Anyone interested in higher education funding and regulation should take some time out in the next few weeks to think about Higher National Diplomas. The plan recently announced by the Department of Business Innovation and Skills to transfer HNDs and HNCs out of the higher education funding system represents an important moment in policy for both HE and FE.
These plans were set out in a recent BIS consultation on further education loans which runs until 21 August 2014 and in a rare example of forward planning, asks for views on how to change policy in 2016.
Higher nationals have a long history. They were invented in the 1920s during the period of education expansion after the First World War and for their first few decades were used only in engineering.
Margaret Thatcher isn’t remembered for many decisions as Education Secretary but she had a role in the development of higher nationals. In 1972 following the Committee on Technician Courses and Examinations chaired by Dr Haselgrave (known as the Haselgrave report), she removed the qualifications from their awarding body (City and Guilds) and handed them over to two new councils – BEC and TEC. These two councils then merged creating BTEC, and then following a further merger with the University of London Examinations Board in the 1990s, Edexcel was born. Edexcel was sold in 2003 and forms the basis for the organisation which is now Pearson Education.
HNDs and HNCs gave lecturers some flexibility in course design and in the 1980s and 1990s were a classic qualification for new subjects like business and computing or developing area like catering or performing arts.
For the last ten years higher nationals have appeared to be on the way out. First there were Foundation Degrees, which were positioned in a similar space but with slightly higher status. And then, more recently, the three year full-time degree has taken over as the qualification of choice with HEFCE’s recent state of the nation report recording a steady decline in sub-degree student numbers and the dwindling of HND numbers to around ten thousand in universities and colleges.
However it is too early to write off the qualification, because whilst it has declined in not-for-profit universities and colleges, it has grown in private higher education institutions. David Willetts’s written ministerial statement on 19 November 2013 reported growth in student numbers in alternative providers from 13,000 in 2011-12 to 30,000 in 2012-13 and stated that this growth was particularly concentrated among students studying for HNDs and HNCs.
This recent growth is the prompt for BIS’s proposed reform to move the qualification out of higher education altogether. Large numbers of HND students in private institutions have put the BIS budget under significant strain and it probably doesn’t help that they are mainly based in London and seem mainly to be following business courses.
Regular readers of this site will know all about the current weaknesses in HE regulation and know that weak controls lead to overspending. What has been less widely discussed is that ministers may not necessarily need a higher education bill to tackle these problems.
The transfer of the qualification from the HE system to one managed by the Skills Funding Agency can probably done by a stroke of a pen through the student support regulations and could lead to the following important controls:
- The requirement to join the Skills Funding Agency register of providers which involves, among other things, more transparency about finance
- A regime in which the maximum loan is more related to course costs than a £6,000 flat rate
- A cap on the cash value of loans that can be issued each year rather than student number entry controls
- A reduction in the student support available – e.g. no more maintenance grants
The precise details of the change are unclear because this is a relatively short and surprisingly open consultation. Officials have come up with solutions in a hurry and are interested in views on all the implications.
This is why it is important for people to respond to the consultation but it also raises other questions about our current system. Is it now so difficult to improve the way HE is regulated that the best solution to an issue like this is to bring the SFA in to sort things out?
Where does this leave the idea of an integrated system of higher education regulation or do we now think that higher education only starts at degree level and above? If so, are we comfortable with a student loan and grant system that offers incentives to young people to take full-time degrees over shorter alternatives given that the average graduation debt is likely to be £40,000 according to the IFS, and yet barely half of graduates will be in graduate-level jobs five years after graduation? (53% of graduates will be in graduate-level jobs according to report on student employability from NCUB).
For those working in the college sector, the HND transfer feels like a policy developed to control a private HEI problem in London, which will have unhelpful consequences for engineering and construction courses in the rest of the country.
Without careful thought, it will result in a shift back towards foundation degrees to keep courses within the HE ringfence. It makes little sense at a time when England needs a new and expanded system of higher vocational education and when we need to break the mould in the current arrangements to take a careless step without working through all the implications.
For those working in universities, the issue has wider lessons because it suggests that changing the terms of trade may be easier than people think. University autonomy is jealously guarded in England through a combination of the Haldane principle, friends in the House of Lords and the evidence that self-governing institutions do best in the global race.
University funding may be slightly more precarious because while no one dares to add new conditions to HEFCE funding agreements, there may be easier ways to adjust the student support rules.
Higher education finance depends to a very large extent on being at the receiving end of a large flow of student loan funds. According to the Office for Budget Responsibility’s Economic and Fiscal Outlook, the government paid out £6 billion on student loans in 2010, will pay £13 billion this year and expects to spend £17 billion by 2017.
Changing the courses which qualify for HE student loans or the students who can apply may (as we saw in 2008 with the decision on equivalent and lower qualifications) be surprisingly easy to implement, but carry widespread consequences.