Whose money is it anyway?

It’s hard not to notice the current focus by some in government, parliament and the media on universities, and in particular issues of value (levels of tuition fees) and accountability (how can VC’s high salaries be justified).

There’s lots to be said on this, but in this blog I want to focus on an underlying issue: whose money is it anyway? Put bluntly, if universities are spending private money, then it’s no business of the state what they spend it on, as long as it’s legal.

Universities get money from lots of sources, and they publish information annually – through their annual accounts and through statutory returns to the Higher Education Statistics Agency (HESA) – about what exactly they get and from who. The information is in a standard format, with many categories. Bear with me while I list these; it’s worth seeing to give context to the argument I’ll be making later. There are:

• Funding body grants

• Tuition fees, comprising Full-time undergraduate, Full-time postgraduate, Part-time undergraduate, Part-time postgraduate, PGCE, Non-EU domicile, Non-credit-bearing course fees, FE course fees, and Research training support grants.

• Research grants and contracts, comprising grants from: BEIS Research Councils, The Royal Society, British Academy and The Royal Society of Edinburgh; UK-based charities; UK central government bodies/local authorities, health and hospital authorities; UK central government tax credits for research and development expenditure; UK industry, commerce and public corporations; other UK sources; EU government bodies; EU-based charities; EU industry, commerce and public corporations; EU (excluding UK) other; Non-EU-based charities; Non-EU industry, commerce and public corporations; Non-EU other

• Other services rendered, comprising income from BEIS Research Councils, UK central government/local authorities, health and hospital authorities, EU government bodies and other sources

• Other income, comprising: Residences and catering operations (including conferences); Grants from local authorities; Income from health and hospital authorities (excluding teaching contracts for student provision); Other grant income; Capital grants recognised in the year; Income from intellectual property rights; and Other operating income

• Donations and endowments, comprising New endowments; Donations with restrictions and Unrestricted donations

If you’ve made it through the list (well done!) you’ll see that some of these come from public sources (eg BEIS research grants), some of these are private (eg UK industry grants). Add together all of the public income for a university, divide by the total incomer, and you can work out what percentage of the university’s income is from public sources. Which is surely relevant for understanding how accountable universities need to be with their spending choices.

For some categories, though, it isn’t obvious if it’s public money. The big one here is tuition fee income.

For income from non-EU students, it is clearly private income. Even if they’re supported by their own government, the UK government doesn’t have a duty or obligation in relation to the money.

For postgraduate tuition fees paid by home and EU students, it will be a mixed bag: some will be paid by the students themselves or their employers; some will be funded via postgraduate grants; some will be paid via public PG loans schemes.

For home and EU undergraduate fees, we need to think about it. Where students have to pay tuition fees (remember that Scottish students in Scotland pay no fees) they are able to take out a loan, on less than commercial terms, from the Student Loans Company. And students do this. After graduation, students make repayments towards the loan from their salary; the amount they repay depends on how much they earn. And after 30 years the remaining debt is cancelled. The initial funds are provided to the Student Loans Company by the state; and an allowance for the ultimately unrepaid element – called the RAB charge – is also part of government spending. So is it public or private money? With hindsight, a proportion of it is private, and a proportion public. Up front, the cash is public.

On this basis it is possible to masker the calculation about the proportion of universities income which comes from public funds. I’ve included home and EU undergraduate tuition fees; I’ve excluded postgraduate tuition fees; I’ve included research and other services rendered sources from UK government and public bodies, and from EU government and public bodies (the income for this ultimately derives from UK government funds, as we’re a net contributor to the EU budget.)

What this shows is that universities receive significant public funding. Across the UK as a whole, 58% of income in 2015-16 (the most recent year for which HESA data is available) comes from public sources. In actual money, that is £20.3 billion out of a total income of £34.7 billion. Yes, I did say billion. It is a lot of money!

Nation	% Publicly-funded
England	58%
Wales	65%
Scotland	59%
Northern Ireland	75%
Total UK	58%

Of course this varies between individual universities. Some have very little income (comparatively!) from non-public sources; a few have very little (again, comparatively!) from the public. 

The graph shows the data: each university is one of the bars; they’re rank ordered from the most dependent on the left (Plymouth College of Art, since you ask, with 96% dependency on public funding) through to Heythrop College on the right (with no public funding whatsoever.) Even the famously-private Buckingham University has a little public income - £95k in funding body grants and research income from UK public bodies. Which means that it is second from the right, with about 0.25% of its income from public sources.

Source: HESA data

What of other universities? The Russell Group members range from the mid 20s (LSe with 24%) to the high 60s (Queen’s Belfast with 69%). The big post 1992 civic universities range from the mid 50s (Sunderland with 56%) to the mid 80s (Liverpool John Moores with 86%). The smaller or specialist research intensives (the 1994 Group, as was) range from the high 30s (SOAS with 38%) to the mid 60s (Birkbeck College, with 66%).

So does the state have an interest in how universities spend their money? The data say yes: at least to the extent that the money derives from public sources.

This doesn’t mean that all of the criticisms made of universities are valid. And it doesn’t mean that university autonomy isn’t a good idea. History, and international comparisons, tell us that the best universities are those that have the most freedom to make their own academic choices.

But it does lend validity to arguments that universities need to be accountable for their spending choices. In my experience, universities don’t disagree with this need for accountability. 

What of current criticisms? The danger is that the huge good that universities do for individuals and for society as a whole is forgotten amongst the current hubbub, and damage is then done. To avoid this, those making the noise need to be careful that their criticisms are well-founded. There’s an anti-elitism in current public discourse which easily mutates into unthinking policy.

And universities themselves need to be aware that (some at least) of the criticisms come from a real point. Are student always the first thought? Sometimes research sees like it is king. And is there real transparency? A few universities have a student on their remuneration committees, and their world has not fallen down. Why not more?

Value for money

Universities seems to be having a torrid time, at least as far as their standing in the political firmament goes. As well as pension headaches for USS member institutions (mostly the pre-1992's), there are high-profile stories on VC salaries, Lord Adonis' campaign about a fee-setting cartel, and (low) teaching contact hours. So far, so not very good at all.

There's a feeling that this might be more than a quiet season set of grumbles: David Morris at Wonkhe writes interestingly on this. For what its worth, I suspect that this is indeed politically driven rather than accidental. Maybe Lord Adonis is marking out ground for his re-emergence within a new model Labour Party; maybe Jo Johnson is preparing for tough discussions around future fees. But whatever the end point, it's worth looking at whether the concerns are real.

An underlying point is value for money. The charge is that (English) students don't get a lot for their money. One quick way to look at this is university spend on staff, the single biggest item on university's accounts. HESA publish handy data on student numbers and staff numbers. It's straightforward to calculate the ratio of students to academic staff over the years.

source: HESA, my calculations

The data show that from 2004-05 to 2011-12, for every member of academic staff there were about 14 students. In 2012-13 - the first year of the new fees regime in England - this ratio started to fall, and by 2015-16 there were just over 11 students for every member of academic staff.

Does this mean that the stories of low contact hours, and questionable value for money are wrong? Not necessarily - the data doesn't speak to the reality at individual universities or programmes, nor does it describe any individual student's experience. But it does show that universities have invested in the most important element of their provision: academic staff.

The haves and the have-nots of the academic world

The Guardian today ran a story on the casualisation of academic staff at UK universities, headlining a Sports Direct comparison. The story is based on a UCU campaign against a lack of security for academic staff. What’s behind the numbers and the issues?

Firstly, the issue. Universities have three types of employment: permanent contracts; fixed term contracts; and ‘atypical’ contracts. Each of these comes in full-time and part-time mode. ‘Atypical’ is a tricky category: there are lots of reasons why. Here’s what HESA have to say about the definition (scroll down and expand 'Terms of employment'  for the source):

"Atypical staff are those whose working arrangements are not permanent, involve complex employment relationships and/or involve work away from the supervision of the normal work provider. These may be characterised by a high degree of flexibility for both the work provider and the working person, and may involve a triangular relationship that includes an agent. Source: Department of Trade and Industry (DTI) Discussion Document on Employment Status, July 2003, paragraph 23.

In addition to this definition from the DTI, some HE specific guidance has been devised by HESA in consultation with HEIs. Atypical contracts meet one or more of the following conditions:

• are for less than four consecutive weeks - meaning that no statement of terms and conditions needs to be issued,

• are for one-off/short-term tasks - for example answering phones during clearing, staging an exhibition, organising a conference. There is no mutual obligation between the work provider and working person beyond the given period of work or project. In some cases individuals will be paid a fixed fee for the piece of work unrelated to hours/time spent,

• involve work away from the supervision of the normal work provider - but not as part of teaching company schemes or for teaching and research supervision associated with the provision of distance learning education,

• involve a high degree of flexibility often in a contract to work as and when required - for example conference catering, student ambassadors, student demonstrators."

Notice here that of the four special conditions the second and fourth cover a lot of ground. And this is the UCU’s point: teaching a module on an hourly-paid basis counts as atypical; being a tutor bought in to cover a short-term teaching need counts as atypical. These are the hourly-paid lecturers which universities often rely upon.

(It’s worth noting that ‘atypical staff’ can also include PhD students who do some teaching as part of their PhD study. This is a normal part of their PhD; witho7ut this experience they would be hindered in their future career.)

Universities say that they need flexibility: sometimes running a course depends on getting sufficient students to make it worthwhile. In this case, if your staffing cost is flexible, then the threshold for being able to run a course is lower (you don’t have to factor in the risk cost of redundancy if it doesn’t run). On this argument, the possibility of employing people on flexible contracts means that more courses are offered than would otherwise be the case.

The other problem highlighted by UCU is academic staff on fixed-term contracts. Such people have a job with regular hours – they can be full-time or part-time – but the contract has an end date. Legislation means that there has to be a reason for the fixed-term-ness (such as time-limited funding), and universities will argue that most research grants, for instance, are a fixed pot of money, to deliver specific outputs by a certain date. There’s also reasons like maternity cover: a person is needed for a specific period for a specific reason.

So what does the data show? It’s possible to recreate (or nearly so) the UCU data using HESA staffing data. HESA staff table 1 gives you numbers of full-time and part-time academic staff and also atypical academic staff at each university. Table 6 gives the number of academic staff – full-time and part-time – in Teaching only, Teaching and Research, Research only, and Neither teaching nor research roles at each university. And finally table L gives the proportions of staff, across the whole sector, in those same four categories who are on fixed-term contracts. With some simple arithmetic it’s possible to work out how many academic staff at each university have what UCU calls insecure employment – that is, are on a fixed-term contract or an atypical contract.

The headline data is stark.

• 52.3% of all academic staff – that is 145,575 people - are either on atypical or fixed-term contracts. 

• 67.4% of staff on ‘Research only’ contracts – 32,488 people – are on fixed term contracts.

• 54.4% of staff on ‘Teaching only’ contracts – 28,251 people – have fixed term appointments.

• 35.3% of academic staff on full-time or part-time contracts (that is, excluding those with atypical contracts) are on fixed-term contracts. That’s 70,015 people.

There are some things that the data doesn’t show.

One big one is that fixed term contracts can become a career pattern. 20 or more years of renewed two- or three-year fixed-term contracts is not unusual for researchers. It’s hard (very hard) for people to plan on this basis. Starting a family is a brave option without security of income. Getting a mortgage can be difficult without permanent employment.

A second big question is the proportion of teaching that is done by staff on these contracts. It isn’t unusual for a researcher who has been awarded a large research grant to ‘buy out’ their teaching duties. This can mean an hourly-paid tutor, or a fixed-term part-time role. So teaching, particularly at a research intensive university, may not proportionately be carried out by the faculty whose names you’ll find on the website. This doesn’t mean that the teaching will be bad: the tutors will still be knowledgeable, keen and expert. But is it quite what was expected?

It’s important to be measured. ‘Sports Direct’ are notorious for Victorian working practices; universities are not in the same league. But there are a lot of people who are not making a stable career in academia. They’re working on the margins. They’re the ones without an office, or even a nameplate on a door that students can find. And the data shows that there’s a lot of them about.

On #Brexit and Universities

The EU referendum on 23 June is a timely prompt to look at what impact the EU has on universities.

There’s no doubt where Universities UK – the sector-wide representative group – sits. “The UK’s membership of the European Union makes our outstanding universities even stronger, which in turn benefits everyone in the UK.”. So that’ll be a preference for In, I guess.

No, it isn't Eurovision ...

The underlying argument is one about mobility: through schemes like ERASMUS, staff and students in UK universities get a chance to work and study at other EU universities, and vice versa. And this leads to a better education, better research, and more capable people.

The EU funds such schemes, and helps to make them happen: it is clear that there are not similar exchanges from UK universities to non-EU countries. The closest thing to such a scheme beyond the EU is the junior year abroad programme that many US universities operate, with some UK universities very happy to bring such students in for a semester or a year. But it’s one way traffic: there aren’t many UK students spend a year at an American university, and where it happens – such as American Studies at UEA – it is linked to a specific degree programme, and arises because the University has worked hard to make it so.

There’s a financial angle too. The EU funds research across its member states, often for projects done in collaboration between EU universities - and UK universities are active in this. And students from other EU nations study at the UK’s universities, on the same terms as home students. (This gives rise to some oddities: Scottish universities are free for Scottish students and non UK EU students, but students from England, Wales and Northern Ireland are liable to pay fees …)

If we left the EU, other things being equal, the research funding would stop, and EU students would be like any other overseas student – and pay the same fees. So what do UK universities currently get from these EU sources?

HESA data lets us find out. Using data for 2014-15, it is possible to calculate for each university how much they get in EU research funding (from finance table 5); and how much they get in tuition fees from EU students (finance table 4 and student table 11a). And this in turn lets you calculate what proportion of their overall income comes from EU sources.

You’ll be pleased to know that I’ve done the maths for you. Across the UK as a whole 4.7% of funding in 2014-15 came from EU sources, with research funding accounting for slightly more of the whole than tuition fees. Of the tuition fees, two thirds is accounted for by full-time undergraduate fees.

The picture varies greatly: while a few universities get less than 1% of their income from EU sources, for others it is a noticeable amount. Here’s the top 10:

What is immediately obvious is the London bias, and also the absence of the big-money research universities. None of the top 10 have medical schools, which drives a lot of UK research money. And of these 10, eight get most of their EU income via tuition fees. But for all of them, the risk of Brexit is clear: 10% of income is a lot to lose, and recovering it is uncertain.

Does this mean that universities are right to campaign for the EU? Money is uncertain, and in truth we simply don’t know what would happen, especially in the medium to long term, if the UK left the EU. To my mind, the better reasons are those of mobility and opportunity, and they are good and noble reasons. The Universities UK campaign seems to me to be based on hope and optimism about making a better tomorrow. I’m all in favour of that.

An export business

With about a month to go until the start of the new academic year universities are busy with admissions and preparations for enrolment. Nothing new about that. But its worth looking at who is being admitted.

source: HESA, my calculations

The chart shows two things.

The columns, in blue, represent the total number of students enrolled in universities in a given year. The numbers reflect real people, not full-time equivalents, so this is the number of actual people enrolled. They also include all levels - undergraduate, postgraduate taught and research.

The line, in orange, represents the proportion of students whose domicile is outside the UK - that is, from any other EU country or from anywhere in the rest of the world. (A technical note for Theresa may, James Brokenshire and others - domicile is not identical to nationality; there will be a small number of people who count as domiciled outside the UK who have UK citizenship - its very complicated...)

(A second technical note for data geeks - the rest of you can skip over this one. HESA changed population definitions and from 2007-08 did not include writing-up and sabbatical students within the overall student numbers, recording them separately without domiciliary data. The proportion of of non-UK students is calculated on the basic HESA data; the total number of students is the raw HESA data plus the writing up/sabbatical data. The difference is negligible, but best to be clear.)

So the overall picture is one of a growth - and its too soon to see definitively whether there's a peak in 2010-11 or a temporary trough in 2012-13 and 2013-14. But the growing proportion of non-UK domiciled students adds to the picture: here's another chart, with one fewer significant axis:

source: HESA, my calculations

The blue is UK domiciled student numbers, the orange is students from the rest of the world. (Data geeks: I've assumed the split for writing-up students mirrors the split for PG students generally and calculated on this basis.)

This seems to me to show that UK student numbers in 2013-14 are pretty much where they were in 2002-03 (actually about eight thousand fewer). The number of UK domicile students hasn't been static over the period - there were nearly 1/4 million more in 09-10 than in 13-14), but the overall growth between 02-03 and 13-14 is driven by non-UK students.

This really does go to show that higher education is an export business. Universities UK regularly seeks to explain - to government and to the public - that universities are a major export industry. And with good reason - without overseas students in particular, many UK universities would be in financial difficulty. It would be a good idea - economically speaking - for the government to discount overseas students from its migration figures, and ease up on visa restrictions.

Staff costs

I’m looking at the issues around managing costs in higher education at the moment (look out for a post in the next few days about why not all vacant posts can be replaced). My starting point has been to look at the data, and in particular the high level data on staff costs.

HJ calculation from HESA data

The chart – which I have calculated using HESA data – shows the proportion of universities’ total income which is spent on staff.  (See my post from October 2014 which explains what this means and why it matters). There is data for the four home nations plus UK-wide data, covering the period from 1994-95 to 2013-14, being the most recent HESA data set available.

The chart tells a story of good financial times in the early years of the Labour government in the late 90’s; and closer management of spend following the introduction of top-up fees in 2006.

Of the four national patterns, England accounts for by far the largest share of the overall income, so it’s no surprise that the total UK and the England lines follow each other closely. In turn, Scotland appears over time to track England more closely. The data for Northern Ireland looks peaky, but don’t forget that it’s a very small sector (only four institutions, of which two are very small), so individual institutional strategy will have a disproportionate impact. Wales looks to be going against the grain – increasing the proportion of income spent on staff compared to the other nations.

With devolved funding this can happen – this may reflect differences in funding for capital, for instance, rather than deliberate policy by Welsh universities to grow staff spend. But HEFCW in Llanishen might be interested to find out why, before the Assembly Finance Committee in Cardiff Bay asks the same question.

Employability

The release of the Employment Performance Indicators by HESA this week made interesting reading. Universities up and down the land will be celebrating or holding post mortems, more so as employability seems set to increase in prominence in the government's thinking about higher education.

It’s a large data-set making it hard to spot patterns. I thought it might be useful to look at the aggregate outcomes by type of university. That isn’t going by mission group, but looking at institutions in historical context:

• The ancient universities – not just Oxbridge but also the Scottish ancient foundations
• The redbrick universities – the civic foundations of the 19th and first half of 20th centuries
• The CATs – the Colleges of Advanced Technology given university status in the 1950’s and the 1960’s
• The plate-glass universities – the new creations of the 1960’s
• The post 1992s - the former polytechnics which became universities en masse in 1992
• Newer universities – those created after the 1992 transition, often from colleges of higher education or former teacher training institutions
• Specialist institutions – arts, drama, agriculture, medical and so on

The HESA methodology changed in 2011-12, meaning that there’s only three years of comparable Employment PI data. This is how those seven categories aggregate:

	Employment PI (%)
	2011-12	2012-13	2013-14
Ancient	93.0	94.0	94.5
Redbrick	92.0	92.9	93.8
CAT	90.8	91.4	92.0
Plate-glass	92.3	93.2	94.4
Post 1992	89.0	91.0	92.4
Newer	91.4	92.5	93.4
Specialist	92.4	92.3	94.7

It’s all very close, but note one interesting feature: the types with the lower employment of graduates are the post-1992 universities and the former CATs. Both of these types of universities aimed, historically, to focus on programmes and skills which met the needs of business and industry.

Within the data, of course, are highs and lows in each category. And the outcomes for any institution will have lots of factors which determine the employment KPI– whether its region and the local economy or subject spread, or even very local issues about how the DeLHE survey was conducted.

Nevertheless, it’s sometimes good to take a step back from the data and see what might be going on.

The Groves of Academe

The world of higher education owes a lot to ancient Greece – the very term academic derives from the name of the place where Plato taught.  And the continuing saga around Greece’s economic and political travails look like a path to exit from the Euro and possibly the EU. If this happened, what would be the impact on UK HE?

First, some numbers: non-UK EU students account for just over 5% of the UK total student population (about 125k out of just shy of 2.3m in 2013-14, according to HESA).  Greece contributes the fourth highest number – just over 10.5k, about 8% of the non-UK EU students in the UK.

Data from HESA

The other top domiciles are Germany, France, Italy, Ireland, and Cyprus, which tells me that in Greece, Ireland and Cyprus going to the UK is a significant cultural pattern (think of the different populations of those countries.)

A decent number of these students are undergraduates.  Greece in 2013-14 had the third highest number of new undergraduates – just over 5000.  As EU citizens, undergraduates are eligible for student loans form the SLC in the same way as UK students, and this enables the continuation of what has been a pattern of EU students studying in the UK for their first degrees.

Data from HESA again

The same countries form the top 6 – again showing that there’s quite a habit of studying in the UK in Greece, Ireland and Cyprus.

So what would Greek EU exit mean?  Hypothetically, of course.

Without access to SLC funding, it’s unlikely that as many Greek students would travel to the UK to study. 5000 new undergraduates is the intake of a large university, so the impact would be felt over the years as fewer students applied to UK universities.

And there’d be immediate questions to address.  The politics make this interesting.  There aren’t any rules or procedures for a country leaving the EU, and my guess is that the politics of such a change would be disorderly and dramatic rather than with a planned transition.  So, just for a change, there wouldn’t be clear policy from the UK government.

And universities are bound by rules and regulations on this. See, for example, the University of Exeter, which has a very clear policy on fee status for EU accession candidates. If a country stopped being a member of the EU, then the natural consequence is that the students from that country would become, in terms of fee status, overseas. Universities can choose to set whatever fees they like, and so could continue to charge the home fee for such students, but since students would become ineligible for state funding, current Greek students would in any case face immediate financial uncertainty and pressure.

Visa status is a further uncertainty. Would Greek students need tier 4 visas? It would be tricky for the current government to be relaxed about this. My understanding is that the direction of UKVI policy is that overseas students who need a visa extension would be required to leave the UK to apply for the extension.  So overall my guess is that Greek students would need tier 4 visas; and would be asked to leave the UK in order to apply for such visas from outside. What chance that many would do this and come back?

This is obviously speculation – Greece hasn’t (yet) left the Euro and the EU, and maybe they won’t. But it might be worth universities checking how many students they have from Greece – if there’s a student support and a financial policy question coming, knowing the scale of it in advance might be wise.

Independent thinking

I posted recently on Scottish independence and what it might mean for students and universities. There’s a parallel question, of course, about research and what impact independence might have on this.  An important disclaimer – I’m not arguing for, or against, independence; just looking at what it might mean.

HESA data on research finance is one way into this question.  Funding for research comes from a number of sources – public, private, charitable, UK, EU, rest of the world, and so on.  The data lets us see how the Scottish picture compares with the rest of the UK.

Research funding makes up a higher proportion of funding for Scottish universities than it does for the rest of the UK – 21% against a UK wide proportion of 16%. Of course, that also reflects, in part, the different UK tuition fee systems – higher tuition fee income for English and Welsh universities inevitably changes the proportions of other types of funding.

HE funding; HESA 2012-13 data

Research funding is typically (although not universally) awarded by a competitive process involving peer review of specific projects.  Comparative performance at this level of detail does tell us something about the research strengths of the different UK nations.

Shares of UK Research Income by nation - HESA 2012-13 data

The highlighted cells show where a nation’s share of total UK funding in that category is higher than its overall national share. The right hand column shows what proportion of overall research funding come from that source.

So we can see that Scotland performs better than its average on the two largest income sources – Research Council (RCUK) funding, and UK charitable income from open competition.  These aren’t small sums of money, either: these two sources accounted for over £2.4 billion in 2012-13.

This is where the impact of independence may be felt. The Research Councils are UK-wide bodies. The large charities are UK-wide. If you redefine UK, then inevitably these funding streams cannot, without other things happening, carry on as they were.   And this is where you get into the unknowable: if Scotland votes yes, then there will be negotiations on a whole raft of things, and the continuation of the Research Councils on a pan-national basis is one of the desiderata of the SNP. Equally, how charities will react is a big question – some charities may have specific clauses that prevent them working across a border, although equally there may be a neat negotiated solution to this.

Another feature can be seen from the data. Both Wales and Northern Ireland have disproportionate shares of UK Government funding. One hypothesis here is that government funding is supporting universities in those nations as a matter of policy, and it would be open to a future Sottish government to do just that. Undoubtedly Scottish universities are one of Scotland’s very valuable assets, and probably have a longevity greater than oil.

The most that I think we can conclude here is that in the event of a yes vote there would be some hard questions about current pan-UK research funding, but it is too soon to say what the effect could be – it’s up for grabs.

Another way to look at this is the question of research culture. Research collaborations between universities are driven by many factors, but an important one is the research question being addressed. Teams working on the same area will know each other, from conferences and journals. They’ll work together if it helps the research question (bringing together expertise, or sharing equipment).

Scottish independence wouldn’t move it further away from the rest of the UK; the question would be whether there were barriers placed in the way of continued collaboration. Unintended consequences of broader negotiations or national policies would be critical here. If Scotland were to join the EU, barriers would be eased. If a good bilateral agreement were reached, then no doubt research collaboration could continue. But research funding may become a pawn in a bigger game.

Should I stay or should I go now?

Last night’s TV debate between Alec Salmond and Alastair Darling brought home to me that the prospect of Scottish independence is possibly very real.  I’m not foolish enough to prognosticate publicly on the rights and wrongs of the question, but it is worth looking at what Scottish independence might do to higher education in the UK.  For this post I’ll look at the student side; research comes another day.

It’s a moot point as to whether there is a single UK higher education sector.  Funding and oversight has been through national funding councils (or similar mechanisms) for some time. And being a devolved matter, quite different approaches to funding of institutions and students have developed in the four UK nations – England, Wales, Scotland and Northern Ireland.  On the other hand, the mission groups (the Russell Group, Million+, University Alliance and the now-departed 1994 Group) and Universities UK, the sector umbrella body, have always worked on a UK-wide basis.  

HESA publish data on undergraduate student mobility between the four nations (the raw data is in a table at the end of this post), and these show what looks like a politically and sociologically interesting pattern.  For starters, here’s the absolute numbers (2012-13 data) in each of the four nations who choose to study in their home country (‘stay’) or study in one of the other UK nations (‘go’):

2012-13 HESA data; first degree students only

The disparity in scale between the four nations is clear here: England has 85% of student numbers. Not surprising really: it has more universities and more people anyway.

But when you look at percentages a striking picture emerges:

2012-13 HESA data, first degree students only

On this view, England and Scotland are very similar: 95% of students from England and Scotland stay in their home nation.  And Northern Ireland and Wales are also similar: about two in three students from Wales and Northern Ireland stay in their home, but one in three go elsewhere (mostly to England, by the way.)

It’s possible to make broad historico-political points here, about Scotland and England being sustainable polities, and Wales and Northern Ireland being places from which that some people see the need to leave to thrive. But I’m going to refrain from that. 

The balance of trade is interesting too (that is, the difference between total numbers of students from the nation studying the UK, and total number of places taken by UK students in that nation). England and Northern Ireland are net exporters of students, and Wales and Scotland net importers. Also, despite the vastly different sizes of the sectors, the actual numbers have a very similar order of absolute magnitude – between 11,000 and 13,500 for each of the four nations.

Balance of trade	Students:
	From	In	Balance
England	924,680	912,615	12,065
Wales	51,095	62,180	-11,085
Scotland	95,930	109,450	-13,520
Northern Ireland	41,370	28,830	12,540

Overall, if Scotland left the UK, the HE sectors in England, Wales and Northern Ireland probably wouldn’t be much affected. The blunt truth is that compared to the whole, not many Scottish students leave (a short 5,000), and most of these go to England, where their number is but a drop in the ocean. Scotland might notice a change more: 16% of home students at Scottish universities – over 18,000 - come from other UK nations.

I don’t imagine that the vote on 18 September will be swayed by the impact on the university sectors. Nor, by these data, should it.

Here’s the raw data I promised:

	Nation of institution
Origin of students	England	Wales	Scotland	NI	Total
England	880,210	29,610	14,195	665	924,680
Wales	18,725	31,955	400	15	51,095
Scotland	4,515	165	91,200	50	95,930
Northern Ireland	9,165	450	3,655	28,100	41,370
Total	912,615	62,180	109,450	28,830

The numbers are from 2012-13 HESA data (did I mention this?) and refer to first degree students only.

Doctor, doctor!

Sorry – not a doctor joke, but a look at what 2012-13 HESA data tells us about doctoral study.

I used the data in HESA Table 15 – HE Qualifications obtained – and looked at the intensiveness of doctoral study. Here’s a scatter plot showing the proportion of degrees awarded at doctoral level against the total number of degrees awarded in 2012-13.

(I excluded three institutions whose data were outliers: the Institute of Cancer Research, with almost 43% of its 70 degrees awarded being doctoral; the Open University which awarded almost 24,000 degrees, with less than 1% at doctoral level; and the University of London central institutes, which awarded 130 degrees, of which almost 20% were doctoral.)

Well, this seems to me to show that there isn’t a scale factor – up to about 8% of degrees at doctoral level you can find institutions large and small.

What if you look simply at the number of doctoral degrees awarded? I think it gets a bit more interesting here.  The plot below shows – using the same dataset with the same exclusions - the absolute number of doctoral degrees awarded in 2012-13 and the proportion of the whole which these represent.

I’ve picked out two clusters – one, in the red oval, are those institutions which are both large in absolute terms (all over 700 doctoral degrees awarded a year) and a high proportion (>6%).  The other, the blue oval which overlaps, are what looks to me like the institutions at the upper end of the trend line – over 350 doctoral degrees per year, but fewer than 10% of all degrees.

It looks a bit like the premier league in recent seasons – there’s three that are at the top and unshakeable, three struggling to break into that top pack; and a fair few that won’t make it any time soon, no matter how hard they try.

I’ll leave it to you to identify which institution is which. There aren’t any surprises.

Does this matter? There's many good universities doing many good things outside the blue and red ovals, and league tables often fail to show this. But in terms of university culture, the red (and to a lesser extent the blue) is where many a vice-chancellor would rather be.

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.

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.

Why are students so hard to count?

A common phenomenon in universities is the argument about data, and in particular differences between the number of students a department thinks it has, and the number of students that ‘the university’ thinks the department has. Let’s set aside for a moment the unworthy suspicion that such arguments are a smokescreen to disguise other issues. Why is it so hard to get student data right?

One reason is the specificity with which student data is defined. If you’re counting students to work out what size classroom to put a course in, then you need to know how many people it is (headcount) and how many are following that course. If you’re counting for budgeting purposes you might prefer full-time-equivalent (fte) and only those that are enrolled and paying fees. (And, by the way, there are students who are following courses who haven’t enrolled or haven’t paid fees.) The perspectives about the right data differ depending on need. And if you think about students who might be re-sitting a module or a year; or who might be undertaking placement work for all or some of their study; or who might be part-time at the moment but in a broadly full-time pattern of study; or many other possibilities, then you can see that there’s a lot of detail to be argued over.

Another, related, reason is that data is often collected by a university to satisfy the demands of an external return – from HESA, for instance, or from a funding council. The definitions used in such collections can be abstruse, to say the best. For instance, a few years ago there was a change in the way that taught postgraduate students were counted for funding purposes, meaning that students might be very present in a university – enrolled, having tutorials, using library facilities – but would be counted as zero fte for funding purposes. They weren’t being ignored – they’d have been accounted for in a previous year’s return – but a data set used for an external return is not then comparable directly with the reality of the institution. Sometimes an almost theological attention to the detail of definitions and rules is needed.

A third, big, reason, is life itself. The model whereby a cohort of students enrols in September and pursues study diligently through the year is just that: a model. In reality people come and go – because of funding, because of family reasons, because they themselves are not sure if the course they are following is right for them. Universities ask students to inform them when they have a change in circumstances or attendance, and so students sometimes do this. And it makes the record a fluid thing. A count of students in the morning may not be the same as a cont taken that afternoon – it isn’t a data problem, it’s life.

A fourth reason is that data systems are complex things. In any reasonably large university there will be many people who interact with students and who record the transactions on the student record system. These record systems have a lot of fields (check out the HESA list of fields for the student return if you don’t believe me). There’s a lot of scope for errors. Nowadays systems do have checks within them, but they aren’t foolproof – the human capacity to find new ways to input data is truly wonderful. (For instance, I once was supported by a temporary PA, who was ordering stationery for me. The finance system required cost codes and account codes, and as this person didn’t have access to the manual, the approach used was to put in random numbers ‘til it worked. I got the stationery, for sure, but it probably didn’t help the management accountants ...)

So what to do about this? Here are three approaches which can help.

Firstly, get in the habit of specifying exactly what data you need. Precisely. Planning and data teams can help by giving menus of data, so users have the knowledge to ask precisely. You’ll reduce apparent data errors this way, but more importantly you’ll promote the idea that precision of specification matters. More sophisticated data users can then have more sophisticated arguments.

Secondly, and related, don’t make data collection and submission the business only of a few people. It can be easy for those who make external returns appear as the guardians of secret and arcane knowledge. (Is a countable year one of my three score and ten?) Not everyone will want to engage with the detail of the HESA return, but if more people know that there is a specific coding, and that it can be found (HESA are very good and transparent) then more people might recognise that what they input does matter.

Thirdly, help the people who collect and own the data in your university to work together. Data quality isn’t about doing a hard sum, it’s more like weeding a vegetable patch. Unless you check regularly and are willing to get your hands dirty, then data errors will occur. Give someone the role of overseeing data quality (often the planning function will do this) and ensure that they bring the data owners together regularly. The more a sense of team develops here, the better your data quality will be, and the fewer arguments you will have.