These are my views and not those of my employer, or of projects and programmes I am responsible for. This post is available under a creative commons CCzero license and I would prefer it to be used without attribution.
Today, in parliament, David Willets announced the coalition plans for higher education funding. As expected, it draws heavily on the Browne Review – with the main changes being a hard cap set at £9,000 for institutions committed to widening participation (at the moment, all of them) and £6,000 otherwise. Repayment rules have been tweaked, , there’s additional spending (more progressive) on student support, and additional requirements for funding and support for widening participation. It’s OK though, as it offers a “better deal for students” apparently.
But the plans still rely on three big assumptions that, to me, seem wrong-headed.
1. We need to cut spending on Higher Education to reduce the big scary deficit
Two arguments here (if you ignore the Nobel Laureates arguing that the big scary deficit isn’t something we should be be basing policy decisions on), firstly HEFCE’s own figures suggest that for every £1 spent on Higher Education, the economy gains £3 of added value, which you may want if you were trying to cut a deficit. And even this doesn’t take into account the long term benefit of a workforce with critical thinking skills. Return on Investment calculations are notoriously dodgy, but investment in HE is clearly investment in the education and skills of the national workforce. Secondly a number of people, most notably 2me2you2me and LeftFootForward have suggested that implementing Browne will cost more than the current model – Margot James MP appeared to agree with this analysis (though as a positive point in favour of Browne) in the House of Commons. Due to the fact that fees are paid by government funds which are not recouped substantially until after graduation, assuming that most institutions will do as they did in 2004 and charge the maximum allowable fees, and taking into account the enhanced student support sweeteners (Willets himself admitting that £28 in every £100 are not expected to be recouped) this is likely to be broadly true at least for this parliament.
Two arguments here (if you ignore the Nobel Laureates arguing that the big scary deficit isn’t something we should be be basing policy decisions on), firstly HEFCE’s own figures suggest that for every £1 spent on Higher Education, the economy gains £3 of added value, which you may want if you were trying to cut a deficit. And even this doesn’t take into account the long term benefit of a workforce with critical thinking skills. Return on Investment calculations are notoriously dodgy, but investment in HE is clearly investment in the education and skills of the national workforce. Secondly a number of people, most notably 2me2you2me and LeftFootForward have suggested that implementing Browne will cost more than the current model – Margot James MP appeared to agree with this analysis (though as a positive point in favour of Browne) in the House of Commons. Due to the fact that fees are paid by government funds which are not recouped substantially until after graduation, assuming that most institutions will do as they did in 2004 and charge the maximum allowable fees, and taking into account the enhanced student support sweeteners (Willets himself admitting that £28 in every £100 are not expected to be recouped) this is likely to be broadly true at least for this parliament.
Sadly the HEFCE teaching funding model is not properly documented in the public domain, unless this information is released we can’t properly model the differences. But both blogs cited above appear at headline level to have used a fair set of working assumptions.
2. Student choice based on price will lead to efficiencies and drive up quality
This is really a broader question about the ways in which free markets work, and there is a lot of observational and theoretical writing that points in both directions. At the very least, their should be an admission that a number of critiques of this model of driving efficiency exist, and that what is being proposed includes a great deal of regulation and intervention in the activities of autonomous market players. I’m not about to launch into a critique of the market in front of so many people who could do so better than me. It is also worth pointing out that prospective students already have a choice, based on subject of study, academic reputation, locality and environment, and their own academic abilities. It is not clear exactly how adding a further factor, cost, makes this choice more valid. Teaching funding already follows student intake, though in a balanced and compensated way thanks to central oversight of this. Indeed, it could be argued that the tendency of markets to bring about supplier consolidation and monopolies would actually harm student choice long-term. A market adds so many weaknesses to the system – it allows institutions to fail, not as educators, but as businesses. It attempts to encourage low-cost, low-quality models of education for those who cannot afford the premiums. It pressures institutions not to make long term plans about staffing or material investment. Of course, as a fan of evidence based policy, I’ll admit that we can’t know any of this for certain without testing these assumptions. And were the increased fees not simply a substitute for a cut in HEFCE resources, we could maybe do this.
This is really a broader question about the ways in which free markets work, and there is a lot of observational and theoretical writing that points in both directions. At the very least, their should be an admission that a number of critiques of this model of driving efficiency exist, and that what is being proposed includes a great deal of regulation and intervention in the activities of autonomous market players. I’m not about to launch into a critique of the market in front of so many people who could do so better than me. It is also worth pointing out that prospective students already have a choice, based on subject of study, academic reputation, locality and environment, and their own academic abilities. It is not clear exactly how adding a further factor, cost, makes this choice more valid. Teaching funding already follows student intake, though in a balanced and compensated way thanks to central oversight of this. Indeed, it could be argued that the tendency of markets to bring about supplier consolidation and monopolies would actually harm student choice long-term. A market adds so many weaknesses to the system – it allows institutions to fail, not as educators, but as businesses. It attempts to encourage low-cost, low-quality models of education for those who cannot afford the premiums. It pressures institutions not to make long term plans about staffing or material investment. Of course, as a fan of evidence based policy, I’ll admit that we can’t know any of this for certain without testing these assumptions. And were the increased fees not simply a substitute for a cut in HEFCE resources, we could maybe do this.
But fundamentally, it allows student choice to dictate the flow of funds within the market. To generalise, 18-year-olds are rubbish about knowing what they want to study. I went to university at 18 dead set on being a pharmacist. After a year of that, I realised that Pharmacy wasn’t for me, and switched to English Literature and Performing Arts. Based on the transferable skills I learnt in that course, I now work in IT and Administration, after spells in Education and Public Policy. I know there are people who set out to do a job, did a course and then got the job. But they are in the minority. I work with a biologist, a computer programmer, a philosopher, an agriculturalist, several librarians, a historian… all managed by a geological engineer. In jobs outside of subject specialisms this is the norm. It’s the transferable skills – research, rhetoric, writing – that makes graduates valuable, in most cases the subject of study is just an interesting way in to gaining these skills.
3. The existing funding model is not fit for purpose
According to HESA in 2008-9 the Higher Education sector in the UK enjoyed a total income of £25.3bn, and made expenditure of £24.9bn. It taught 2,396,050 students (the largest population of students ever recorded, and a student body more than twice the total population of Birmingham.) A business model which makes a profit whilst attracting a record number of customers is not a failing business model. I’m leaving aside why anyone would ever want to judge an education system in these terms, I’m just saying that if you want to, those are the numbers. Admitting more students is going to require more investment, both on a year-on-year basis and reliable long-term investment in infrastructure and capacity. If the government wants more people to access HE, and they want this access to come from parts of society that have previously have not had access, then it is going to require investment by the the state. The proposals recognise this, with £150bn pounds of additional funding in this area. But rather than developing new funding channels, why not just support the cost of teaching by the state? In conclusion
According to HESA in 2008-9 the Higher Education sector in the UK enjoyed a total income of £25.3bn, and made expenditure of £24.9bn. It taught 2,396,050 students (the largest population of students ever recorded, and a student body more than twice the total population of Birmingham.) A business model which makes a profit whilst attracting a record number of customers is not a failing business model. I’m leaving aside why anyone would ever want to judge an education system in these terms, I’m just saying that if you want to, those are the numbers. Admitting more students is going to require more investment, both on a year-on-year basis and reliable long-term investment in infrastructure and capacity. If the government wants more people to access HE, and they want this access to come from parts of society that have previously have not had access, then it is going to require investment by the the state. The proposals recognise this, with £150bn pounds of additional funding in this area. But rather than developing new funding channels, why not just support the cost of teaching by the state? In conclusion
Within the Bullingdonian ideology, you are not allowed to critique policy unless you have a fully worked out alternative, Willets again pushed the point today – Labour had “no costed plans”.
I’ve got one, it’s called “sticking with the status quo for the moment.”
The status quo is not perfect, but it works well enough to deliver a world-class HE sector. It needs work, but the work that needs doing moves in the opposite direction to the current plans… removing elements of market driven competition rather than adding more. There are more detailed critiques emerging – for instance by the University of Utopia – but we need to give them time to fully emerge.
We’ve plenty of time to think about these changes too – there’s no crisis in HE funding, despite what we are encouraged to believe. So lets not rush into half-baked policy with serious long-term consequences. We can’t go on like this.