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If the numbers don’t add up, something has to give

With inflation rocketing, cuts are coming. Jim Dickinson reviews the protection for students when the money isn't there for promises to be met
This article is more than 2 years old

Jim is an Associate Editor at Wonkhe

Up is down and food is greed, where convex mirrors cover the walls, where death is honour and flesh is weak. Nothing is ever quite as it seems through the looking glass of higher education funding in England.

When I speak at student events, I sometimes like to wind up participants by arguing passionately that (home, undergraduate) tuition fees should double. Or even triple.

If – at least under what will soon be the old terms and conditions of the student loans system – the vast majority of graduates never pay off in full, the smart thing for student reps to have done would have been to campaign to maximise the amount of money that universities had available to spend on students’ education.

It’s one of the pernicious paradoxes of the English tuition fees system. Back in 2010 student campaigners were able to convince everyone that the contribution from students was going to triple because the headline fee was tripling – and the riot of Millbank ensued as a result.

Here in 2022, the government changes the terms so that lifetime repayments will go up for some lower-earning graduates by £30k, boasts that it will now only be putting 20p in the pound into the subsidies in the system, makes the system spectacularly much cheaper for rich male graduates, and yet because the headline fee remains frozen, barely anyone notices.

That fee freeze is now, however, set to become a major problem.

I ain’t calling you familiar

There are lots of reasons why we shouldn’t take some of the “efficiency savings” assumptions at face value in the original Augar report, but let’s play along for a minute.

Back in May 2019, the panel said that the best way to encourage the sector to achieve further efficiencies was to extend the 2018/19 and 2019/20 freeze of the average per-student resource for a further three years. Based on inflation forecasts at the time, that was going to mean a real terms reduction of 8 per cent between 2019/20 and 2022/23, and a reduction of 11 per cent compared to 2018/19 funding levels.

Adding in pensions pressures and domestic student numbers growth, Augar argued that universities could take gradual pain of a fees freeze and both “rise to the challenge” of greater efficiency and redesigned business models whilst maintaining the quality of provision. Beyond that though, it thought attempts to generate further savings would jeopardise the quality of provision.

That was a conclusion based on OBR estimates from March that year – that for all sorts of reasons turned out to be major underestimates. It thought, for example, that CPI might hit 2 percent this April – now thanks to the compound impacts of Brexit, the pandemic and Ukraine, multiple forecasters think it will hit 8 percent. And while fees were, of course, frozen for that further two years, we now know they’ll be frozen for a further two years on top of that.

Further savings, according to Augar, are going to jeopardise the quality of provision. Something is going to give, and I don’t just mean graduates on average incomes.

I don’t know your face that well

It was only a few weeks ago, for example, when Michelle Donelan said that online learning could be a great way to supplement and enhance learning, but was not be used as a “cost-cutting exercise”. That was on the last day of January – by March, the DfE consultation document on her funding reforms was saying:

In the adversity of the pandemic, providers have found efficiency savings as well as reduction in expenditure and have innovated in delivery. Over the coming years, in the context of our proposed reforms, there will be much further innovation in how providers deliver the flexible post-18 education offer the nation needs.

Then in the aftermath of its publication, David Willetts was saying the quiet part out loud when he argued that universities need to deliver “substantial and sustained” efficiency gains through hybrid learning, where things like the removal of class size limits imposed by the size of lecture theatres was fancifully framed as “opportunities for innovation in pedagogy, with better use of online learning.”

It’s not so much that providers might collapse. That’s not what happens. It’s that class sizes will grow, and email response times will grow with them. Feedback will take longer, and facilities will fray. Those specialist modules you enrolled for in the third year have gone, to be replaced with “support” to study the subjects yourself. Mental health strategies will have to depend on fruit and friendship rather than proper counselling. Disputes over pay and pensions will grow, not subside. And more and more out-of-their depth international PGTs will be piled in to make the bottom line add up without the support they need to succeed.

Could you volunteer?

The thing is, some would argue that in the context of major economic shocks, it’s fair enough that something has to give.

In an education system where the state makes the majority of the contribution to its costs, you can make a decent argument for being able to vary the quality of the provision in accordance with political wishes. When making a choice, a student might have thought they were going to get lots of module choice, plenty of places to sit, a functioning personal tutor system and a rapid turnaround on their marking.

But having chosen higher education over getting a job, living away over living at home, Geography over Film Studies or Lancaster over Loughborough, if those things change for the worse as a result of government cuts in the intervening three or four years, then it’s kind of tough luck – that’s the reality of shifting political priorities and economic realities.

Even if you have a part-individually funded system with modest tuition fees and a small number of international students, as long as you warn people clearly that the quality of the experience they’re going to get could end up declining if there were dramatic falls in funding, maybe you can just about make a case that that’s OK.

But we don’t have a system like that. Once you have one where the vast majority pay in full (55.2 percent of those in the fee system along with international students and those that pay up front), it’s reasonable that those making the choices described above know what they’re going to get from the outset and for the duration. If we really must reduce government subsidy, we the duty is there to implement it slowly to ease the pain. And there’s where, in the economic and regulatory context that is coming, we have a problem.

And you’re talking to the wall

In England there are five ways in which we are supposed to protect students from changes that come as a result of budget cuts.

  • There’s Consumer Protection Law, which is roughly as much to students as an ashtray on a motorbike;
  • Complaints, which are around as helpful as a waterproof teabag;
  • OfS mandated Student Protection Plans, which offer similar protection to that of roll-on hairspray;
  • The Student Transfers regime, which has all the efficacy of a solar-powered torch, and
  • OfS’ general arrangements for the regulation of quality – which are roughly as helpful as snooze button on a smoke alarm.

Consumer protection law, adherence with which is regulated by both the Competition and Markets Authority and the Office for Students in England, is supposed to ensure that providers make their promises to students clear, and then deliver on them for the full duration of the course. But those promises over provision are vague in the first place, tend not to cover all the aspects of the experience, are spectacularly difficult to enforce, and not really regulated at all either by CMA or OfS.

In 2017, then universities minister Jo Johnson said his new regulator would introduce new contracts that would set out what students could expect from their providers in terms of resource commitments, contact time, assessments, support and other important aspects of their educational experience. In 2019, a “source close to” Secretary of State Gavin Williamson said that folks have more consumer rights buying a £500 washing machine than those spending £50,000 on a three year degree course.

Later that year, a paper to OfS’ board by its now interim CEO said that the information available to support student choice was inadequate because it was not always sufficiently detailed about the things that matter to students, and was not always structured in a way that allowed students to make meaningful comparisons between different providers and courses. It said that the contractual relationship between students and providers was unequal, terms and conditions were often unclear or unfair, it was not easy for students to identify instances where they had not received what they were promised and to seek redress, and that a model that relied primarily on individual students challenging a provider for a breach of contract placed a burden on students in an undesirable way.

It hasn’t done anything meaningful about it since. Maybe it’s a coincidence that if it had have done, hundreds of thousands of students would have been due compensation during Covid that the government would have had to underwrite.

When it comes to Student Protection Plans, the DfE document that explained them in 2016 said that because students invest significant amounts of time, commitment and financial resources in their education, SPPs would give students greater clarity about what they could expect from their provider, and greater consistency about what would happen if unexpected problems occured – adding that all providers would be expected to make contingency plans to guard against the risk that courses could not be delivered as agreed.

OfS originally said that it would require providers to set out how students would be protected in the event not just of course, provider or campus closure, but also in the event that “material components” could be delivered. It never further defined that term. Roughly half the plans didn’t mention “material components” at all, and the other half defined them only as compulsory modules – leaving substantial changes to promised optional pathways, facilities, services and support all unmentioned.

In 2018 in a rush to get providers on the register, then OfS Chair Michael Barber admitted that the initial crop of student protection plans “still needed some work” despite being a condition of registration, and an OfS report said that it had approved a number of plans that significantly below the standard it would expect, and so was intending to publish revised guidance.

It never came. Maybe it’s a coincidence that if it had have done, providers would find it much more difficult to introduce rapid culls to (optional) module catalogues, dramatic cuts to library opening hours and reductions to the staff-student ratio that make the personal system more of a pipe dream than a proper aspect of provision. That stuff would have to be slower – government would need to underwrite the pace.

Complaints? During the pandemic Michalle Donelan was telling anyone that would listen that students could complain if the quality wasn’t there, without ever defining its meaning or revealing to students that they can’t actually complain about quality – because judgements about it are made either by their university, or by OfS, which is only just finishing a two year consultation on its meaning. It’s almost as if students using the ability to complain en masse would have caused DfE to underwrite the implications.

Student transfers? One thing that would slow and smooth funding changes would be the meaningful threat of students going elsewhere mid-course – that government would need to underwrite. DfE used a document on the reduction of bureaucratic burden to signal its approval of an OfS announcement that there would be “no further regulatory action” on student transfer arrangements from 2020 and that a review was coming. Earlier that year, 34 percent of students told HEPI/Advance HE’s Student Academic Experience Survey they’d made the wrong decision either to go to university at all, or had chosen the wrong university or course.

Quality? In its old reportable events guidance, OfS used to say that a substantial increase in the number of new students registering at a provider could affect its ability to satisfy condition E2 (management and governance) in the short term, and conditions B2 and B3 (quality and standards) in the longer term, especially where the increase raised concerns about whether such growth was effectively planned and managed, or whether the quality of student support or student outcomes will be maintained for larger numbers of students.

That’s not something that appears in the revision to the guidance effective from this January, and last November instead of being worried about overcrowding, OfS was cheering on the CMA telling providers that they had to take the larger than expected number of applicants that had got the grades to get in thanks to the grade inflation of Examnishmables 2.

The things they said we do

If we were really interested in protecting the interests of students, there are things we would do.

Universities are expected to be able to deliver promises (facilities, services, module choices breadth etc etc) made four years out on a standard 3 year undergraduate course. So we could make those promises more detailed, enforcing and expanding on CMA’s definitions of pre-contract information that is “material” to applicants when making choices, and making it easier for students to identify and make a complaint if those promises weren’t met. Student Protection Plans would be revamped as part of that process – with a focus on any circumstances under which a provider can’t deliver on the tougher promises it made to students to get them there.

We could insist that every university is able not just to deliver the full range of its promises in coming years, but is able to demonstrate that it could withstand either a major drop in numbers or a drop in the unit of resource – by demanding they each have much bigger reserves than are in place now, and requiring that those funds be ringfenced for teach-out and teach-through in all circumstances. In other words, OfS’ definitions of financial sustainability – designed for an era of gently rising inflation – now need to change as rapidly as inflation is growing.

We could also take steps to protect universities from major drops in numbers and from sudden dramatic cuts to funding. We would do so by exerting some control over the market to smooth any funding reductions that are caused by over or under-recruitment. My colleague David Kernohan sets out the case for a proper debate on SNCs elsewhere on the site – a debate which some argue is “dangerous”. I always think it’s dangerous to suggest that ideas that could protect provision for the most disadvantaged students somehow can’t be debated.

But it’s not clear to me that DfE or OfS are really interested in protecting the interests of students at all. In fact, I’m left thinking that the relentless panoply of tough talk on protecting students’ interests that we have to endure is really designed to hide that the whole idea is a regulatory regime that punches down when promises to students can’t be met because the funding isn’t there. And in that scenario – without the funding to cushion and slow what’s coming – no wonder universities go along with it.

It’s a regime designed to facilitate, not protect students from, the ravages of funding cuts.

Then kick me to the floor

As the pandemic proved, students can’t meaningfully hold providers to promises, and they can’t really switch. OfS looks busy by autonomously spending its time “cracking down” in precisely the way the government wants, while the government is able to get away with freezes to fees and cuts to top-up funding that are going to be implemented immediately.

Meanwhile, student numbers continue to be really volatile, and in some speeches that’s part of the design – so while some will pack them in, pile them high and tell them to largely self-direct their learning (and remind them how grateful they ought to be to have got in if they moan), others look set to lose a lot of income very suddenly, and then provision for some students could be in real trouble. Just about the only protection at all for providers is students’ inability to switch, and their desire to finish what they’ve started once they’re in – however bad things get.

It’s really very simple this. As Augar noted, if you’re going to have pain, to protect students you need the pain to be gradual because what they experience was promised to them years ago. But gradual is not what is coming at all.

Providers daren’t tell the truth about that. I’ve yet to read a prospectus this year that is saying to students “have you seen the rate of inflation? There’s not a chance we’ll keep to this already over-optimistic impression by the time you graduate”. Yet any undergraduate student who asks today “can you guarantee my course depth/breadth, plus the facilities and services you’re saying are there now can be delivered, for the full three years” would be being lied to if most universities said yes.

That’s a scandal. And so when Michelle Donelan says that her reforms to higher education will mean “quality, transparency and fairness”, I can’t help thinking that it’s really the opposite that’s about to be delivered, and both the sector and OfS are now boxed into a protection racket role where they have no option but to play along. After all, it is ever so easy to get here. It’s harder to find your way back.

3 responses to “If the numbers don’t add up, something has to give

  1. Excellent article – also tied to this – we are starting to see the sub-scale problem at many post-92 Universities – their RG neighbour has hoovered up the students (who now must have a lecture online because the physical space to teach them doesn’t exist) and now their own provision in some areas is getting to be sub-scale. If it’s a Cap-ex heavy area, then in turn leads to the question of viability.

    Always hard to predict what the sector will do but for a range of reasons including these I’d expect a few Universities to simply exit certain areas.

    “It’s not so much that providers might collapse. That’s not what happens.”

    Not sure about this – I know of one London provider already deep in the hole who this type of shock might push under if it cannot make enough staff redundant quick enough.

  2. It is hugely depressing to admit it, but perhaps the reason there has been zero progress on the calls begun thirty years back by Dennis Farrington for a standardised, fair, comprehensive, detailed consumer protection law compliant U2C B2C contract (despite, as noted by Jim, even with a onetime push from the relevant Minister), is simply that the HE industry knows it would greatly hamper its ability to achieve total control in its favour of the scam that we call ‘Going to Uni’. Perhaps it is an industry just too big to regulate? Perhaps the hope must lie in weaning youth off HE/Uni by welcome recent/current Govt policy to upgrade the long neglected attractiveness of alternative TE by way of enhanced vocational local FE provision? And it is all the more sad since the advent of the 2015 Consumer Rights Act (and its concepts of ‘material’ information along with the new rights to a price refund in the absence of adequate repeat performance) means that it really is, in legal terms, now pretty simply to come up with a robust consumer protection regime against what Jim labels a ‘protection racket’.

  3. “to upgrade the long neglected attractiveness of alternative TE by way of enhanced vocational local FE provision? ”

    It simply doesn’t work because the money is not there – if you look at recent successful IoT bids the numbers don’t add up. The only way to do it is to get staff on the cheap and in a tight market people with decent technical skills aren’t going to work for peanuts.

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