Competition between HE and FE is doing more harm than good

“We will give FE colleges access to the main student finance system, so that they are better able to compete with universities.”

Those were the words of Boris Johnson last September in his big-vision speech on lifelong learning. The ambition to better support FE colleges is a good one – the lopsided distribution of financial and political support for the “other” bits of post-18 education is one of Britain’s abiding errors, in our view.

But what about the idea of competition? What does it mean when providers from the two sectors compete, and is that competition helpful?

Markets work

Those are the questions we set out to answer in our latest work with the Further Education Trust for Leadership, supported by GuildHE. We spoke to HE and FE leaders in England and Scotland, where things work differently, and often better. And we went back to first principles on the way competitive markets work.

In a market, competition is good for consumers when it transfers surplus value from suppliers to buyers. It can also force suppliers to innovate, offering new and better products at lower prices.

But the scope for such things to happen in post-18 education is fairly limited. In part that’s because this isn’t a real market: providers don’t have great scope to vary their offer to “consumers”, who don’t really act like consumers in the economic sense.

And in part it’s because of the sheer imbalance in clout between the two sectors – universities generally have much greater resources, scale and social cachet than their local FE college. So when a university feels compelled to try to lure away students who would otherwise go to that college, it’s a competition that’s only likely to end one way.

It is regrettable that such contests are so often winner-takes-all affairs. Many people from both sectors are enthusiastic about articulation and validation arrangements (which are especially strong in Scotland) that allow students to take a blended approach, either by taking degree-level courses at an FE college, or by proceeding from a college to a university.

Yet some in English HE confessed that such arrangements end up costing them money – there are greater financial rewards for universities who persuade students to sign up to a university-only path than those that work together with FE colleges.

The system is encouraging conflict, not the collaborative innovation that would benefit students more.

Guarding the turf

The accounts we heard from VCs and principals of such turf wars were not happy ones. Both sides lament the resources they felt they’d wasted developing and promoting increasingly similar offers to would-be entrants. They also spoke of the opportunity cost of lost collaboration – good working relationships between universities and local FE providers can be soured by the fight for students and the funding they bring.

Despite those misgivings, many of our interviewees – who spoke anonymously, allowing greater candour – are bracing for more battles ahead. The gloomy picture that emerges from our research is of some universities being driven to make up for revenue lost to the pandemic and falling international student numbers by driving deeper into FE’s traditional territory.

Here again the honourable intentions of the Westminster government could have adverse consequences. Expanding technical education at and below degree-level is a good thing, for students and the UK economy.

But pushing universities to offer even more level four and five courses will draw more universities into the messy, disputed borderlands of HE and FE. FETL president Ruth Silver captured the worries of several of our interviewees when she warned of providers from the two sectors being pitched into an “educational version of the Hunger Games” in the years ahead.

Avoiding hunger games

How to avoid that? More overall funding would be helpful, but when is that not true? Existing funds also could be used to support and reward collaboration between the sectors: institutions offering “split” degrees should gain, not lose from such innovation. Simplifying regulation of programmes that straddle the HE-FE border, so that institutions have to deal with fewer agencies, could help too. There may also be a case for more restructuring – federal structures and even mergers of institutions may be more useful than making those same bodies fight one another.

But the biggest need here is clarity. The core differences between HE and FE – research-led versus practical courses; independent study versus guided learning; a broad, often residential, university experience versus a narrow focus on learning particular skills – have eroded in recent years. This has created ambiguity over their respective roles and purpose. Fundamentally, we need to decide what we want universities to do and who we want them to teach, and the same for colleges.

These questions are deep and challenging – but they must be answered in order to develop a more coherent vision for tertiary education.