Memorandum 8
Submission from Million +
FUNDING FOR EQUIVALENT OR LOWER QUALIFICATIONS
(ELQs)
THE DECISION
1. On 7 September 2007, the Secretary of
State for DIUS wrote to the Higher Education Funding Council for
England instructing the Council to withdraw a total of £100
million in public support by 2010-11, commencing in 2008-09, from
the teaching of students studying for "a qualification that
is equivalent to or lower than a qualification that they have
already attained". Prior to this instruction to the Funding
Council, there had been no public consultation with HEIs or with
other representative bodies including students, employers or professional
bodies.
2. Million+ (a university think-tank supported
by a network of universities) welcomes this Inquiry and the opportunity
to give evidence to it. This submission is based on research and
evidence provided by institutions, including a significant number
which appear in the top 22 of institutions identified by Hefce
modelling as likely to lose funds. In total, these 22 universities
currently educate £100 million "worth" of ELQ students.
They do not have the characteristics of the OU and Birkbeck and
this decision has wide implications for institutions which have
been outstandingly successful in encouraging first generation
students, employer engagement and professional and vocational
higher level qualifications and supporting access by students
of varying backgrounds, ages and qualifications.
GOVERNMENT PRIORITIES
3. In his correspondence of 7 September,
the Secretary of State stated that he wished to redirect money
"to fund more students through their first degrees. While
there may be much benefit to an individual, or their employer,
in them retraining for a second qualification at the same level,
this is not, in my view, usually as high a priority for public
funding as support for students who are either entering higher
education for the first time, or progressing to higher qualifications.
In many cases, it may be appropriate for the employer to pay at
least a proportion of the costs of such re-training".
4. In other public statements, Ministers
have suggested that it was unfair to expect taxpayers to contribute
to the funding of "second degrees". At first sight,
these priorities may seem non-contentious. However, the policy
will increase tuition fees and will have an effect on participation.
In fact, the "second degree" descriptor is a misnomer.
Apart from some exemptions, all higher education students in England
who are studying for "a qualification that is equivalent
to or lower than a qualification that they have already attained"
will lose the public funding which currently contributes towards
the costs of teaching their courses. The announcement therefore
affects a very wide range of students and universities, including
many involved in vocational and innovative professional training.
Unless students fall into an exempt category, this decision withdraws
public funding from the teaching of anyone with an HE qualification
who is taking a sub degree or institutional credit and will affect
many part-time courses and tens of thousands of people seeking
to re-skill.
THE COMPREHENSIVE
SPENDING REVIEW
AND THE
"RE-TARGETING"
OF ELQ FUNDING
5. The Government announced that the Comprehensive
Spending Review would allow for 50,000 additional student numbers
up to 2011 (a period when the number of 18 year olds will continue
to increase). However, neither Hefce nor DIUS have confirmed whether
the 50,000 students are really additional or whether current student
categories are being substituted for student numbers associated
with new initiatives, eg the Government's strategy of encouraging
the funding of higher education students by employers (co-funded
student numbers) under the Leitch agenda. Employer co-funded places
also have the effect of reducing the public unit of resource available
for these higher education students.
6. The withdrawal of £100 million of
funding from the teaching of ELQ students raises the further question
as to whether the 50,000 student numbers announced in the CSR
are in fact being paid for by the withdrawal of student numbers
and associated public funding from ELQ students.
7. In fact overall student numbers in terms
of both applications and acceptances have not yet recovered from
those recorded in 2004-05 (ie prior to the introduction of variable
fees in England). Overall since 2002 there has been a 10.5% reduction
in the number of applications, mirrored by falls in applications
from each individual socioeconomic grouping with the exception
of unknowns (Appendix Table 1). Most significantly UCAS statistics
confirm that acceptances fell by 21.93% between 2002 and 2006
(Appendix Table 2). While applications in March 2007 were reported
by UCAS to have increased by 4.6%, this has to be compared against
the significant drop in applications recorded in 2006. As these
Tables suggest, each year thousands of qualified applicants, the
majority of them first-time applicants, do not progress to the
places for which they have been accepted in higher education institutions.
8. The Government may have decided to prioritise
first-time applicants because of the CSR settlement. However,
there is no evidence that ELQ students are currently substituting
for first-time applicants. Indeed on the contrary, the public
funding made available for the teaching of ELQ students (who do
not access student financial support arrangements) supports the
viability and availability of courses for first-time applicants.
For first-time and ELQ students, employers and universities the
"either / or" funding model which the Government has
announced makes little sense either in terms of access to education
or the business models which govern unit costs.
STUDENTS
9. Some universities have been excellent
at offering new opportunities for first generation students of
varying ages, with varying qualifications and from non-traditional
backgrounds. Their course programmes frequently include both first-time
(and often first generation students) and ELQ students. The latter
are often not studying a specific course programme although where
this is the case, the future viability of courses will undoubtedly
be put under threat because the withdrawal of public funding will
substantially increase tuition fees.
INCREASE IN
TUITION FEES
10. Currently, home / EU ELQ students pay
the same fees as their full-time or part-time equivalents—just
over £3,000 a year for a full-time degree course in England.
Once universities lose all public funding for these students,
they will have no option but to charge them the full cost. These
students will have to be treated in the same way as overseas (international)
students where tuition fees start at £7,000 per annum. Fees
for ELQ students will rise with the obvious risk that students
who cannot afford to pay will be priced out of their studies.
11. The increase in tuition fees in England
has led to a decline in both applications and acceptances and
influenced cross-border applications. 11.2% fewer Welsh domiciled
students now apply for higher education places in England and
5.4% fewer students normally resident in Scotland now apply to
study at English institutions.
12. ELQ students or their families will
have paid taxes. Many have family or care commitments. If they
have accessed student support arrangements previously they are
not eligible to do so again. Like other students in England, they
already have to pay course fees—and in the future, increasing
numbers of ELQ students may also be repaying loans from earlier
HE studies.
13. An increase in tuition fees for ELQ
students will have the effect of depressing the market and participation
in higher education. Such increases in tuition fees for ELQ students
will not be moderated by a student support finance package and
these students are already providing substantial funds from their
own resources towards their higher education. Many ELQ students
may wish or need to access study at their local university and
it not surprising that a significant cohort of higher education
institutions which will lose funds, are those which have outstanding
records in terms of encouraging regional and local participation.
HOME STUDENTS
WITH ELQS
FROM NON-UK
INSTITUTIONS
14. The new policy affects home / EU students
with ELQ qualifications from UK and non-UK institutions. There
are real problems for institutions in establishing equivalences
for qualifications obtained outside of the UK. Just as significant
is the fact that many long-standing UK residents look to improve
their lives and career prospects by taking UK degrees at an equal
level to those attained prior to taking up residency in the UK.
Some may have been UK residents and citizens for many years, have
paid taxes but have not previously accessed higher education in
the UK but have an ELQ from a non-UK institution. From 2008, these
UK residents will have to be treated as overseas / international
students and will be charged accordingly.
THE LIFELONG
LEARNING AGENDA
15. Many ELQ students are engaged in specific
vocational professional learning that happens to be at the same
level as their first qualification. Foundation degree students
will be exempt. However, there are many instances where it is
necessary to study a full three year degree to achieve professional
recognition. Moreover, a foundation degree is not necessarily
the most appropriate or relevant form of study or qualification
if the student is to enhance their skills or develop a new career
path. Professional bodies determine many qualifications which
do not fall into the foundation degree "category" and
they were not consulted.
THE LEITCH
REPORT
16. Lord Leitch suggested that increasingly
individuals would be required to have higher level skills and
to re-skill. According to his Report (accepted by the Government),
70% of the 2020 workforce are already in work. In a global economy
which is constantly shifting, a qualification relevant 10 years
ago may no longer be relevant. There is no good economic or social
reason why individuals should be entirely reliant on self-funding
or employer support to access opportunities to re-skill or to
return to higher education—and no evidence base to suggest
that withdrawal of public funds and reliance on student self-funding
will incentivise take-up of further study or higher level skills.
17. Leitch suggested that future funding
would need to be tripartite and based on contributions from individuals,
employers and Government. There are question marks as to what
extent this tripartite model of funding will meet the needs of
those students outside of the workforce, hidden learners (ie those
who do not want to tell their employers) and those who work flexibly
or for employers who are reluctant to co-fund education and training.
However, the DIUS announcement goes much further than Leitch by
withdrawing public funding entirely from ELQ students. Lord Leitch
did not refer to this as a policy or funding option.
DIUS PUBLIC SERVICE
AGREEMENT (PSA): SKILLS
18. The CSR identified a PSA target for
DIUS relating to skills. It has been assumed that, in line with
Leitch, this PSA target would include higher level skills and
opportunities to re-skill. It is difficult to see how this policy
enhances the achievement of the PSA objective unless re-skilling
for higher level qualifications has been discounted by DIUS or
is to be entirely funded by employers and individuals.
PART-TIME
STUDENTS
19. Modelling by Hefce and by institutions
suggests that part-time students and the institutions which teach
them will be badly affected. The proposition that part-time students
get significant funding for fees from their employers is not borne
out by current statistics or evidence. These students are not
just taught in institutions which specialise in part-time provision.
20. An additional part-time premium is to
be paid by the Funding Council to institutions. This is welcome
but was already planned because of the additional administrative
and teaching costs for part-time students. The additional part-time
premium will not fully compensate for the loss of funds for ELQ
students and will not be paid until 2009-10. However the withdrawal
of funding from ELQ students will commence in 2008-09.
EXEMPTIONS
21. DIUS and the Funding Council (Hefce)
have suggested that there should be exemptions eg for NHS students,
doctors, dentists, veterinary sciences, teacher training, architects
and other strategically important or vulnerable subjects (SIVS).
It is difficult to see the logic behind these exemptions. For
example, these include teacher training but exclude courses leading
to qualified teacher status for the FE, Lifelong Learning and
Skills agenda. Many other education courses and qualifications
are not exempt. It is unclear whether courses for midwives and
professions allied to medicine eg radiographers, physiotherapists,
occupational therapists are exempt or what the rationale and costs
would be for their inclusion in the exempt category if other courses
eg leading to qualifications in mental health were to lose public
funding.
22. ELQ students on courses related to land
management and the EU accession countries are exempt and therefore
publicly funded but ELQ students on courses related to business,
management, housing, charity accountancy, pharmacy and psychology
(to name a few) will receive no public funding. ELQ students studying
STEM subjects will be exempt but students studying, for example,
biomedical science will no longer be publicly funded
23. Universities have positive duties under
equalities legislation. However students of Islamic Studies will
continue to be publicly funded while ELQ students on other specific
religious studies courses will no longer be publicly funded.
24. While, the foundation degree exemption
is helpful, it will not cover the wide range of other courses
of study and the work-based provision which are delivered in small
packages, especially to part-time students. The demand for this
type of provision is driven as much by the individual as by the
employer, especially in regions which have a predominantly SME
base of employment. The withdrawal of funding is likely to undermine
this provision and, as a consequence, undermine the Government's
own objectives.
25. Hefce is charged with withdrawing £100
million of funding from ELQs so not all exemptions proposed by
universities, however worthy, may be accepted if the Funding Council
cannot identify £100 million of savings from the ELQ budget.
Moreover any specific protection arrangements agreed with specialist
institutions which reduce the savings achieved, have the potential
to transfer additional saving requirements onto other institutions..
Exemptions, although helpful, do not resolve the fundamental problem
and add inevitable and huge complexities to recruitment, admissions
and funding regimes.
FUNDING WITHDRAWN
ON RETROSPECTIVE
DATA
26. Funds will be withdrawn from Universities
in 08-09 based on an estimate of ELQ students derived from HESA
student data collected for 05-06. There was no requirement for
this data to accurately record equivalent or lower qualifications.
Some codes in the HESA Entry Qualifications field cover combinations
of qualifications at similar levels that are not the same. For
example, students who have completed a postgraduate certificate
and started a diploma are counted as having an ELQ. These student
returns therefore include a large number of "unknowns"
in terms of previous qualifications. Universities will lose funds
on the basis of retrospective student recruitment, inaccurate
data and in relation to a policy of which they were entirely unaware.
ADMISSIONS
27. University admissions and finance officers
already check residency and other requirements. They will now
be expected to check whether British residents who want to better
themselves by studying for a higher education qualification have
been honest about or understand that they may have a previous
qualification which is deemed equivalent to or "lower than"
the course for which they have applied to study. Thousands of
people who have left school and college do not have individual
learning numbers and it is not necessarily easy to check ELQs.
Students may end up being told by universities at the point of
enrolment that they will not benefit from any public funding and
that they will have to pay much more each year. Little consideration
appears to have been given as to how the implementation of this
policy can be robustly monitored—and there has been no assessment
as to the impact on the online application process which universities
and UCAS are promoting.
ADMINISTRATIVE COMPLEXITY
AND REGULATORY
BURDEN
28. In future, HESA student data will have
to be used to determine which students are fundable (this return
includes qualifications on entry and qualification aim). HESES
returns will have to split students into further categories. There
will have to be cross-referencing between the HESA and the HESES
returns and funding returns will be even more complex. Students
will face very different fee regimes according to their entry
qualifications.
University Case Study
This change of policy will mean that some students
on a programme are fundable while others taking the same programme
are not—based entirely on entry qualifications. Universities
will be faced with charging differential fees for the same programme
according to whether the student is Hefce fundable or not. For
example, a student enrolls on ACCA (Accountancy), having previously
completed a first degree—they are potentially non-fundable.
A student enrolls on ACCA, having been accepted with a HND or
relevant experience—they are fundable.
NEW TUITION
FEE SCHEDULES
AND ACCESS
AGREEMENTS
29. The tuition fee schedules published
for potential students by universities are usually set out for
"Home / EU" and "Overseas" students. In future,
universities in England will have to consider setting these schedules
as "Publicly Funded" and "Other". These will
not be terms readily understood by many applicants although the
implications of the withdrawal of public funding will be obvious.
Universities will also have to rewrite their Access agreements.
THE IMPACT
ON THE
COST BASES
OF INSTITUTIONS
30. Removal of £100 million from universities
in England will have an impact on the cost base and staffing of
universities in spite of any transitional funding which may be
available. The impact upon a University Centre for Lifelong Learning
(case study below) can be replicated throughout the HEI business
model.
University of Sunderland Case study
The University runs a Centre for Lifelong Learning.
This is targeted at ELQ students and "hard to reach"
aspiring first time HE students and offers very large numbers
of evening HE level modules which could now be at risk. About
60% of the 450 FTEs are likely to fall into the ELQ category.
This is 300 FTEs worth of provision. The loss of public funding
from the latter will inevitably affect the cost base of the Centre.
It is very unlikely that the University could successfully increase
the fees for the ELQ students and retain market share.
IMPACT ON
INSTITUTIONS
31. Hefce has published modelling, taking
into account exemptions identified to date and the predicted withdrawal
of funds. The first 22 universities "yield" the £100
million savings. In addition to the OU and Birkbeck, the net effect
of the policy is to withdraw funding from universities which are
well known for their contribution to widening participation, their
innovative approach to developing courses of direct relevance
to employers and for offering flexible opportunities to study.
Even when the additional part-time premium is taken into account,
universities will still lose significant cash sums. Other universities
and colleges lose a significant percentage of their teaching funds.
The reduction in teaching funding will also affect HEI capital
funding.
SUMMARY (HEFCE MODELLING)
| Rank | Institution
| Loss/*m |
| 3 | London Met | 6.2
|
| 5 | UEL | 3.8
|
| 6 | TVU | 3.6
|
| 7 | LSBU | 3.5
|
| 10 | Westminster | 3.0
|
| 11 | Wolverhampton | 2.9
|
| 13 | Beds | 2.7
|
| 14 | Sunderland | 2.6
|
| 15 | Anglia Ruskin | 2.6
|
| 17 | Leeds Met | 2.5
|
| 18 | Birmingham City | 2.4
|
| 20 | Coventry | 2.3
|
| 21 | Teesside | 2.1
|
| 22 | Middlesex | 2.0
|
EQUALITY IMPACT
ASSESSMENT
32. The announcement has the potential to impact adversely
on women returning to work and older men. The London institutions
in the top 22 identified by Hefce as losing funding are some of
the most successful in recruiting BME students. Universities have
expressed concerns about the impact of the policy on disabled
students. DIUS has not published an equality impact assessment
(although Hefce refers to equality impact in its consultation).
CONCLUSIONS
33. There has been no public consultation about the principle
or merits of the policy which only applies to England and will
create a further distinction in fee and funding regimes within
the UK. The Secretary of State's letter makes clear that the receipt
of future grant by Hefce is dependent on the policy's implementation.
There is some doubt as to whether this instruction complies with
Section 68[20] of the
Further and Higher Education Act 1992. Ministers have suggested
that they cannot consult on a consultation. However, Hefce's consultation
deals with the operation of the policy but not the principle or
its merits.
34. The decision deregulates and will significantly increase
tuition fees for a significant number of potential higher education
students. DIUS has not published any research findings which assess
the impact of the policy upon students, employers, the lifelong
learning agenda or institutions.
35. The decision itself raises serious questions about
access to higher education and higher level skills in the context
of the lifelong learning agenda. Current HE students who may have
anticipated undertaking a further course of study to help them
in their career and to improve their life chances will be affected,
as will all future ELQ students who cannot afford to pay "full
cost" fees.
36. The President of the NUS, the General Secretary of
UCU and the heads of 29 institutions wrote to the Guardian on
21 November 2007 calling for the policy to be referred to the
2009 Fees Commission.
If Ministers are not prepared to wait for the 2009 fees review,
Million+ recommends that:
— the policy is withdrawn for implementation in
2008-09
— further discussions take place between the Department
of Innovation, Universities and Skills and Hefce to consider how
the funding made available through the CSR can be deployed in
ways which seek to meet the Government's objectives to broaden
first-time participation without damaging the opportunities which
ELQ public funding provides.
January 2008
Appendix
Table 1
APPLICATION RATES BY SOCIOECONOMIC GROUP
| 1997 | 1998
| 1999 | 2000 |
2001 | 2002 | 2003
| 2004 | 2005 |
2006 |
| Higher managerial and professional | -
| - | - | - |
- | 71,054 | 69,700
| 70,059 | 69,631 | 63,982
|
| Lower managerial and professional | -
| - | - | - |
- | 99,404 | 100,465
| 102,737 | 105,698 | 90,061
|
| Intermediate occupations | -
| - | - | - |
- | 51,002 | 49,803
| 50,500 | 52,423 | 42,215
|
| Small employed and own account workers |
- | - | - | -
| - | 24,535 | 24,616
| 24,663 | 25,394 | 22,715
|
| Lower supervisory and technical | -
| - | - | - |
- | 15,559 | 16,540
| 16,054 | 16,348 | 14,071
|
| Semi-routine occupations | -
| - | - | - |
- | 43,485 | 44,834
| 45,789 | 50,563 | 40,283
|
| Routine occupations | - |
- | - | - | -
| 19,905 | 19,243 | 19,358
| 20,392 | 17,355 |
| Unknown | - | -
| - | - | - |
76,910 | 84,767 | 84,174
| 104,181 | 81,821 |
| Grand Total | 398,327 | 389,588
| 388,691 | 389,091 | 399,645
| 401,854 | 409,968 | 413,334
| 444,630 | 372,503 |
Source: UCAS.
Note: We do not provide a breakdown of applications
by socioeconomic grouping between 1997 and 2001 as the classification
of socioeconomic grouping changed between 2002 and 2002 making
annual comparisons difficult.
Table 2
ACCEPTANCES BY SOCIOECONOMIC GROUP
| 1997 | 1998
| 1999 | 2000 |
2001 | 2002 | 2003
| 2004 | 2005 |
2006 |
| Higher managerial and professional |
| | | |
| 61,419 | 59,472 | 59,679
| 59,670 | 48,529 |
| Lower managerial and professional |
| | | |
| 83,476 | 83,113 | 84,628
| 87,107 | 66,823 |
| Intermediate occupations | |
| | |
| 42,112 | 40,576 | 40,790
| 42,222 | 30,649 |
| Small employed and own account workers |
| | |
| | 20,056 | 19,992
| 19,881 | 20,668 | 15,926
|
| Lower supervisory and technical |
| | | |
| 12,830 | 13,457 | 13,114
| 13,454 | 10,030 |
| Semi-routine occupations | |
| | |
| 34,647 | 35,254 | 35,516
| 38,866 | 29,309 |
| Routine occupations | |
| | | | 15,855
| 15,183 | 15,199 | 16,062
| 12,577 |
| Unknown | |
| | | | 61,330
| 66,895 | 65,488 | 82,195
| 75,386 |
| Grand Total | 303318 | 298220
| 303065 | 308718 | 325472
| 331,725 | 333,942 | 334,295
| 360,244 | 289,229 |
| Ratio of Acceptances to Applications | 0.76
| 0.76 | 0.78 | 0.79
| 0.81 | 0.82 | 0.81
| 0.81 | 0.81 | 0.77
|
Source: UCAS.
Note: We do not provide a breakdown of acceptances
by socioeconomic grouping between 1997 and 2001 as the classification
of socioeconomic grouping changed between 2002 and 2002 making
annual comparisons difficult.
20
Grant to funding council by Secretary of State: the F & HE
Act 1992 Sect 68 (3) states that "such terms and conditions
may not be framed by reference to particular courses of study
or programmes of research (including the contents of such courses
or programmes and the manner in which they are taught, supervised
or assessed) or to the criteria for the selection and appointment
of academic staff and for the admission of students". Back
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