Written evidence submitted by GuildHE
SUMMARY OF
KEY ISSUES
— UK
Higher Education (HE) enjoys a world class reputation amidst rising
domestic and global demand for higher education.
— Higher
education delivers social as well as economic goods and the broader
economy and society should be more clearly factored into a co-payment
approach for tuition funding. Graduates should pay their part,
but so too should employers and wider society.
— Browne
bases his views on a particular type of student making choices
in a single national system free of constraints. We don't believe
that either students or the sector can sensibly be considered
in such a way.
— No
one can really predict the effects of the new regime on student
demand and participation—especially among the most disadvantaged
groups. Ambitions to widen participation and boost access and
social mobility through the role of OFFA and the National Scholarship
Programme are untested and unproven.
— Specialist
higher education is a key part of the sector and of sectoral ecologies—higher
education reforms underplay their role and threaten their contribution
to the economy, as well as the choice and diversity they offer
to students.
— Higher
education is essential to both national and local economic growth
and this role is significantly underplayed in both Browne and
the Government's response thus far. The reforms have unpredictable
effects and potentially place this role in jeopardy.
Introduction
GuildHE, one of the two formal representative bodies
for higher education, has 32 members across a diverse spectrum,
including universities, university colleges, specialist vocational
institutions, and further education colleges with significant
proportions of HE. Our members also include public, as well as
private "for profit" and "not for profit"
institutions. GuildHE's membership is varied in size and institutional
character, and covers many perspectives—small and larger,
private and public, with varied specialisms and research interests.
They include institutions as varied as the Royal Agricultural
College, the Universities of Worcester and Winchester, University
College Birmingham, the University for the Creative Arts and Bishop
Grosseteste University College Lincoln and Norwich University
Colleges of the Arts.
GuildHE members and the HE sector as a whole has
benefitted from many years of popularity and expansion in domestic
and global higher education. It is clear from OECD evidence, that
there is a strong international trend for more people to go to
university. Average OECD net entry rates into higher education
increased from 40% in 2000 to 57% in 2008, with the UK rate increasing
from 48% to 57% in the same period. Every single OECD country
has been increasing net entry rates over this period.
Part of the incentives to gain a degree in England
have been the well publicised wage returns to graduates. On average
a graduate will earn comfortably over £100,000 more in today's
valuation, net of tax, than a similar individual who achieved
university entrance qualifications but did not go into higher
education—this premium has held up in spite of the recession.
There is also a continuing strong employment premium. Returns
to higher education participation are not just economic—graduates
are in general more healthy, more active in their community and
more likely to pass on generational benefits to their children.
The reputation of UK universities is a continuing
economic strength and the value of a UK degree in the global education
market remains high. In institutional terms, Eversheds have recently
valued UK degree awarding powers at between £175 and £250
million.
The Browne Report and Government Response
The Browne Report contained some welcome progressive
proposals, including higher repayment thresholds on student loans
and more support for part-time students, which Government has
acted upon. It also recommended more places on higher education
courses in the reiteration of the belief that the UK requires
a mass higher education system. However, it also rests clearly
on a vision where all students should have the opportunity to
follow a traditional three-year student experience. In terms of
the cost to both the state and the individual, this represents
and expensive model—one that simply and ultimately may be
unaffordable over the longer term.
GuildHE takes the view that HE seeks to deliver significant
public benefits as well as major economic impacts for the individual,
employers and local economies, as well as for UK society as a
whole. From this a principle of co-payment for tuition should
be in place, namely that graduates should pay their part, employers
should pay (through the understanding that they contribute through
general taxation) and the wider public good should also be reflected
in contributions by the state (and also funded through general
taxation).
Substituting state income with graduate income is
not therefore appropriate or ideologically fair. The principles
of co-beneficiaries and co-payment should continue to underline
the government's approach to any new system. Anything with too
much weight on one beneficiary may be better affordable in the
current climate but 'unfair' over the longer term.
Economic growth
Instead, the emphasis should be on how we
sustain a world class HE system for the UK and how institutions
are maintained as key economic and social assets. When the HE
Framework was launched in 2008, the overarching question was how
to create and sustain a world class system over the next 10-15
years. This must still be a question in our minds as we collectively
consider how to implement Browne's recommendations and how we
fund the system that develops from it.
The direct relationship between higher education
and economic growth is well and widely made. The possibilities
of reduced participation and resources could dangerously weaken
the ability of the sector to drive economic growth in the short,
medium and longer term. This is a part of public policy that should
not be left to chance. Higher education as a sector should play
its part in reducing the deficit, but it must also play its fundamental
part in spearheading the recovery.
Funding world class research is clearly a major part
of both our world standing and our ambitions to develop an innovative,
knowledge based economy across the UK. The financing of capital
expenditure that will support the best facilities for both teaching
and research is also in doubt. Both will be crucial to the broader
HE package and significant cuts will have a detrimental impact
on our current world standing. We currently punch well above our
weight and stand only second to the US in our scientific output.
Deep cuts will erode the UK's chances of attracting the best students,
scientists and businesses looking to take advantage of our position.
"Over the past decade the British economy
has become deeply unbalanced...We need a new approach. One that
empowers local leadership, generates local economic growth, and
promotes job creation in all parts of the country." [35]
The themes of a rebalanced economy—both sectorally
and geographically—and a private sector led growth model—all
less dependent on debt also underpinned David Cameron's first
major speech as Prime Minister[36]
as well as George Osborne's first Emergency Budget.
Economic growth is not just a generic, national story
but is also relevant in specific areas throughout the country
too. GuildHE members, whether in High Wycombe, Carlisle, Bradford
or Birmingham are experts at generating human capital, supporting
local businesses and the highest quality public services in their
areas. Using the unadjusted principles of "market" to
drive choice and competition, runs the risk of driving HE out
of places where its benefits can make a real impact.
Growth is also likely to be driven through key sectors
of the economy, also represented by GuildHE members such as specialist
institutions supporting the creative industries, land-based industries
and advanced manufacturing and environmental industries. The private
sector may indeed be able to take some of the strain in replacing
some of the jobs that could be lost. However, they will not be
able to easily replicate the value and impact of a local or specialist
university.
A flawed and outdated conception of student choice?
Browne's vision of student choice depends critically
on a one dimensional view of students in England and their geographical
mobility. Browne is based on the view of a student as a school
leaver planning to move away to university, fully informed of
his or her choices and prepared to take on the commitments and
repayments of a lengthy loan. GuildHE simply do not believe that
students or their choices are quite like that. The reality for
some time in higher education has been that the school leaver
embarking on a traditional three year degree is in an increasing
minority.
— HESA
data shows 47.4% of all undergraduate students enrolled in public
HEIs are aged 21 or over.
— Exactly
one third (33.3%) of all Undergraduate students were studying
part-time in 2008-09 and 32.4% of UK-domiciled Undergraduates
studying for their first degree in 2008-09 were 21 years or over.
— These
mature students made up 92.8% of all part-time first degree enrolments.
58% of part-time first degree entrants were aged 30 or over.[37]
So we should be very wary of using an outdated stereotype
as the defining principle of a new system. Many students have
homes, jobs and families who cannot easily be uprooted. GuildHE
institutions educate higher than average proportions of such "non-traditional"
students. For part-time students and employers local provision
is vital. Though this is the only real choice that many have,
we rarely admit it openly.
New providers
Flagged up in opposition and in the early days of
the Coalition's time in government, both Vince Cable and David
Willetts (Secretary of State and Minister of State at the Department
for Business, Innovation and Skills) have repeatedly looked to
FE colleges as well as to other new providers as a way of bringing
choice and competition to England's higher education sector.[38]
But Government will still need to look at the needs of students
in a new choice-driven market. It should reflect on what students
want—and where provision of proven quality is meeting these
demands—before throwing open the doors to providers. And
because the key kitemark for recognition in HE is quality, policy
must avoid perverse typologies of institutions based on cost.
As the 157 Mixed Economy Groups have pointed out:
"HE in FECs is already a distinctive part of the HE system.
While it is dangerous to over-generalise about a diverse system,
HE students in FECs are more likely to be over 25, more likely
to study part-time, and more likely to come from areas with low
rates of participation than other students in HE. They are more
likely to be studying foundation degrees and sub-degree programmes
such as HNCs and HNDs."[39]
Supporting student choice means recognising the routes
into HE, the diversity of applicants and the choices they make.
The largest proportional growth in applicants for 2010-11 entry
was those progressing from FE colleges (7.3%), from foundation
degrees and through independent applications and other, less "traditional"
routes (18%). The GuildHE group of institutions, which saw a 9.3%
increase in acceptances compared to the sector's overall growth
of 0.4%, and which includes small and specialist providers, has
accepted larger than average proportions of students progressing
into HE through these routes. And with the continued rise in mature
students, and over 40% of UK students accepted to local institutions,
enhancing student choice must be about maintaining a diverse ecology
of HE provision.
Alongside, Further Education Colleges, ministers
are also keen to encourage private providers into the UK market.
In both cases, we welcome a commitment to new providers in the
market as long as they are able to meet the rigorous and exacting
standards that have underpinned the sector up to now. In this,
as well as in all matters of funding and quality, we support the
continued existence and enhanced roles for both HEFCE and the
Quality Assurance Agency. Both roles should develop and change
as the sector evolves not least into more regulatory functions
ensuring continued quality, fair competition and market functioning.
Government's plans for Widening Participation
and Access
We wholeheartedly endorse the Government's aim to
further improve participation, access and outcomes for students
from under-represented groups through more rigorous powers for
OFFA. We hope, over time, that the measures are successful and
that access and participation are improved at all universities
and across the sector as a whole.
For GuildHE institutions and many others, this will
build on the considerable achievements that have been made in
widening participation and improving access to date. Taking into
account existing performance and how far institutions have to
travel against benchmarks is the right approach and if allowed
to address challenges in their own ways and free of other constraints,
then we should be confident of further progress. A focus on progression
and effective working with schools and colleges is crucial to
widening participation and access and collaboration with the pre-HE
sector is a two-way process.
The National Scholarship Programme is part of this
approach and while it is to be welcomed for the additional support
it will bring to individuals from poorer backgrounds, it is important
to be clear that is a competitive fund where relatively small
numbers will benefit rather than an entitlement for all students
with certain levels of household income. Many students from equally
poor backgrounds will not be able to get support because the NSP
is of limited size and reach. Although the greatest uncertainties
on participation are likely to be nearer to 2012, Government funding
for NSP will take three years to reach its full £150 million
size.
Ministers must now make sure that they avoid both
intended and unintended consequences of their access and participation
proposals. It is a concern that the letter to OFFA brings together
the imperative of improving access with the need to keep the cost
of government funded loans down. Threats of Government intervention
to avoid the clustering of tuition fees at high levels and the
enforcement of price competition is likely to cause problems in
the short and longer term. Conflating Access Agreements and price
control mechanisms is likely to create perverse incentives and
outcomes and could impede the worthy policy intentions of improving
fairness and social mobility.
We simply cannot know the impact of higher graduate
contributions on participation levels among students from poorer
backgrounds, so we do not know who will be applying for study
in future. We also, therefore, cannot yet know whether the proposed
system is fairer than the current system. In a few years we could
need a further review to assess the impact on widening access
and on the world standing of our higher education sector
Reducing loan book costs
To satisfy ambitions for reduced costs and increased
(or at least) maintained participation levels from less well off
groups, it is important that Government looks at how more flexible
number control and institutional innovation might be encouraged.
"Off quota" students on "low or no fee" provision,
with no loan book commitment, will allow for a more dynamic system
with better choice.
This might mean domestic students paying fees of
some form without taking up loans or reducing their loan levels
to a minimum. The White Paper should explore opportunities for
additional numbers and income from those locally based students
who are likely to be risk averse and potentially deterred by a
large, thirty year loan commitment. In practice the "off
quota" ideas involve developing some models whereby institutions
could develop low fee options when they consider what to do with
marginal cost capacity. Such models might include:
— Intensive
part time programmes—spread out over 4+ years where study/contact
comes under the 25% intensity threshold.
— Partnered
programmes (2 + 2 or 2 + 1 or similar) where some study is part
time and some is full (thereby keeping loan commitments away from
all or part of the programme apart from the final year/phase)
— Modular
courses combined with employment (brokered by HEI and partners—especially
relevant in specialist sectors)
— Employer
sponsored programmes (fully or partly) where employers pick up
all or some of fee costs (not practical in new loans system) and
combine with paid work phases (may work with public as well as
private sector employers)
Recognising the cost of provision and the real value
of providers
Browne suggested removing funding from the two lower
cost bands (bands C & D). Cost of provision is a significant
consideration in setting fees for courses (although not the only
consideration). However, if the fee/student contribution package
does not encourage participation, the impact on specialists, or
generalists with a large WP student orientation, may be particularly
severe. Lord Browne—and in a statement to the Commons in
October 2010 Vince Cable—stated that £7,000 a year
is roughly what institutions will have to charge to maintain investment
at current levels, based on assumptions about the reduction in
HEFCE funding.
However, more recent statements by the Minister for
HE and Science that have been revised down to £6,000 for
Band D and just over £7,000 for Band C based on HEFCE's existing
funding model. HEFCE currently uses price bands to determine the
level of funding needed to meet the cost of different subjects.
Basing estimates on broad sector averages taken from existing
data does not bear relation to the costs of provision in different
subjects, or at specialist providers with varying opportunity
for subsidy—either now or in future. Simultaneous reductions
in funds for widening participation (including the abolition of
Aim Higher), specialist funding, capital investment and Higher
Education Innovation Funding (HEIF) all impact more severely on
price calculations of small and specialist institutions. This
should be valued and recognised in broader considerations of price
calculation and future funding decisions.
Specialist institutions, alongside all universities,
have a powerful role to play in the economy at both a local and
a national level. The Browne report and the Government's response
seriously underplays this role as well as the effects that the
planned reforms may have on it. Worse, by focusing on unconstrained
market choices and general pricing levels, this may undermine
this role further as well as reducing choice in the sector as
a whole.
The Government continues to develop its policies
for supporting economic growth including at the local, regional
and sectoral levels. This work is being developed in other parts
of BIS as well as in other Government departments including Communities
and Local Government and the Treasury. The future of higher education
will be critical to these ambitions. However, as in other areas
of emerging policy such as in schools, health and immigration
control, the effects are unexplored, the joining up between departments
unclear and the overall consequences unknown.
We believe that the contribution of higher education
is vital but we are prepared to work with Government to further
improve its role and value in all of the aspects of society and
the economy that it touches. However, we worry that in the race
to develop and introduce new policies, to make savings to address
the deficit and to introduce reforms while the public and political
appetite is clear, that we will reduce the role and impact of
higher education in the future.
10 March 2011
35 George Osborne, Emergency Budget Speech 22 June
2010. Back
36
David Cameron's first key economic speech (and first major speech
as PM) Friday 28 May 2010. Back
37
HESA, Students in Higher Education Institutions, 2008-09. Back
38
David Willetts speech to Universities UK Spring Conference, 25
February 2011. Back
39
157 and MEG report: "Rising to the Challenge: How FE Colleges
are Key to the Future of HE", October 2010. Back
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