Would subject-based fees stem arts provision?

The kind of people who like to tell you authoritatively about policy positions in various parts of government will tell you that the Treasury are keen on some kind of subject-linked fee cap funding model for HE. The conventional wisdom was that this preference did not extend to DfE, so to see Damian Hinds doing the Sunday morning sofa circuit pushing for such a model to fall out of the post-18 review came as something as a surprise.

Subject-based fee caps, on the face of it, feel like a Treasury thing. Complicated tables with exhaustive datasets filtered through salary benefit scaling and societal preference models feels like an economist’s answer to a question – whether or not said question has anything to do with economics. And we are looking a tripartite calculus of price: “the cost [to universities] to put it on, the benefit to the student and the benefit to our country and our economy.”

You could imagine, with the setting of such caps, the ability emerging to manipulate market signals to drive student interest in studying nationally important subject. To more fairly reflect the cost of tuition. Or, as Hinds hinted, the ability to dissuade students from taking arts and humanities degrees.

What is a subject?

The clean lines of the new HECoS (or the increasingly tatty-looking JACS) suggest an ordered and transparent understanding of what is being studied in UK HE. But anyone who has peeped under the hood of the headline HESA stats will know that there is significant variation in the way such coding is applied – a topic dealt with in some of my very favourite reports from the HEDIIP project.

Miscoding and poorly applied coding is one part of the problem – the other is deliberate gaming of the system to maximise income and reputational benefit. Under the current system, JACS coding underpins a part of the decision making used by HEFCE to allocate provision to price groups – but everything from Unistats scores to subject TEF ratings will be affected by the way provision is coded. There’s a noble tradition of the same provision being coded in different ways for different purposes. HECoS will eventually fix some of the most egregious examples of this, but we are a long way off.

So my classification usage in the charts below is deliberately blunt, and should be seen as indicative only. I should also note that I’ve used selected institutions (mainly large, public ones) for these illustrations.

Cost by subject

The venerable HEFCE price bands represent the culmination of decades of research. They now control the direction of the majority of HEFCE’s remaining teaching funding almost entirely, supplementing fee income for medical and laboratory-based subjects. Of the three parts of a putative-subject based model, this is the part that is least controversial. At least partially because it already exists.

If we’re using subject to control fee levels as well as the level of direct public support, we need to bear in mind that this support is set at current levels because – as far as we know – this is how much it costs to teach these subjects for the institutions that teach them. Other factors are applied (small and specialist as a current example) to address specific institutional costs on top of this.

Unpicking all of this to factor in variable student fees would be also ignore the fact that some funding to preserve at risk subjects is allocated without reference to student numbers.

Value by subject to the individual

Though the review reports in the spring, it will be born under the sign of LEO. The experimental dataset that joins HMRC data to individual learner records promises much regarding understanding how a given degree at a given institution will affect your salary.

The big downside is that it is historical – there’s nothing really to suggest that how well the class of 2009 are doing five years on has much to offer for the class of 2022. Wages grow as demand grows – unevenly, and dependent on macroeconomic trends far outside the control of a university or the sector. This would be true in a normal economy – throw in the prospect of David Davis’ Mad Max style dystopia and you may as well study what you enjoy and leave career predictions to the quizzes in Just Seventeen.

As Wonkhe pointed out when the first full data was released, the subject of your degree isn’t even the major influence on your earnings – your social background is. Whether one wants to charge disadvantaged young and people more or less to study the course of their choice at an institution that accepts them does not feel like the most important question within the system we have.

But even ignoring these major issues, the idea of charging more for STEM and less for arts and humanities has major flaws. In many institutions, graduates in the arts earn more than their STEM counterparts – in others the difference is hardly remarkable. This visualisation shows arts/humanities and social sciences/languages earnings after 5 years as a proportion of the earnings of STEM graduates from the same institution – any value above 1 means that an average graduate within a given group of subjects earns more than the average STEM graduate for that institution.

Alert readers will no doubt have noticed that this all depends on the way you cut the categories – I’ve lumped languages in with social sciences as subjects that may pass a putative Hinds Economic Usefulness test. But no matter how fine your slices, you still have to contend with the fact that many subjects of study will not clearly fit into one category or the other – and any split that even approaches the complexity of actual subject of study will make for very complex policy indeed.

Value by subject to society

This – to me – has always been the element of the post-2012 system that needs more attention. Rather than just a hands-off regulator, we need a strategic investor to apply funding in ways that benefits national or regional priorities. We’ve never really had one. HEFCE did fund vulnerable subjects once – back in 2011 a review noted “A new policy approach is now in development. It starts from the assumption that the new student-led system for financing teaching, operating alongside HEFCE teaching funding and the dual-support system for research, will for the most part achieve the government’s aspirations with regard to subject provision. HEFCE’s future policy must be concerned with identifying the minority of areas in which this may not be the case and determining any mitigating action that might be taken.”

HEFCE still makes strategic investments in languages, maths and the quantitative social sciences. And it monitors a few other subjects.  But there’s been no indication that this would directly continue into the policy vacuum that is the OfS. The issue is clearly up for discussion – with the BEIS Industrial Strategy offering the clearest hints

All this ignores the wider question of what value to society actually is. Is it value to employers? Value to the government? Value to public life? A convincing answer to these philosophical questions would reveal hitherto unexpected depths within Damian Hinds.