HEFCE's powers of intervention
29. HEFCE told our predecessor Committee that it
would only consider intervening in internal decisions taken by
universities "where there was an exceptional case in national
policy or gross market failure".[61]
This sets the bar for intervention so high as to be ineffectual.
In isolation, few departmental closures in themselves would
qualify as the gross market failure that HEFCE uses to define
situations meriting its intervention, even though the cumulative
impact of these closures on regional and national provision may
be extremely damaging. Mr Egan suggested that the threats
to chemistry provision were sufficient to qualify as a "gross
problem", telling us that HEFCE was now "seriously concerned".[62],[63]
In practice, the tools available to HEFCE when addressing potential
departmental closures are inadequate. Mr Egan told us: "the
help we could provide is to say, 'If you want to work in collaboration
with another institution to ensure that you have a viable chemistry
department' we may be able to broker that kind of arrangement".[64]
He subsequently conceded that departments were fully capable of
developing such collaborations independently, calling into question
the value of HEFCE's involvement in this process.[65]
It remains to be seen what steps HEFCE will take when faced with
the potential closure of the last department in a particular STEM
subject within a region. The Government has recognised that
the market is imperfect as a means of matching graduate output
to the country's need for STEM graduates. It has asked HEFCE to
intervene when necessary to support its policy aims but has failed
to give it the powers or political support necessary to enable
it to fulfil this function effectively.
30. HEFCE also plays a wider role in promoting strategic
science provision and Mr Egan was keen to draw attention to the
proactive measures initiated by HEFCE:
"We have a feasibility study in the south
east region concerning physics and how physics providers in the
south east region can work together. We have a similar arrangement
developing in the east and west Midlands for physics and we are
having discussions through regional associations at all regions
across all strategic and vulnerable subjects as to how we can
develop consensus around what can be done and how collaboration
can improve and protect the supply".[66]
Mr Egan nevertheless accepted the criticism that
HEFCE did not undertake horizon scanning to identify potentially
vulnerable departments: "we do not do analysis of the sort
which says which are the likely departments to close […]
that is something we need to look at to strengthen that process".[67]
HEFCE must be proactive in horizon scanning and collection of
relevant data. The Government can only exercise proper strategic
oversight of STEM capacity if it has access to comprehensive data
sets, including trends in student demand, uptake and quality,
and employer demand for different STEM subjects, where appropriate
at institutional as well as regional and national level. We recommend
that the Government ensures that such data is maintained and published
periodically.
31. Mr Egan was refreshingly open with us regarding
the constraints facing HEFCE. He commented on HEFCE's lack of
planning powers: "there is only so much we can do on geographical
proximity because we are not a planning body; we are a funding
body", and admitted that while "in many cases the market
is efficient and does deliver the policy objectives", in
"STEM subjects, it does not".[68],[69]
It is extremely unfortunate that in an area of higher education
so crucial to the nation's future industrial strength there is
now an acknowledged policy failure. Furthermore, Mr Egan told
us that "under certain circumstances HEFCE would like more
powers" to enable it to intervene.[70]
However, HEFCE later qualified this statement in a supplementary
memorandum:
"Those circumstances would be if we could
not rely on higher education institutions to work with us at an
early stage in the development of their thinking to ensure adequate
provision of a subject at a regional or national level […]
We will work with the sector to see how we might strengthen the
existing voluntary guidance. If, as we suspect, we are successful
then there would be no need for further powers".[71]
HEFCE seems to be cautious to an extreme about impinging
on the autonomy of higher education institutions. In view of the
Government's own timidity on this front, it is perhaps not surprising
that it is so resigned to its own impotence.
32. The Government is evidently committed to preserving—indeed
cultivating—a market in higher education, although we note
that it does not appear to have ever consulted Parliament specifically
on this matter. We invite the Government to rectify this situation.
In our view, there is a fundamental disconnect between the
Government's desire for strategic provision of STEM subjects and
its desire to maximise the autonomy of universities. As a result,
the Government has no effective lever to control its strategic
science policy in terms of undergraduate provision. This lack
of strategic vision in Government policy could have significant
ramifications for the future supply of home-grown STEM personnel.
In recognition of this threat, our predecessor Committee proposed
a "hub and spokes" model of regional collaboration between
universities.[72] The
Government has rejected this model without putting forward a viable
alternative to secure regional provision of STEM subjects. The
University of Sussex example has illustrated the weakness of existing
safeguards. In the absence of any new measures, the Government's
target to expand significantly the national cohort of STEM graduates
looks increasingly unrealistic.
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