Government reform of Higher EducationWritten evidence submitted by Professor Roger Brown, Professor of Higher Education Policy, Liverpool Hope University
Summary
1.
Any attempt to determine the future funding regime for student education needs to take into account the funding of research.
The Browne Committee proposals would if implemented have been a disaster for UK higher education.
By retaining the fee cap, the Government’s proposals are a slight improvement. But they will still lead to a reduction in the public benefits of higher education as well as massive and unnecessary disruption of the system.
Instead of moving towards what is in effect a voucher system, state funding for institutions should be channelled through negotiated multi annual agreements with each institution, which could include “rewards” for those universities and colleges that are serious about widening participation.
So far from raising quality, a differential funding regime will almost certainly damage quality, as well as leading to a more complex, and almost certainly more burdensome quality assurance regime.
The immense costs of the student support regime should be re-examined. There are various ways in which these can be reduced so as to relieve the pressure on public funds for teaching.
This evidence is based primarily on work done for the author’s recent book and book chapter (Brown, 2010a and b) and his reports on the American system for the Higher Education Policy Institute (HEPI) (Brown, 2008 and 2011a).
The Need to Take Account of Funding Differences Between Institutions
2. Even before we move into a true variable fee regime (if we do), there are already considerable resourcing differentials between institutions. Work done for HEPI in 2006 found that, taken together teaching and research income per weighted full-time equivalent student, and allowing for subject mix, the best funded institution enjoyed an income of up to two and a half times the mean sectoral figure whilst the most poorly funded institution had an income of just under half the sectoral mean. This was on the basis of 2004–05 data. In the same year, the top 10 universities in the 2008 Good University Guide had an average student/staff ratio of 13.97 compared with an average of 23.2 for the bottom 10n. Similarly, the top ten institutions spent an average of £1,418 per student on academic services like libraries and computing and £326 on facilities such as sports, health, careers and counselling. The comparable average figures for the ten institutions at the bottom were £674 and £198 (Leathwood and Read, 2009).
3. These resourcing differentials stem chiefly from institutions’ varying ability to attract funding for research and private donations. Some 75% of public research funding goes to 25% of institutions, and the Government has signalled that it would like this concentration to continue and even increase. Research income has wider benefits to institutions in terms of better libraries and laboratories and more staff, quite apart from the advantages to institutional standing and reputation. If we do see variable fees, it will be the research intensive institutions that will be able to charge the higher rates, thus putting even greater distance between them and their erstwhile competitors. Yet there is no evidence either that research funding needs to be so highly concentrated, or that students learn more in a research environment (Brown, 2010a). Only Oxford and Cambridge are able to attract significant volumes of private donations, and it will be many years (if ever) before they and other institutions are able to generate endowments on the American scale.
The Browne Committee Report
4. The Browne Committee’s central proposal was that the present fee cap should be abolished, with institutions free to charge what they liked to as many students as they could recruit within an overall resourcing envelope set by the Government. However US experience shows clearly the dangers of such price competition in what is essentially a positional market where price is seen as a synonym for quality, and where the most prestigious institutions simply charge what the market will bear. By doing this and at the same time keeping their student numbers down, they have created a “price umbrella” for less selective ones, what has often been called the “academic arms race”. US experience also shows the dangers of extremes of wealth and income as between different institutions and the social groups they serve, with the best resourced institutions catering for the wealthier students attracting the greatest degree of private and public financial support, and the poorest institutions serving students from less well off backgrounds attracting the least (Brown, 2011a). As a result, the US system has over the past thirty years or so gone from being one that was universally admired for its ability to combine excellence with equity to one that stands as a dreadful warning to anyone who seriously wishes to place the provision of higher education on a market basis.
The Government’s Proposals
5. By retaining a fees cap, the Government’s proposals may prevent the worst excesses of positional competition. But there is still a possibility of a waste of resources as institutions charge varying amounts. At the very least, any institution charging more than what it would need to offset the loss of teaching grant income (say £7,500) should be required to show what the additional monies will be used for, how they will improve the quality of student learning, and how they will know this.
6. However a more fundamental difficulty is the transfer of funding of teaching away from a combination of grants and fees to one where virtually all the funding for teaching comes through the student fee. This is effectively a voucher system. A recent (2009) HEPI report concluded:
The arguments against vouchers, and the disadvantages that the introduction of a voucher scheme would bring, are substantial and serious, and it is difficult to conclude other than whatever benefits the introduction of a voucher scheme would bring would be more than offset by the disadvantages. Moreover, the only significant voucher scheme in higher education in the world [Colorado since 2005] is judged by those who have evaluated it to have been unsuccessful (Bekhradnia and Massey, 2009: paragraph 28).
7. The main argument in favour of such a system – voiced both in the Browne Report and in the Government’s response – is that the best judges of quality are students and potential students, and that putting funding power in their hands is the best means of improving quality, by getting institutions to “raise their game”. There is very little evidence to support this. But there is a very real risk that by moving from a mixed system of funding, where student and institutional perspectives on what should be taught are able to interact, we shall lose the benefit of a balanced curriculum without any compensating improvements in quality or efficiency. Ironically, both the Browne Committee and the Government partially accept this because they have retained the possibility of direct government funding for some of the more expensive subjects. If subjects like history, sociology and philosophy are to be left to the market, why not medicine or engineering?
8. The wider issues involved have been well ventilated by Stefan Collini:
What is at stake here is not primarily the question of whether this or that group of graduates will pay a little more or a little less towards the costs of their education, even though that may seem (particularly to those in marginal seats) to be the most potent element electorally. What is at stake is whether universities in the future are to be thought of as having a public cultural role partly sustained by public support, or whether we move further towards redefining them in terms of a purely economistic calculation of value and a wholly individualist conception of “consumer satisfaction” (Collini, 2010: 25).
9. The other main planks of the Government’s response to Browne are increased information for students and facilitating the entry of new providers.
10. There can be no objection to students having more information about courses, subjects and institutions. But the costs of what is currently envisaged are likely to outweigh the benefits. Higher education is not a commodity, and there are simply too many variables and unknowns for meaningful comparative information of the kind found in a typical consumer market to be produced. Nor is there any evidence that students would be any more rational in using it than consumers of conventional goods or services (Brown, 2007).
11. Similarly, there can be no objection in principle to the entry of new providers. But again American experience with commercial “for profit” providers – where large amounts of public money had been very poorly used – should give us pause. Two particular concerns are quality – where the Government appears to be contemplating changing the present rules so that institutions that do not teach can nevertheless award degrees – and equity, where the Government appears to be planning to offer access to fee and maintenance loans and grants to students of private providers at the same time as funds for public institutions are being radically scaled back. This again suggests that there should be a very careful consideration of the benefits and costs before the present rules are changed (Brown, 2011b).
An Alternative
12. Internationally, there is a long term trend towards increased private funding of student education. Indeed the UK already has one of the most privatised regimes. If the institutional grant falls as a proportion of institutions’ funding, then serious consideration should be given to a different means of funding teaching, using institutions’ strategic plans.
13. Institutions would submit their strategic business plans to the state funding agency (HEFCE) or its successor. The plans would set out how the institution intended to develop, and would outline the educational, social and economic outcomes proposed. The plans would cover mission, priorities and targets; projected student numbers and subject mix; financial planning, current and capital; prices/costs within the system and the funding agency’s indication of the unit of resource; anticipated income; and organisation, mechanisms and processes, including quality assurance; and performance indicators.
14. The funding agency would assess these in the light of its own policies, its analysis of societal needs, and its commitment to learning and education generally. It would consult the regulatory agency (QAA or its successor). It would then decide what proportion of each institution’s teaching costs to meet. In effect, the agency would be funding the institution’s development over a period of years. This approach acknowledges the reality that a high and increasing proportion of institutional teaching funding will be private; would secure a greater coherence between institutional plans and the allocation of resources; would sit better with institutions’ business cycles; and above all would provide greater incentives for institutions to concentrate on the activities they are best suited to. It also enables the public authorities to steer institutions and students towards students and activities that may be overlooked in a scramble for status.
15. As already noted, there are already considerable resourcing disparities between institutions which the concentration of research funding and variable fees will intensify. State intervention may be needed to see that these disparities do not become any wider. The alternative is to abandon any comparability of educational standards across UK institutions, any notion of a UK degree, and any hope of a distinctive UK “brand” not to mention greater social cohesion (see below). This would be a disaster for our international reputation for quality and the ability of our universities and colleges to attract the overseas students without whose contributions our system would literally be bankrupt.
Protecting Quality
16. Both the Browne Committee and the Government appear to believe that the best way of raising quality is through market competition. Whilst there is certainly evidence that, at least in its initial phases, market competition increases institutional efficiency and responsiveness, there is little evidence that it raises academic standards, and indeed quite a lot that points in the other direction.
17. One reason for this is that, as the Browne Committee accepted, there can never be valid and reliable quality indicators:
One option is to link funding to a measure of quality. However, there is no measure that we have seen that could function effectively across the whole range of institutions and courses. There is no “national curriculum” for higher education. Looking at student outcomes by institution can be misleading as these reflect which students the institution selected as much as the value added by the institution (Independent Review, 2010: 29)
18. The Committee recommended that the new Higher Education Council should enforce “baseline standards of quality” as well as exercising tight control over the curriculum of directly funded subjects like medicine.In fact we could well end up with a market that is both more customer driven and more heavily regulated and costly for institutions (Brown, 2010c).
Student Support
19. Neither the Browne Committee report nor the Government’s response resolves the fundamental problems facing British higher education: underfunding, the costs of student support, and the lack of equity.
20. UK higher education is still suffering from serious underinvestment in the 1980s and 1990s. Even now, the unit of funding for teaching is only about 4/5ths of what it was in 1989 whilst the proportion of GDP devoted to higher education is little changed from what it was before the huge expansion of the late 1980s to mid1990s. Although the Higher Education Minister has recently claimed that institutions charging more than £6,000 will be better off, he has produced no projections for the unit of funding that will result or the share of GDP that higher education spending will represent (it is well known that the UK expenditure on higher education as a share of GDP is below the OECD average).
21. The main problem in recent years has been the cost of student support. This is why, in spite of the proposed changes, respected independent agencies such as HEPI and the Institute for Fiscal Studies doubt whether the Government’s proposals will reduce the costs of the system to the taxpayer in the longer run. In the short to medium term the budget for teaching will continue to suffer at the expense of student support. There are various ways in which the costs of student support can be reduced, for example, charging higher interest rates or having a lower effective threshold for repayment, if not a longer write-off period. It would be a tragedy if the system went through a long and difficult period of disruption only to have to revisit this issue and experience yet further upheaval as a result.
Equity
22. There are well evidenced and longstanding differences in social participation in the UK – and especially English – higher education which is unnecessary to rehearse. It is well established that these are linked to differential attainment, and that this is the product of many factors over which higher education policy has little or no influence. In other words, the key to widening participation in higher education is improving school and college participation and attainment (to which actions like abolishing the Educational Maintenance Allowance are hardly helpful). But there is one point here that may be worth highlighting as we move to a more market-based regime.
23. At least since the Laura Spence affair, the public debate on widening participation in higher education has tended to focus on improving working class access to the most selective institutions. There is indeed an institutional dimension to widening participation, but this is arguably the least relevant. What is of far greater importance – and what the US experience of reducing public funding and channelling it via the student shows – is that competitive funding regimes of the kind envisaged by the Government disadvantage those institutions with an access mission, and that this in turn acts as a further obstacle to widening participation.
Conclusion
24. Unless there is a very radical rethinking of policy, we shall end up by the middle of the decade with an English higher education system with the following characteristics:
There will be much greater resourcing and status differentials between institutions than is currently the case. These will arise from the very widely varying ability to attract private and public revenue for both teaching and research. There may also be much wider quality differences even if these are not as great as the resourcing differentials.
The student population is unlikely to be any more representative of the general population than is currently the case, and may even be less. The existing pattern of students from wealthier backgrounds attending wealthier institutions, and students from poorer backgrounds going to poorer institutions, will be further solidified.
A much greater proportion of the university curriculum will be “vocational” or concerned with “employability”. Non-vocational subjects – especially, but not only, the arts, humanities and social sciences – will be confined to a small number of elite institutions catering for wealthier students, together with poorer students on scholarships – just like the 1950s.
Research will be even more heavily concentrated. Staff salaries, terms and conditions will vary to a much greater degree: in the US, a professor at a private university already earns almost 50% more than their counterpart at a public one. A much bigger proportion of the teaching force will be on part-time and/or temporary contracts, again as in the US and again with negative implications for student learning.
Students will be even more clearly consumers, rather than producers. Institutions will be putting much greater effort into student care and complaints, as well as into marketing, advertising, branding and recruitment. There will also be more conspicuous expenditure: what one American college president called the “amenities arms race” will have come to Britain.
Most institutions will be experiencing a more complex and more costly regulatory regime because of the inability of markets to police quality in any serious way, and the unwillingness of successive governments to accept this.
9 March 2011
References
Brown, R (2007) The information fallacy. http://www.hepi.ac.uk/pubdetail.asp?ID=229&DOC=seminars
Brown, R (2008) Where the US goes today. http://www.hepi.ac.uk/484-1579/Where-the-US-goes-today.html
Brown, R (2010a) (Ed) Higher Education and the Market New York and London: Routledge.
Brown, R (2010b) “The March of the Market” in Molesworth, M., Scullion, R. and Nixon, E. (eds) The Marketisation of Higher Education and the Student as Consumer New York and London: Routledge.
Brown, R (2010c) Nonsense on Stilts: The Browne Review Proposals on Quality
Brown, R (2011a) Lessons from America? http://hepi.ac.uk/455-1936/Lessons-from-America.html
Brown, R (2011b) “What will for-profit providers actually cost?” Education Guardian 8 March.
Brown, R (2011c) “The New English Quality Assurance System” Quality in Higher Education (forthcoming).
Collini, S (2010) “Browne’s Gamble” London Review of Books 4 November.
Independent Review of Higher Education Funding and Student Finance (2010) Securing a sustainable future for higher education. An independent review of higher education funding and student finance http://www.independent.gov.uk/browne-report [last accessed 12 October 2010].
Leathwood, C and Read, B (2009) Gender and the Changing Face of Higher Education: A feminised future? Buckingham: SRHE and Open University Press.