Wicked problems: reputation, exit, failure and protection

The "market" is supposed to deliver "quality" but what happens when it lets students down? Ben Elger and Jim Dickinson on reputation, exit, failure and protection

What happens when there’s no money left for the stranded student?

Ben Elger, Chief Executive, Office of the Independent Adjudicator

Here at the OIA, an issue we want to highlight is the risk of students being left without remedy or financial recompense in the event of provider closure.

In a situation where “market exit” is viewed as a necessary part of the eco-system, it is clear that there will be a much stronger line against resources being used to keep providers going. But there is a danger that an in-principle determination not to “bail out” failing providers leads to an in-reality that students lose the right to redress.

In an insolvency situation there will inevitably be limited time and scope to ensure that students get what they were promised, and so financial compensation becomes even more important. And as unsecured creditors, students are likely to find themselves at the back of a long queue for a vanishing pot of money. The current arrangements fail to address the need for a meaningful remedy to be available.

Over the years there have been numerous attempts to start discussion on various insurance schemes (ABTA often being mentioned) that could help protect students, give them confidence in the system and pay out in the worst case scenario. This in turn would protect the reputation of the sector as a whole especially as we have now seen market exit is a reality.

Such discussion generally flounders at the point where individual providers realise they might be expected to pay – and point out that since there is no chance of them going under, they are not the right source of funds. After all – you’ll struggle to find a Student Protection Plan that entertains the possibility of exiting the market. But the problem remains, and we would like to see more discussion and policy thought into who is responsible for providing this vital safety net – and how it should be paid for.

Playing the student protection ball where it lies

Jim Dickinson, Wonkhe

One of the things I sometimes find frustrating about higher education policy is that critique of it usually focuses on the underpinning ideology.

In, for example, the case of “market exit”, I can understand why – I’m as horrified by the idea that “managed course changes and orderly institutional exits are a feature of a healthy, competitive and well-functioning higher education market” as the next wonk. But as we’re stuck with these “neoliberal”, “marketised” logics for a while, I also think that we may as well do what we can to hold decision makers to their promises of mitigations.

Universities in England aren’t operating in an unregulated market. Indeed, at their core, the idea of student protection plans is that one of the bits of regulation required in this market is that things are put in place to remove (or at least cushion) harm to students when the market does what it does.

These are the sounds of the wickedness

But there’s more than a hint of wickedness about this policy problem. Like all wicked problems, “market exit” is a symptom of other problems, leading to rows about how to prevent it. Is it about the removal of the numbers cap? The governance? Course quality? The irresponsible behaviour of more successful providers in scooping up student numbers and rendering others unviable?

Like all wicked problems, there is no definitive formulation of the problem – OfS has decided that “market exit” means “provider, campus or course closure” and “protection” means measures to mitigate that closure that go beyond the contract. But what if your course is moved from one campus to another because of an efficiency analysis? What if you’re on an integrated foundation year and the main degree course is closed because of poor success rates? What if a module catalogue of 100 options shrinks to 10 because of low demand? And what if the “market” means you’re on a massive course of 400 people with nowhere to sit on a Tuesday lunchtime and a library where overcrowding means that fights break out over space? In what way are these not “risks” to meaningful “study continuation”?

Like all wicked problems, there is no definitive formulation of what success looks like – does the “protection” of an arranged alternative mean you’ll still get the “advertised” “learning outcomes”, or comparable satisfaction, eployment and quality outcomes? Does protection mean compensation? Do you get a refund on your fees? Your institutional accommodation? Your books? Your bus fares? Your lattes?

And just like all wicked problems, solutions are a “one-shot operation” – when there’s no opportunity to learn by trial and error, every attempt counts significantly. It means you have to put a lot – a hell of a lot – of effort into investigating the disasters so far – really good research on what happened and the people that were affected. We need, in other words, much better and deeper analysis of what the market has meant for the student interest so far than (as far as I’m aware) we actually have.

In the first round of SPPs, institutions found it hard to say that the risks to students were anything other than vanishingly small – in fact, OfS said that risk assessments in some plans were “overly optimistic”. At Sunderland, for example, the current and live SPP says that the risk that the university will cease to deliver in complete subject areas is “very low”, because the university has undertaken a “comprehensive Quality and Sustainability Review of its provision in 2017/18”. That’s not quite what it said in January.

And that’s perhaps the biggest irony of all. As it prepares to release its new guidance on SPPs, the question for OfS is whether it will be prepared itself to admit how little it really knows about the minor market exits and manged mitigations that students have faced over the past decade; and whether it can say with any confidence that its regime really means that students – and the range of risks they face from the market – will even get close to be being protected by these plans. We wouldn’t want the regulator to be “overly optimistic” about the benefits of the market, now would we?

3 responses to “Wicked problems: reputation, exit, failure and protection

  1. What’s stopping the OfS/QAA from studying the real impact (and action taken by HEIs) of campus, major course or provider closures over the last ~5 years? Given the delay to the further guidance on SPP (which has been coming for over a year?), you’d think it was something the regulator could have considered.

  2. Interesting to see the idea of an ABTA style scheme being prompted again, but as the article suggests this is not something providers are likely to to buy into due to the costs. Those most at risk are likely to be paying the least. You’ve only got to look at the USS pensions situation to see where joint responsibility is making some more well off institutions looking to break away to gain access to cheaper loan and bond rates.

    The role of SSPs in partnership arrangements is going to be a ‘wicked problem’ for the policy markers to resolve. The increasing requirements in this area is making many institutions consider the risk of these partnerships as the possible impact increases, this could see institutions withdrawing from relationships and narrowing the market environment the Government wants. A factor I hope is considered by the OfS in their long awaited review of validation arrangements in the sector.

  3. Good points, Phil. The new regime does not exactly encourage universities to take risks in partnership arrangements. Over the medium- to long-term, this will stifle market entry by new providers, as well as opportunities for established providers who, for whatever reason, have to switch validating universities. Government cannot pin all of its hopes on DAPs – whether Full or so-called “New” – as a means of bringing providers without validation arrangements onto the playing field. The standards required by DAPs are high, and they are concerned with provider culture, maturity, organisational capacity and bandwidth, as much as governance, quality and standards, and the other criteria. Let’s hope that OFS don’t fumble the long-awaited review of validation arrangements.

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