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Doing more with less? Big changes in Australia could signal things to come in the UK

Ant Bagshaw reviews the good and the bad in proposals to change to the Australian HE funding system.
This article is more than 4 years old

Ant Bagshaw is a Senior Advisor in L.E.K. Consulting’s Global Education Practice and co-editor, with Debbie McVitty, of Influencing Higher Education Policy

The Australian Minister for Education, Dan Tehan, announced last Friday his Job-Ready Graduates Package which includes headline-grabbing changes to the fee structure for domestic students.

He’s trying to do a few things with his package:

“Within the higher education funding system there are opportunities to restore growth, better align funding with the average cost of delivery, offer greater flexibility and provide incentives to produce graduates in disciplines that support the national interest. Through restructuring the Government’s investment in higher education this way, we can increase accountability and maximise outcomes for all Australians.”

Attention has focused on how the government is changing the fee categories around: right now there are eight government contribution clusters and three bands for student’s fee contributions. In the future, there will be four groups each for government and students with a bit of shuffling between the disciplines to get to the new arrangements. The changes mean big swings in what students will pay (via a public income-contingent loan system) with humanities degrees more than doubling and maths a bargain fifty per cent off from next year, subject to passing through Canberra’s parliament. The combination of the two independent scales means that there are also some significant changes to providers’ unit of resource (and if you want to see the before and after shots, they’re in the handy FAQ).

It’s sparked great concern about how humanities are undervalued, which may well be true, alarm that university education is seen in only an instrumental way leading to jobs, which for some policymakers it is, and concern that the Morrison government wants to do only the minimum to support universities, which also has the ring of truth to it. But there are some more interesting things going on here than a change in headline fee levels which, let’s remember, remain still significantly lower than in England and Wales (the announcement on Friday said “UK” which conveniently forgets free tuition in Scotland) with a maximum of $14,500 per year, about £8,000. Happily, continuing students will benefit from cheaper prices where they’ve reduced but won’t have to pay the higher ones.

It’s also worth noting for the UK reader that while there are many similarities between the systems here and there (the language itself feels eerily OfS, no?), there are some key differences like students paying module-by-module (confusingly called “subjects” in Aus) and a much greater propensity to study near home rather than move away for university. And without maintenance loans, the total debt burden is generally much lower.

The government giveth and the government taketh away

You might be thinking that Australia needs to learn from what happened in England when the £9,000 fee was introduced and some universities filled their boots with “high margin” humanities students. It appears they have: total funding for each university will remain capped, and institutions will be expected to teach more with less. They will be able to shuffle around their student numbers to try and optimise their resources, but this is a full-on efficiency drive which comes at a time when most institutions are already facing very difficult decisions as a result of the Covid-19 disruption.

The bit of genius in the government’s plan is addressing what was likely to have become a significant political problem. To meet a coming demographic bulge for standard-age students the government will introduce an extra 39,000 places by 2023. Coupled with the anticipated increase in demand due to the recession, the government needed to find a solution which met that demand within a system of capped funding and in a fiscal environment where there aren’t many spare dollars to splash around. Though there’s an open question about how easily universities can scale programmes in the areas the government is trying to incentivise: teaching degrees are placement-intensive, as is nursing which like STEM subjects need expensive facilities and equipment.

Less headline-grabbing is the renewed focus on regional and remote Australia in which there’s a shocking gap in education participation. A new commissioner, accelerated funding cap rises, a dedicated research fund and student-facing incentives are all to be welcomed, but the regional unis that will benefit also face the reduction in the average per-student resource as a result of the funding changes.

While universities won’t like the whole package of measures, there are some interesting tweaks like the ability for universities more easily to recruit to sub-bachelor awards. There’s also a new transition fund and a reallocation of money to support under-represented groups – including redoubled efforts for Indigenous students – and for new links with industry.

What’s next?

No-one – including loan scheme architect Bruce Chapman and chief policy wonk Andrew Norton, both professors at the Australian National University – seems to believe that the change in fees will prove much of an incentive for students to switch to the lower-sticker-price courses, which is one of the design features of the income-contingent loan system. There’s also a real concern that those students who follow the incentives may be from the most disadvantaged groups, plausibly more sensitive to the headline fee price.

The Westminster government is likely to pay close attention to the changes in Australia, not least that much of this package aligns with Augar’s findings from last year. Universities will not like the level of micro-management that comes from aiming to align costs with price so closely and the renewed focus on where the money from tuition actually goes.

It’s likely that, as in Australia, the UK’s universities will be expected to do more with less, and with diminished flexibility to redirect resources to where an institution thinks – in its autonomous wisdom – they should be spent. In an interconnected world of policy borrowing, this is one to keep an eye on.

5 responses to “Doing more with less? Big changes in Australia could signal things to come in the UK

  1. The extra places are mostly funded from an increase in student fees by an average of 8% from an average of 42% to 48% of total funding for each discipline, and a corresponding cut in the government’s share of funding from 58% to 52%.

  2. An interesting piece Ant. Thank you. While I understand some of the Australian Government’s arguments on fees what doesn’t make sense that students take a degree just because it is cheaper! The aspirations of a student wishing to take History versus Nursing are completely different. A student won’t just switch to another course. As you rightly say fees are a little cheaper than in the UK and many students still live at home and study locally.

  3. Isn’t it an open secret at this point that plan is to fund or not fund courses based directly on HMRC and student loan data?

    Nothing I’ve heard says the government has changed their mind on this (and if they don’t to do this, they have spent a lot of time creating ensuring data is collected in the right way to do this).

  4. Nine out of ten for correctly identifying the UK as not being a single system, with particular reference to free full time undergraduate level tuition in Scotland. It’s only been 13 years …

    But one mark deducted for a slight slip-up:

    “It’s also worth noting for the UK reader that while there are many similarities between the systems here and there (the language itself feels eerily OfS, no?) …”.

    I think you meant the “reader in England”.

    There are in fact many dissimilarities between the systems “here” (sitting as a “UK reader”, but in Scotland) and “there” (Australia), not least the fact that OfS remit and language, fortunately, does not apply “here” in this wee part of the UK.

  5. Of course, if you want to persuade a student to study a different subject at university, you really need to get to them quite early on, before they have made any choices about subject preference at lower levels. So it may be a while before any real impact is felt.

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