MarginCore and the dumb hand of the market

So, the hints coming out of the HEFCE annual conference regarding university funding were, firstly, the imminent appearance of the much delayed White Paper, and, secondly, further tweaks to the Willetts-Browne funding model to avoid the now universal embarrassment that this model costs substantially more than the current one. What we seem to be blindly heading towards is something called a core/margin model, and that I'm going to call MarginCore. This should come as no surprise to readers of my blog, as we called it back in December. We also said it wouldn't be a very good idea.
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So, the hints coming out of the HEFCE annual conference regarding university funding were, firstly, the imminent appearance of the much delayed White Paper (now a running joke within the HEFCE exec), and, secondly, further tweaks to the Willetts-Browne funding model to avoid the now universal embarrassment about the fact that this new model costs substantially more (we’re now up to £1bn in the mainstream press, it’s more than that as we know) than the current one.

What we seem to be blindly heading towards is something called a core/margin model, and that I’m going to call MarginCore. This should come as no surprise to readers of my blog, as we called it back in December (see about 6 paras from the bottom). We also said it wouldn’t be a very good idea. For those of you who don’t read links in blog posts, here’s a recap:

Each course, within each institution, has a set number of students it can recruit to it (the core allocation). Depending on how lucky they feel, institutions can then bid for Additional Student Numbers (ASNs) which are extra students they are allowed to recruit that year. If they do recruit them (and keep doing so, and meet various other requirements) their core is eventually reassessed.

You may be impressed that I’ve got a whole actual acronym in there already, but this is for a very good reason. HEFCE ALREADY DOES THIS. Seriously; this is how we currently do student number controls. As a Plan B goes, doing something we are already doing is fine with me, usually. But it just doesn’t work in Browne-Willets land. Their tweak is that we allocate extra numbers to cheaper courses.

As criteria go, it’s not good enough. Currently, we allocate ASNs according to strategic subject priorities, and assess ASN bids based on ways in which the institution supports widening participation, meets student retention targets and generally has an ability to manage extra students. So you can see why “x is cheaper than y, therefore x should have more student numbers” will not suffice. We can allocate student numbers for more sensible reasons than that, with a greater chance of successful outcomes.

A MarginCore model based on price will just accentuate the dumb effects of the market – we are competing entirely on price rather than any other metric. Welcome to Tesco Value U.

The other option on the table is the Big Scary Teaching Funding Clawback, viz. the nasty Treasury takes away some of the money allocated to central (HEFCE) teaching spend under the new model. That won’t work either, mainly because all the central funding under the new model goes to band A and B subjects… courses in lab-based sciences and medicine. So – as the headline writers will clearly spin it – these cuts hits our future healthcare professionals disproportionally.

Or I suppose you could claw back money already awarded to student numbers in the current model. And that’s not going to be popular with a student body that already seems to be the most active and politically engaged in a generation.

This model of funding isn’t going to work. If the coalition wants to come out of this whole sorry episode with any shred of credibility they need to pull out now, before academics lose jobs and courses close in some idiotic “market”-led rationalisation.

This post represents my personal opinions, and not those of current or former employers, projects, or programmes I am or have been responsible for. This post is available under a CC-BY license.

2 responses to “MarginCore and the dumb hand of the market

  1. I’d agree with this post, though in agreeing have to make a couple of points. One is that I can see that a core/margin model is instinctively attractive, to the Conservative part of the coalition at least, which has had to compromise on the more market-like elements of the new system. It therefore seems the most likely of the potential mechanisms to “discipline” the sector once the average fee comes out, as it surely will, at over £8k.

    The other point I’d make would be that if the core/margin were somehow selective (i.e. targeting those universities charging at the top end rather than the whole sector equally) it might actually reward those institutions that have set what you could call “responsible” fees (i.e.looked at cost base, profile of courses, graduate returns etc rather than going for a defence of brand approach) Assuming there was assurance on quality, that it was not simply a case of lowest fees win and that it was a genuinely open competition rather than a way of “fixing” a redistribution to the private or FE sector, there would be an opportunity for expansion.

    One alternative way of looking at this situation is this: if there were no prospect of intervention from the Government, then it could well be that those charging at the top without any concomitant evidence in terms of quality/returns etc are simply rewarded for their behaviour. This would then push other institutions to the top in subsequent years as otherwise they couldn’t compete fairly due to lower income.

    But overall I am more concerned than optimistic. The chances of a selective approach seem small. More likely is that the whole sector will be disciplined, the lower as well as the higher chargers. This would undermine the use of fee-setting processes (looking at cost, outcomes, market position etc) and incentivise pitching high in the expectation of clawback, which is hardly the kind of system that politicians of any persuasion want, nor is it one I’d hope universities would want to operate in.

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