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The strange death of student number controls

In December 2013 in his Annual Autumn Statement the UK Chancellor George Osbourne announced the end of the Student Number Control (SNC) regime for English higher education institutions, thereby removing the cap on places that had been in place since 2009. But how and why did we get here? Was this the Government's plan all along? Colin McCaig builds on his recent research to take us on a journey of paradoxical adventures in higher education market making.
This article is more than 9 years old

Dr Colin McCaig is a Professor of Higher Education Policy at Sheffield Hallam University's Sheffield Institute of Education.

In December 2013 in his Annual Autumn Statement the UK Chancellor George Osbourne announced the end of the Student Number Control (SNC) regime for English higher education institutions, thereby removing the cap on places that had been in place since 2009.

Instead we are to have a demand-led system, to be kick-started with 30,000 additional places in 2014/15, and which is ultimately expected to see around 60,000 additional student places per year, many at new entrant providers and further education colleges.

This announcement marked the end of an experiment in market making based on quality, information and price. The context for the number control regime was outlined in the White Paper as the introduction of variable tuition fees up to a new maximum of £9,000 per year.

The idea was to use quality and consumer choice to open up a tuition fee differential between those institutions that most satisfy the wants of students and those that least satisfy them. Combined with a liberation of student numbers (hitherto distributed on the basis of ‘block grant’ in the form of capped quotas from the Higher Education Funding Council for England (HEFCE)) this fee market would reward excellence.

The main mechanism was the removal (exemption) of High Grades (AAB and above A Level and equivalent BTEC qualifications, later extended to ABB and above) from number allocations; institutions could recruit as many of those with High Grades as they wished within their institutional cap. The idea was that the ‘most popular’ institutions would expand by enrolling student with higher grades that were previously enrolling at less prestigious institutions.

Applicants were expected to take account of Key information Sets and thus make ‘informed choice’. The less prestigious institutions would then react to losing high grade students to more prestigious competitors by lowering their average tuition fees to attract sufficient alternate students. It is worth recalling that this market mechanism was introduced precisely because tuition fees set by institutions in the first year of the new regime (an average of £8.2k) were well above the level modelled by government in order to make the system financially sustainable (£7.5k).

The Higher Education Academy commissioned myself and Carol Taylor at Sheffield Hallam University to carry out a piece of national research: Evaluating the impact of Student Number Controls, choice and competition consisting of a national survey of institutional policymakers at Pro Vice Chancellor and Dean level, and a series of follow-up interviews of a representative sample of them. As it happened, we were carrying out interviews only weeks before the announcement. Certainly none of the interviewees expected or predicted the Treasury announcement or a free market in student places; they mostly spoke about the problems and distortions created by the High Grades policy and other aspects of marketisation, and in the process provided us with some useful perspectives on why the policy was withdrawn.

The (mis)application of market levers

So the key question becomes: was the High Grades element of the Student Number Control regime always destined to fail to create a price differential between institutions? Or was it only designed to last for two academic years as a prelude to an opening up of the market to full competition? The latter is unlikely as the then Minister for Universities & Science, David Willets MP, asked HEFCE ‘to consider the best way to deliver further flexibility for 2014/15 – in line with our white paper commitment that ‘the share of places liberated from number controls altogether rises year on year’ – only months before the Treasury statement.

Why, then, did the Government lose patience with their experiment? Part of the answer was simply that demand for higher education places still exceeded supply (given the cap on numbers), with acceptances up to a record level for 2014/15 according to UCAS figures, and average fee levels for 2014/15 (£8,600) were also closer than ever to the maximum and further from the modelled average.

Even at the higher achieving end, demand remained high in those post-1992 institutions because many of the equivalent-to-ABB qualifications are BTECs that are often not been considered for access to more prestigious institutions (the Russell Group and other pre-1992 institutions). However, they are accepted by post-1992 institutions, which consequently attracted healthy proportions of exempt students in addition to their SNC and were thus largely unaffected.

Overall in the first two years of the new financial regime and the operation of the High Grades mechanism, our research found that there had been little redistribution in student numbers from one part of the sector to another, and what little High Grades redistribution there was mainly took place between pre-1992 institutions. That wasn’t actually surprising: HEFCE’s own analysis on the distribution of AAB+ students by mission group prior to the 2012/13 reforms found that most applicants with AAB+ grades already attended these institutions, and that a redistribution of higher grade places beyond the selective pre-1992s institutions was unlikely.

Of 22 HEIs that enrolled over 50% of student AAB+ profiles in 2011, 17 were members of the Russell Group or 1994 Group and the other five were specialist colleges of higher education covering the arts, dance and music.

Unintended Consequences for subject breadth

However, while our respondents reported little actual redistribution of numbers, there were profound changes below the surface, especially in the second year of the regime when the exempted grades were expanded to ABB and above. This reduced the size of the core student number allocation to around only 20% of places for some of the more prestigious Russell Group members. They found that expanding those subject areas that require ABB and above (STEM and Subjects to Medicine mainly) meant that they had fewer places within the overall institutional cap to offer on courses which don’t always require ABB+, even in Russell Group institutions. These include hugely popular degree programmes in the Social Sciences, Humanities, Arts and Modern Foreign Languages. Nor, they reported, could they maintain courses specifically designed for widening participation students (who usually have lower grades) or EU students (who by definition don’t have the required exempt qualifications).

Taken together, this threat to subject breadth and aspects of their mission such as fair access severely impinged on institutional autonomy; some mused openly that, while they weren’t yet considering closing departments, it may be necessary in the future, especially if the core was to be further squeezed. And this is at some of the most prestigious institutions, remember, where all aspiring ‘bright’ applicants are supposed to be choosing to go.

So how did this situation come to pass? Let us look at how institutions dealt with two key issues impacted by the control mechanism: widening participation; and subject breadth.

While it should be noted that there is no necessary correlation between candidates with sub-ABB profiles and widening participation students, they are statistically under-represented in selective pre-1992 institutions, which take on most students with the higher grades. However, there is in fact little correlation between the subjects that WP students apply to study and the subjects that are least likely to require high grades. Often our respondents noted that the distribution of ABBs was skewed heavily towards some disciplines (Sciences, Engineering, Subjects Allied to Medicine) that recruit quite strongly from those with WP backgrounds, while other disciplines popular with those from non-WP backgrounds are less likely to recruit those with ABB or above simply because these grades are not often required for entry.

The threat to autonomy

In order to protect WP and subject breadth, some pre-1992 institutions were obliged to shift responsibility for number allocations away from academic departments, in effect centralising the admissions function. This meant departments no longer had the freedom to adjust their own minimum admissions criteria to fill places. So if a department ran a course demanding ABB and received 100 UCAS applications from young people anticipating those grades, but in the event only 90 of those young people actually achieved ABB and the rest ABC, the department no longer had the discretion to take on the other 10 as in the past. The institution found it needed those sub-ABB numbers to maintain the viability of other programmes.

The reality of dealing with the post-2012 SNC regime challenges the simplistic notion that equates prestigious institutions, the most selective provision and the most qualified applicants all meeting at the pinnacle of the market driven by student choice.

Tapering down from this £9k pinnacle a differentiation of tuition fees would emerge, driven by the informed choice of applicants without high grades obliging other institutions to lower their average tuition fees. The missing element in this supposition is that many of the most prestigious institutions see it as part of their mission to offer programmes of study in subjects that, in fact, do not require ABB+, yet which are in high demand from applicants whose choice is supposedly sovereign.

The Plan is dead: long live The Plan

With the structural problem of the supply-demand imbalance, the decline in the number of 18 year olds and the decline in the number of young people taking A levels, the failure of the government’s High Grades market mechanism was always likely.

Add the shrinking core number control problem into the mix, which effectively precluded further ‘year on year’ flexibility, and you have a mechanism that completely failed on its own terms; no fee differential; no redistribution of high grade students; no downward pressure on less prestigious institutions. Time, therefore, for Plan B – the opening up of a demand-led system which may – or may not – bring down average tuition fees across the wider sector, but at least restores freedom of movement to institutions.

4 responses to “The strange death of student number controls

  1. This is a very interesting article.

    I would say that another factor that works against differential fees is the system of graduate contributions. Regardless of what the “sticker price” is for a course, a graduate will pay back at the same rate and will have the debt written off after 30 years anyway. Lower fees only mean that 18 old HE entrants may be a bit better off in their 40s.

    With this system, the only rational response is to get as much from it now. It’s better to be on a well resourced course than to have some vague hope of being better off some time in the distant, uncertain future.

    However, to change the system of contributions would threaten all notions of affordability and fair access to HE.

  2. Another aspect of the high grade policy was the incomplete nature of the data on higher education admissions. “Students at the Heart of the System” estimated that the policy would cover 65,000 high grade students entering higher education in 2012-13 (para 4.19) but when HEFCE published entry data later that year (in circular 2011/20 Annex D), it turned out that only 70% of those entering in 2009-10 had known entry grades. Data gaps were sorted out in the next few months but time then had to be spent working out which grades counted as high grades and which combinations were legitimate or not. There was also disagreement over the total numbers and this might have been a student loan budget overspend only the budget was fairly loosely controlled and recruitment was down in 2012-13 for other reasons. The culmination of the high grades work was the 14 page exemptions listed published by HEFCE in September 2013 which lists a large array of high grade qualification combinations ( and which shows that “AAB or equivalent” isn’t as simple as it first sounds.

    The lesson I’d draw from this issue is that government should be very careful about using entry qualification controls to manage access to HE student support unless it is confident about the completeness, accuracy and validity of the data. The Browne review proposal that only suitably qualified entrants should be allowed access is likely to attract supporters particularly as this is the way that other HE systems seem to ration places. England is different and has a uniquely complicated pre-university qualification system. The people designing the high grades policy seemed to miss this fact in 2011. Hopefully lessons will be learnt for next time.

  3. It is interesting that this was the second government policy that used qualification data that was probably not fit for purpose, ELQ was the first. There is a wealth of qualification data but HEI’s are not necessarily in the best position to know what that is for all of their students, especially those that come from non traditional backgrounds but the funding councils do. So you have a situation whereby HEI’s are trying to get data which is already known. One hopes that HEDIIP will address this sort of issue as part of it’s work.

  4. David
    It is also the second government policy that was introduced after the 2011 fee rise and the White Paper that has been abandoned within two years, following the National Scholarship Programme farrago. They really are not very good at understanding the market they intervene in, nor the complexities of how universities work. This is the government, remember, that thought OFFA Access Agreements could be used to force institutions to lower their tuition fees. I mean, its not as if the rationale of, and guidance to, OFFA is complex or hard to find, seeing as it all emanates from the Secretary of State for BIS and the Minister for Universities. It remains breathtaking that Ministers and their SPAds didn’t understand this. And therefore perhaps no surprise they couldn’t grasp the admittedly more complex mechanics of the number control regime either.

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