Written evidence submitted by the National
Union of Students (NUS)
INTRODUCTION AND
SUMMARY
1. The National Union of Students (NUS) is a
voluntary membership organisation which makes a real difference
to the lives of students and its member students' unions. We are a
confederation of 600 students' unions, amounting to more than
95% of all higher and further education unions in the UK. Through
our member students' unions, we represent the interests of more
than seven million students. NUS welcomes the opportunity
to provide evidence to the Business, Innovation and Skills Select
Committee.
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)
Core Funding Issues
2. In our view, the conclusions of the Browne
Report were, in the main, totally the wrong approach to the future
of higher education funding and regulation. The review commissioned
very little original research and was hastily conducted. No evidence
was presented so suggest that in the context of higher education
courses and institutions, competition improves quality. No evidence
was presented to suggest that where strongly market-based systems
operate in higher education, price and quality are linked. No
evidence was presented to suggest that the quality of provision
has improved since top-up fees were introduced in 2006. In short,
the Browne Report failed to establish the case necessary to commend
the enormous changes that it proposed.
3. The government's response has been to substantially
endorse the general thrust of the Browne Report. It has already
partly put that endorsement into practice by recommending to Parliament
a very large increase in the basic and higher fee caps, more than
quadrupling the first, and almost tripling the second. This will
mean that students starting higher education in 2012 will make
far higher contributions, as graduates. This will offset a reduction
in the direct funding of university teaching activity, by the
government, of around 80% (and up to 100% in some institutions);
this loss of funding will be concentrated on the arts, humanities
and social sciences.
4. Much debate has been focused on whether the
government's undergraduate scheme is "progressive" or
"regressive", including some controversy in the media.
The NUS assessment has been clear and consistent throughout. The
undergraduate loan repayment structure is progressive because,
of those who borrow loans, the estimated repayments of the lowest
decile of earners are low (an estimated average of £5,000),
rising up the range so those with the highest earnings pay the
most back (an estimated average of £30,000 in the top decile).
However, we contend that the system as a whole is regressive because:
a) those with the highest earnings have their overall contributions
limited, and will therefore pay a much smaller proportion of all
their lifetime earnings than people in the middle of the range,
and b) the variable fee system is intended to distribute money
into institutions with a high representation of people from affluent
backgrounds, and away from institutions with a high representation
of people from poorer backgrounds. When making a judgement on
whether the system is progressive or regressive, we should look
at the system as a whole.
5. Browne recommended the extension of fee loan
coverage to part-time students. Equitable treatment of part-time
students was something we had sought for some time, and we strongly
welcome it. The government's response to make loans available
to people studying at a pace of "one quarter" of the
nominal full-time pace of a course (rather than "one third"
pace, as proposed by Browne) was a very good decision and will
enable many more thousands of people to participate in higher
education on a part-time basis.
6. The shift in approach to part-time funding
is dramatic, and may allow some institutions to adopt a strategy
of specialising in part-time provision; this would be highly desirable,
as it would make people's study options far more flexible in the
future.
7. The good work done on part-time support has
not so far been true of postgraduates. Browne studiously ignored
the postgraduate funding question, saying simply that "it
works well". It was naïve, however, to imagine that
such a radically changed undergraduate funding model would not
have an impact on the postgraduate fee landscape. There are growing
fears that with undergraduate prices and demand for postgraduate
study both rising, institutions will wish to increase their postgraduate
fees to keep pace with their undergraduate prices. This could
cause a rapidly developing fair access to postgraduate study,
as many people would find themselves priced out of the market
without the kind of loan support available to undergraduates.
8. We welcome the government's recent announcement
that Sir Adrian Smith will look again at the issue of postgraduate
finance, and we will work with BIS on that process. We hope that
the solution may involve the extension of some kind of loan support
to postgraduates, possibly with limitations in place to make the
policy affordable.
PARTICIPATION AND
MOBILITY
9. We have not been enthusiastic in the past
about the approach taken by the Office for Fair Access (OFFA),
which in our view has been insufficiently proactive and reluctant
to use its powers to give guidance to the sector. We think the
new expectations, focusing on outcomes and progress against targets
(set by institutions themselves) is right and always should have
been the approach. It is also right for government and OFFA to
endorse, though not compel, the use of contextual data in making
admissions decisions, which has been and important and rather
brave step beyond the policy of the previous government. However,
OFFA is under pressure to stretch its powers in the quest to achieve
a differentiated pricing landscape: this should be resisted and
OFFA must remain focused on its access remit and not become a
price manipulator. We are concerned that with a new story in the
press every week about more another institutions' fee levels emerging,
the landscape will quickly become confusing for students and we
welcome OFFA's decision to publish all new access agreements in
a "gathered field" this July.
10. The planned National Scholarship Programme
(NSP) has been very poorly thought through. Firstly, because the
allocation of NSP awards will be based on institutional size,
institutions with high numbers of students from disadvantaged
backgrounds will be able to support a much smaller percentage
of those students compared to institutions with an under-representation
of poorer students; this is unfair and counter-intuitive. Secondly,
applicants will not know at the point of application whether or
not they have been awarded a scholarship, which means that it
will have little if any impact on applicants' behaviour (in fact,
the scheme may have a higher "deadweight" cost than
the abolished Education Maintenance Allowance). Finally, the scheme
will only support people for one year and it will not be permitted
to offer students "cash in hand" of more than £1000,
to ensure an emphasis on fee waivers, motivated by a desire to
keep down the size of the student loan book, even though the amounts
involved are quite marginal. It is a very bad policy indeed.
11. In a dynamic higher education market, students
should be mobile between institutions, and not confined to just
one choice. Higher education institutions (HEIs) should therefore
be required to accept direct application by existing HE students
into the first or second year for all undergraduate programmes.
Providers would maintain their independent control of admissions
decisions, and they would have the sole power to decide whether
applicants are suitably qualified and should or should not be
offered a place. This scheme would enhance student power by allowing
them to move if they are dissatisfied after the first year of
study. The system would also enable people who do very well in
the first year on a programme with a low entry tariff to seek
admission to an provider or programme with a higher entry tariff,
breaking down the cliff-face culture of the A-level route and
giving people a second chance to obtain entry to a more selective
programme. UCAS should be asked to devise a central portal to
administer this new mobility scheme, making things easier and
more transparent for students.
12. The way that people participate in higher
education must become more flexible in the future to meet the
needs of an ever more rapidly changing workforce and economy.
More people will need to have advanced education, but it is unaffordable
and inappropriate for this to be provided in the traditional university
model. Many HEIs agree with this, and are already pursuing flexible
and innovative types and modes of provision, but the white paper
should set out how this could develop and how the government will
support it. We welcome, for example, ministers' support for greater
use of franchising and programmes taught in local providers but
examined in major universities.
13. Too much provision in the sector is designed
to be full-time, with part-time pathways added only as an afterthought,
and support services are too orientated to full-time students;
this should be investigated. There should be more provision of
two years' duration, though we are concerned about "compressed"
degrees offering poor quality and poor value: instead, funding
should be restored to stimulate the further growth of Foundation
degrees and the potential value of "Associate" degrees
should be considered (many other HE systems benefit from a strong
tradition of two-year Associate degrees as a terminal or staging
qualification).
Sector Regulation and Accountability
14. Browne recommended the merger of higher education
sector bodies to form a single "Higher Education Council".
We do not agree with this approach because it would leave too
many potential conflicts of interest inside a single body, and
we hope the government does not pursue it in the white paper.
We recommend that the Office of the Independent Adjudicator should
remain essentially as it is, and that the Quality Assurance Agency
(QAA) be reconstituted along similar lines - that is, an independent
corporate body with statutory functions assigned to it. Both should
report directly to Parliament, through an appropriate committee.
OFFA should either be kept independent but given a proper board
and more resources to take over participation and access activities
from HEFCE, or it should be merged with HEFCE. Either approach
could deliver a more coherent approach to access and participation
that is much needed for the future.
15. Improving the provision of information for
prospective students has been a central feature of both the Browne
report and the government's approach, which we welcome. Core information
programmes like the National Student Survey (NSS) and Unistats
are crucial and should continue. We are working with partners
in the sector to develop a Key Information Set, which will offer
a common, comparable digest of information for every programme
offered by universities. This is very important work that is going
well. We hope that institutions will go further by providing provisional
timetables and/or learning schedules much further in advance,
ideally at the application point, as this would be of great help
to many students who have busy working and family lives. We would
like to see more accurate data on employment rates and earnings
made available, possibly by deriving data from student loans company
records. The government should give seed funding for voluntary
and private sector providers of information to develop new services.
16. We are working with colleagues in the higher
education sector to develop an improved structure for managing
quality and standards of provision. In our view, this should involve
changes to the remit and constitution of the QAA so that student
interests are at the centre of its work and student representatives
are more involved in its governance. The institutional review
process could become more risk-based and flexible. New technology
should be used to speed up student feedback about their courses
and improve responsiveness. To improve the complaints regime,
we recommend that the judgements of the OIA should become binding
and enforceable, and that institutions should have to deal with
complaints internally within a strict time limit (sixty days,
for example) before students can take complaints directly to the
OIA. Both the QAA and OIA should be funded via a single account
derived from a small percentage of all student fees, instead of
by subscription as at present.
17. New guidance on the preparation, design and
use of Student Charters has been developed by a joint NUS and
Universities UK (UUK) working group. This guidance sets out the
foundations for the development of good charters over the next
two years. In the future, these Charters should have a more important
and central role, becoming the principal statement of each provider's
quality improvement aims in a given year. Charters should be negotiated
between student representatives and the governing body of each
organisation, and reviewed annually, to keep them "alive"
within the organisation.
18. We are concerned about the extent of hidden
and additional costs and charges that students face. Every HEI
should be required to set out a full schedule of charges that
it makes upon students and an estimate of the additional costs
they are likely to face, at the programme level. Clear and comprehensive
regulations should be issued to HEIs on what charges additional
to the main fee are permissible and impermissible. For example,
it may specify that increases to accommodation costs be held to
a certain level, or that bench fees in science subjects be blocked.
Failure to comply with these regulations could then give rise
to successful complaints by students.
19. An effective student voice will become even
more important as the new higher education landscape develops.
This means students' unions will need to be more effective and
more accountable. In the recent past, the government has supported
quality improvement in students' unions themselves by providing
supplementary funding for the Students' Union Evaluation Initiative
(SUEI), and HEFCE has also funded research into the relationship
between SUs and HEIs. We are currently developing an improved
model for taking this work forward. We would like to see the funding
of students' unions and the effectiveness of the strategic relationship
between students' unions and institutions become matters for scrutiny
by the quality agency. We are also pressing for inclusion of data
on students' unions to be included in the Key Information Sets
and possibly for an additional question on students' unions in
the National Student Survey.
The Role and Future of State Funding in Higher
Education
20. Under government proposals, the state will
continue to fund higher education, but to a lesser extent and
in a very different model. We expect the core HEFCE teaching grant
to reduce from circa £5 billion per annum to circa £2
billion per annum by 2015. In place of that lost funding, institutions
will be allowed to charge fees up to the amounts prescribed by
law (or without limit in the case of unregulated fees). The costs
of regulated fees will be met with loans from the state, on slightly
worse terms than at present. Even so, the cost of financing those
loans will rise significantly: DEL attributed to loans will rise
from circa £1.4 billion to circa £3 billion. In annual
resource terms, some £3 billion is saved, but around £1.5
billion is added to the loan inefficiency bill. This is before
the "capital" costs of making the loans are even considered.
The facts are that under the government's proposals, the state
makes barely any savings, but graduates pay up to three times
more: something is out of joint here.
21. This is a system based on debts: the debt
our graduates owe to the government, and the debt the government
owes to the markets as a result of making those loans (ie their
part in the national debt). It is quite true that the debts owed
by graduates are not in the same category as commercial debts:
the income-contingent system provides an essential safety net,
reduces the cost of monthly repayments, and makes those payments
predictable. The retention of this protective framework (put in
place in 2006) is to be welcomed. The salient point though is
that the system proposed is not more cost-effective or more sustainable
in the long term than a system based on maximising core public
funding delivered through HEFCE. It seems clear that the real
reason for adopting a system based almost wholly on loaned vouchers
was to ensure money is distributed according to institutional
brand and prestige rather than quality, in a "pseudo market".
22. This approach has now backfired. There is
growing clarity that many more institutions than expected will
charge above £7,500pa (the figure the government has estimated
as the average fee level) than expected. This will cause the cost
of loan finance to increase dramatically and become unaffordable.
Threats to further reduce HEFCE funding to compensate will do
no good - institutions that might be expected to charge lower
fees are not those institutions standing to lose from such a penalty.
Threats to introduce new fee limits where "drop out rates"
are high, or student satisfaction indicators are low would cause
chaos, probably be open to legal challenge, and in any case confound
the whole idea of a market based on student choice and free movement
between providers. Ministers opted for a system based on market
rationalism, and now appear surprised and nonplussed that Vice-Chancellors
are seeking to maximise their utility in that market, acting in
accordance with its rules. It is very hard to predict that the
government's policy will be successful, even within its own terms.
23. We do not, of course, support the government's
approach. We would recommend restoring the majority of the HEFCE
teaching grant (accepting the need to make efficiency savings
and use resources more effectively), and revisiting the entire
question of graduate contributions to pursue a non-market, non-loan
based system such as a form of graduate tax. In the longer term,
following the hoped-for return to economic growth, contributions
from graduates and funding from the state should steadily rise
in parallel, ensuring that their overall value is broadly equal.
This would achieve increased funding for our higher education
sector, while reflecting the first two-thirds of the "Dearing
Compact" of balanced contributions between the state, individuals,
and employers. This approach would be more stable, more sustainable,
and far more equitable than the government's policy.
11 March 2011
|
