One of the highlights from Wonkfest18 was universities minister Sam Gyimah getting a grilling from Wonkhe’s editor Mark Leach on the HSBC Main Stage. There are some choice quotes from the transcript that we have been analysing ever since.
What he said: “no bailouts”
What he might mean: “depends who’s asking for what”
Gyimah made clear that “with autonomy comes responsibility … We do not see as our role to bail universities out when they make reckless financial decisions”. He said unequivocally that banks and investors should not expect the government to underwrite their money.
Yet moments later, he did equivocate when talking about Open University’s catastrophic decline in part-time and mature student numbers. There is, he said, a “difference between messing up your business model and [government] policy decisions making it difficult for an institution”.
There will be much head scratching about this distinction. The tough financial situation that many institutions are in is shaped precisely by deliberate policy decisions: the freeze in £9250 ‘ticket’ value; cuts in direct grants; the abolition of student number controls; inflexible visa policy; and rising baseline costs imposed by Treasury. There is, as Mark Leach put it, “good failure” and “bad failure”. We could be about to find out which is which.
Gyimah knows there will be enormous economic, social and political fall out of university going to the wall – which is why he left the door open that “every situation will be taken on its merits”. And similarly, behind Michael Barber’s headline message, there was a softer line: that OfS was ready to step in early with at-risk institutions to enable them to restructure and broker “creative” solutions. The clear inference was they would intervene before a university ever reached crisis point – but the onus was institutions to be open with the regulator.
The mood in the hall afterwards, however, was one of frustration – that there is a disconnect between the no-nonsense headlines and the complex, commercial realities on the ground. Why pretend there is a one-size-fits-all approach to a radically diverse sector? What about universities which were academically strong but financially weak? What about universities which were the largest employer in their area? There is a clear precedent of ministers intervening in struggling institutions – and if the ONS decides that HE subsidy needs to go on DfE’s books, there’s all the more reason that ministers will need to avoid messy market exits.
What he said: “universities finances are robust”
What he might mean: “we think”
Gyimah was clear that he didn’t “recognise” The Independent’s splash 11 days ago about universities “on the brink” on the basis OfS had flagged no major financial issues among the 182 institutions already registered.
But if everything was really hunky dory, why did OfS and DfE feel the need to spend Tuesday morning ruling out bail-outs to unspecified institutions?
Barber, perhaps, let the cat out of the bag that the new student protection plans “still need work”, remained an untested “innovation” and warned that universities need to treat them seriously – suggesting that to date, they hadn’t. It’s an open secret that many registered institutions are dealing with very tight finances, which they hadn’t gamed out to the OfS. And it opened up the challenges of the regulator basing its judgements on the one-hand, historic data and on the other, institutions’ own self-assessments.
Course restructures and remodelling are part and parcel of life in HE. But it’s clear that the level of financial stress across the sector is unprecedented. OfS has to argue that students will be able to complete their studies – but it’s clear there are worries whether this can actually be delivered – and if not, what OfS’s responsibility will be if an approved student protection plan ends up not being worth the paper it’s written on.
The unposed question is the level of responsibility an individual university has to the sector’s wider health. Will they stand by and let fellow institutions start to close courses and cut students adrift? And do the leaders of major established universities want to take the market to its logical end in order to choke off their competitors? Time will tell.
What he said: no comment on future headline fees
What he might mean: possible cut to £6,500 is serious
There were mixed messages about the ongoing Post-18 Education & Funding Review. Gyimah played coy at first stating “a good degree is worth the investment”, saying he wanted to see the expert panel’s recommendations in their “totality”, while refusing to comment on The Times’s splash on proposals to cut headline fees to £6,500, with top-ups to around £13,000 for STEM degrees. He hinted that he was concerned such a drastic cut or even differential fees might mean a return to student number controls.
This risked putting “positive strides” on participation, access and progression “into reverse”. His message to universities was: “don’t be alarmed [about £6,500], actually go out there and set out a positive vision for what you think would work”. It was not entirely clear if he was disagreeing with the direction of travel of the review and exhorting universities to play their own game. It was, however a glimpse into DfE, No.10 and Treasury all being in different places on HE funding. And it foretold a big spending review battle next year, made even more complicated by the Office for National Statistics ruling due on 17 December.
Many in the sector might have thought that the debate over contact hours was dead, particularly given the demise of the teaching intensity metric from pilot subject level TEF, and OfS’ focus on outcomes, not outputs. But Gyimah remains concerned that a student might “turn up to a lecture and you don’t have anywhere to sit”, and wanted OfS “to look at this whole issue of what students are getting for what they pay for in a lot more detail”.
OfS’ initial research demonstrated that students are just as concerned about outputs as they are outcomes – but if history courses do subsidise STEM, you can either use levers to deliver more for the history fee, or pay less for the status quo. Work on student contracts and VFM is due from OfS this winter.
In questions later Gymiah added that “the whole psychology around fees and fee pricing is sometimes baffling for me … I don’t know how people respond to one subject being cheaper than the other. Do they actually want to go for the more expensive one because actually people view education as a Giffen good inherently or do they go to the cheap one. I don’t know what the answer is.” It’s an answer the government will need to get to grips with over the next 12 months.
Wonkhe’s editor Mark Leach presents the universities minister with headlines on HE…from the last four days.
What he said: Brexit presents “challenges and opportunities”
What he might mean: “there are only challenges”
Gyimah said he’s always been honest about voting remain: “I thought Brexit was going to be costly, complicated and very difficult to do”.
He is focused, he says, on “locking-in” the benefits of current EU membership: retaining association status with Horizon Europe and wider collaboration, funding and mobility. He claimed no-deal planning on research was “at an advanced stage… but no one was planning for no-deal” – which did not entirely reassure the audience. There was, however, no mention of an immigration bill, which will be a huge battleground for HE next year. Nor on the UK losing yet more ground in the wider international competition for students.
Gyimah did underline the long-term commitment to raise R&D funding to 2.4% of GDP – a huge ambition, of course, which ministers did not need Brexit to make. But there was no mention of the promised UK Shared Prosperity Fund, which is designed to replace current EU structural and innovation funds – a big issue for universities outside London and the south east.
Gyimah posed the key economic question universities are central to answering: “how do we pay our way when we leave the EU? With financial services less profitable and North Sea oil on the decline, what is Britain going to be like in twenty or thirty years time? The bet the government is making is it’s going to be [based on] innovation, research and science“. It is time for HE, he inferred, to stop sulking and step up.
What he said: “campus monoculture” is a big concern
What he might mean: there are no real hard and fast examples
Gyimah aired well-worn lines on campus “monoculture” (not a proxy for voting Labour, he said), culture wars, identity, safe spaces, no platforming and trigger warnings. So his central argument, while fluently argued, was familiar territory. But he was far more revealing on where he would draw the line on freedom of speech.
He was pushed on inviting the-then Iraqi Deputy Prime Minister Tariq Aziz to the Oxford Union in 1998 – an event cancelled after the Home Office refused to give Aziz a visa. “The reason I invited him was for him to be challenged by very intelligent students and to be debated with … that’s a good thing and something I don’t regret doing at all”. Would he deem it acceptable then for a university to invite Bashar al-Assad of Syria, Crown Prince of Saudi Arabia Mohammed Bin Salman or others accused of war crimes?
Extraordinarily, it seemed he would.
“Democracy is not putting our fingers in our ears and challenging views we don’t agree with. Democracy is about pointing to those views and showing how the wrong they are”.
What he said: “yet to be persuaded” on post-qualification admissions
What he might mean: I am persuaded – but it’s not a priority.
Gyimah is on the record repeatedly criticising unconditional offers – so why not, he was asked, simply end the whole system of offers based on predicted grades.
He said the case was “interesting”, particularly if it can be shown to boost social mobility (which think tanks like the Sutton Trust, claim it does). But he was “yet to be persuaded that all the administrative complexity can be resolved”. This has been the excuse for decades – despite the UK retaining an administratively complex, inefficient way possible of managing HE admissions by relying on predictions.
UCAS consulted in detail on a potential model in 2011 which was blocked by teacher unions, the HE establishment and then-Education Secretary Michael Gove among others. Yet there is increasing momentum again given the scale and profile of clearing, and given policy is coalescing around a more joined-up post-18, tertiary system. DfE in particular is looking at the ‘customer journey’ all students take to further study or work. The key, however, is whether ministers have the political capital, bandwidth and energy to drive forward a big structural reform.
What he said: DfE is “looking at” cost of living
What he might mean: DfE has no answers (yet)
Given the issue comes up at every one of his “Sam on campus” visits, Gyimah was asked point blank about what government could do practically to address students’ cost of living, rather than just expressing concern. Did he back, for example, rent controls (see Ireland) or building subsidised halls? He neither backed radical proposals nor ruled them out. Instead, he said that DfE was looking at accommodation costs, and placed the emphasis on Augar’s expert panel to come up with options on maintenance support for ministers to examine.
The trouble is that it is not exactly flush with additional budget to fund maintenance spending or subsidise student living, and it’s hardly DfE’s job to fix the student slice of a fundamentally broken housing market. Should Augar really be pushing subsidised student debt onto the balance sheets of housing investors? The answer needs to be part of the much bigger picture – major supply and demand-side reforms to open up housing for the under-40s.
Decide for yourself. The full recording of the encounter is available from Wonkhe’s podcast channel now.
This article has been amended on 15.11.18, as it included an incorrect reference to the OU’s financial deficit.
The logic of marketisation policy is that HE costs well above the £7.5k modelled as affordable back in 2011. Every move since then has been to get fees down and a differential distribution of fees that matches the distribution of UCAS points emerges (a dual-price mechanism). If institutions will not voluntarily reduce fees OfS will not feel the need to save them from ‘bad business decisions’. They are relaxed about a medium sized post-92 or 5 going under as a lesson for all, but in reality the most likely to fail are those new ‘challengers’ that the same policy needs to emerge as viable competition. The policy fails on its own logic but there is no reason to suppose they will back down.