Government reform of Higher EducationWritten evidence submitted by the Oxford University Campaign for Higher Education (OUCHE)

It is clearly unwise to make major changes to a complex system of high importance to the world standing of the UK and to the national economy without risk assessment and full economic costing.

2. The need for a comprehensive review of the future of higher education before initiating major change to funding sources and funding methodologies was recognised some years ago:

We need to decide what a world-class [higher education] system of the future should look like, what it should seek to achieve, and establish the current barriers to its development.[...] I want to do this before we initiate the review of undergraduate fees next year (John Denham 29 February, 2008).

3. This debate has not taken place, and the failure to carry it through was regretted by the previous Select Committee in its “Students and Universities” Report:

We support the approach of the former Secretary of State, John Denham, in examining the function and structure of higher education ahead of reaching decisions on funding. We regret, however, that the Government did not initiate and complete the examination of the function and structure of higher education in time to allow the review of fees to be completed in 2009 ( Recommendation 1).

4. The present Government has set about altering the fundamental principles of a complex system not only without this essential and promised preliminary review, but without research or consultation or the necessary careful costing. It has rushed proposals, implemented them in a fragmented and unsequenced way, and in a manner which brings the planning horizon for institutions down to a few days at a time. This has imposed wholly unrealistic time-constraints on universities for the setting of fees (for example, publishing OFFA guidance on 8 March with a response date of 19 April, which expects universities to consult their students during a vacation) and required them to take decisions in an inappropriate hurry, and testing the boundaries of their governance controls.

I. The role and future of state funding in higher education

5. The principal structural changes to be brought about under the Comprehensive Spending Review which followed close on the heels of the publication of the Browne Review on 12 October 2010 include the decision to remove the bulk of public funding for higher education and end the “block grant” on which higher education funding has successfully relied for nearly a century. These complementary policy-strands have not been sufficiently integrated or balanced against one another and the implications of this failure do not appear to have been thought through.

6. The implications of the Browne Review’s idea of moving to a “student-led” future were not worked out in any detail before making this the main plank of future policy. “Students and Universities” was concerned above all with the student experience, but it tended towards recommendations directed at requiring consistency and ensuring that students could rely on the promises made to them, rather than making the presumption that allowing freewheeling student choice and putting the bulk of teaching funding in the hands of students would automatically improve the student experience. These options and others should be explored and tested ahead of the making of major changes.

7. The removal of the block grant means institutions will not be able to adjust their spending by transferring funding from one purpose to another within their general FHEA 1992 obligation to spend it on teaching and research and activities supporting teaching and research.

8. For example: academics’ terms of employment will be altered beyond recognition if academic salaries can be paid only out of the tuition fees of students choosing the courses they teach, when in many institutions the numbers of students opting for those courses cannot be known until close to the beginning of the term or even later:

This is likely to involve redundancies, with the concomitant probable legal costs of responding to Employment Tribunal applications, and the need to make urgent appointments of lecturers at the last minute, when the quality of those available may not be easy to ensure. Both of these will make financial planning difficult.

Universities subject to the Education Reform Act 1988 section 202 are already seeking to modify their versions of the Model Statute, The purpose of the governing legislation was to ensure that redundancies of academics could not be made for inappropriate managerial reasons which might be in conflict with academic considerations.

Far from “driving up quality”, this appears incompatible with the provision of courses of reliable consistent quality and also with reliably fulfilling the promises made in the prospectus, student charter and student contract.

There are already indications that institutions are seeking to make academics redundant, to close courses and merge departments.

II. 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)

9. There is a worrying pattern, in events so far, of failure to think through the potential consequences of the legislative changes which the new fees and funding régime require and failing to ensure that they are:

flagged up for consultation at the earliest possible moment;

considered as a whole, and not piecemeal and not merely as a chain-reaction to unfolding events; and

made in a timely way so as to ensure that action initiated or required of institutions is not unlawful.

10. In November 2010 BIS produced an Interim impact assessment entitled Urgent reforms to higher education funding and student finance. Admitting that its projections were in many respects speculative, it opted (Option 4b) for a Higher Amount of £9,000 for student tuition fees and a Lower Amount of £6,000, in the apparent confidence that an average of about £7,000 or a little more would emerge.

11. In November 2010 Parliament made a decision to adjust the Lower and Higher Amounts for student tuition fees to £6,000 and £9,000 respectively, ahead of consideration of consequences and wider implications.

12. HEFCE received its annual Grant Letter on 20 December. At that time the Government was still maintaining that the change from public funding to tuition fee loans was going to “contribute to eliminating the structural deficit over the lifetime of this Parliament”. HEFCE was asked to “focus in particular on supporting a smooth transition for all institutions to the new arrangements” but the necessary detail about the arrangements was missing, making inexact any attempt to calculate the effects on individual universities.

13. The Minister, apparently alarmed at indications that most universities were going to charge the Higher Amount and that the cost to the tax-payer would become unacceptable (and far higher than simply continuing with the public funding of higher education), was reported as warning that universities would “not be allowed” to set fees at the Higher Amount without permission.

14. In late-February, speaking at a conference on widening participation, OFFA’s Director explained that Government and its advisors had misunderstood the law. OFFA did not have the necessary legal powers to do this. “Now the government is in some difficulty in limiting expenditure to the levels that the Treasury has assumed,” he said. The Ministerial guidance letter to the Director of OFFA was delayed until 10 February so as to make the necessary amendments. The letter of Guidance as published mentions the possibility of changing the law:

if the sector as a whole appeared to be clustering their charges at the upper end of what is legally possible, ... we will have to reconsider what powers are available, including changes to legislation, to ensure that there is differentiation in charges.

15. At the Ron Dearing Conference on 17 February, restrictions in present legislation kept breaking the surface in David Willetts’ speech:

The 1992 Further and Higher Education Act made it clear that universities control admissions, not the Government – by preventing the Secretary of State from interfering by setting conditions for HEFCE grants.

He admitted that 2004 Higher Education Act stands in the way, too, for it:

“requires the Director of Fair Access to respect the autonomy of institutions with regard to admission of students”.

16. In the Commons Willetts was called to task for appearing to seek to impose social-engineering quotas on university admissions through the OFFA agreements with individual universities. In his response he again referred to the existing legal restrictions:

Mr Willetts: We in the coalition Government do not believe in quotas...They would be not only undesirable but illegal because the autonomy of universities in running their own admissions arrangements has legal protection.

17. The response to the recognition that the existing legal framework prevents the Government from overseeing the new fees régime in such a way as to ensure that the taxpayer is protected from an overspend, has, paradoxically, been the postponement of the White Paper formerly promised for the Spring of 2011. On 25 February, David Willetts announced to the Universities UK Spring Conference that its publication is to be postponed, apparently until after a first run under the new financial arrangements.

18. This has not, however, prevented a series of piecemeal legislative changes being put in hand.

19. The first of these is the Public Bodies Bill, which promises a considerable widening of Ministerial discretion including powers to create primary legislation affecting HEFCE and OFFA.

20. The Education Bill published on 26 January 2011 contains a final clause allowing interest rates charged on student loans to rise at ministerial discretion in future by amending the power given to the Secretary of State in section 22(4) of Teaching and Higher Education Act 1998 to make regulations setting interest rates.

21. Another White Paper is now promised on “public services”, in which it appears that there is likely to be amendment of the legislation presently controlling the granting of degree-awarding powers and the use of university title:

The Government will publish its overarching public services White Paper shortly.... we ...want to make it easier for new and alternative providers to enter the new system – and there are clear ways in which we are doing so.

The Minister’s statement that “Over the past 50 years, we have created a regulatory system which says that teaching students and awarding degrees must be done by the same institution” is an error. But on it he proposes to base plans to:

make it easier for new providers to come in as teaching institutions with their students getting loans without that institution having its own degree awarding powers.

22. He explains that this decision is in response to lobbying:

by various existing education providers who are deeply-rooted in their local communities and have argued passionately for the right to offer externally-validated degrees to local people with limited existing access to higher education.

A “core-and-margin model for student numbers could allow this type of provider to bid for extra places”, he suggests, apparently with access to taxpayer-funded loans, but with no clear guaranteed that the quality of provision can be maintained in a sector which can be entered without the strict controls the current legislation contains.

23. An area where the legislation needs urgent review which does not appear to be on the White Paper agenda yet is the legislation governing freedom of speech on campus. This dates from the Education (No.2) Act 1986 s.43 and was designed to meet quite different needs. Student protests on a substantial scale began in the autumn, and are likely to continue, as Cambridge saw on 25 February when the police entered King’s College without its permission, and made arrests.

III. Institutional autonomy and state control: striking the balance

24. The Robbins Report of 1963 identified four areas of activity where it believed it to be in the public interest for the autonomy of universities to be respected. An elegant summary of the essentials - drawn from the University of Cape Town - was quoted from in the Standing Committee’s discussion of the drafting of the Education Reform Act 1988: “the right to determine, on academic grounds, who may teach, who may be taught, what may be taught and how it should be taught” This “quadrilateral” was touched on obliquely in the evidence to the Select Committee when it was preparing “Students and Universities”:

“It is very important that institutions have autonomy in terms of the election of their staff, in terms of the design and delivery of their academic programmes and so forth” (Evidence, Q.177, Vice-Chancellor, University of Oxford).

25. The Select Committee which produced the “Students and Universities” Report of 2009 summarises these Robbins rules as:

“encompassing (with in some cases a limited role for government) appointments, curricula and standards, admission of students, the balance between teaching and research, freedom of development and salaries and staffing ratios” (“Students and Universities”, Para. 238).

26. OFFA’s guidance goes to the question of institutional autonomy in admissions. The proposal is that such public funding as remains shall be restricted to STEM subjects and such other subjects as Minister may from time to time approve. The role of HEFCE as a “Haldane” buffer between state funding and state control of the use of that funding by institutions, embodied in the FHEA 1992, is apparently to be diminished. The removal of the block grant and the principle of the Haldane buffer seems likely to place in Government hands and therefore directly in the hands of the state, the right to decide “what may be taught” and by implication “who” may teach and “how”. These changes to fundamentals should not be taken without the widest possible consultation on the continuing importance of protecting the Robbins “quadrilateral” for the future.

IV. Conclusion

Piecemeal and reactive legislative change is likely to imperil the sustainability of higher education. A consolidated White Paper inviting consultative response on the workability and sustainability of the proposed new system as a whole is increasingly urgent. It should address key issues about the future of higher education by providing an opportunity for the consultative review which was promised by the previous Government before the raising of tuition fees.

10 March 2011