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Make Room! Make Room! Quality, new providers and the gateway conundrum

Andrew McGettigan on the new quality assessment model introduced by HEFCE, the Green Paper and their potentially overlapping or conflicting gateways.
This article is more than 5 years old

Andrew McGettigan is a journalist, researcher and commentator on higher education.

Before Easter, HEFCE published its Revised Operating Model for Quality Assurance. This document opens the next phase in a story that has been unfolding since late 2014 when the Council announced that it would not be renewing the Quality Assurance Agency’s contracts to run Higher Education and Initial Reviews. Six tenders covering different processes in the new system have now been published.

Coverage on Wonkhe so far has focused on the new risk-based review process, the power and role of students in the new scheme and whether that process is likely to reduce the burden and costs for institutions. Gordon McKenzie has also asked how the operating guidance fits with government plans for a new Office for Students outlined in November’s Green Paper.

Would it matter if some of HEFCE’s proposals didn’t feature in, or even contradicted, the White Paper and an HE Bill? I’d argue that if this was the case, then the approach of BIS and HEFCE to transition to a new system becomes crucial.

The casual follower of HE policy might have concluded that HEFCE’s coverage of ‘gateways’ for ‘entry into the higher education sector’ might overlap with, and indeed contradict, the Green Paper’s proposals covering alternative providers and their entry to the higher education sector through access to student loans, applying for degree awarding powers and bidding for the use of the protected title of ‘university’.

Neither the Green Paper nor the Revised Operating Model adequately sets out the manner in which they in fact complement each other. HEFCE’s ‘gateway’ is not the same as the Green Paper ‘gateway’. There are two gateways although the aim, according to HEFCE, is to move to ‘a coherent single Gateway for all providers from 2018/19’.

These two gateways relate to two processes in the English HE system, both called ‘designation’ – Specific Course Designation and HEFCE Designation. The former governs access to student finance support – tuition fee and maintenance loans. The latter governs access to the grant funding distributed by HEFCE: teaching grant (e.g high cost – Band B – subjects, student opportunity fund etc.), capital grants and QR funding (for the time being).

That is, the ‘gateway’ to new providers set out in the Revised Operating Model on assuring teaching quality will also operate as a gateway to a major strand of research funding: designated providers will be eligible to submit to a future Research Excellence Framework (assuming a certain level of policy continuity).

This is nowhere spelled out in the new guidance, although a footnote on page 17 of HEFCE’s publication states:

The current regulatory framework for higher education in England provides statutory powers to HEFCE to assess the quality of education in those providers in receipt of HEFCE funding and those to whom HEFCE is considering providing funding. HEFCE has no regulatory power in relation to alternative providers seeking to enter the English system through the process for Specific Course Designation …. In England, therefore, throughout this document, references to ‘providers seeking to enter the higher education system’ relate specifically to providers seeking HEFCE funding. [my emphasis]

You might well wonder why it didn’t make sense to simply use ‘providers seeking HEFCE funding’ throughout the Revised Operating Model so that ‘HEFCE designation’ (grant access) was differentiated clearly from ‘Specific Course Designation’ (loan access).

You could also ask about another terminological decision. In the 2015 consultation on quality assurance, on which the new guidance ‘builds’, ‘HEFCE designation’ was referred to as ‘the gateway for entry into the publicly funded system’. Indeed the phrase ‘publicly funded’ appears in three of its consultation questions. For example:

Question 14: Do you agree that there should be a ‘probationary period’ for new entrants to the publicly funded sector in England?

Twelve months later and you will find no reference to public funds in the new Model, which means it obscures what the gateway is a gateway to. In the consultation and Model documents, paragraphs which are otherwise identical differ only in that ‘publicly funded’ has been excised. (HEFCE did not reply to my questions on this matter.)

The tenor of the Green Paper is adopted by HEFCE in that the Revised Model recognises that the future regulatory setup will have to cope with a ‘growing diversity of providers’ and will be geared so as ‘to encourage innovation in learning and teaching, rather than driving providers towards risk-averse activities and homogenised provision’ (§7 Revised Guidance).

From that perspective, we need to revisit the ‘Models’ put forward by the Government in the Green Paper. To remind you, three Models were suggested there with the idea that providers would opt for one. The first, Model 1, would offer ‘a licence to operate’ or regulatory compliance through ‘baseline checks on quality and on financial sustainability, management and governance’.

Those seeking designation for student support (tuition fee and maintenance loans) would have a further two choices. Model 2a reflects the current conditions available to alternative providers with access to Student Loans Company money: a maximum tuition fee loan cap of £6000 pa, but no maximum tuition fee or requirement to enter into access agreements with Offa.

It is Model 2b that is relevant here. That model held out to alternative providers the future opportunity to join the established HEIs. In return for accepting a tuition fee cap of £9 000, access agreements and tighter overview of governance and sustainability (‘commensurate with the higher level of public funding which they will receive per student’), these providers would become eligible for government grant (Fulfilling Our Potential, p. 45).

What HEFCE’s Revised Operating Model underscores is that the implementation of Model 2b does not require an HE Bill. The designation powers that exist allow for any provider to go down this route now. The Green Paper specified that those electing for Model 2b would ‘need to demonstrate that their provision adds a minimum level of value to English higher education’, but this criterion is already captured by new BIS guidance issued last September. (At the same time, BIS lifted a moratorium on providers applying for the status).

As with Specific Course Designation, the decision to confirm HEFCE Designation rests with the relevant Secretary of State – in this case, Sajid Javid, the Business Secretary. The new document reiterated criteria that have been in use for over a decade.

Firstly, the institution applying to access grant funding from HEFCE must have a student body of which 55 per cent (FTE) are enrolled on HE level courses. (This criterion was specified in the 1988 Education Reform Act and repeats the clause governing applications for university title though in this case there is no minimum requirement on actual student numbers).

Further, the Secretary of State specifies two criteria that I cite in full (with ‘You’ referring to the institution making an application):

  • You bring new or highly distinctive provision into the HE sector (primarily in terms of subject, but possibly also in terms of learning environment or approach), and so would add to the HE sector’s diversity, but in an area which has academic credibility as a fit subject or specialism for an HE provider; and/or
  • You make provision which, in subject coverage or delivery, is already found in the HE sector, but you have a standing and repute that would enhance the sector overall and/or you make provision that will add to the skills, growth or economy of your locality.

Note that there is no requirement to hold the university or university college title, nor do those applying need to have their own degree awarding powers.

While the Revised Operating Model reflects this BIS guidance and insists there will be ‘a rigorous test of a provider’s readiness to enter the higher education sector,’ there is no discussion of who might be likely to seek access to its grants. Crucially, there is no restriction on for-profit operations seeking ‘faster access’ to grants, in addition to ‘Specific Course Designation’ that currently gives their students access to loans.

In recent years, relatively few institutions have achieved HEFCE Designation. Most recently Anglo-European College of Chiropractic (AECC) and the British School of Osteopathy have joined (they will receive direct funding in 2017/18 and 2016/17 respectively) while over the last fifteen years only six others have come into the fold of the publicly funded system:

  • National Film and Television School (Nov 2013)
  • Liverpool School of Tropical Medicine (July 2013)
  • Liverpool Institute for Performing Arts (Aug 2006)
  • Guildhall School of Music & Drama (Aug 2006)
  • Conservatoire for Dance & Drama (Aug 2001)
  • Royal Agricultural College (Aug 2001)
  • (University Campus Suffolk has an application under consideration).

All of these institutions have track records within English HE and are not-for-profit. In the case of Anglo-European College of Chiropractic, its application for HEFCE designation comes after ten years in the funding system through partnership arrangements. Its Principal, Prof. Haymo Thiel confirmed that the college is also currently seeking taught degree awarding powers and had sought designation to boost ‘the independence and reputation of the college’ and to avoid being ‘caught in the middle’ between its validating partner and changes to government policy. AECC intends to continue to access Band B funding for high-cost subjects and would consider applying for capital grants and small and specialist institution status ‘if appropriate.’ Prof Thiel told me of his plans for ‘sensible, niche growth’ over the long-term: “We would consider applying for research funding, perhaps in relation to the next REF exercise, but it is too soon to specify a date”.

HEFCE’s new guidance seems to anticipate an increase in interest in access to grants and has relaxed its track record requirements in accordance with government preferences. Its Gateway process will be ‘operated to avoid unnecessary barriers and bureaucracy’ and

‘designed to ensure that it can produce reliable judgements about a provider’s readiness to enter the higher education sector and deliver a high-quality academic experience, even when the provider does not have a substantial track record of delivering higher education’ (Revised Operating Guidance §65).

Those new to grant funding will face an initial review and a four-year ‘development’ period of ‘enhanced scrutiny and support’ prior to judgment about whether the institution is ready to join the ‘established’ provision. But there is no suggestion that a loan-funded track record will be the necessary prerequisite before an institution can apply for access to grants.

These new developments are consistent with the Coalition government’s ingenious use of existing powers to pursue its market reforms in piecemeal fashion between 2010 and 2013 (before the extent of that alternative provider policy foul-up became clear). We now have different Business Secretary, and things can move further quickly, with grant funding opened up to start-ups and entrants backed from overseas. Although attention will still be focused on a Higher Education Bill this calendar year, market reform can move on again without the worry of parliamentary delays.

Finally, we ought to consider the recent, delayed BIS grant letter to HEFCE. That outlined expected cuts to its funding over the next two years: Teaching Grant would fall by £200m from £1670m to £1457m, with Capital grants falling over the same period from £600m to £300m.

In other words: we are now preparing to make room for more providers as the grant pot diminishes.

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