Value for money in higher education Contents


1.Our inquiry has been conducted at a time of increasing public scrutiny of the higher education (HE) sector, and significant questioning of the extent to which universities offer their students and graduates value for money. Although the inquiry has primarily considered value for money in terms of the student, and the graduate, we also looked at it in terms of wider society, the taxpayer and the economy.

2.The marketisation of higher education has led to the term “value for money” becoming embedded in public discourse. The recommendations of the 2012 Browne Review, and subsequent introduction of £9,000 fees, fundamentally changed the relationship between the student and their institution. Students increasingly want to know where their money is going, the quality of the product they will receive and what they should expect in return.

3.The extent to which the concept has become ingrained in higher education is demonstrated by the fact that ensuring “that students receive value for money” is one of the Office for Student’s (OfS) four core objectives.1 It is also one of the terms of reference of the Government’s review of post-18 education. The creation of the OfS as the market regulator, together with the introduction of the Teaching Excellence and Student Outcomes Framework (TEF), have driven the narrative of students as consumers, and forced the question of value for money to the forefront of higher education policy.

4.Value for money in higher education has been defined in a variety of ways throughout the inquiry. These can be broadly divided into value to the economy, and value to the individual both in a non-monetary and monetary sense. Clearly there is no one definition of value for money, and our inquiry has sought to take evidence across the spectrum of views. In written evidence Universities UK framed it in terms of value to the economy and told us that “in 2014–15 universities generated over £95bn of gross output, supported more than 940,000 jobs across the UK, and contributed £21.5bn to GDP”.2

5.The Education Policy Institute discussed value for money in terms of non-monetary benefits for the individual:

Graduates have higher levels of trust, are more involved in civic activities such as volunteering and are more politically involved than non-graduates. Therefore, it can be argued that there are other non-monetary returns to a university degree, and that value for money should not be limited to earnings but should include all the benefits experienced by graduates.3

6.Our report looks at value for money in terms of fairness to students and the taxpayer, wider societal benefits, the quality of teaching received by students, social justice for disadvantaged students, graduate employability, academic research and scientific endeavour.

7.We have sought during our inquiry to re-define the concept of an ‘elite’ university. We believe that for a university to be regarded as elite it must prepare students to find high-quality graduate employment and focus its provision on meeting this country’s skills needs. It must also provide opportunities to students from lower income households. Elite universities should no longer exclusively be understood as those who deliver the traditional linear three-year undergraduate degree, but also those who offer degree apprenticeships, have a strong focus on work experience and offer flexible learning such as modular courses and accelerated degrees.

Our inquiry

8.We launched our inquiry into value for money in higher education on 15 September 2017. The terms of reference were designed to be broad enough to attract written submissions from a wide range of individuals and organisations, and consider the concept of value for money from different perspectives:

9.We received 81 written submissions during our inquiry and took oral evidence on five occasions. Our witnesses included the Chair and Chief Executive of the OfS, Sir Michael Barber and Nicola Dandridge, a panel of current and former students and a panel of Vice-Chancellors. In our final session we heard from Sam Gyimah, Minister for Universities, Science, Research and Innovation, Department for Business, Energy and Industrial Strategy and Department for Education, and Philippa Lloyd, Director General for Higher and Further Education, Department for Education.

10.In addition to our formal oral evidence sessions, we held a private roundtable with 11 stakeholders in January.4 We visited Warwick Manufacturing Group and the University of Warwick in February. During this visit we met degree apprentices studying with Jaguar Land Rover, Rolls Royce and Dyson, as well as undergraduate engineering students and staff. In July we visited the Dyson Institute of Engineering and Technology in Malmesbury. During the visit we met staff and degree apprentices studying on its new four-year general engineering degree. We are grateful to our hosts and all the students and staff we met during both visits.

11.During the course of the inquiry the Chair visited the Universities of Bedfordshire, Essex, Hertfordshire, Middlesex and Nottingham Trent, and had further meetings with a range of HE providers.5

12.In December 2017 the National Audit Office (NAO) released a report on ‘The higher education market’,6 and the Public Accounts Committee published its report in June.7 Two other parliamentary committees have conducted inquiries on higher education in the past year. On 18 February the Treasury Committee published a report on Student Loans.8 The House of Lords Economic Affairs Committee published its report on ‘Treating Students Fairly: The Economics of Post-School Education’ on 11 June.9 Whilst each of these reports cover different areas of higher education policy, there is some crossover between the reports. For the most part our report has not focused on student finance, or the debate around market forces in higher education.

The Government’s review of post-18 education and funding

13.On 19 February the Prime Minister announced a “major” review of post-18 education and funding. We agree that it should focus on access to higher education for students from disadvantaged backgrounds, the decline in part-time and mature students, and non-traditional routes through higher education including degree apprenticeships. We are also encouraged that the review will look at the “whole post-18 education sector”, including further education and the skills the economy needs.10

14.The wide-ranging review gives the Government the opportunity to begin a shift in higher education policy away from the traditional three-year degree model to a more flexible, less linear approach. It also provides the opportunity for the Government to address the regressive system of student support which has led to the decline in part-time and mature learner numbers, and financial worries of full-time students. The recent Diamond Review in Wales is a good example of a review which recommended a holistic system of financial support.

15.The scope of the review’s recommendations may be limited by the Government’s decision not to “make recommendations related to the terms of pre-2012 loans or to taxation, its recommendations must be consistent with the Government’s fiscal policies to reduce the deficit and have debt falling as a percentage of GDP.”11 By indicating that the core principles of the current system will not be re-designed, there is a risk that the review will fail to overhaul the system in way which will benefit students or graduates.

16.We encourage the post-18 education and funding review to be brave in its approach, to design a holistic funding model which supports a wider range of pathways and prioritises support for disadvantaged students. The Government must take this opportunity to signal a move away from the traditional linear approach which currently dominates. The future of higher education should be more inclusive, more skills-based and more focused on value for money for students.

2 Universities UK (VAL0063)

3 Education Policy Institute (VAL0060) para 3.1

4 See Annex 1 for further details

5 Further meetings with the Chair are detailed in Annex 2

6 NAO, The higher education market, HC 629, December 2017

7 Public Accounts Committee, Forty-Fifth Report of Session 2017–19, The higher education market, HC 693, June 2018

8 Treasury Committee, Seventh Report of Session 2017–19, Student Loans, HC 478

9 House of Lords, Treating Students Fairly: The Economics of Post-School Education, Second Report of the Economic Affairs Committee, Session 2017–19, HL Paper 139

Published: 5 November 2018