Augar reviewed as Education Committee learn about university finances

So what is the point of a parliamentary committee hearing?

For those that form a part of an inquiry, the end point is a hefty report that can challenge and shape government policy. The education committee hearing on higher education and funding was a non-inquiry hearing – the purpose of these is to inform committee members as to the detail on topics of common interest, and to allow those outside of parliament to share their opinions.

On that narrow definition today’s hearing didn’t achieve much. If you’d have started with the presumption that the sector is struggling financially and the government may need to consider stepping in, you will have heard almost nothing to change your mind.

Each panel of witnesses faced the same initial question – what are the root causes of the current financial crisis. Particularly instructive was a set of responses from Philip Augar (who chaired the committee that wrote the report that bears his name) – for him there have been errors of policy over many years, and errors in governance at providers.

From the policy angle, Augar labours under the belief that the trebling of the fee cap in 2012 made teaching home students profitable, and that this new profitability (coupled with the removal of student number controls) meant that universities expanded rapidly. What they should have done is taken a measured approach, and not used money to invest in essential resources to benefit students and staff – perhaps all in the expectation that Covid-19, geopolitical instability, the Truss budget and ensuing inflation, were all bound to happen sooner or later.

Older readers may recall that the Augar report called for a fee freeze and a reduction in the fee cap to £7,500. How would this have played out through Covid and the rest? The man himself told us he “thinks about the review a lot” and that he may have got those bits wrong, even though “the analysis holds up”.

To be fair, the LLE appears to be going ahead (expected by 2027), and while I don’t think it is fair to say that the report drove a renewed interest in the skills sector and higher education quality, it was helpful to have the issues spelled out. There has, of course, been no action on the maintenance regulation. And although there has been some action on efficiencies, for Philip Augar these have “lacked bite”.

Other responses illustrated just how much current efficiencies did bite. Malcolm Press (vice chancellor at Manchester Metropolitan University, at the committee representing Universities UK) emphasised just how hard universities were working to drive efficiencies – highlighting examples of collaboration, and the ongoing Universities UK project in response to the government’s reform agenda.

For him, the current crisis had three roots. The value of the fee cap had fallen, the government’s own policies had hit international recruitment, and the failure of student maintenance to keep up with a rising cost of living had made full time study less attractive to home students. And all this while the sector (or perhaps parts of the sector) maintained what was repeatedly termed a “world class” student experience – involving low student-staff ratios and wrap-around support.

Augar was the only one to suggest that no university should fail (for place based and system reputation reasons), and called for “behind the scenes” support for the sector – Press finessed this as a call for the transformation funds.

Most of those who appeared at the Education Committee are already on the record concerning their thoughts about the current situation in universities. Many were there representing sector representative groups, mission groups, or other interests – most of whom have been frantically producing spending review submissions and other documentation setting out to the government what is going wrong and what should be done.

But the guts of the issue are simple – universities have seen costs rise substantially faster than income, and revenue from international students (the not-so-secret quid pro quo in the system that allows for research and teaching to be funded below what it costs to carry out) is beginning to dry up due to a series of government policy decisions. It is to be hoped, at least, that the Education Committee are now across this.