Memorandum submitted by the Higher Education
Policy Institute (HEPI)
This note offers comments on a number of the
issues raised by the Select Committee, and does not attempt to
offer a comprehensive or systematic reply to all the issues raised.
Nevertheless, it is hoped that it will provide some material and
perspectives that the Select Committee will find helpful as it
begins its review.
WHAT DO
STUDENTS WANT
FROM UNIVERSITIES?
If pressed, most students are likely to say
that they go to university because that is a necessary step on
the way to a better life, and, in particular, a better job. Increasingly,
jobs that were previously available to bright young people who
had not gone to university are now available only to graduates,
leading to what Professor Alison Wolf has described as the "tyranny
of numbers".
Certification is important to students, and
there is a widespread, and probably accurate, perception that
certificates (degrees) from some universities are more valuable
in the job market than others—ie there is a hierarchy of
esteem. That may be regrettable, and to some extent the effects
may be deleterious, but it is a reality . By and large—not
in all cases but by and large—students will tend to apply
for the most prestigious institutions that they think they are
capable of gaining admission to, institutions select the most
able students that apply, and employers, believing that in so
doing they will be recruiting the most able, favour students from
those institutions, thereby creating a vicious (or virtuous) circle
that perpetuates the hierarchy of esteem.
There are some changes afoot that may lead to
the breaking down of this hierarchy. First, the increasing trend
for young people to study near their home may have the effect
of reducing the dominance of the hierarchy in decisions about
where to study (though the great majority of young students still
study away from home); and second, the increasing availability
of information about various aspects of the university experience
(for example the facilities available to them, the satisfaction
of other students, employment outcomes and the amount of teaching
they receive, as well as information about quality) may lead to
more sophisticated choices. But these developments should not
be exaggerated. If it is indeed the case that a degree from one
university is more valuable in the job market than another then
it is entirely rational that students would prefer to obtain a
degree from that university, whatever the facts about the quality
of provision. It is difficult to see how this pattern can be broken
(if indeed that is thought desirable). It would require the Government
to control admissions to universities, and deny freedom of choice
to students and of selection to institutions, perhaps (as in other
countries) requiring universities to admit on a "catchments
area" basis.
The other important thing will be to ensure
that more and better information that is relevant to students
is available. The HEPI survey earlier this year of the academic
experience of students[96],
which among other things provided information about the amount
of teaching and private study that was required in different subjects
and different universities, was the first of its kind. Surveys
like that need to be refined and conducted on a far larger scale
to enable better student information to be available. The HEPI
survey also revealed that there was a disquietingly high level
of dissatisfaction with the accuracy of the information that universities
provided about themselves in their prospectuses. It is extremely
important that universities do not mis-sell themselves—particularly
to overseas students who are more vulnerable in this respect,
but whose poor opinions may have extremely damaging effects for
the whole system not just the guilty universities.
WHAT SHOULD
THE GOVERNMENT
AND SOCIETY
MORE BROADLY
WANT FROM
HIGHER EDUCATION?
All over the world universities are seen as
key to the emergence of knowledge economies, although there is
little understanding or agreement about the precise role that
universities play in this. It seems reasonable to conclude that
high quality university education and a workforce that includes
substantial numbers of graduates are necessary but insufficient
conditions for this. Important though they may be, all manner
of other conditions need to be satisfied as well—the existence
of knowledge-based industries, for example, appropriate fiscal
and financial structures, and so on. Subject to that, it is reasonable
that the Government should want universities that are capable
of producing highly educated people and conducting high quality
research. But it is no less important that industry should be
able and willing to make use of the highly educated people emerging
from university and to exploit the research that is conducted
in universities. To have one side of the equation fulfilled without
the other will not lead to the societal and economic outcomes
that the Government seeks.
It is good that the Select Committee has identified
"engagement in society and democratic debate, and producing
active citizens" as an element in the role of universities.
Public discussion about the role of universities—and the
case for public investment—is increasingly dominated by
the economic role and economic benefits. While that is understandable
it risks missing some of the key benefits of investment in higher
education, which do not lend themselves to economic evaluation.
Work by the" Wider Benefits Of Learning Group" at the
Institute of Education demonstrates very clearly the very substantial
non-economic benefits of university education (in terms of health
and citizenship). In any sensible discussion these ought to be
given an appropriate weight.
The contribution of universities to democratic
debate and active citizenship seems particularly important at
a time when ethnic, cultural and religious divisions are threatening
to fragment society; and it is particularly depressing that universities
are regarded as the breeding and recruiting ground for intolerant
and fundamentalist doctrines—the very antithesis of what
universities ought to stand for. All the evidence, though, is
that they are much more likely to be a force for good in this
respect than for ill, and the role of universities in upholding
liberal, democratic structures is essential.
UNIVERSITY FUNDING
One of the very substantial achievements of
the present Government has been that it halted the large and rapid
decline in funding per capita that occurred during the 1990s.
It needs to be noted though that the decline was only halted in
1998 with the introduction of tuition fees. It was private funding,
not public funding, that stabilized the situation. On the other
hand, it needs also to be recognised that the two main fears of
the opponents of tuition fees have not been realised.
— First, private funding has not, apparently,
simply substituted public funding, as many feared. Although there
is no way of knowing what the level of public funding would otherwise
have been, public funding per capita has actually increased recently
alongside the private funding that has been generated through
fees.
— Secondly, there has not apparently
been any impact on participation in higher education (although
because the poorest students paid no fees under the regime introduced
in 1998 introduction of the fee should not have been expected
to impact participation by the poorest groups. What might have
impacted participation would have been the move from maintenance
grants to loans, but that does not appear to have had such an
effect). The definitive study of this remains the HEFCE report
"Young Participation in Higher Education"[97],
which among other things, showed that following the 1998 reforms
there was less turbulence in higher education participation in
England than in Scotland (which did not introduce tuition fees).
The 1998 reforms, welcome though they were in
introducing the principle that the beneficiaries of higher education
should contribute to the cost, were illogical in that they put
the cost on the parents of the beneficiaries—not the beneficiaries
themselves—and thus necessitated a great deal of fee remission
in order to make higher education affordable to the poor.
The new arrangements introduced this year are
among the most progressive in the world.
— First, they are logical in that they
put responsibility for repayment squarely with the beneficiary.
— Second, by ensuring that there is
no upfront payment, they ensure that nobody is disabled from participating
in higher education because they cannot afford it.
— Third, by making repayment income-contingent
(with no repayments made at earnings below a threshold, and then
graduated repayments according to the amount earned) they ensure
that higher education is truly affordable.
— Fourth, by ensuring that extensive
and generous grants are available (whether called bursaries or
grants), they provide positive incentives for students from poor
backgrounds to participate in higher education, while nevertheless
ensuring that to the extent that they benefit from higher education
they subsequently contribute to the cost.
— Finally, the very substantial subsidy
that the Government provides for the loans is an imaginative way
of using public money. Effectively, by subsidizing the student
fee instead of providing grants direct to the institution, public
money is being used to gear private money
It took political courage to introduce the current
arrangements and by and large the structures are now in place
on which to build. The level of the fee that was set initially
was too low to create the sort of market that the Government hoped
for (though why it wanted to create a market is not clear, and
in any case that ought to be a consideration second to ensuring
adequate funding for universities), but there is no doubt that
the new tuition fees will make a significant difference to the
funding of universities.
HEPI calculated some time ago that per capita
funding would increase to something like the levels of the early
1990s, and although that may be optimistic the increase will be
significant.[98]
The HEPI report on "The prosperity of English universities:
income growth and the prospects for new investment"[99]
showed that over the last decade universities have operated in
a relatively benign funding environment—largely but not
entirely because of the significant increases in research funding
provided by the Government—and predicted that these favorable
conditions would be likely to continue over the next few years.
However, a large part of the increased resources available will
be used up by things like salary increases for academic staff
and other commitments. Nevertheless, these are all legitimate
expenses that contribute to a high-quality university environment.
There seems widespread agreement that the current
£3000 cap on the fee should be lifted. That seems right.
Although, as has been said, the current level of fee makes a significant
difference, it still leaves some universities far short of what
they believe they need to earn in order to complete with the very
best universities in the world (mainly American) in terms of the
salaries they offer and the facilities they can provide. But there
are a number of difficult issues that will surround the raising
of the fee cap:
— First, are we prepared to accept
increased differentiation between universities? The reality is
that universities are already substantially differentiated, and
it would be quite wrong to argue that allowing some to charge
a greater fee than others will create a situation that does not
exist already.
— Second, there is a risk that poor
students will be put off going to those universities that charge
the highest fees. Although it appears that current levels of fee
do not create a substantial disincentive, it cannot be assumed
that that will be so at higher levels. The problem is that we
do not know the fee level at which significant disincentives kick
in. It will be essential to ensure that effective arrangements
are in place to ensure that higher fees do not lead effectively
to discrimination against poor students, and there may be a continuing
role for OFFA in this.
— Third, the current arrangements mean
that the Government provides a substantial subsidy for the fees
that students pay, and for the integrity of the system that needs
to continue whatever the fee level. It would be almost unprecedented
for the Treasury to offer an open cheque-book to universities
without attempting to control the commitment on the public purse
that decisions by individual universities will imply—the
higher the fee a university charges, or the more students it admits,
the larger the Government's subsidy. A way needs to be established
of controlling public expenditure while giving universities the
ability to charge higher and differential fees. Differential fee
levels, incidentally, would also mean that universities that charge
higher fees (probably the better off) will receive higher levels
of public subsidy than poorer universities that charge lower fees.
That may be a difficult political issue, as those universities
that are likely to charge higher fees are also those that receive
higher levels of research funding from the Government. That is
a fact that is inherent in the current system, and it is not suggested
that that is a reason for changing it.
December 2006
96 "A Dangerous Economy: the wider implications
of the proposed reforms to the UK Research Councils' peer review
system" HEPI December 2006. Back
97
"Young participation in higher education" HEFCE 2005-03. Back
98
"HE Bill and Statement: Implications of the Government's
Proposals" HEPI January 2004. Back
99
"The prosperity of English universities: income growth and
the prospects for new investment" HEPI September 2006. Back
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