Augar reviewed as Education Committee learn about university finances
David Kernohan is Deputy Editor of Wonkhe
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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.
He admits “he may have got that bit wrong”, in proposing the tuition fee be reduced to £7,500. Wow!
In the run up to the commissioning of the review there was wide spread talk among Tories that the fee should drop to £7,500 or £6,000 and then amazingly Augar adopted a number in the report, partly on the back of some bespoke and never to be repeated KPMG research on costing teaching and a decision to ignore the TRAC data as they weren’t convinced it had merit (ie they didn’t understand why a margin was added to cost). There was never any justification for the £7,500 fee proposal, it was the report bending to political will. But then the Torries went into a spin, May was dumped and Borris and Brexit took over.
The Augar report is mostly pants. Its best part of the report is its Foreward, this is worth reading. This crispely sets out how post-18 sector finances can be characterised as one of “care” (meaning HE) and “neglect” (meaning FE). Yet the entire debate from its day of publication has been focused on HE.
We’re not any further forward in developing sustainable finances for the sector, despite Dearing, Browne and Augar and despite lots and lots of hand wringing from everyone. Time to revisit Browne and examine how unconstrained student admissions, combined with a flat fee, is the root cause of unsustainability. But no one in the sector wants to discuss this.
Three things strike me about this.
The first is that UNISON – the union with the majority of PSG staff in it was not in attendance. When you consider that PSGs bear the brunt of restructuring/resizing/etc, this seems odd.
The second is something that Philip Augar seems to have hinted at. The rapid expansion of universities with shiny new buildings, remote campuses in London, etc which have cost much without necessarily delivering any benefit.
Finally, no mention of the amount of money spent by University Execs on bringing in outside consultants to review systems and procedures.
In everything I read about university finance, everyone mentions the tuition fee for home students and the decline in international, but, apart from unions raising it, hardly ever anything else, so there is no accountability from senior management for large sums of money that have been but have, again not necessarily brought any tangible benefit.
Agreed. While the main/obvious causes of financial challenge in the sector aren’t really disputed, it is the omissions that both damage sector credibility to the public, government, and staff, ie that poor decisions, bad investments, ineffective governance, are also factors in why individual institutions face difficulties. And while HE is starting now to talk more about responses to these causes, I think it could be argued that we don’t have a strong basis of evidence to show how the sector has continued to improve productivity, student satisfaction, and staff engagement.
Ineffective governance is indeed a major part of the woes a large number of providers are facing. Look at pay levels for senior staff, look at the costs of servicing the loans taken for vanity projects, look at the spiralling costs of external contrators, etc. etc. The drop in income is obvious, but what’s not being talked about is the irresponsible spending which took place pre-covid, and in some cases is still taking place.