He also said that 75 per cent of institutions are in good financial health – and given that they have the same access to the funding system, he nudge nudge wink winked that the rest must be being badly managed:
Some of it…may be down to the management of that particular university and the leadership, rather than the funding system.”
Part of the argument was that universities have it good in comparison to other beleaguered bits of the state:
Universities get £40 billion from a variety of sources, given everything else that is going on in the economy, I think higher education is in a fairly strong position compared to other parts of the public sector.”
Of course the problem with this “we’re all in it together” style of argument is that students shell out tuition fees, and have the consumer right to what was promised for the duration of the programme. If universities can’t afford to deliver what was promised, there’s a problem.
Oh – and if 25 per cent of providers’ finances aren’t in good health, regular readers will know I argue that students applying to university really ought to know who they are.
One way to shore up everyone’s finances would be to increase the cap on fees – but in a notable moment of brass neck, argued that doing so would hit students financially:
I am not an advocate of increasing tuition fees… I think that would hit the student and that is important at a time when things are very difficult. That doesn’t mean they are never going to go up but I think the approach of the government has been the right one.”
An increase would not hit students, only graduates – and a failure to increase reduces the discretionary student financial support a university can give. Halfon is also currently overseeing changes to the student loan system that, as Martin Lewis has been pointing out, will see swathes of graduates paying twice the amount they pay now as the subsidy in the pound shifts from over 50p when 9k fees were introduced to about 14p now.
Halfon added that he was “less concerned” than others about the volume of international students and the extent to which their fees subsidise other university.
Less concerned, it turns out, than the Office for Students (OfS), which has written today to 23 providers to raise concerns about their “high levels” of recruitment of Chinese students – calling on them to develop “contingency plans” to be deployed in the event of a “sudden drop” in numbers.
It’s a disclosure that’s contained in OfS’ annual report on financial sustainability, which more generally finds university finances to be good shape while worrying about international reliance:
We continue to have concerns that some universities have become too reliant on fee income from international students, with students from one country sometimes a significant part of the financial model.
One aspect not picked up by much of the media is the stuff we get in the report on projections, which includes the revelation that providers are predicting total postgraduate student numbers (FTEs) to increase by just under 30 per cent (130,000 FTEs), the majority of which are expected to be international.
Either a) the UK’s university towns and cities have 130k empty bedspaces suitable for students lying around, b) Paul Daniels will be along any minute to magic up the bedspaces while PBSA projects complain about interest rates and landlords leave the HMO market, or c) providers are predicting widespread student homelessness.
That OfS’ definitions of sustainability avoid an assessment of whether there will be somewhere to live for the students providers say they’ll recruit markers it up as a regulator, but not necessarily an Office for “Students”.
More generally, there’s not much in here on the way in which a squeezed unit of resource might be impacting actual delivery – stepping into that breach, UCU has also published an analysis of HESA stats (think a DK blog only more alarming) which it says shows that universities generated more money than ever last year, “yet staff expenditure has hit rock bottom”.
As ever it uses an aggregate position to “reveal” that the surplus universities generated could have raised staff pay by 10 per cent with “hundreds of millions to spare”.
Does any of this give us a true picture of the financial sustainability of the sector? Sort of. There’s no doubt that Halfon, OfS and UCU have all been able to find that most providers aren’t teetering on the brink of financial collapse.
But what’s missing from the ministerial, regulatory and staff analyses here is any real understanding of what’s happening to the student experience in order to get to these numbers – as optional modules get scrapped, class sizes grow, personal tutor systems become decidedly impersonal, admin gets rationalised beyond what’s sensible and support services asked to do even more with even less.
Halfon won’t want to point that out, OfS has spent so long avoiding calling out poor quality that it now feels like it daren’t get going for fear of being seen to have tolerated it for so long (or causing a run on the bank scenario), and UCU has other fish to fry – or at least a different framing.