David Kernohan is Deputy Editor of Wonkhe

As we seem to be having what is now the semi-annual conversation about university funding in England I thought it was time to chuck a few more ideas and concepts into the pot.

The English debate has pretty much ossified between a kind of needs-blind gradualism (the 2012 settlement is nearly perfect, but this handful of tweaks or climbdowns will get it over the line) and a need to refight the Ed Miliband glory years (a “graduate tax”, for various values of the words “tax” and “graduate”), with the occasional intervention from the free education fundamentalists (worthy, principled, sadly unimplementable), and from the contrarian headbangers who want to burn it all down and rebuild it in their own image (not so much policy, more a cry for help).

All this dynamic cut-and-thrust in the offices of the kinds of think-tanks that bring Matthew Goodwin out in hives conceal a paucity of genuinely original thinking about what it is we are funding and why. I’m not conceited (and certainly not Oxbridge) enough to assume I hold the key to the One True Path, but it is surely worth making some efforts to widen the parameters of the debate.

Fund universities (or other things?) not students

An insistence on funding following the student is probably the biggest issue with the system we have. It elides the fact that so much of university provision in the broader sense is built on cross-subsidy and encourages the near-nonsensical idea that every year of every degree costs the same to deliver as any other (an idea that has leaked into the worthy-but-flawed Lifelong Loan Entitlement… unless anyone wants to explain to me why 30 credits of English literature is the same price to deliver as 30 credits of practical mechanical engineering or sports medicine).

I can see where the idea came from – the idea that we would accidentally fund capacity that the market didn’t immediately want to use is anathema to the early Coalition thinking about free markets being our likely public service salvation.

However, one of the more promising threads in an even older and more played out conversation (“what are universities for?”) is the civic duty of contributing skills and expertise to a local or regional community. There’s little direct funding for that (though HEIF sails pretty close), it’s just one of the extras that having a university nearby appears to bring.

If it helps to have universities around, perhaps we need to think more about maintaining and shaping this infrastructure than focusing on individual students. The idea that at least some of the money a university receives from the Treasury is simply to keep it university-shaped would have been familiar from Haldane to Dearing, and arguably defines the worthy but unfashionable world of QR.

This rather neatly brings in Jim Dickinson’s thoughts on reopening the conversation about what student (and local) services are best provided by universities in themselves and which are best provided by consortia or by other approaches entirely. On his travels he’s noted that some systems (for example in Norway or Germany) fund universities’ teaching and research but expect student contributions to support wider student life, and where (as in Finland) direct funding is provided to support student health it flows through different vehicles at different levels of resolution. We’re very used to defaulting on the provider as the sole unit of delivery. Perhaps it is time to ask whether all aspects of student life should have their funding (and governance) threaded through providers – and if not have some sensible (often place based, as in Manchester or Nottingham) discussions about alternative models and structures.

And how much of this funding needs to be ringfenced? It’s a mental leap (from targets based on individuals to infrastructure based on capacity) that the research world has also taken with the establishment of ARIA – and there’s a model there that builds in the ghosts of project (or at least thematic and goal-based) approaches to allocations that are at best speculative. In an era of local authority atrophy after all, who else, after all, is going to have the capacity to raise aspirations and attainment in the schools system, provide lifelong learning opportunities in a wide range of formats, and import economically active young people fresh each September?

Focus on first years

One of the least edifying news themes since the end of pandemic restrictions has been the transformation of an overheated student housing market into a chaotic undersupply of bed spaces. Students unexpectedly landing a place on their “dream” course have found that this comes with the coda that they need to live 30 miles away from the campus during their first year away from home.

As yet, we’ve not seen the data to back up the widespread suspicion that this is not the optimal situation to live, work, and study in. We do, as we have become accustomed to, have a lot of information that suggests that first year students are often very unhappy with capacity constraints elsewhere in the university offer. For the universities that are expanding larger numbers of students are meeting a greatly reduced spending power – those estates manager dreams of getting back into owning student accommodation have been stymied by a perfect storm of inflation, materials availability, and capacity in the construction industry putting costs up while finance becomes more expensive to secure.

We don’t routinely, nationally, survey first year students – the NSS just about survived one of DfE’s more unhinged 2020 interventions but the idea of expanding the survey to “all years” (even to PGT!) appears to have fallen by the wayside. But a long hard look at the year one experience in term two would offer us a clearer and unflinching picture the moment where the tarnish comes off the prospectus gloss that would differ substantially from the conventional three years on sunk cost special.

First year students are not having a great time – I think this deserves system level accountability and consideration in the way funding is managed.

Abolish full time study

UK higher education clings onto a low student attrition rate as a global leader in a race that nobody else is running. Other mature systems already allow the kind of variations in intensity that the LLE is riding over the hill to provide in England, but we are still stuck in the mindset that it is more important to ride out an expensive choice that isn’t working for three years than to stop, pause, and reconsider.

The idea of “full time” study (outside of some of the more extreme STEM offers) is perhaps a misnomer anyway, and a shamefully dwindling maintenance offer means that most students are working at least part-time alongside full time study. If your situation demands concessions from the university course to fit in the rest of the stuff you need to do then this is seen as failure – where universities are proactive in offering a timetable that fits around the realities of work and care they are met with the warmed-over contact hours debate that sees universities castigated for not bringing students on campus for the full working week.

Of all the “universities as big boarding schools” moves that DfE has pulled since taking over responsibility for the sector in England, the focus on what we should probably call attendance is the most telling. Every move towards the broadsheet commentator conception of “value for money” (based on the idea that learning only happens in a classroom) makes it harder for actual students to learn (apparently it doesn’t only happen in a classroom!) and live. The LLE points the way towards an end to the idea of forcing people into “full-time study” and staying the course for three or more years – let’s make this flexibility available to traditional students as well as lifelong learners.

Let employers pay fees

The 2019 Liberal Democrat policy on “skills wallets” bears more than a family resemblance to the bank-account conception of the LLE with one important difference – it is possible to make deposits as well as withdrawals. Less an entitlement than a mechanism, it opens the door to addressing the real weakness in lifelong learning – the failure of employers to provide high quality staff training and development.

Employers – via everything from local skills improvement plans to university accreditation programmes – have a disproportionately large impact on what is offered by post-compulsory education. Indeed, the whole of the current government’s lifelong learning theme stems (though I may be being a little cynical here) from a widespread industrial desire to have graduates do graduate jobs without paying graduate wages.

While the majority of English higher education is (at least nominally) “vocational”, there is a smooth elision between graduate skills as a kind of overlaid ability to learn and adapt and what we might call the subject matter of a qualification. Whereas it is fair to expect a course that nominally prepares students to enter a chosen industry to understand current practice in the employers they work for, this rather ignores the inconvenient fact that large numbers of graduates do not enter the industry they have nominally trained for (the classic example being that most law graduates are not lawyers).

It might be fair to argue that employers should have even more say over vocational training at universities – but it is also probably fair to suggest that they may wish to pay for it. Employers already pay for a fair amount of university short course provision but this has not yet leaked across to longer courses. The apprenticeship levy effectively requires most large companies to invest in one particular style of training, but it feels odd to bake in pedagogic choices at the funding level and to freeze out those large organisations that are already experts in imparting skills to young people. Especially if you feel like the wider gamut of research, collaboration, presentation, and self-organisation skills might be handy on the shop floor too.

Raise the bar

The whole UK (certainly England, but I would argue there is also a compelling case to re-examine current models in Scotland) deserves another thoughtful national conversation about university fees and funding – but the one that appears to be kicking off appears to be constrained by parameters that have remained the same since Dearing. To be honest, we should demand better because we deserve better – if two decades of multiple “generational settlements” have left us in the mess we are, quibbling over whether we continue to describe our graduate tax system using the language of loans and trying to dissuade people from studying qualifications they know and understand doesn’t really cut it.

I’m not saying that everything I’ve touched on here has legs or is even a particularly good idea – more that these ideas and others like them need more air time while fee levels need rather less.

2 responses to “Let’s have a better debate about university funding

  1. Flexibility of delivery is going to be essential surely? Degree Apprenticeships and cost of living not withstanding the delivery of degrees as full time only excludes a significant potential market. I speak as someone who’s (private sector) employer paid for my degree which I did part time back in the late 1990’s via a local college (ironically perhaps accredited by a University I ended up working for).

  2. Some thoughts on DK’s musing on other funding systems.

    Funding things not students
    A similar pattern is revealed in systems that fund institutions not students. This Systems that fund institutions not individual students tend to squeeze the unit of resource per student over time, remember MASN in the 1980s and 1990s? Look at Northern Ireland and Scotland now. It also tends to lead to strange expenditure on infrastructure as budgets need to be spent regardless of need or investment calculation. Most importantly it often leads to a lack of support for high cost shortage subjects and for disadvantaged students.

    Flexible funding systems
    In 2010 President Obama campaigned to raise the graduation rate in the USA not by enrolling more students, but by more students completing their undergraduate studies in six years or less. This would be achieved he suggested by reducing flexibility in their studies so fewer students studied the wrong things in the wrong order and accumulated too much or too little credit to graduate. In that year while nearly 70 percent of high school students enrolled in college, only 57 percent actually graduated. Among minorities and low-income students, less than half got a college diploma but all got a repayable loan. In 2010 the four year graduation rate was about 30% and the six year rate was 57%. In 2022 the official four-year graduation rate for students attending public colleges and universities in the USA is 33.3%. The six-year rate is 57.6%.

    The corresponding figures in the U.K. using England as the measure in the most recent year for which we have figures courtesy of HEPI, 2017, was 75% on three year degrees and notionally 85% six years after initial enrolment. The differences in the rates between the USA and the U.K. are very significant and very costly to US students and the people who pay for the loans, particularly those students with loans that don’t complete their studies. If the Obama plan had reduced drop out rates to U.K. levels in the early 2010s several million more students would have successfully graduated in the USA by now.

    Cost and quality
    The differences between the USA and U.K. outlined above reveal that the U.K. system is cheaper than the US system. Students here have undergraduate degrees of three years duration not four, and they fail less often. Similarly, at postgraduate level taught masters degrees are ostensibly 12 months in duration in the U.K. and not two years as in the USA. Better students and teaching in the U.K. or lower standards? You pays your money and you makes your choice. Does any of this explain the choices international students make?

    The above also demonstrates that a more flexible national government run system will cost more. And it will cost poorer students more as drop out rates are very much higher for students from disadvantaged backgrounds in more flexible systems.

    Targeted funding on courses of less than 30 credits where the national state is the first payer through a centralised system carries an enormous administrative overhead. Remember the student loan company costs c£300m. More complexity takes you from arithmetic progression to geometric progression of cost. Similar effects happen with national systems of highly variable tariff funding rates according to subject etc.

    Devolved funding
    The simplest way round these things is to devolve funding to regions and allow local electorates and representatives to have a say over how the money is spent. It is their money after all. Well more than half of it is because it is paid for through general tax at current RAB rates. Students pay the other half on top of their general taxes. Isn’t this one way of getting civic universities? It works in lots of other countries. Under these arrangements you could have more flexibility, more variability and more diversity. This could include employers paying either through national or regional taxes/levies. Perhaps such a system would be more effective it likely to be less hierarchical.

Leave a Reply