Monday 30 June 2014

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 ...

Thursday 26 June 2014

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 ...

Wednesday 25 June 2014

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.

Monday 23 June 2014

"Knowing trust" - or three ways to make a collaboration work better

A recent piece of work with a client got me thinking about the mechanics of collaboration between universities. Universities nowadays have lots of reasons to work together - whether it’s a research project that spreads across several universities; a joint doctoral training centre; joint courses; or shared services - universities have financial, regulatory and market encouragement to play together nicely.

It doesn't always work, of course, and often when it doesn't, it's to do with people, who are at the heart of any collaboration. I think that there are three really important factors to bear in mind.

The first is clarity about purpose.  Do your best to make sure that people don't think that there's a hidden agenda - this helps with focus. If the collaboration is about a joint doctoral training centre, then say so. And it’s good for senior leaders in the work to be clear early about points of tension and difference. If then plan is to share student numbers 50:50, then say so early. Clarity leaves no room for speculation and mischief making. But where there's uncertainty, it’s easy for people to see and find conspiracy (and merger threats!) We're hard-wired to spot danger, and if there's a chance to revert to type, we'll all do it easily.

The second is to take the time to get to know each other. Universities are long-term organisations: the arrangements often need to last for years, if not decades, and this happens well only when people relate to each other as trusted colleagues. This doesn't have to mean shared team building weekends with paintball and obstacle courses (phew!), but it does mean making ample time in any workshops and meetings for informal discussions - make lunch breaks long not short; have plenty of chances for tea and coffee; and make sure that people from the different partner institutions are actually talking to each other.

The third is easy to forget. Face-to-face is better than phone-to-phone. Better than Skype-to-Skype. Certainly better than email-to-email. That can be tricky when the partners are a distance away, but it is worth working at. Some of the very successful partnerships that UK universities have with overseas institutions are underpinned by regular get-togethers, where a lot of people from one of the partners travel over to meet with the others. You don't do this unless there's real value, and that value, I think, is the authenticity that comes from being present in the same space as your co-conspirators, in whatever activity you're undertaking.

All in all, I think that it’s a ‘knowing trust’ which is required. 'Knowing' because it's important to focus on what your institution needs, and why it’s doing it. But it isn't a short term transaction, it’s a long term relationship. And so trust is an equally important partner.

Wednesday 4 June 2014

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.

Monday 2 June 2014

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.