Friday, February 25, 2011

New worries about British higher education reform

Today, the government's minister for higher education, David Willetts, has announced a delay to the publication of its Higher Education White Paper. This was originally scheduled for publication next month. The reason for the delay is that the minister wanted to wait and see what fees universities planned to charge students for 2012-13. Further details are here.

This makes a bad situation worse. Let me explain why. Universities were first subjected to genuinely massive cuts of about 80%. They were told not to become too fearful as lost revenues could be retrieved via raising the cap on university tuition fees. This cap was then raised to a maximum of £9,000.

Several things have gone badly wrong for the government since. First, they seem to have got the maths wrong. They had assumed that universities would not have to charge £9,000 per student to make up monies lost, but perhaps need only £6,000. Universities put their figure much higher at roughly £7,500 or higher.

There is the further issue of perhaps University A need only £6,000 to keep the doors open, but that it could charge students £9,000 with this added investment put into improving and expanding facilities and hiring new staff. If it is not unlawful to charge the even higher amount and it is expected student recruitment will be sufficient strong, then why not charge more given the additional benefits?

There is another issue of perceived quality. Reputation is everything. Universities may have a disincentive to charge less than competitors where (a) student recruitment would be unaffected by higher fees and (b) those that charge more may be perceived as offering a better service and degree. Only a handful of universities did not raise fees to the maximum last time around -- when the cap was set at £3000 -- and promptly did so shortly afterwards.

So how were the maths done wrong? First, the government seems to have got wrong how expensive it is to teach students: this cost appears much higher than predicted. Secondly, the government has got wrong the weight of perceived quality in relation to fees: no one will want to be known as the best place for a cheap degree, or at least not yet.

Most importantly, the government wants to see a "free market" emerge where degrees vary in cost by subject and institution while ensuring a top-down management structure that will make impossible such a market. Let me explain this crucial point. Nick Clegg recently claimed that ministers, not universities, will give final approval on the costs of degrees. Therefore, there cannot be a free market because institutions cannot charge the cost of the relative worth of their degrees given such fundamental potential interference from the government. Not only might ministers control what fees are charged, but they continue to control how many students may be admitted (at least home/EU students). This makes the desire for an emergent free market sound like an empty dream. If ministers genuinely wanted such a market, then less interference in price and student numbers is required rather than more -- and more is precisely what this government has proposed.

This is all further complicated by three additional factors:

1. First, the government has said that if too many universities charge £9,000 fees per year then there will be cuts elsewhere. The government proposes that students need not pay fees up front: they only pay fees after graduation. Thus, the government will need to pay the cost of fees before being reimbursed by students. The government has a budget of only so much to cover these costs. The more universities might want in fee income, the less money will remain in the budget: additional cuts in research income or student recruitment numbers may be a result.

This is an unnecessary mess. This could mean that universities that require x to fund the teaching and learning of students may not receive this amount despite having sufficient student interest -- and even students willing (and able) to pay up front. Furthermore, what would then be the point of the competition for research funding? Acceptance rates are already notoriously low for ever dwindling amounts. The situation may only get worse if those that do get accepted begin receiving far less than they require: experiments on the cheap anyone?

2. Secondly, we have yet to see any thought on students who drop out. We know the government will be looking closely at retention rates and that penalties may follow rates that are too low. So that's the university-side, but what of the student-side? There may be an incentive for some students to sit their undergraduate course, but not sit exams. They could have a transcript showing marks short of graduation and earn valuable skills -- but would not pay back anything because they are not graduates. What would the government have them pay, if anything? We require an answer.

3. Finally, Willetts now says that private firms will have access to the public funding for higher education as well. This means that ministers have planned a budget for 2012 on false assumptions on what universities might charge. There is already the worry (noted above) that they might charge more than the Treasury thinks it can afford. This is all further complicated now with the fact that private bidders can tap into this cash as well. This makes all the more likely the possibility of further cuts to research grants, etc. as it makes all the more likely -- with so many hands in the pot scrapping for loose change -- that all available monies will be drained fast and perhaps spread too thinly.

The outcome? Clearly, this is a time of immense change in how higher education is funded in the United Kingdom. My own view is that I have never before witnessed an education policy so poorly thought out and defended. The effects could genuinely be disastrous.


Richard Baron said...

This looks like a classic case of a government first deciding in detail what it wants to do, rather than first defining its objectives clearly, then standing back and reflecting on the different ways of achieving those objectives. It happens all the time. In the formulation of tax policy, they have now recognised the trap and explained how they will avoid it, so there is hope of reform in other areas.

Turning to the specifics, would something like the following do the trick?

Objective 1 is to avoid an excessive drain on the Exchequer. So tell each university how much it can charge in fees in total (not per student), each year. Exclude from the total to be capped, all fees that are paid up front rather than by taking out loans. Students like that are not a drain on the Exchequer.

Objective 2 is to avoid extravagance. So set a cap per student. This would be the £9,000. A university could then choose to take more students at a lower fee each, or fewer at a higher fee each.

Objective 3 is to get the money back. So make the obligation to repay student loans contingent on having been on the university's books, not on graduating.

Objective 4 is to get students onto the right courses, where they will succeed. So give universities some sort of bonus for low drop-out rates.

Objective 5 is to let universities run themselves. So don't add any more rules. Accept that this means that the outcome will not be perfect. But the outcome would never be perfect anyway, and there comes a point where it is better to live with imperfection than to add more rules.

What have I missed? Lots of things, probably.

Nick T said...

Hi Thom, I wonder if you have any insight into Willetts's claim that universities that charge £9000 would get an extra £2600 per student beyond what they get now ( I've tended to hear that even at £9000, there would be a loss compared to current funding levels. I would have thought this was straightforward to confirm (and easily available information), but perhaps the current funding formula is too complex to make this easy to extract.

Anonymous said...

This is a really interesting and well-developed account here. It may take me a while to get to my feedback - please bear with me as I ought to disclose my rather unique circumstances as context to my reply...

As a "freelance academic" I am in a very odd space. This is to say, I publish well-cited papers and books of academic relevance but work for my own consultancy in industry, rather than under the umbrella of a University. My lack of affiliation is in part because of a deep suspicion of the modern university system which seems increasingly to be veering towards Kant's "higher faculties" at the expense of "lower faculties" and - for me at least - the point of the universities is philosophy and arts that can't exist without them, and not just training for business. (Plus, my post-graduate advisor's experiences with academic bureacracy really dropped the scales from my eyes about wanting to be employed by a university).

Over the last few decades, what I've witnessed is the two-fold shift in the role of the university towards (a) an outsourced research venue for industry and (b) an advanced training academy for industry. I don't personally see how universities can fulfil what I see as their 'purpose' (if you forgive this overtly teleological assertion) under these twin strains.

This brings me to your account. This funding issue goes right to the heart of the student question - but why are we sending so many students to university? And is this really what we, as a culture, want to be doing - heightening the divide in employment by making degrees a requirement in the employment market, and discouraging people from pursuing a more skills-based career that they might, in many cases, do better at or enjoy more. I remember discussions with Italian graduates who talk about how so many alumni end up working in coffee shops because almost everyone in Italy has a degree, making higher education slightly redundant.

Now obviously if the government cuts funding by an astronomical margin - as they have - the students are the only source of fees. But my understanding was that to a large degree this was *already* the case - and indeed, many of the ex-poly universities offer honey-pot courses such as "videogame studies" precisely in order to pull in punters and raise money. I don't mean to diss videogame studies - along with philosophy it's actually my main field of publication! - but no field benefits from swathes of sub par courses, which is in fact what seems to have happened in this regard.

The whole thing is a ghastly mess for me... As someone who wants to see the University exist as a place where intellectual culture can exist without it becoming solely a means to an end, and who actively doesn't want so many students to be sent there, what am I supposed to hope for as a funding solution? I find myself scratching my head as to what I should *want* let alone what we should *do*.

I have to ask: have we expanded the university system too far by allying it too closely with industrial concerns? And, which is related, can we undo this damage (if indeed one chooses to see it this way) without destroying the very thing that the university is good at - namely preserving and developing intellectual culture.

One final point: I'm not sure how many students go to university to "learn useful skills", as you imply in point (2)... they go to get the piece of paper that they believe (possibly correctly) will improve their job prospects. So I'm not sure how much the drop-out issue matters.

Thank you for your patience in reading my remarks - I apologise for my verbosity, but I lack the time to make this comment any shorter. :)

Anonymous said...

This is quite simply a terrible era in which to be a young researcher working on anything other than cancer.

I'm just hoping that Abu Dhabi, Qatar, China etc. will get serious about developing world-class HE provision soon, so the inevitable brain drain can commence in earnest.

The Brooks Blog said...

Richard - I agree in part. It is such a classic case, but unsure how easy its resolution. This is because you miss the crucial objective that there should be a movement toward a free market in degrees and differentiation in the price of degrees by subject and institution. Furthermore, the objectives clash rather starkly. For example, take your objective 4 of interference by the state in what courses are available to students versus objective 5 that "universities run themselves". They can hardly run themselves when gov't attempts to help dictate how much degrees will cost (and *not* based on how much it will cost universities to teach), how they might be financed, and which degree courses will be on offer -- all in the name of reducing state interference and opening the sector to market forces. It is genuine madness. This is not to say that every objective is itself objectionable, but that together these objectives are wildly incoherent.

I don't genuinely recall a worse higher education policy supported by a government.

The Brooks Blog said...

Nick T - yes, it seems Willetts did say this. However, it is unclear that universities charging £9,000 would receive nearly £3,000 extra when they say that they need on average about £7,000-7,500 to almost break even. Thus, charging the higher amount (£9,000) might mean about £1k or so extra per student.

We must view this in tandem with his other remark that the government cannot afford for all universities to charge the top rate. If too many charge about £6,000 in fees, then it has been made clear that the government will cut even deeper in other areas, such as the number of student places and research grants. There has already been tens of millions in previously awarded research grants clawed back -- and the threat is there may be more to come. Madness.

Richard Baron said...

Hello Thom. I agree that the policy is a mess, and that objectives can all too easily conflict. I was, however, not clear enough what I meant by "get students onto the right courses". That may have given rise to an impression of more incoherence between objectives then there need be.

I meant the right courses for the students: that is, courses on which they would do well. I envisaged that being something for the universities and the students to sort out. I wasn't thinking of "right for the economy", a policy that would imply central government direction.

On reflection, we might not need the Government to do anything in relation to objective 4, in the sense in which I meant it. We might be able to rely on people's aversion to choosing subjects for which they had no talent, an aversion that should be strong when they would have to pay for their courses.

The Brooks Blog said...

Many thanks for this clarification, Richard. What would a public policy of "getting students on the right courses" look like? One answer is what the gov't of the day thinks are best to suit the public need - and you appear to (correctly) reject this. Instead, you say that these will be courses that students will "do well" on - so the courses where students are most likely to receive higher marks? Or where there is higher pay? Or do you mean simply whatever course students would most enjoy sitting? If the latter, then it's not a matter of them doing well but having the freedom to choose for themselves without unnecessary interference.

Richard Baron said...

Hello Thom. I was being, and remain, simple-minded and traditional about the notion of what people are good at. Will you get respectable marks without burning yourself out? There is no point is taking a course in a subject if you have no talent for the subject and will very likely drop out.

I was not thinking about earnings, or enjoyment. There should be a positive, but imperfect, correlation between talent and earnings, and one between talent and enjoyment. Those who pick subjects that commonly lead to high earnings will only make lots of money if they are reasonably good at those subjects. And most of us enjoy doing things for which we have some talent, and are miserable when we have to do things for which we have no talent.

Such imperfect correlations would not be enough to justify allocating students to the subjects for which they happened to have the greatest talent. But I would not advocate that. Free choice matters, and I want to preserve it. I only suggest that it is important that people do not make silly choices of subject that will place them at high risk of dropping out. Most students will have a fairly wide range of subjects for which they have some talent.

The more I think about it, the more I am of the view that the Government would not need to do anything here. As I noted in my last post, few will want to be saddled with large bills for courses that they are likely to quit. Lecturers will also apply good sense when admitting students. They do care that the students should do well. Furthermore, it is far more satisfying to teach people who have some talent for their subjects. Finally, the notion of “should” that I use in “should pick a subject for which you have some talent” is more a recommendation for eudaimonia than an imperative of sufficient strength to justify regulations.

The Brooks Blog said...

Two thoughts. First, while perhaps there should be a correlation between talent and earnings - is there? Someone with a talent for football may earn many times what others may earn with their different talents. Some talents are rewarded better than others. I agree on the "should" but think it utopian. Secondly, while I agree that students should choose the course that best suits them according to their own perceived notion of best interest (in combination with university admissions staff views on suitability), I'd actually like to see a US-styled "liberal arts" programme take root at UK universities. One reason is that a liberal arts education is a broad education. Students would have the freedom to take subjects they know they want and be exposed to subjects they may discover they enjoy even more. A second reason is that this might provide opportunities to expand "STEM" education: for example, I had to sit maths, chemistry, and physics while studying for my arts degree. Finally, few graduates work specifically in the subject of their BA degree upon graduation. This is especially true in the present economy. What society may require are graduates who are flexible with knowledge across disciplines rather than specialists in one or two areas. A liberal arts education might provide this. Thus, it may speak to individual choice and satisfaction, societal needs, and government targets. Will it happen? I fear not anytime soon...