Is Britain’s university system really a timebomb?

These are extraordinary times. Back before the ill-fated 2017 general election, a bill was passed that set out a new regulatory structure for English higher education; destined, it seemed, to replace the 25 year long settlement since the end of the Binary Line (tidied up by the Dearing Report). But that election brought back into play the funding of higher education, and since then all sorts of things have kicked off – some of which have centred around He Who Must Not Be Named (in case he blocks you on Twitter).

Richard Tice and Tariq Al-Humaidhi have pulled together a report for UK2020 (the think-tank of Owen Paterson) which collates the issues telegraphed this summer. This is quite a long piece (157 pages) and makes some extraordinary assertions and assumptions. It takes further elements of the government’s own rhetoric on markets and consumer choice to beat the universities while weaving in a critique from the ‘populist’ threat to the sector. The failings of the post-Browne £9k fee regime become the fault of the universities. The logical actions of universities become the acts of a cartel. Amongst the assumptions are some spectacular misunderstandings, many stemming from the grounding of the report in anecdotes from the children of Tice’s friends.

At the heart of the evidence base for the report is a YouGov survey of 503 students, supplemented by another 170 survey responses that the authors gained themselves (by means unknown). The report leans heavily on the survey, but we are not told any information about its methodology or offered sight of any data tables. There is an appendix with selected quotes, linked to the university and course of the respondent. These ‘unvarnished’ comments are critical, and have clearly influenced the authors, but we know nothing about the context for these comments. The survey in question was clearly run to supplement the HEPI/Academy Student Experience Survey, whose outcomes are treated extensively.

There is a clear confirmation: the increase in fees has not lead to an increase in the perception of value for money; and how could it? The Government has not trebled the amount available for spending on undergraduate education; it has simply swapped funding sources.

The cartel

The eye-catching accusation that English universities have acted as a cartel, setting out to fix prices, is repeated here, but in the most curious way. The £9000 fee cap was mis-sold to parliament and the country. Claims that universities charging fees above £6000 would be exceptional were delusional, and soon undermined by the very structures put in place around the fee system. The report notes that the OFT found no collusion in fee setting, but claims because the ‘incentives’ in the £9000 fee cap system logically resulted in universities charging £9000 this is still a cartel.

The cartel accusation supports the notion that the providers are ganging up on the consumer. Price is vital in this analysis and the £9000 sticker price is totemic here. As with other commentators this summer, the authors assiduously ignore any price competition that there is; bursaries, scholarships, even the fee waivers which have somehow survived. £9k is an affront to the English sense of hierarchy; it sits at the heart of concerns about value for money, graduate earnings and contact time. There is no incentive for a university to set its fee cap below £9000, and those that did in the initial years soon discovered they were turning away government money for no good reason.

Assumptions and Confusions

A little knowledge is a dangerous thing. The report contains some extraordinary assertions, examples include:

• Apparently the English universities typically have a semester structure.
• OfS will be able to blind mark exam papers at institutions where quality concerns have been raised.
• Students paying international fees are ‘second-class foreigners’ because they pay more than EU students
• Research funding is ‘one of the few financial levers’ to enforce widening access policies

Old Chestnuts

You can’t escape from the range of issues thrown at universities, and the following all get an outing:

• Grade inflation, of course.
• Students should get an invoice specifying the hours of teaching they’ll get
• Some subjects have higher earnings than others
• Some subjects are cheaper to teach than others
• Universities won’t validate degrees at private providers that compete with them for students
• Universities are rich – as shown by their vast borrowings
• Vice-Chancellors get paid a lot

Flexibility: the Accelerated Degrees proposition

The major recommendation in the report is the two-year degree. The chapter discussing this notes that rather than introduce choice, universities have reverted to a ‘bog-standard model’, ‘backsliding’ by controlling validation elsewhere, increasing the proportion taking 3 year FT degrees (the authors missing the obvious issue that the collapse in PT numbers has increased the proportion of FT students). They note that accelerated degrees exist, but that they are concentrated in ‘post-1992’ universities.

Further, they collate credit transfer with acceleration – noting that US transfer students can complete their degrees in two years. A US associate degree is, of course, emphatically not an accelerated degree. And English foundation degrees also get the brush-off. Apparently universities should accept ‘A’ levels in place of first year courses. The report urges OfS to enforce a credit system, having just accepted that Oxford and Cambridge should not be forced into using credit.

The report relies on their YouGov survey for evidence of demand for two-year degrees, but fails to note why these have not taken off. It may come as a surprise to many, but universities do think about markets for their courses. There is a place for the accelerated degree, but the students who can benefit from it have particular characteristics. In addition, the funding regime hasn’t helped; fixing students’ fees into academic years. Although the new powers to vary the fee for accelerated courses are welcome, Tice and Al-Humaidhi are right to note that only a credit-based fee would rectify this.

Student Accommodation

The model of residential life at university, what Nick Hillman has called the “boarding school model”, adds significant costs to students. Here the report covers the growth in private sector purpose built student accommodation much more carefully, highlighting how the facilities race has been used to justify rampant cost inflation. Tice’s background is in property development, and no doubt this section has benefited from his knowledge.

The report pulls the solution back to the accelerated degree. One major advantage to a 2 year degree is that there are only 2 years of maintenance costs to be paid, a key part of which is accommodation. Furthermore, the authors tot up that 52,500 rooms would be freed up if 20% of all UK students took an accelerated degree. That such a large number would switch is implausible and its effects would play out more slowly than the authors suggest.

Conclusion

The report catches a lot of what has been said about higher education in recent months and years, but almost entirely drawing on a series of negative impressions. It is an artefact of the centre-right’s approach to the issues of higher education, containing its assumptions (for example on the private good accruing from education) and its frustrations (for example that a market for price doesn’t solve problems). The dubious justifications used in policy making, that changes would put students at the heart of the system, are used to beat the sector. The exaggerated claims of policy makers, for example on lamentable teaching, cannot be reliably used as a benchmark for assessing what universities do.

But the report ends with an opportunity.

It is up to universities to deliver on this opportunity – as in so many other areas – by offering a better deal for students that focuses squarely on their interests rather than simply carrying on with the way they have always done things. (p137)

Universities look like they don’t change very much. This is simply not the case. They are also quite keen on evidence; they have had quite a lot about the pros and cons of accelerated courses. The authors think they have found a panacea, but it is illusory. This is not least because it builds on the shaky foundations of other reports which they uncritically incorporate. It does however catch many of the issues that concern Richard Tice and his friends, and we in universities cannot ignore them (or simply ridicule them). We need to address them as they are continuing to catch the attention of the media.