently obliged to give out tuition fee grants of £5,190 to European Union students studying in Wales, rather than EU students applying for places at UK universities as self-supporting international students.

UKIP will:

• abolish fees for Welsh domiciled undergraduates taking degrees in Science, Technology, Engineering, Mathematics and Medicine (STEM) subjects in Wales, i.e. extend tuition fee grant to cover the current tuition fee loan element of costs for eligible courses

• replace tuition fee grant with loans for Welsh domiciled students choosing to study in England

• establish a bursary fund to help students from poorer backgrounds attend the most prestigious universities beyond Wales, whether in England or internationally, with a particular emphasis on STEM subjects and modern foreign languages

• remove the £5,190 tuition fee grant from EU students studying in Wales following a ‘Leave’ vote in the referendum

• retain the quality-related research (QR) budget that underpins world leading research in Wales

• support part-time provision to widen access to higher education and to help up-skill the Welsh workforce

And there's more!

Using figures from the Diamond Review interim report we [UKIP] estimate that the saving to the Welsh government of replacing fees with loans for Welsh domiciled students studying in England as £62.1 million. However, the Welsh government is too optimistic regarding likely repayments on loans and the Diamond interim report implies that £11.9 million more a year should be set aside to cover non-repayment. We estimate the cost of abolishing fees for Welsh domiciled students studying STEM subjects in Wales as £28.7 million. The net annual saving from the above would therefore be around £21.5 million, of which we propose to use £5 million for our proposed bursary fund, leaving £16.5 million to help finance our spending priorities in other areas.

Part-time higher education and flexible learning opportunities, useful to workers and employers alike, are essential if we are to have any chance of improving the Welsh economy. There are over 34,000 part-time students studying at higher education level in Wales. Almost 23,000 of these are studying at undergraduate level. The number of students studying part-time HE in Wales is in decline: there has been an 11.5% drop in part-time undergraduate numbers between 2009/10 and 2013/14.

UKIP will:

• encourage institutions to keep part-time fees low and to incentivise part-time provision.

• maintain the current flexible credit system including credit transfer

• retain the widening access premia paid to institutions to support recruitment and students from widening access backgrounds 

• continue existing grants for part-time students

• introduce loan restriction exemptions for Equivalent or Lower Qualification (ELQ) students in priority subject area

• support disabled students to counter any adverse effects from the proposed changes to Disabled Students’ Allowances (DSA)

This looks like it’s been written by somebody with a good working knowledge of HE management and governance. ELQs and premia are a bit of a giveaway.

But does it all matter? All of the smart money is suggesting that Labour will be by far the largest party, but will be a few seats shy of a majority. In second place, neck-and-neck in the week before the election, are Plaid Cymru and the Conservatives. UKIP are expected to get enough seats to need two hands to count them; the Lib Dems will do well to get three AMs, and may even disappear entirely.

All of which means that we’re in coalition territory, based around Labour, or a minority Labour government. So most manifesto commitments won’t count for anything except in negotiation, and Labour have given themselves a lot of room for manoeuvre on HE issues. I suspect that Labour would be glad if another party required a change of tuition fee policy as a condition of coalition, or confidence and supply. It’ll get them off what is a pretty messy hook at the moment.

Casualty?

The Department of Health has just launched its consultation on changes to funding of student nurses, midwifes and other allied health professions (radiographers, physiotherapists and similar) in England. This is a big deal. What’s the issue?

Currently, such students in England pay no tuition fees, and get a bursary to cover living costs. The NHS contracts with individual universities to provide a set number of training places, and universities recruit and teach these students. As part of the programme, there are clinical placements in real NHS settings.

The contract process has been brutal in some cases: the ending of a contract (and this has happened) means that universities have staff with no students, leading to reorganisations and problems in teaching out cohorts; contract management has involved monitoring students in ways different to and often very much more intensive than for other courses. So you might think that the ending of this process (elements of which, at least, are surely implied by the proposals to end bursaries and move to ‘normal’ tuition fees and student loans) would be good news for universities.

Perhaps it will be. The case for the changes, as argued by Ben Gummer, Health Secretary, is that it will enable universities to take more students, and meet student demand (Gummer claims that two out of three nursing applicants are turned down.) But of course this will only happen if universities are able to find placements for students, and that depends upon the NHS being willing to host students.

An utterly gratuitous carry on 

It’s instructive to compare this with medical education, where (in England) universities have money (SIFT, or Strategic Increment for Teaching) to pay NHS trusts to take medical students. Medical student numbers are also capped, recognising the practical limit on the number who can be accommodated by the NHS. These conditions – a fund to pay trusts the costs, and a cap on numbers) make finding placements workable for medical schools. NHS trusts have an incentive to do activity which is slightly removed from core healthcare, and there’s a practical limit on the costs of this and the logistical burden.

Could the same happen for nursing, midwifery and allied heath students? There won’t be a state-imposed cap on numbers – that’s the whole point! – so it will be down to universities and NHS trusts to manage this. And in the absence of an equivalent to SIFT funding (and I haven’t seen reference to this) NHS trusts will face a real cost in providing the educational supervision to placement students which makes the placement a learning experience, rather than the student simply being an auxiliary in a clinical setting. Will universities have to provide the staff to do this, making the educator part practitioner? Will universities need to pay NHS trusts to take placement students?

There are some big risks in here. The contacts for providing education at least guaranteed placements. Take that guarantee away, and the job of finding placements becomes harder. No doubt the new system will work well in some places, but equally likely, it seems to me, is that there’ll be market failure in other places. Leading to fewer trainee nurses, midwives and allied health professionals in some English regions. And possibly fewer clinical staff and students on wards.

It seems clear to me that the rationale for this is cost: by passing the cost onto students, it enables the NHS to deal with tighter budgets. And maybe that’s necessary. But it’ll be important to have a robust system to guard against the sort of market failure that impacts upon healthcare, and it’s hard to see how to make that happen without more resource somewhere. My guess is that universities will find this bargain less good than you might at first think.

Virtuous necessity

I’m currently doing a project at a Big Northern University, and like many universities there’s an atrium created out of the space between buildings by putting a glass roof on it. And like many glass rooves it leaks when it rains. Which it does quite a lot.

A feature roof

I like the way that they has been dealt with – using sheets of polythene, transparent pipes and water butts to make a pretty stylish water collection system; and it looks like this is used to water the plants in the atrium. Thus making a virtue of necessity.

That’s quite a common need in management and in working life generally – you can’t always control the world or what it does to you, but you can choose how to respond to it. So when it rains, don’t be down, take the chance to water the flowers for free.

Keeping secrets

Today’s reporting of the data protection leak at the University of Greenwich highlights the issues around information security for universities.

The BBC report is not explicit, but it seems that the papers for a university research committee were published on the university’s website, and that these papers included personal data relating to students.

There are disappointingly few
 files like this in most university offices

This highlights the twin pressures universities face in relation to information. On the one hand, the Information Commissioner expects universities to proactively publish lots of information, and this would include committee minutes and papers. On the other hand, universities – like all other bodies – have very clear responsibilities to properly protect personal data. Which would include not publishing it on the web.

Universities are habitually collegiate places. And despite their scale – and some are very large indeed – many decisions are people decisions, meaning that the collegiate bodies which take decisions have to have personal information in front of them. So they have to deal with personal data – and sometimes sensitive personal data – within a notionally public context.

Universities typically have procedures in place to square this circle – classifying papers in accordance with FoI schemes, so that when written, authors think about whether it should be disclosed. And then the papers are published or withheld depending on judgments made. This is, I expect, how the Greenwich situation occurred – a mis-classification, or a correct classification which slipped through the net. Or in fact slipped onto the net.

Some universities – notably the Russell Group – have been campaigning for exemption from the Freedom of Information Act. That argument is made more sharply in relation to research and the commercialisation of research, where the exemptions available under FoI legislation have, universities argue, been found wanting.

At heart this is a question of autonomy, and the extent to which universities are public bodies. Universities have autonomy because that enables them to be better universities. But autonomy doesn’t place them outside the law. The balance to be struck is between removing some of the nonsensical FoI burden – Paul Greatrix is always good value for money on this – whilst enabling public accountability.

If it were down to me, I’d happily see some tightening of FoI exemptions for universities around research, to help protect intellectual property and enable collaboration with industry, but in general openness is a good. A complete exemption will remove the sunlight from university business, and without that disinfectant things won’t always be as clean as one would like.

High finance

Are you sitting comfortably? Good. Then I’ll begin.

Once upon a time universities in the UK were funded by the state, through an arms-length body which was fairly non-interventionist, and received money to cover every-day operating costs and salaries, and money for building projects and other capital costs. Polytechnics and higher education colleges were funded by the state too, though in their case it was through local authorities and later an arms-length body. There was money to give students grants, too, so that they could afford to study instead of work.

More people started to go to university, and polytechnics and colleges got called universities too, but the amount of money they received didn’t keep up with the extra costs. The arms-length body invented some very clever ways to get universities to do a great amount more for a little extra more, and then tell them that it wasn’t a one-off effort, but the new normal. And so, especially in the former polytechnics, resource got stretched very thin. There was still money for recurrent costs and capital, but less than it used to be, given the extra students they were teaching. And the money, being thinly spread by the state, meant that there was less to fund students during their study.

Everyone saw that this couldn’t last. And so after much deliberation a scheme was agreed to ask students to pay towards the cost of their study, and a fund was set up so that students could borrow, at a reasonable rate, to support themselves whilst at university. Did this work? Not really. More and more people went to university; students continued to struggle to pay for their time at university; universities struggled to put in place good facilities; and class sizes went up. It wasn’t right. Another think was needed.

And so another think happened: and this time universities were allowed to charge a lot more in fees, and a much bigger fund was put in place, so that they could borrow to do this. But the government allowed universities to charge higher fees than they had budgeted for, and so paying for the bigger fund meant that universities received less and less in grants, both for particular annual costs and for capital projects. And the whole thing was still too expensive …

It isn’t much of a story, I know, but put some detail in and it’s not far off a history of UK higher education funding since the 1970’s. I haven’t taken up a creative writing course – don’t worry! – the point of this is to illustrate why universities are taking to borrowing money.

The UK HE sector has moved from being directly publicly funded to being publicly funded via a market mechanism. That is, most home tuition fee income comes via the Student Loans Company, which is definitely public money, but depends upon students actually choosing to go to the university in question. This is life and death for some universities, and for all it is critical in determining how much resource there is to spend. Student recruitment matters more than ever, and universities therefore like to present their best face – hence the need for investment in facilities, in staff and so on. Additionally, investment requires a stock of money; tuition fee income comes in flows. So a pile of borrowed cash, which can then be re-payed over time, makes a lot of sense.

There’s two other lessons to be learned from this, which arise from how universities are going about their borrowing.

Universities are borrowing in new ways. Yesterday for instance, Cardiff University announced it had issued a bond worth £300m, at a historically low rate of interest (there may be a paywall on this link, sorry). Other universities have issued bonds too: Liverpool (£250m), Manchester (£300m), Cambridge (£350m) and De Montfort (£110m) – this isn’t an exhaustive list.

Bond issues are long term – 30, 40 or 50 years, typically. Universities pay interest annually on the amount borrowed, and at the end of the period are liable to repay the whole amount. The interest rates are low at the moment – Cardiff is paying 3.1% on its borrowing, meaning that it must repay interest at £9.3m per year – but this will be cheap, particularly if, or when, inflation rates rise. Cardiff gets this low rate because it is regarded as a very safe investment – rated as Aa2 by Moody’s, which means it is regarded as “high quality and … subject to very low credit risk“.

And this leads on to the two other important things about university management which I hinted at.

Firstly, if you’re committed to repaying a lot every year – remember the £9.3m per year that Cardiff is signed-up to – you need to be sure that you can afford it. And that means that the investments you make from the capital need to show a return – additional students with additional fee income; more research grants with additional overheads; reduced operating costs with actual savings in expenditure. These conversations already happen in universities, but they’ll be a little sharper where there’s a loan repayment in mind. And in the larger universities, where perhaps there’s been a little more slack in the past, things will tighten up.

Secondly, stability is the watchword. The low interest rates achieved by universities (you’d bite the hands off a bank offering a fixed-rate mortgage at 3.1% for 40 years) only come about because of the very good credit rating they receive – the Aa2 in Cardiff’s case. This is based on an assessment of the long term risk that the university won’t pay the debt. A more unstable funding scenario doesn’t necessarily mean that loans won’t be available, but they do affect the interest rate. So uncertainties about fee levels, student number caps, research funding, all contribute to difficulties in other universities getting such good rates.

I don’t imagine that many university senior managers started their careers thinking that they’d be engaging in high corporate finance, but it’s an inevitability given the move to the market that we’ve seen. The universities that do best will be those that become the sort of organisations that can deliver in a good business-like way without changing their core values. And they’ll all live happily ever after.