1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) and the new higher education regulator the Office for Students on the functioning of the higher education market. We also took evidence from the National Union of Students, University Alliance and the Oxford Centre for Higher Education Policy Studies.
2.Over 2 million people are students at higher education institutions in England, mostly at universities. The Department provides £9 billion of up-front funding each year for higher education in England in the form of grants and tuition fees, equivalent to £7,903 per student, up from £6 billion in 2007/08. Some 85% of up-front funding now directly follows student choice (up from 23% in 2007/08) via tuition fee loans, which the government increased from £3,000 per year to a maximum of £9,000 in 2012. The government also removed caps on the number of students institutions could accept from 2015/16 to allow popular providers to expand and more young people to access higher education.
3.In 2017, the Department introduced further reforms to the higher education market through the Higher Education and Research Act. The Department’s objectives for the reforms included introducing more competition and variety of options, for example two-year accelerated degrees or online courses, into the higher education market. The Department also intended for the reforms to foster excellent teaching, ensure students could make informed choices, and increase access to higher education among students from disadvantaged backgrounds. The reforms included setting up a new market regulator, the Office for Students (OfS), whose remit is to support a competitive environment, promote choice, quality and value for money in the interests of students and the taxpayer.
4.Participation in higher education represents a significant financial commitment for students, with average student debt of £50,000 from a three-year course. On average graduates earn 42% more than non-graduates, although the earnings of individual graduates can vary widely by subject, provider and family background. A wide range of factors influence student’s higher education choices including the perceived prestige of institutions, location and family background and, for some, choices are constrained by cost (for example, travel and accommodation) and caring responsibilities.
5.In light of these substantial costs and wide variation in outcomes, we asked witnesses whether prospective students are properly supported to make informed decisions about what and where to study. The NUS and University Alliance told us that universities have responded to an increasingly competitive market by investing more in marketing. The NUS told us that this has led to misleading information being given to prospective students in a number of cases and the Advertising Standards Authority has had to intervene as a result. University Alliance also told us that the diversity of the higher education market (for example, in terms of course content and learning styles) makes it very difficult for students to work out what would suit them best without face-to-face advice from an informed independent source. We also received written evidence from Professor Roger Brown, Professor Emeritus of Higher Education Policy and former Vice Chancellor of Southampton Solent University, who told us that providing good information to students to inform their choice was an “insuperable problem” in the higher education market. He told us that this was in part because it is impossible to ensure valid, reliable, comparable and tailored information. In the absence of this information, Professor Brown asserted that students use “institutional prestige” as a substitute which is mainly based on an institution’s age, resources and research performance.
6.The Department accepted that it needed to improve the quality and reliability of information available to young people and ensure that 16 and 17-year-olds have access to much more information than they currently have in order to make an informed choice about their education. It told us that it is launching a new website in 2019 that will include information on what graduates have earned, searchable by course and provider. It has also introduced a new transparency duty as part of the new regulatory framework, whereby higher education providers will be required to provide information on admissions, completion rates and outcomes to prospective students, including how these may vary by gender, ethnicity and socio-economic background. The Department confirmed that this information will be made available on the new website. The Department also told us that the Teaching Excellence and Student Outcomes Framework (TEF) is intended to provide students with information on the teaching quality of institutions. In comparison, the NUS told us that it does not believe TEF accurately measures teaching quality and asserted that the Department’s plans to introduce subject-level TEF ratings from next academic year will further confuse students.
7.Students can receive careers advice and support from a range of sources, including in schools. The NAO found that only 60% of 13- to 14-year-olds had access to an external careers advisor, and the support available does not always reach those who need it most. The Department accepted that the level and quality of careers advice that students receive was “nothing like as consistent as it should be”. It told us that its new Careers Strategy is intended to address this and have a real impact on the lives of young people, with a full-time dedicated Careers Leader established in every school. We asked what it was doing to support older entrants to higher education. The Department told us that careers advice is available through the National Careers Service, and the Careers & Enterprise Company is establishing career hubs to enhance career information in the most deprived parts of the country.
8.The Department’s reforms of the higher education sector are designed in part to ensure equal access to higher education, regardless of an individual’s background. The percentage of 18-year-olds entering higher education from the lowest participation areas of the country—those with low levels of higher education participation and strongly correlated with areas of social deprivation—has improved in recent years, but there remains a substantial gap with higher participation areas (26% compared to 59% from the highest participation areas). As most of this gap is explained by differences in how well students do at school, we questioned the Department on what action it is taking to reduce the inequality in school attainment between children from disadvantaged and more affluent backgrounds. The Department recognised the scale of this challenge and told us it was a “huge priority”. The Department told us that it had developed a Social Mobility Action Plan to address inequalities across the education system, which included specific measurable outcomes that it planned to track.
9.Since 2011, the number of part-time students has fallen 55% by and the number of mature students has fallen by 39%. The number of students studying non-degree undergraduate qualifications has also fallen. In its written evidence, the Open University called the decline in part-time higher education “catastrophic” and described it as a symptom of a “broken market”. As lifelong learning is critical for social mobility, we asked the Department what it was doing to address these worrying trends. The Department acknowledged that these declines were in part an unintended consequence of the new tuition fee regime, but asserted that other factors had also contributed to the decline. It told us that addressing this issue is a key question for the review of post-18 education and funding that the government is currently carrying out and which will be concluded in early 2019. The Department told us that in the meantime it had introduced maintenance loans for part-time students from 2018–19 and was working to ensuring that there were attractive degree options for part-time students, such as accelerated degrees and online courses.
10.Higher education providers have a responsibility to take action to widen participation and carry out the majority of outreach activities, funded from their tuition fee income. University Alliance told us that universities can do a lot to widen participation, including: building up relationships with schools and colleges; assessing applicants on their potential not just their grades; providing additional support; and putting in place measures to reduce isolation and foster a sense of belonging and participation. University Alliance and the NUS told us that not all universities are doing enough to support widening participation, and that some universities are doing more of the “heavy lifting” in relation to widening participation. Universities that are able to attract a lot of applicants because of their perceived prestige have less incentive to work hard to widen participation.
11.The Department acknowledged that good practice across the sector in relation to widening participation is not consistent, and that the OfS will have an important role in ensuring good practice is being applied across the sector. The OfS told us it will make Access and Participation Plans a condition of institutions registering to access public funding for higher education. These plans will specify targets for each provider to improve both access and outcomes for disadvantaged groups, and the OfS will monitor progress against these plans. It told us it will have a range of sanctions it can impose if a provider is failing to make progress, describing these as a “more nuanced range of responses” than were available under the previous regulatory regime. OfS will be able to impose fines if it felt it were necessary, but the level of these is still to be determined and is currently being consulted on.
1 Report by the Comptroller and Auditor General, , Session 2017–19, HC 629, 8 December 2017
2 , paras 1.1, 1.4
3 , para 1.10–1.11
4 , paras 2.6–2.7
5 Qq 4, 19
6 Qq 1–2
7 Qq 4, 33
8 Professor Roger Brown () paras 5–11
9 Qq 45, 47, 78
10 Qq 47; Office for Students, , 2018.01, p124
11 Qq 1, 36–40
12 , para 2.14–2.15
13 Qq 46
14 Qq 45; Department for Education, , 2017, p22–24
15 Qq 47–51
16 Qq 63; , paras 2.16–2.18
17 Q 63–67; Department for Education, Cm 9541, December 2017
18 , para 3.33
19 Open University () para 6–7
20 Qq 90, 124
21 Qq 16
22 Qq 17
23 University Alliance () para 4
24 Qq 69–71
Published: 15 June 2018