The Future of Higher Education

Written evidence from the Institute of Physics

The conclusions of the Browne Report and the content of the Government’s proposed White Paper on higher education (including the Government’s proposals for widening participation and access)

1. O ver the 2011/12-2014/15 Spending Review period, HEFCE’s grant for teaching is going to be reduced significantly, probably by around 80% . ( HEFCE's funding for teaching in 2011/12 will represent a substantial reduction in real terms – a further 4% in addition to the reduction of 3.5% in 2010/2011. Thus university departments are already feeling the squeeze on teaching funding before the introduction of the new fees system from 2012/ 13.)  Given the assumption of greatly increased income from fees, it is unlikely that HEFCE will be funding any subject at its present rate. However, it is reasonably safe to assume that the reduction in HEFCE’s teaching grant will be phased in over three years from 2012/13 as successive entry cohorts are charged higher fees.

2. If the government accepts the model set out in Section 6.2 of the Browne Report, HEFCE’s mainstream funding for teaching will be limited to the additional funding provided for high-cost subjects in Price Groups A and B and potentially some in Price Group C, above the funding for band D subjects ; i n 2010/11 this difference was £2766. In addition, it would be consistent with the Browne Report principles to continue to pay the special funding in respect of students studying strate gically important laboratory- based subjects (SIVs) , including physics. On these assumptions the HEFCE funding per student would be reduced from £6640 per FTE student in 2010 /11 to £3966 per FTE student by 2015/16, which is a cash reduction of 40%.

3. It will be for each university to determine its own tuition fee policies: the level of the fee, the extent to which and on what basis the fee might vary between subjects even down to the individual course level. Work undertaken by Charles River Associates International in 2008 which includ ed interviews with a sample of vice-c hancellors suggested that a fee cap of £6000-£7500 was likely to be required to allow the emergence of a market in fees [1] .

4. However, a detailed analysis by the Higher Education Policy Institute (HEPI) of the government’s proposals published in November 2010 [2] suggests that public perceptions about quality will within a few years drive all universities to charge the maximum fee of £9000. Furthermore, in line with the analysis above, the HEPI report argues that all universities will need to charge at least £7000 to maintain current levels of funding.

5. In order to address these issues, universitie s face considerable unknowns, particular ly given deferred payment, how sensitive student demand will prove to be to price and the true cost of meeting the requirements to be set by the government for charging fees above £6000. The HEPI report argues, however, that it will be no more difficult or costly (relatively) than at present for universities to satisfy the requirements set by the Office of Fair Access to charge higher fees.

6. While such issues will apply to all subjects and all universities, they are particularly pertinent to subjects like physics in which supply and demand are broadly in balance – over the last five years around 90% of all applicants for physics undergraduate degrees have been accepted ( based on UCAS figures ). As demand has crept up in recent years, supply has followed very closely. Nevertheless, if there proved to be a general sensitivity to fees above £6000 or a particular sensitivity on the part of those students who would under current arrangements have applied to study physics, demand may fall placing the viability and sustainability of physics teaching in a number of departments at risk.

7. The introduction of the financial reforms in the 2006 /07 academic year appear not to have had any adverse affect on either applications or entry to physics undergraduate degree courses, based on UCAS figures; between 2004/05 and 2009/10 the number of applicants (home and overseas) accepted onto undergraduate physics degrees increased by around 25 %. Data we have seen from two of England’s biggest universities reveals that participation rates for different groups of students in their physics departments (i.e. state schools/ colleges; lower socio-economic; low participation neighbourhoods; black and minority ethnic, etc.) have changed very little as a result of those financial reforms.

8. In engineering and the physical sciences, four-year first degrees (e.g. the MPhys) are now the norm for those considering a career in university or industrial R&D a s they are the preferred route to professio nal recognition and PhD entry. F inancial constraints are certainly a factor in some able students ch oosing to study a three year degree , and not taking-up the extra year which means another year of debt accumulation. Furthermore, PhD courses are now drifting towards four years and, while these may not cause students to accrue further debt, they do not allow loans to be paid off either.

9. There are genuine concerns that the introduction of the new fees regulations from 2012/13 in England and the prospects of substantial debt based on increased living costs may deter students from applying to study the four-year MPhys degree . Furthermore, a possible disincentive to postgraduate study is the level of debt accumulated from undergraduate study (which is a serious issue as certain industrial sectors require specific skills that only PhD study can provide). Such disincentives are likely to impact most on students who come from lower socio-economic groups.

10. In addition, it seems feasible that some students who might have considered undertaking initial teacher education (ITE) a fter completing a p hysics degree might well in the future decide that at graduation they need to enter full -time employment rather than undertake another year with limited income, especially if they are charged students fees at the highest level. This could undermine the government's current initiative to switch more ITE science places to physical sciences with the possible outcome of even fewer new science teachers overall.

11. O ne way of countering these effects is for students to be better informed about career choices. Market research undertaken by the Institute has shown that it is a commonly held view that a physics-based educational trajectory is highly restrictive in career terms relative to a subject like English, whereas, of course, the opposite is true. In addition, an Institute survey of careers advisors in schools has shown that they are rarely scientists and the vast majority of them do not feel competent in offe ring advice about careers from physics.

12. This problem will not be solved by the production of more materials; there are already many excellent resources, including web-based material such as Future Morph [3] . Two courses of action might yield dividends. First, careers information could be implicitly incorporated into lessons by the development of resources to support teaching that include real people working in real applications; the Institute is producing resources along these lines [4] . Second, there is an urgent need for an independent study of career prospects from various degree subjects. The studies to date have tended to be based on the Labour Force Survey, which is good but does not have a large enough database , or are based on highly unreliable first destination data. The government has access to data via the Inland Revenue, the National Census and the Student Loan Company. It could, with relatively little effort, provide a vast, reliable data set.

The role and future of state funding in higher education

13 . We noted HM Treasury’s statement in its Spending Review 2010 press notices [5] that despite a planned reduction in the resource budget for higher education by £2.9bn by 2014/15, teaching in STEM subjects would remain publicly funded, in line with the Browne Report recommendations, as mentioned previously. However, we haven’t seen any further discussion of this in any subsequent government material; the Institute trusts that details will be revealed in th e forthcoming White Paper on higher education .

14 . To date, HEFCE’s teaching funding in suppo rt of high-cost subject s such as physics, has been important . The teaching of such subjects is expensive because of the need to impart laboratory-based skills which require both adequate floor space, and modern laboratory equipment (including computers, etc.), coupled with rising inflation and ever tightening university budgets. O n a cost basis, STEM degrees such as physics, are more expensive to teach than those subjects in lower teaching price groups . If STEM degrees are to be affordable to students of all socio-economic backgrounds, then the cost difference has to be made up somehow and the state is the most probable route.

15 . The importance of public funding for physics has been determined by a detailed financial study commissioned by the Institute which showed that teaching in physics had been seriously underfunded by around 20% over a significant period of time [6] .

16 . The study revealed that in 2003/ 04 all of the English physics departments in the sample that were surveyed were in deficit on a fEC basis, ranging from about 16% to almost 45% of total income. In part this reflected their very heavy dependence on public funding and the metrics used to allocate those public funds. Following a number of departmental closures (primarily due to low student demand in those specific departments ), and the study’s recommendation that a significant uplift in HEFCE grant would be required, given the then fixed undergraduate fee, to bring the physics departments into balance, HEFCE provided £75m in funding to maintain the provision of high-cost and strategically important subjects from 2007-08 for a three year period [7] (which recently became a recurrent fund). As a result, coupled with income from variable tuition fees from 2006/07 , the financial position of teaching in many physics departments has improved, as confirmed by a follow-up financial study based on 2007/08 data [8] . It was shown that teaching income for the English physics departments surveyed in the study ranged from a surplus of 27% to a deficit of 31%, with the average surplus more or less breaking even on total teaching income .

17 . The additional income from the SIVS funding, and variable tuition fees from 2006/07 , has been used by physics departme nts : to provide bursaries for stude nts from low income backgrounds; to inv est in a range of widening participation a nd outreach activities; to improve academic pay (which has helped physics departments to retain and recruit staff) ; and to invest in teaching facilities and laboratories.

18 . Nevertheless, uncertainty remains, until the White Paper on higher education is published, on what the future will hold in terms of teaching income for many physics department s from 2012/13 , and their financial viability . At present, there is increasing demand for undergraduate physics degree courses ( a number of departments have been oversubscribed), which is in the national interest , as the UK economy needs and benefits from highly skilled physics graduates .

10 March 2011