Forget the dead cat: what’s really at stake in the Adonis wars

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Andrew Adonis’s fixation on the salaries of vice chancellors looks like one of Lynton Crosby’s dead cats.

In practical terms, cutting the pay of vice chancellors by, say, 20% would make a negligible impact on the sector. But it’s a nice, outrage-inducing, stinking carcass that perhaps distracts attention from a more profound and controversial agenda. It’s not clear whether Adonis himself is sure what that agenda is, but a direction of travel is emerging. What’s under that dead cat – whoever cares to lift it – is a debate about radical restructure of the UK higher education sector.

Amidst the alarmist rhetoric about students ‘saddled with debt’ and fanciful ‘Ponzi schemes’, it’s worth remembering where we are. The increase in the maximum fee for home undergraduates in 2012 to £9,000 was accompanied by a slashing of the level of state teaching grant: for most courses, to zero. Despite the expectations of the time – and contrary to the absurd claims now of a ‘cartel’ – almost all universities set fees at the maximum level because degrees operate as positional goods. Price – long deferred regardless – is perceived in this market as a proxy of quality, and students don’t want second-rate degrees. In this context, setting fees lower than £9000, in most cases, would be irrational and irresponsible.

These changes led to an increase in the average overall funding per student, although that was nowhere near as much as the near-threefold increase in fees might suggest. Since there was no inbuilt mechanism to adjust fees in line with inflation, the system begged questions of long-term sustainability from the outset: hence the 2.8% rise – the first since 2012 – this year. Overall levels of student debt have been affected further by government tinkering with interest rates, repayment rules and the abolition of maintenance grants.

If it is broke, fix it properly

So what, precisely, is the problem that needs fixing? The populist critics are obfuscatory on this question, preferring the general stench of dead cats and big numbers. Social mobility is always a concern in the U.K., but there is no credible evidence that the system is deterring students from lower socioeconomic groups. The headline levels of individual debt look bad, but this is a ‘fee’ that operates more like a tax, balancing eventual cost with financial benefit. The generational politics of the 2017 General Election breathed some life into this particular cat – and, of course, many people in the HE sector remain opposed to fees on principle – but it’s still hard to see an overwhelming weight of evidence for massive change.

Adonis suggests cutting the maximum fee, so that the state pays no more and the sector is returned roughly to 2011 levels of funding. This sounds simple, but the impact on quality would be devastating. With few other flexible lines of spending, and often high levels of debt, universities would be forced to cut staff numbers, increase class sizes, decrease contact-hours, and downgrade their research mission.

Fine, says Adonis: universities are spending too much time on pointless research anyhow, and can balance their books by taking more international students. But this strategy is so laden with risk that it borders on delusion. International students make rational decisions in a fiercely competitive market. Any policy that undermines overall funding levels, or risks our position in international league-tables – heavily dependent, as they are, on research performance – puts our position in this market at risk.

Elitism as populism

Arguably the only alternative would be sweeping structural changes, with much more state intervention. That might mean strict tiers of institutions, priced accordingly. It might also mean a concentration of research resources in a handful of universities. There are models for such an approach internationally. It’s an elitist structure, but there’s an awful lot of elitism under Adonis’s faux populism.

Structural change like this may look deceptively easy from a distance. Funding can be cut, student numbers slashed, preference given to STEM subjects (since, we’re assured, that’s what the country needs). But damage would be done. The strength of the UK system is founded on its diversity: a fact documented in both the Research Excellence Framework and the Teaching Excellence Framework. Universities that are low in league tables provide important specialist degrees and contribute enormously to regional economies. Which ones do we want to close?

Populist campaigns like this one can take unpredictable turns, especially when a government is weak and distracted. It might just disappear after the stench of dead cat has lifted. If not, it can only be hoped that everyone involved recognises the world-class quality and diversity of UK higher education. If we’ve learned anything from Brexit, it’s that before we smash something that works, it’s a good idea to have thought about alternatives.

5 thoughts on “Forget the dead cat: what’s really at stake in the Adonis wars”

  1. Someone says:

    In practical terms, cutting the pay of vice chancellors by, say, 30% would mean every underling also took a pay cut, creating a material saving. It would send out the right messages on restraint. The idea that maximum fees need to be charged as otherwise the courses will be perceived as second class is absurd – not all universities *are* first class. The only reason maximum fees are being charged is because it is being paid for by unsustainable bad debt (Ponzi scheme) rather than in real money. The university sector needs to get real – at the moment they are on a massive binge fuelled by bad debt underwritten by the tax payer rather than economic demand. A massive 25% cut in capacity is coming.

  2. Scott Wilson says:

    VC salary inflation is a symptom of the poor governance and lack of senior management accountability in many institutions. That needs addressing, regardless of the wider system.

  3. Andrew – I’m sure you’re familiar with the paper by Chowdry, Dearden, Goodman and Jin, “The Distributional Impact of the 2012–13 Higher Education Funding Reforms in England” (FISCAL STUDIES, vol. 33, no. 2, pp. 211–236 (2012) 0143-5671). The authors stated (amongst many other things) that HEIs “need[ed] to charge £7,000 a year just to replace the lost income from the reductions in public funding …[but]…The average headline (gross) fee charged by universities in 2012–13 is £8,660 per year [and] the average net fee is £8,330 per year.” As a result, “universities [will] receive a total transfer of £24,460 [per undergraduate over three years], a 21 per cent increase compared with the current system.”
    To put it another way, the government assumed universities would charge (on average) £7,500 per student per year. In practice, most charged £9,000, giving them a unplanned windfall. The value of the windfall has been eroded by inflation, but has not yet disappeared.
    The increase might be easier to justify if the extra income had demonstrably improved teaching standards across the board, but yesterday’s story in the Guardian, “Teachers in elite universities not feeling benefit of £9k tuition fees” (https://www.theguardian.com/education/2017/aug/22/university-teaching-staff-pay-research), tends to point the other way.
    Andrew – I’m sure you’re familiar with the paper by Chowdry, Dearden, Goodman and Jin, “The Distributional Impact of the 2012–13 Higher Education Funding Reforms in England” (FISCAL STUDIES, vol. 33, no. 2, pp. 211–236 (2012) 0143-5671). The authors stated (amongst many other things) that HEIs “need[ed] to charge £7,000 a year just to replace the lost income from the reductions in public funding …[but]…The average headline (gross) fee charged by universities in 2012–13 is £8,660 per year [and] the average net fee is £8,330 per year.” As a result, “universities [will] receive a total transfer of £24,460 [per undergraduate over three years], a 21 per cent increase compared with the current system.”
    To put it another way, the government assumed universities would charge (on average) £7,500 per student per year. In practice, most charged £9,000, giving them a unplanned windfall. The value of the windfall has been eroded by inflation, but has not yet disappeared. And it’s worth noting that collectively, HEIs in England saw their total income from all sources rise from £23 billion in 2010-11 to £29 billion in 2015-16, an increase of 29% over five years – not bad for a period of so-called austerity.
    This might be easier to justify if the extra income had demonstrably improved teaching standards across the board, but yesterday’s story in the Guardian, “Teachers in elite universities not feeling benefit of £9k tuition fees” (https://www.theguardian.com/education/2017/aug/22/university-teaching-staff-pay-research), tends to point the other way.
    Meanwhile, HEIs have embarked on massive construction projects. Collectively, they have several hundred more buildings today than they had five or six years ago, and the aggregate value of their tangible assets has increased rapidly.
    Andrew Adonis has focused attention on the salaries of vice chancellors because (yes) it’s a story that makes the news. But the story raises important questions about university governance, the way HEIs set their priorities, transparency, accountability and value for money.

  4. Apologies for the duplication in that post – don’t know how it happened!

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