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Which levers might ministers dare to pull in the post-Augar settlement?

After a decade of demand-side strategy, ministers might be about to intervene in the supply of higher education. Jim Dickinson considers their options.
This article is more than 2 years old

Jim is an Associate Editor at Wonkhe

One of the first higher education providers I ever visited that wasn’t my own was Falmouth College of Arts back in 1998.

In comparison to my alma mater of UWE Bristol, it was dinky. At the time the total student population was around 1,000, and the big news of the year was the acquisition of Tremough, the 18th-century country house and 70-acre estate in the nearby town of Penryn.

Falmouth itself was like lots of British seaside towns – quiet, run down, ageing, going nowhere slowly – and topping the tables for deprivation according to the Falmouth Packet.

Yet these days the university is estimated to add £100m p.a. in Gross Added Value to the local economy, it boasts a 96 percent employment rate and produces four times the number of self-employed graduates compared to UK average – many of whom remain in Cornwall after finishing their studies.

So on the face of things, it looks preposterous that government could be threatening a success story like it:

They would like to control numbers in specific subjects. The Treasury is particularly obsessed with negative returns in creative arts subjects.”

That was the line in the Guardian from a “source close to the government” on the idea that ministers might be about to limit student numbers on lower-earning arts degrees in England, and along with much of the rest of the sector, the prospect that government might start to play god with subject choices instinctively fills me with deep dread.

But maybe I need to check myself. Decades of free market orthodoxy in public services where “choice” is the mantra – and where the language of “autonomous providers” gets conflated with concepts of “academic freedom” – can mess with your head.

Let’s imagine for a minute that it’s reasonable for governments to be interested in what it does with the money it takes off us in tax, and the impacts that those decisions have on people and places – both within and adjacent to higher education.

Arguments that critique the sorts of things that ministers might do in the future tend to frame the way things have panned out in the present as some kind of perfection. What if they’re not – and what might we do as a result?

No matter what

It is true, for example, that universities have expanded in the past decade and now some proposals could limit the proportion of young people that enter higher education – especially given the demographic increase that now sustains for a few years. But are we sure that university was the right decision for everyone that’s in it?

In the HEPI/Advance HE Student Academic Experience Survey, when students were asked whether, knowing what they now know, they would make the same choice of university and course again, just 58 percent agree. Wouldn’t it be a scandal if governments didn’t explore alternatives?

It’s also the case that we have a demand-led system which has had a major impact on provision, with popular courses at popular universities expanding to accommodate. But are we sure that’s been an untrammelled success?

It’s surely possible that without decent safeguards we’ve ended up with some courses at some universities where the educational experience is sub-par because there’s too many students, and others where the viability of the programme and in some cases the provider is under threat because there’s too few. Is that what we wanted?

It is true that the aggregate preferences of eighteen year olds in a “market” have had a major impact on the courses provided, with popular courses at popular universities expanding to accommodate. But are we sure that’s been the only influence?

In a system where the signalling power of an institutional brand can be an important factor in both fulfilling family expectations and generating future earnings power, isn’t it possible that some universities have tended to expand places in subjects that are cheap(er) to teach because they know demand will be high – leaving us with important skills gaps?

C’est la vie

As well as numbers, you can look at the way in which those numbers study and where they do it. One of the features of our system, for example, is that we have a comparatively high proportion of young people that have opted to study away from home in a “boarding school” model of higher education that appears to bring them significant educational and social benefits. But are we sure the benefits have outweighed the downsides?

University towns and cities have seen significant economic activity and growth while those without a university languish. But house prices and rent rocket in university areas in ways that look problematic, and the social effects of cleaving young people away from areas they are unlikely to return to look profound and undesirable. Are we sure so many need to leave home to go to university – and if we are, are we sure that they’re travelling to the right places?

You can look at the “investment” case, either from the student or the treasury point of view. There are plenty of people in and around our sector that have noted that trying to ascertain the “value” of a degree course by predicting the drop-out rate or future job prospects graduates by subject or provider (or both) is a crude and reductive exercise that’s fraught with noise and contextual factors in the data. But are we sure that just giving graduates the information is enough?

There must surely be some students who will enrol onto some courses that, knowing what they know later, wouldn’t have. And there must surely be some students on some courses that we want as a country to fund and others that we do not.

And fairness matters too. Plenty of folk point to the progressive features of the system – students only pay in if they earn over a threshold, and only then for a fixed period. But even if we think we’re taking the right amount in contribution from graduates overall, are we sure that we’re taking the right proportion from the right graduates at the right time in their careers?

You can make the case that more graduates generally should pay more of their “loan” back. You can make an alternative case that the richest graduates get away either without taking a loan out, taking one out and paying off early, or paying off in full on time – all paying less as a proportion of lifetime earnings than everyone else.

Remainers and levers

Other levers are available, of course. But the point is that if you’re against the intense “marketisation” of the system that we’ve seen since the lifting of the numbers cap in the middle of the last decade, with all of its downsides and unintended consequences, you can make a case for a government being interested in and wanting to exert influence over who goes into higher education, what they study, where they study it, whether they study it from home or residential, how much them and their provider is given to do so, and who pays for that funding.

In some ways it would be astonishing and irresponsible if it left those things to the market.

And that takes us back to Falmouth. When I was there last week visiting the SU, I was first reminded of just how huge the campus has become around Tremough House. But I was also reminded of how neat the dovetail is between Falmouth’s tourist season is with its student season – there’s a week in September when the tea rooms become kitsch and the fudge shops start to flaunt vegan options – but basically, it now thrives off two sorts of tourism – family and educational – for pretty much 52 weeks a year.

A few weeks ago, the press was all over stories that Falmouth and Penryn had run out of student accommodation and students were having to live in tents and on the beach. It turns out that by and large, England’s late running summer “staycation” season had bled into term time – and by the time I got off the sleeper, the problem had corrected itself as landlords turned their AirBnBs back into student accommodation.

That’s interesting because back in June, Chris Whitty published a report that highlighted the “overlooked” issues in coastal towns, which have higher rates of poor health and lower life expectancies:

These are really wonderful places, but alongside the beautiful areas on the coastline and some of the resort areas, very close to them you can often have areas of really significant deprivation.”

Shared issues included poor housing and transport connections, he said. One solution would be to focus medical training colleges in deprived towns.

It’s not, of course, just coastal towns that should concern us and where there’s a potential opportunity. At a Policy Exchange event on the fringe of Conservative Party Conference this year, Michael “Minister for Levelling Up” Gove was asked about the potential for new universities to bring economic benefits to “places like Doncaster and Thanet”. Gove simply said: “I agree”.

That’s interesting because I was in Thanet the weekend before Canterbury Christchurch opened its Broadstairs campus back in 2001. Set aside the water pressure issue in the newly minted halls of residence. Demand was so poor for provision there that the university had to switch a cohort of criminology students to the campus from Canterbury with just a few weeks’ notice – with inevitable results. This stuff can work, but it needs sustained intervention.

Gove sounds better with you

So where does that leave us? First, I’m worried that the sector is lobbying in the rear view mirror – arguing for (more of a) free market approach and nostrums of “choice” on the demand side to a “Brexity Hezza” government that’s actually quite comfortable with supply-side interventions. Leave us alone won’t cut it if leaving us alone got us here, and ministers show no signs of calling App Britain again.

To help inform supply, I’d like to see a decent bit of research into what seventeen year olds actually want to study, and how and where. Too much of the debate involves partial and contestable comparisons between what we say students want (exactly what they get now) and others argue they’d choose if the alternatives were out there. Both sides should prove it.

As a dramatic supply side flourish, I can make an argument for completely halting expansion in current university towns and cities. If any provider in any part of the sector wants to expand HE student numbers – and they should be encouraged to do so given the changes in demography – they should be regulated to do so in other places, and encouraged to expand in places that we decide as a country need the economic activity. I’m not sure the market on its own will magic up provision in Doncaster or rebuild a more viable Canterbury Christchurch experiment in Thanet/Broadstairs. Ministers need to intervene “before breakfast, lunch, tea and dinner”.

Then, if we must have a graduate contribution system, we need urgently to break the hypothecation of the flat fee voucher into a single provider. It incentivises expanding supply in low cost subjects, and encourages the voucher to be seen as debt that can be avoided by the rich, and a “noose” around the necks of the poor. A straightforward alternative would simply be to run a salary contribution above a threshold for a fixed term – generating a fair contribution from the richest, and freeing government up to provide funding for places that matches the costs of them being put on and to target where they are staged. Imagine that!

But then most importantly, as the long-term debate rages on whether universities should be looked after by the Department for Education or the Department for Business, Energy and Industrial Strategy, I’d propose something else altogether. Place has come to matter a lot – perhaps more than all other issues. So if academic quality is principally co-regulated internally to the sector, and matters of governance and probity are handled by an arm’s length regulator, that just leaves matters of locality, geography, civic impact and “levelling up”.

Policy on universities should become part of the Department for Levelling Up, Housing and Communities, directly into the arms of Michael Gove. What could possibly go wrong?

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