Policy failures in higher education: reflecting on ELQs

In the first of a new series looking at policy failure in and around higher education, David Malcolm reflects on the legacy of the controversial government decision to cease funding for Equivalent and Lower Qualifications (ELQs). How and why it came about, what effect it had on students and the sector, the debates it sparked in policymaking, as well as a look at what the future might hold for this unpopular policy.

Were Wonkhe to poll those working in the higher education sector on the worst HE policy decision of the last 10 years, there would surely be a wide range of candidates. Perhaps the abolition of post-study work visas would feature, almost certainly the abject failure to properly regulate the alternative provision that has blossomed in the wake of Students at the Heart of the System.

However, more than a few votes would likely be received for the 2007 decision by John Denham, then Secretary of State for Innovation, Universities and Skills, to restrict HEFCE funding for students undertaking equivalent or lower qualifications (ELQs) – second degrees in common parlance, though the scope of the policy was somewhat wider.

There are several reasons why ELQs remain so loathed, though the perceived impact on part-time provision is normally the most prominent. In 2015/16 the policy will see a small-scale reversal: part-time students in certain STEM subjects will be eligible to apply for fee loans even if they already hold an ELQ. As much as this has been welcomed, it’s seen as further evidence the last government got it wrong.

In their comprehensive account of contemporary British political fiascos, The Blunders of our Governments, Anthony King and Sir Ivor Crewe define ‘blunders’ as decisions which either completely fail to achieve their objectives, or do so at disproportionate cost, or cause significant damage due to unintended consequences. They did not analyse the ELQ policy in that book, alas – but does it fit their definition? Was it a myopic and damaging blunder, or merely a judgement call about the priorities for scarce resources, however controversial?

The original policy rationale was not to cut the funding which went to ELQ students from the HE budget, but to redistribute the £100m saved to “other [HEFCE] priorities”, most notably an expansion in places for those undertaking their first qualification. The Leitch Report, published the previous year, had set ambitious targets to increase the proportion of adults with HE qualifications to 40% by 2020 (from 29% in 2005) and this was where funding was to be targeted.

Denham also had a fairly explicit hope that, by withdrawing public funding for most ELQs, employers would step into the breach, a faint echo of the otherwise forgotten ‘Dearing compact’ that proposed HE funding be split between the state, individuals and business. He would write:

“While there may be much benefit to an individual, or their employer, in retraining them for a second qualification at a lower level, this is not, in my view, usually as high a priority for public funding… in many cases, it may be appropriate for the employer to pay at least a proportion of the costs of such retraining.”

The decision was also in line with a student support system which had become more hostile to those undertaking second degrees. It is true that public policy had never been especially warm to the idea of providing individual students support for repeat study – as long ago as 1960 the Anderson Report on student grants had warned against the funding of “perpetual students” – but the discretion for local education authorities to make exceptions had already been substantially eroded by successive reforms after 1998.

Most significantly, neither the fee grants introduced in 1998 nor the fee loans which replaced them eight years later were made available to those who already held honours degrees. So, when fees for full-time students increased to £3,000 in 2006, with the tacit understanding that (then-unregulated) part-time fees would increase in tandem, the financial barriers for those undertaking second degrees were becoming insurmountable, at least without substantial family support.

At the same time, those who held honours degrees found they could no longer access loans for living costs for a subsequent course (with exceptions made for a small number of professional qualifications, including medicine, veterinary science and architecture). Had fees not also risen at the same time, this change might have attracted more attention, but it took the decision on HEFCE funding for ELQs the following year to bring the issue to public prominence.

Though substantially fewer ELQ students would now receive funding, the policy HEFCE introduced was not monolithic. Certain exceptions were made: in line with the intention to promote greater employer engagement, foundation degrees were eligible for funding; those students eligible for Disabled Students’ Allowances would also be exempt; so too were those subjects that continued to attract a maintenance loan.

Though not strictly exempted, some additional funding was also provided for strategically important and vulnerable subjects (SIVS). Nevertheless, where an exception did not apply, students wishing to study ELQs often found the fees had increased well above their previous rate.

The backlash that the ELQ policy then provoked rather took DIUS by surprise. Those institutions specialising in part-time study – the Open University and Birkbeck – were particularly incensed, as they had a particularly high proportion of ELQ students, but the HE sector as a whole was united in its condemnation. Fears were raised for the viability of courses with significant numbers of ELQ students, whilst UCU and NUS argued that the policy ran contrary to the Leitch report by undermining the idea of lifelong learning (the noble Lord himself declined to take sides).

A hastily-convened review by the relevant select committee was sharply critical, in part because of the lack of consultation ahead of the implementation, but mainly because:

“…the decision to cut funding to ELQ students was insufficiently justified either by persuasive analysis of its likely effectiveness in achieving the desired goals or evidence of the likely wider impact of the policy.”

The select committee also felt that implementing the ELQ policy before the anticipated review of HE funding due in 2009 put cart before horse. This would prove prescient, though perhaps not in a way that any of those opposed to ELQs would wish.

The select committee reported in March 2008. Within six months, the global financial crisis erupted and by the time what became of the Browne Review reported, the political and economic conditions were very different indeed, and radical cuts were the order of the day. The Coalition Government made the ELQ policy essentially immaterial by withdrawing the teaching grant for all but a minority of subjects.

Given it had been long-standing policy to deny second degree/ELQ students any student support for fees, replacing most HEFCE funding with higher fees and matching fee loans would have had much the same effect even had the ELQ policy not been in place.

Does this mean the ELQ policy counts as less a blunder as it was an unwitting jumping of the gun? Certainly, few of its specific objectives have been achieved: DIUS hoped to save £100m a year by 2010/11 to reallocate elsewhere in HE, but it’s very doubtful any of the money saved remains in the system now. Meanwhile, far from increased employer investment in HE, the combination of soaring fees and economic recession has resulted in a 35% decline in the number of part-time students entering HE with employer funding, not to mention a 46 per cent fall in part-time enrolments overall between 2010/11 and 2013/14.

However, despite this apparent failure, disaggregating the precise impact of the ELQ policy on HE from the wider context is virtually impossible, though it’s likely to have been comparatively minor compared with the Browne reforms that were to follow. Perhaps all that can be said is that the policy made a bad situation worse, and gave DIUS, HEFCE and others a great deal of grief at the time for little or no gain in the end.

But even if it was overshadowed by what was to follow, the ELQ policy is still totemic of a utilitarian approach to higher education that views targets for initial participation as more important than providing any ‘second chances’, and this is perhaps the reason it continues to generates such negative reactions.

In that light, the decision to extend part-time fee loans to ELQ students on STEM courses from 2015/16 has been welcomed by most, even if it has only been made possible by the saving realised from the shocking decline in part-time numbers. It’s also not, technically speaking, a reversal of the original ELQ policy – I’d argue it’s a more fundamental shift than this, opening up as it does student support for fees to those with ELQs for the first time.

It could prove to be just the beginning. When announcing this new policy last year, David Willetts stated he’d like to go further:

“one could dream of a world where we just get rid of it [the ELQ ‘bar’], but I think we’re not in that territory. But you could do it incrementally.”

The pressure continues to build, with the recent Higher Education Commission report on HE funding the latest to recommend removal of the “remaining restrictions” on ELQs. We’re still a long way from that point, and it will be interesting to see whether the new loans for taught Master’s will be available if a person already holds a postgraduate qualification. However, it’s just possible that in the years to come, the start that Willetts made in unwinding the ELQ legacy, will be seen as one of his best policy decisions.

4 responses to “Policy failures in higher education: reflecting on ELQs

  1. This article raises some very valid points. I think that there is a mind set behind government’s HE policy that it is all about 18 year old school leavers on full-time honours degree courses.

    Another area affected by the ELQ policy was short lifelong learning courses. However, the first blow against these was making working towards a specific qualification (or credit towards one) a requirement of funding. The ELQ policy was just another blow and the shift from grants to fees seems to have finished them off.

    Very few universities now offer this type of provision. It may perhaps have been mostly the preserve of the retired middle class but it did result in a narrowing of what HE is about.

  2. The ELQ decision was a terrible one but there’s some further context and some further lessons to be learnt about budgeting for English higher education.

    John Denham announced the ELQ decision on 7 September 2007 and said there would be a £100 million saving which could be re-invested in 20,000 new full-time places

    However just two months before, he had announced an extension of HE maintenance grants to cover more students (family income up to £60,000). This was costed at £400 million.

    If BIS had been slightly more cautious on maintenance grants, they might not have needed the money they clawed back via the ELQ decision.

    It was then just 15 months later that John Denham had to go back to Parliament to make some changes to the HE maintenance grant policy to deal with a £200 million overspend
    http://news.bbc.co.uk/1/hi/education/6273082.stm

    There were clearly problems in the department (then called DIUS) because earlier in 2008 there had been a Month 12 transfer from further education to higher education to avert a possible overspend. The Permanent Secretary at the time, Ian Watmore, told the relevant select committee that this had been necessary because Easter was early in 2008
    https://www.tes.co.uk/article.aspx?storycode=6007938

    A lot has happened in the six years since but no-one should be surprised when government gets its higher education budgets wrong because it keeps happening.

    The connection back to ELQ is that the £100 million saving which justified the policy may not ever have been really necessary.

  3. Thanks Julian, that is important context I’d overlooked, though I have a slightly different angle on it. The increase in grant thresholds was one of the eye-catching announcements made in the first few days of the Brown premiership and intended to illustrate his priorities and was probably also a degree of penance for the decision to abolish grants in 1998 (temporarily, as it turned out).

    That said, I think that even had Brown and Denham been less generous DIUS would nevertheless have ploughed ahead with the ELQ policy, as there was a firm belief the focus should be on getting people into HE for the first time, given the Leitch targets as mentioned above. So whether it was extra places, higher grant thresholds (and the grants were only paid to those on first degrees) or some other intervention, I think the monies going to ELQ would have been diverted to that purpose regardless.

    You’re absolutely right that by mid-2008 it was clear the department’s forecasts on grant expenditure had been badly wrong and that limited any room for manoeuvre in undoing ELQs when opposition grew. Nevertheless, the initial decision was political rather than budgetary as such.

    1. The other piece of context is that government had already developed an equivalent policy in FE – prioritising funding for a ‘first’ full level 2 or level 3 qualification. It was a bad decision in FE, carried forward into HE.

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