You better run, you better take cover

Before Jo Johnson returned to his role as Universities and Science minister at DfE, the rolling assumption was probably that the Augar review mattered, whereas many in the sector were confident that they’d killed off TEF – or at least its malevolent subject-level cousin.

These days, an equally lazy assumption is that the reverse is now true – after all, JJ was pretty dismissive of Augar on release, whereas he was closely involved in the development of the TEF both at institution and subject-level.

But we’ve got a feeling that everything is a bit more complicated than all that. The triumphant return of TEF-architect Iain Mansfield to DfE – now a special advisor to Jo Johnson rather than a civil servant – certainly suggests that the department is more likely to want to find ways through any critiques of subject-level TEF rather than kill it off completely.

Developments in Australia are also interesting. Down under policy has started to tie together the metrics and funding in ways that could well be replicated, once Parliament returns and DfE has to respond to both Augar and Dame Shirley Pearce’s as yet unpublished review of the Teaching Excellence and Student Outcomes Framework.

Funding by the numbers

The Australian government operated a familiar-looking “demand-driven” funding system for its public universities between 2012 and 2017. Universities could enrol unlimited numbers of bachelor degree students onto any subject other than medicine – and be paid the fees for all of them.

Universities weren’t required to meet all of that demand from prospective students, but they certainly had much more freedom to do so. It’s wasn’t hugely dissimilar to David Willets’ scrapping of the “cap” on higher education number caps in the early part of the decade over here.

Broadly, “demand driven” funding led to improvements in equity outcomes, with increased enrolments for what the aussies call “low socio-economic status” (SES) students – and increased higher education opportunities for people from regional and remote areas and Indigenous Australians. The Australian Productivity Commission (2019) also concluded that the demand driven system created more accessibility for students from low SES backgrounds and “first in family” students.

But (just as in the UK) there continue to be significant disparities in attainment across Australia – about 28 per cent of 15–64 year olds in Australia have a higher education qualification compared to around 15 per cent for those in regional and remote areas.

And crucially, while the demand driven system led to expanded opportunities for students, it also resulted in an escalation in public expenditure. As a result back in 2017, the Australian Government announced a funding freeze to relieve the pressures that that demand driven system was creating. In 2018 and 2019, funding was capped at 2017 levels.

Now from 2020, funding for domestic non-medical bachelor level places will only be allowed to grow in line with population growth in the 18–64 year-old age bracket – with universities only being able to access this funding if they meet specified performance requirements to ensure the quality of the higher education sector.

Your face sounds familiar

This is where things get interesting. Buried in Augar are essentially three “levers” that seek to wrestle some control back for public funding and improve accountability of universities for that funding. That gap between 7.5k and 9.25k, if funded by the Treasury in full, was going to be given to the Office for Students (OfS) and distributed to universities in accordance with three new levers – some funding diverted towards those with the most WP students, some funding for “high cost” or strategically valuable subjects, and controversially some diverted towards those courses delivering the best “value for money” – presumably based on LEO and Graduate Outcomes data with some regional and “arts is cool though” tweaks.

Over in Australia there are similar concerns and objectives. A new performance-based funding allocation (that will only apply to “new” undergraduate places above the 2017 cap level) is basically a kind of student number control, where funding will be released on the basis of performance against four familiar looking metrics:

• student success – measured by the drop-out (non-continuation) rate;
• equity group participation – measured by participation rates for indigenous, low socio-economic status, and regional and remote students;
• graduate employment outcomes – measured by the overall employment rate of graduates available for work at four months after graduating; and
• student experience – measured by student satisfaction with teaching quality drawn from the Australian Student Experience Survey.

In the words of Theresa May: remind you of anyone? Yes, that is pretty much the TEF metrics linked directly to policy, just as Jo Johnson once dreamed (and indeed legislated for in HERA) in the UK.

To address concerns about metrics and fairness, there’s a complex bit of work to go on that will “smooth out” areas where factors outside of a university’s control might distort the data – like the impact of wider economic conditions on graduate employment rates. But it’s happening.

Could it happen here?

It’s worth bearing in mind a few things. First, we know that the overall cost of higher education is a concern for the Treasury in this post ONS-review world. Some of the problems with offer-making that regularly hit the press are about there being excess “supply” of places in comparison to “demand”. Population growth will rebalance that equation, but is also likely to exacerbate the cost issues, and there’s a need expressed in the Augar intro to swing that pendulum back a bit towards government accountability and control. The bottom line is that given demand, higher education will need to expand in the next decade – but that doesn’t automatically mean that the university part of the sector will.

TEF was originally designed as a performance based system that would have funding levers attached – but because there have been so few increases in the fee cap, and because interest rates have been so low, TEF is stuck as a moderately faulty consumer signalling device. We know that Iain Mansfield is on the look-out for ideas that would control funding and places, that JJ is still concerned about funding, offer making and access, and that they’ll both be keen to make subject-level TEF work.

Use a bit of flair and imagination, look at the cautious welcome that the Australian sector has given to the performance-based proposals, and we can probably see an Aussie tint to a potential future on sector metrics, funding and accountability – one that might well square too many of the circles for DfE to resist.