Taking is too easy: leaks from the Augar review

I was tinkering in my shed this morning and I built a new funding model.

What we’ve seen from this weekend’s leaks so far doesn’t give us much in the way of specifics, but it is enough to model the impacts on each English institution.

The story, such as it is, would be a sticker price cut that could go as low as £6,500 for most students, with STEM courses priced at £13,500. This premium level reflects both the costs involved in running an intensive lab-based subject, and the extra earnings expected for graduates.

There’d be some further Treasury exposure to “top up” fees, this would mostly concern support for medical students (who would take a fairly substantial cut given what we know currently). This has the ironic side effect of making the Office for Students into a proper funding council again.

Too much of something is not enough?

This is a very rough model, and is unlikely to match your own detailed projections – I’ve mapped the top level JACS subject codes very simply to the OfS price groups to calculate the current income, based on all UK undergraduate first degree students. The new model calculations simply replaces the price groups with the binary STEM/non-STEM designation that has been talked about. The shortfall is what would need to be topped up to maintain institutional income at current levels. So we are far from exact, but using the same assumptions on both sides at least allows us a sensible comparison.

There are three tabs on this visualisation if you look at the full screen – the first two allow you to look at institutional impact in cash terms and as a proportion of current income (you can filter by group and region, and highlight institutions), the other takes a broader look by mission group.

[full screen]

The first thing that jumped out for me is that, even given the overall cut, some institutions turn a small profit under this model even before there is an attempt to make up the shortfall. Imperial College and the Royal Veterinary College are two notable winners.

Institutions that will need significant additional support can be characterised as being small arts institutions (with many approaching a 30% cut). In cash terms larger post-92 providers and some institutions with medical schools lose out a lot.

EU do you think you are?

The Times also speculated that the ability to charge EU students international fees would address some of this shortfall. A quick look using a few slightly dubious assumptions (income will increase from the most likely fee an undergraduate will pay – £9,250 – to the average international fee as cited by The Times – £11,000) suggests that this will make very little difference – even in the unlikely event that post-Brexit Britain remains as attractive to EU students as it currently does.

[full screen]

I’ve used the same scale as the institutional graph above to highlight how far this change would be from matching current undergraduate student related income – there’s a visualisation by group on the full screen version. HEPI and London Economics have carried out a more detailed analysis on this point.

Stop right now, thank you very much

Remember this is all supposed to enthuse young people to the extent that they vote for the current government at the next general election. A £2,500 headline fee reduction, of course, does not materially change the loan repayments of any but the richest graduates – an issue we went over in depth back when Ed Miliband ran with a similar idea back in 2015. There’s nothing yet public on issues we know young people do care about – maintenance support and loan interest rates – and coming so soon after major HE legislation isn’t a great look for the government either, which will probably need to change the law to make something like this work.

And this is all very early speculation – so it’s a spur to increase your lobbying activity rather than to institutional reorganisation. In many ways the “floating” of ideas like this makes them less likely to be the final proposal, as feedback both in public and private will shape the way such ideas are developed and refined before Philip Augar’s panel reports early next year, and the government responds to this and aligned DfE analysis some time in spring 2019.

Updated 10/11/18: A few minor display errors in the visualisation have been corrected, with some article text changes following this.