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Cut-throat competition over students is the opposite of what we need in a crisis

Cut-throat competition over students is the opposite of what we need in a crisis, argues Jim Dickinson who looks at the choices facing OfS and DfE over Covid-19
This article is more than 4 years old

Jim is an Associate Editor at Wonkhe

There are plenty of creative, dedicated people in higher education – that right now are applying plasters to the student experience as we battle through a pandemic.

It’s wonderful work, and all of those at all levels putting in the hours to arrange alternatives should be saluted. It’s even possible, temporarily, to dismiss students like this.

But when we step away from the screen in the dining room for a coffee, there is this ominous, lingering sense that things will never be the same again – and that even if they are in relation to public health, Covid-19 brings other things in the sector to a head with a ferocity and rapidity that could be savage.

Take the regulator. OfS has now written to providers to announce its planned approach to Covid-19, and in some ways it represents a significant pivot.

First, it’ll act as a central way to share information with providers – sensible. Next, it’ll protect students “by working with providers” to “develop practical ways to maintain teaching quality and standards, enable adequate exams and assessment, and support financial sustainability” – a major shift away from a regulator that has previously declared that it will “not provide advice to providers about how they should run their organisation” and that providers “should look to other sources, for example to sector bodies, for such advice and support”, as it moved from “provider interest” to “student interest” and from “funder” to “market regulator”.

It also announced that it would “seek to minimise long-run disruption to the English higher education system” by “reducing permanent damage” and “laying the foundations” for the sector to recover as quickly as possible once the pandemic is over. And that’s where things get interesting. Because given the financial problems potentially about to hit the sector, either it takes a wedge of money from DfE and hurls it at the sector – or it relaxes a bunch of its regulatory requirements. Or both.

Keeping afloat

One of the current casualties on OfS’ “forward look” page, for example, is its annual assessment of the financial sustainability of higher education providers in England. On one level a postponement makes sense – as a reminder, last year forecasts indicated a “general weakening” of financial performance right now, with improvements thereafter – partly due to ambitious assumptions about growth in student numbers. Who knows what that looks like right now, particularly given the rest of the report suggested that uncertainties included including the UK’s future relationship with the EU, potential changes in government policy following Augar, and increased cost pressures.

But it’s the finances of providers at individual level is where things must be getting scary, and the moral quandaries facing the regulator of a different order as a result. Most major providers will be biting their nails about international recruitment come September. Cue a “scramble” for home UGs, with inevitable winners and losers. Now that the government has announced that exam results are about to appear out of thin air, home UGs are about to be the sector’s equivalent of toilet roll in Tescos. Half the sector will grab, and the other half could be in very serious trouble, student numbers wise.

And even if the potential loss of student numbers wasn’t a thing, the loss of other revenues from stuff like accommodation, catering or even car parking is causing some even paler faces than usual to appear in virtual FD offices all around the UK. Surely no-one is going to charge students rent for next term. Surely?

The debate over whether to “bail out” a university is one that’s been had before – and is arguably for government rather than OfS – but has always been harder since we stopped having to consider (public) “universities” and started having to think about the long tail of providers now on the register. Even if the cash is made available, determining who it should go is hard work – ministers and the public might support a bail out for a post-92 in the North, but be much more sceptical about private providers hoovering up tuition fee subsidy on the Cranbrook Road.

And weirdly – the amount needed (something Gavin Williamson in the commons said needed to be flagged to him early) will depend not so much on how much the sector needs, but how it behaves in terms of “panic recruitment”.

Are they viable?

In regulatory terms, OfS has to assess financial “viability” (no material risk of insolvency within three years from the date on which the judgement is made) and “sustainable” (sufficient financial resources to deliver stuff for five years). The first question is whether an assessment today might mean OfS should technically fail some institutions altogether for just not meeting those conditions – or whether it should relax the requirement, with the risks that brings.

Then bear in mind that in the initial provider registration process, 74 got a formal communication over finances and 71 were subject to enhanced monitoring. Imagine right now that those numbers doubled or tripled, and that a whole bunch would be tipped into public registration conditions. We’re back here to the old run on the bank problem – public admonishment could mean a collapse in recruitment, and keeping loads of judgments private is morally dubious if students enrol there with the confidence that OfS has assessed them, but who might then go on to fail.

And anyway – depending on how the “scramble” goes, some could go from looking viable and sustainable to the opposite overnight. And we don’t really have a way of catching that early enough – especially in the “long tail” of the sector.

For the regulator, it’s the same sort of Hobson’s choice assessment facing the pensions regulator over USS. Your job is to make sure that employers plans stack up – but what do you do now? Push too hard, and employers could fall over, so the scheme falls over. Don’t push at all, and the scheme falls over.

Enhanced protection

If it’s the case that a clutch of providers could be about to fail, their student protection plans will need to kick in – and it’s likely that students will pay the price for their widespread inadequacy in offering any real protection. Even if the system had been working well, they’re risk based, and OfS’ judgment of them is risk based. And guess what – neither the process of development nor approval was designed to cope with the risk of a global pandemic, and when coupled with an assumption that a large group of providers won’t fail all at once, means they’ll look wafer thin in weeks. They are, in effect, insurance policies that won’t pay out.

Even if the pandemic problem was understandable and fair enough, bear in mind that SPPs were judged to be globally pretty inadequate as far back as Wonkfest 2018 when Chair Michael Barber said as much. We’ve been expecting tougher regulation on what should be in them ever since – but other “priorities” like sabre-rattling over grade inflation and bad luck (like the calling of a general election) all got in the way. The sun could hardly have been said to be shining for the last 18 months but it’s pretty clear we didn’t fix the student protection roof when we could have.

Of course, not everyone will fail – and if some financial help kicks in from government somehow, maybe only a minority will. But it’s how that will happen that really worries me.

Bigger is better

Back when there were student number controls in the 00s, the gradual decline in the unit of resource caused the sector to “punch up”, lobbying on a cross party basis to secure the Browne review that eventually led to the tripling of tuition fees. It’s how HE funding had always been done – but things have changed in the last decade.

It’s not so much the public and political unpalatability of universities going with a begging bowl to the Treasury – although that’s a factor given the past five years. It’s really that in England at least, the removal of the number cap has seeded a different kind of senior sector skill to avoid institutional bankruptcy – expansion.

Unit of resource under pressure? Expand. Numbers down in a particular subject area? Expand another. Augar assumed that a freeze in the unit of resource could be offset by expansion. And even ahead of an Augar response, Gavin Williamson’s Faustian pact with the sector assumed similar – we’ll relax immigration controls, and allow you to expand international recruitment.

The problem is that everywhere students look, they count the cost for expansion being encouraged with weak controls. There are bits of the Russell Group rocking “seminars” of 100 students. Business schools everywhere look at research on innovation in teaching and assessment (all of which assume small groups) and laugh. Parts of the “mid market” – already haemorrhaging numbers and facing the growing costs of student diversity and student support – are under massive pressure. Students are lonely. Cities, and now towns, are “full”.

Before Covid-19, those reading the runes were already predicting that (home) expansion may soon be knocked on the head via number controls. Now there’s a material danger that doing so via international recruitment is not a runner either. And that only leaves one option – cutting costs. Or, as I’m calling it – “punching down”.

Trim the fat

According to that HEPI paper a few weeks back, there’s not really any fat left to trim. True, the Association of Colleges might argue, that it is possible to deliver a university course on fees of less than £9,250 – but UUK might well hit back and say that the experience is different. And that’s where things start to get even more interesting.

The sector has had to cope with cost-cutting before – but potentially not on this scale, and certainly not with the added spectre of consumer law on its back. If you promise something in exchange for a price and deliver more than expected, no-one’s really worried – but deliver less, and there’s an obvious problem. In principle, there’s nothing wrong with a society allocating collective resources according to priorities. But if it cuts that subsidy resource, you gotta manage it – and in the meantime give people what they paid for.

The problem is that for all the moaning in some quarters about students as consumers and “bloody CMA” supposedly not letting you update your module outlines, what consumer law should do here is protect students – but actually doesn’t. I’ve looked at hundreds of contracts – and right now, they’re wafer thin too. Class sizes could all triple. Already precious contact hours could collapse. Optional modules – the breadth of the offered academic experience – could almost all be swept away. Vital services like careers, or counselling, or funding for SUs – could all be targeted. And there’s pretty much nothing the student as consumer can do about it.

We’ve seen it already. Some students have lost huge swathes of their student experience due to strikes and now Covid-19, and have no real recourse. During the depths of the industrial dispute, one of the things I kept seeing on Twitter was descriptions and workload models of academic services that are provided “behind the scenes” like marking and assessment under intolerable strain – and certainly not provided as they should be, in law, with “reasonable skill and care”. But contracts are weak and almost completely unenforceable by students – something else OfS has been dragging its heels on, has now officially delayed, and where action now will almost certainly be too late – or push providers into further precarity.

But can you imagine? “Dear all, a range of things you paid for are about to get worse”. Or “Dear new student. 2nd and 3rd years are going to get a better service than you”. No-one’s going to do all that unless they absolutely have to, are they?

And that’s the big irony for me. If students and their individual rights were stronger – as has been repeatedly promised they would be by the government and the regulator – punching down on their experience and their academics’ working conditions would be much less palatable as an option, and money would need to be found. But given almost everyone seems to oppose student “consumer” rights, as it stands and given the alternatives, “punching down” is starting to look like the easiest of all the alternatives.

Time to protect students

And all of that’s why – amidst the calls for regulation to relax and understandable smiles at the return of “provider interest” – some aspects of regulation need to intensify, and fast.

First, the government needs to put some serious money into universities – and with students absent from the employment safety nets put in place by government, DfE also needs to allocate funds for student hardship into providers now. It would be shameful for universities to call for institutional funding without doing so for students. It would be nice – as OfS briefs ministers on the financial sustainability of institutions – if someone could be bothered to do the same financial sustainability assessment on student life.

Next, new emergency student protection arrangements should be discussed and developed, with financial underwriting from DfE. OfS should accelerate its work on contracts to ensure that students don’t bear the brunt of cuts, and ensure students get the experience they “paid for”. We should brace for a large number of the OfS register’s “long talk” to collapse now. And OfS should also speed up aspects of its admissions review to ensure that international students aren’t tricked into the UK unable to cope with the course – or via unattainable promises from ever-dodgier agent behaviour.

And perhaps most controversially, the government should probably re-impose number controls of some sort – certainly no-one should be allowed to expand their home UG numbers. We need to spread the pain. Getting through all this will be difficult enough – but competition is only really worth it if it “drives quality” in the “student interest”. Cut-throat competition in a crisis does anything but – and if you can find me someone who’s prepared to prize in public a high-achieving student’s “right” to attend an over-extended, expanding Russell Group course at the expense of another institution’s wholesale failure, I’ll send them a Wonkhe mug just for the brass-necked cheek.

One response to “Cut-throat competition over students is the opposite of what we need in a crisis

  1. There is a whole level of cost-cutting that could be done without affecting student experience. Universities have not moved to efficient business models as other organisations have, and have clung on to old-fashioned hierarchical systems, which invariably mean too many management (and therefore expensive) layers and silo working.

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