Written evidence submitted by Universities
UK
INTRODUCTION
Successive governments have sought to reconcile twin
policy objectives: the desire to expand higher education provision
and the need to provide sustainable funding for higher education
that recognises both the public and private benefits that are
derived from a university education. The decisions made by the
current government will effect a radical change in the funding
model for higher education in England but they should be seen
in the context of this longer history. They build on the logic
of earlier decisions. Universities UK is broadly supportive of
the changes to tuition fees and student support that will take
effect in the autumn of 2012, despite the reduction in direct
government funding for teaching. We continue to work with government
and other stakeholders to ensure that UK universities retain their
place as a world leader in the provision of higher education.
A key objective for Universities UK is ensuring that
no one is deterred from applying for university because of misunderstandings
about the costs involved, and how these will be met. The scale
of the communications challenge here should not be underestimated
and we are working with others - including those in schools -
to address it. Universities recognise their responsibilities under
the new regime and are already working on innovative responses
in relation to effective management of costs, for example, and
strengthening the provision of information to prospective students.
It is right that the political debate around the tuition fee cap
was vigorous. It is important now, though, that opinion leaders
ensure that the transition to a new system is properly managed,
so that the goals of enhanced student choice and wider and fairer
access are not damaged. For that reason we welcome the Committee's
enquiry and we hope its conclusions will help to reduce the risk
of misconceptions about the continued value of a university education.
UNIVERSITIES AND
THE UK ECONOMY
UUK's plea for a sustainable funding package for
universities was built squarely on the economic case for higher
education. Universities provide the skills that will be needed
for the UK to thrive in the future. Universities are major actors
in regional economies. They also generate substantial "added
value" to the national economy through their research work,
export earnings and the increased earning power of graduates.
The economic downturn has had a short-term effect but the evidence
shows that the UK economy will need more, not fewer, graduates
in the medium and long term. Universities remain a driver of economic
recovery, not a drain on resources.
Within the OECD, the UK's comparatively strong position
as a highly skilled economy is under threat as more and more countries
focus on increasing the skills of their populations as a source
of competitive advantage. The graduation rate in the UK has remained
more or less stable over the last eight years. The improvement
of other countries over the same period, however, has meant a
downward movement in the UK's relative position as a producer
of human capital. In 2008 the UK was ranked 15th amongst OECD
countries in graduation rates for tertiary type A qualifications
compared to fourth in 2000 (Figure 1). If we want to compete in
the world as we have in the past, and ensure the future strength
of our economy, we need to increase the proportion of our population
with skills at Level 4 or above.
Figure 1
TRENDS IN TERTIARY TYPE A GRADUATION RATES
- PLACE OF THE UNITED KINGDOM
| Rank | 2000
| 2003 | 2004 |
2005 | 2006 | 2007
| 2008 |
| 1 | New Zealand | Australia
| Iceland | Iceland | Iceland
| Iceland | Finland |
| 1 | Finland | New Zealand
| Australia | New Zealand |
New Zealand | Poland | Slovak Republic
|
| 3 | Norway | Finland
| New Zealand | Australia |
Australia | Australia | Iceland
|
| 4 | United Kingdom |
Iceland | Finland | Finland
| Finland | Finland | Poland
|
| 5 | Denmark | Poland
| Norway | Denmark | Poland
| New Zealand | New Zealand |
| 6 | Australia | Denmark
| Poland | Poland | Denmark
| Denmark | Denmark |
| 7 | Netherlands | Norway
| Denmark | Netherlands | Netherlands
| Ireland | Ireland |
| 8 | Poland | Netherlands
| Netherlands | Italy | Norway
| Norway | Portugal |
| 9 | United States | United Kingdom
| United Kingdom | Norway
| Sweden | Netherlands | Norway
|
| 10 | Iceland | Ireland
| Ireland | United Kingdom
| Italy | Portugal | Netherlands
|
| 11 | Ireland | Sweden
| Sweden | Ireland | Ireland
| Sweden | Sweden |
| 12 | Spain | Japan
| Italy | Sweden | United Kingdom
| Slovak Republic | Japan |
| 13 | Japan | Portugal
| Japan | Hungary | Japan
| Japan | United States |
| 14 | Sweden | Spain
| United States | Japan | United States
| United Kingdom | Czech Republic
|
| 15 | Canada | United States
| Spain | United States | Slovak Republic
| United States | United Kingdom
|
Source: OECD (2010) Education at a glance
As we continue to develop as a knowledge economy, access to higher-level
skills will be a condition of access to an increasing proportion
of jobs. Between 2007 and 2017 the three occupational groups most
likely to require graduate-level skills will see the highest level
of structural expansion. Just under 2.2 million jobs in the three
occupational groups most likely to require graduate-level skills
will be created compared to a net loss of 220,000 jobs in other
less skilled groups (see Figure 2).
As well as higher education's contribution to the nation's skills
base, universities make a huge contribution (conservatively estimated
at £5.3 billion) to UK export earnings. They also add economic
value through their high quality research: data from UK Trade
and Investment indicates that they have used the overall strength
of the research base to attract more than 200 research and development
investments, with a combined estimated value of £330 million,
to the UK during 2008-09 alone (Department for Business Innovation
and Skills [2009] Annual Innovation Report). In terms of
gross outputs, UK higher education is larger than the advertising
industry. UUK's own research shows that universities employed
over 372,400 people in 2007-08 (324,600 full-time equivalents)
and for every 100 full-time jobs within universities themselves,
more than 100 full time equivalent jobs were generated through
"knock-on effects" in other sectors of the economy (Universities
UK [2010] The impact of universities on the UK economy).
THE FUNDING
OF HIGHER
EDUCATION
All of this data contributed to our case for sustained public
funding in higher education. Because of this, we welcomed the
Government's decision to cushion science and research spending
from the worst of the cuts (science and research funding will
remain fixed in cash terms which means a real-terms cut of around
9% by the end of the Spending Review period).
Financial results from the sector in 2009-10 show that universities
are entering uncertain times from a sound financial position.
Over this academic year and the next we face in-year cuts to HEFCE
grant of £190 million for 2010-11 and further, provisional,
cuts of around £750 million for the academic year 2011-12.
The BIS capital budget is being cut by 44% over the period of
the Spending Review - there will be a 58% cash-terms reduction
in HEFCE capital funding for 2011-12. And there will be knock-on
effects from spending and policy decisions by the Department for
Education and the Department of Health too.
Universities are responding to the challenges of reduced funding
by innovating.
UUK has work under way that is looking across the sector at how
institutions can proactively manage their costs and secure value
for money whilst sustaining support for the delivery of high quality
teaching and research. This work will build on the significant
experience institutions already have of driving efficiencies (for
example outsourcing, procurement and shared services are all widespread
within the sector), but examine the scope for further saving through
a strategic shift in institutional structures, business processes
and practices, and identifying what needs to happen to bring this
change about. Many individual universities are already looking
at pursuing their own initiatives to make these strategic shifts.
Nottingham and Birmingham universities recently announced that
they are exploring the possibility of sharing teaching staff,
for example.
The reforms are likely to contribute to changes in the way universities
deliver courses too. For example, improvements in the support
package for part-time students are likely to result in increased
demand for part-time courses.
Many universities have long-standing partnerships with further
education (FE) colleges and they will continue to strongly support
and invest in these relationships. These include Staffordshire
University Regional Federation (SURF), which supports the development
of accessible higher education (HE) provision that is demand-led
and socially inclusive, delivering Foundation Degrees through
FE colleges; and the University of Bedfordshire, which has extensive
links with FE colleges, which are directly supported by providing
their HE staff with free access to the postgraduate certificate
in academic practice delivered by the university.
There are signs that increased collaboration with employers will
result from the funding changes too. The recent announcement that
KPMG is to sponsor a cohort of accountancy students through their
degrees at Durham University is just the most high-profile example.
The likely reduction of direct formula funding raises several
issues. We do not yet know how the cuts to teaching grant will
be managed, and are expecting a wide-ranging consultation from
HEFCE after publication of the White Paper, but we know that the
Government supports the broad thrust of the Browne proposals in
this area. The Browne Review proposed concentrating core funding
on meeting the additional costs of subjects (principally high-cost
STEM subjects) that could be vulnerable if wholly reliant on students'
willingness to meet the cost through a graduate contribution.
It will be important to recognise, as government ministers have
in recent pronouncements, that there are many forms of high-cost
provision which are of broad strategic, social and economic importance.
These include ensuring successful participation for under-represented
groups, developing business models to support part-time students,
and providing appropriate teaching in specialist institutions.
Moreover, it will be difficult to predict which subject areas
might become vulnerable in a system where a greater proportion
of the costs are met through a graduate contribution. This matters
because capacity in higher education takes time to build up and,
once lost, can be difficult to recover. Any loss of capacity could
impact not only on the opportunities for students but also on
the strength and diversity of the UK's research base.
ACCESS AND
PARTICIPATION
There are understandable concerns about the impact of higher fees
on participation, especially from among lower-income families.
Universities UK is committed to widening participation and supporting
measures to increase access from traditionally low-participation
groups. The fee cap will be lifted by a substantial amount from
autumn 2012 and we cannot know precisely, in advance, what the
impact on applicant behaviour will be. However, we believe that
wider access should not be damaged under the new system, for the
following reasons:
— The
design of the system means that full-time (and an increased number
of part-time) students will not pay fees until after they have
left university and are earning more than £25,000 per year.
The 30-year write-off provision is another element of progressivity
in the regime. Universities UK is committed to working with other
stakeholders - including schools - to ensure that the progressively
of these measures is clearly communicated and well understood.
— Universities
UK and other stakeholders are working with the Government on the
development of the National Scholarship Programme which will help
to fund university places for students from less well-off backgrounds.
— A key
element of the new system is the requirement for universities
to sign Access Agreements with the Office of Fair Access (OFFA)
if they wish to charge more than the new lower fee cap.
— We
don't yet know what the precise impact on employer behaviour will
be but, as mentioned above, it seems likely that more firms will
look to support the brightest students through their degree.
— Improvements
to the support package for part-time students should help to encourage
more applicants from "non-traditional" backgrounds to
take a degree.
— Universities
will continue to develop their own schemes, relating to the needs
of their own student population, to support fair access and wider
participation. This will include outreach into schools, institutional
bursaries and other measures deemed appropriate.
INFORMATION AND
GUIDANCE
The changes made by the Government clearly make the
higher education system more "market-like" in its operation.
An essential part of any successful market is good consumer information.
Universities are working with other stakeholders to improve the
range and quality of information that is available to students,
prospective students and their families. Work already planned
or undertaken in this area includes:
— the
development of an agreed Key Information Set that will form the
standard for future information provision by universities to potential
applicants; and
— spreading
good practice through the adoption of Student Charters; an outline
agreement was published in January 2011.
The Quality Assurance Agency (QAA) will make a judgement
in the area of public information at each institution from 2012-13,
meaning that any shortfall would be subject to HEFCE policy on
unsatisfactory quality (in extreme, this can lead to the withdrawal
of funding).
In an increasingly competitive market for recruitment
it will be in the best interests of universities to provide consistent,
high quality information. Universities UK is committed to the
principle that, as far as possible, changes should be driven by
sector stakeholders and should not result in increased bureaucratic
burdens imposed by government. At a time of severe financial constraints,
it is essential to maximise the resources available for frontline
teaching and learning, and student support services. Therefore,
we will continue to explore the potential for innovative ways
of capturing and disseminating information, in ways that are most
valuable to these stakeholders.
STRUCTURAL REFORMS
AND THE
PRESERVATION OF
QUALITY AND
STANDARDS
Although we await details in the White Paper, the
Government has made it clear that it plans to make "supply-side"
reforms in the sector. This may well include an increased role
for "private providers" of higher education and for
the provision of higher education through further education colleges.
This can be seen, for example, with the granting
of University College status to BPP College of Professional Studies
and in the positive reception by the minister for universities
and science to the decision by Kaplan, the US education provider,
to offer degrees examined and awarded by the University of London.
UUK does not oppose such changes as long as quality
thresholds for a degree are not lowered as a result and as long
as government gives existing collaboration the opportunity to
grow in preference to top-down changes.
It is important to recognise that universities in
receipt of public funding via the funding councils already operate
in partnership with a huge range of private and for-profit providers.
This collaboration takes a wide range of forms - for example,
accreditation of degrees, support for international students,
the provision of academic content and the delivery of continuing
professional development (Universities UK [2010] The growth
of private and for-profit providers in the UK). But, all of
these partnerships have also evolved from the inherent responsiveness
and dynamism in the sector.
If government seeks to further free up the distribution
of public funding across providers of higher education, the priority
must be to protect the quality of UK higher education and ensure
that students in the UK receive the student experience they expect
and deserve. This will mean ensuring appropriate and proportionate
regulation and accountability. For example, there is a strong
argument that any institution in receipt of public funds - which
could include any subsidised loans and grants for which their
students are eligible - should be required to provide the same
key public information, so that students are able to make informed
choices. It should be noted that institutions which do not receive
direct grants from the funding council or Training and Development
Agency for Schools do not have to submit an access agreement to
OFFA if they wish to charge fees over the basic amount.
We will of course want to look at new pathways for
progression, to improve, for example, the exceptionally small
percentage of apprenticeship learners progressing to further or
higher education (only 0.2% in 2007-08) (Skills Commission [2009]
Progression through apprenticeships). We support
the Government's call for a "skills system that supports
progression", and its commitment to "review actions
to support progression from further into higher education through
vocational as well as academic routes" (House of Lords written
answers, 9 August 2010). However, we would reiterate the importance
of evolving the existing collaborations and partnerships within
the current system where this is possible.
Whatever changes are made to the structure of the
HE sector, universities recognise the importance of maintaining
confidence in the quality of the UK degree. Expansion in provision
has inevitably led to questions about the extent to which quality
and standards in higher education have been preserved. UUK, together
with other stakeholder bodies and individual universities, are
currently engaged in an extensive review of the quality assurance
system. It is intended to ensure that the system remains fit for
purpose and part of that is to increase the role of students in
the evaluation process.
CONCLUSION
Universities UK has consistently argued that higher
education is a national asset, not a drain on resources, especially
in view of the trend towards increased integration into a global
knowledge economy.
Universities have been at the core of a high quality
higher education sector, and will need to continue to be central
in the future if we want this quality to be maintained. Part of
their strength is derived from the delivery of a wide range of
subjects. We need to ensure that breadth of provision is not lost.
Universities themselves are large and diverse institutions
with a record of innovation and flexibility. They have well-established
records of seeking to broaden access, collaboration in provision
and investment in improving the student experience.
We also need to recognise the interconnectedness
of decisions in other policy areas: changes to the visa regime,
for example, which risk hampering our ability to compete for the
best students, staff and researchers around the world. Higher
education plays a vital role in supporting quality in schools,
too, through teacher education. And changes to the health budget
risk a knock-on effect for universities providing training for
medical professionals.
Above all, the added value for students must remain
at the heart of our higher education system. We must ensure that
participation rates are not damaged as a result of the changes
to the funding regime. In particular we have a substantial task
in promoting accurate information about the continued importance
of a university degree as a source of highly valued skills.
ABOUT UNIVERSITIES
UK
Universities UK (UUK) is the representative organisation
for the UK's universities. Together with Higher Education Wales
and Universities Scotland, our mission is to be the definitive
voice for all universities in the UK, providing high quality leadership
and support to our members to promote a successful and diverse
higher education sector.
10 March 2011
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