Once upon a time, the government decided that the forces of the free market were needed to act for the benefit of the consumer. Contentious legislation was introduced which, among other things, created an economic market regulator with new powers and a remit to promote competition. The legislation was passed in the Lords but only just. A sector held its breath.
I could be describing the Higher Education and Research Act of 2017 and the Office for Students (OfS). Or, equally, I could be referring to the last major set of health reforms introduced via the Health and Social Care Act 2012 (enacted shortly after David Cameron had promised “there will be no more of the tiresome, meddlesome, top-down re-structures” in health).
Lessons from (recent) history
While there are clearly significant differences between higher education in 2018 and health and social care in 2012, there are lessons to be learned from the earlier experience. After all, given the current challenges facing health and care in England – significant financial pressures, concerns about quality, pressures on workforce – there will be many in higher education keen to avoid those same outcomes.
It is worth recapping what Andrew Lansley’s reforms as Secretary of State for Health set out to achieve – and what the result was. The broad strategic objectives of his White Paper ‘Liberating the NHS’ were:
- Putting patients and the public first;
- Focusing on improvement in quality and healthcare outcomes;
- Autonomy, accountability and democratic legitimacy;
- Cutting bureaucracy and improving efficiency.
All laudable aims. You could switch ‘patients’ for ‘students’ and ‘healthcare’ for ‘education’ and convince most people these refer to former universities minister, Jo Johnson’s, reforms.
Lansley sought to achieve these goals by freeing up commissioning and providers from central Whitehall control, aiming to remove the politics from the Health Service. NHS England (conceived as the NHS Commissioning Board) was to become an body at arm’s length from government. GPs would form clinical commissioning groups to procure the care they needed for their population from “any willing provider.”
Monitor, previously the regulator of foundation trusts, would then promote competition between providers as an economic regulator, by means of a licence. Essential public services would be protected from the worst risks of competition through mechanisms within the licence. Autonomous, well run, financially sustainable hospitals would be liberated from direct control from central government.
The reality has turned out to be somewhat different. Financial pressures on healthcare providers have gradually pushed more of them into deficit over the last five years. Monitor (now NHS Improvement) has taken a keener interest in the financial affairs of the NHS trust and foundation trust hospitals it regulates (putting some into special financial measures – currently twelve of them). It has also increasingly downplayed its role as an economic regulator.
Its new title speaks to its ambitions to be an agent for quality improvement, while continuing to set limits on temporary staff and consultancy spend. The current Secretary of State – far from being removed from the day-to-day management of the NHS – now meets its leaders every Monday morning to review its work closely.
None of this is to pass judgement on these developments. Yet it is all some way from the original goals set out by Lansley. And this is where the lessons may lie for higher education:
- Regulatory strategy can be trumped by politics, with the regulator being asked to respond to immediate crises.
- An understanding of regulatory theory is not always extensive among the public and even many policy professionals. This potentially makes it more challenging to bring people with you (especially when talking about choice, competition and markets).
- The theory is that the “best” are left alone to “get on with it” autonomously. But if there are financial pressures or a scandal, the regulatory burden appears to increase across the board.
So what does all this mean? Is it inevitable that the OfS will go the way of Monitor and NHS Improvement? That all depends on the ability of the regulator to push back – act as a “buffer body”, if you will – if government asks that it responds to every headline. It also depends on how effectively the OfS makes its case for how it works and why – and on the financial stability of the economy and the sector. The recently announced funding review will ask much of the OfS, whatever the outcome.
Much may rest on the OfS’s first regulatory actions: these are likely to set the tone for subsequent activity and send messages to the HE sector about what to expect and how to respond.
Ultimately, significant financial pressures on health providers have derailed many of the original good intentions within the HSCA 2012. It now remains to be seen how HERA 2017 does.