Thursday, 22 December 2011

More Christmas Spirit

When a Russell Group Vice Chancellor calls for funding to be taken away from universities that teach poor people, and given instead to universities that teach science, it is easy to see that as just another example of the Christian spirit of generosity that comes over all of us (to a greater or lesser extent) at Christmas. The way David Eastwood lavishes praise on the Browne Review whilst modestly avoiding any mention of his own role in the review is also, surely, praiseworthy.

Reporting in the Higher suggests that at least some of the less posh fear he is pushing at a half-open door as Treasury wants to withdraw the Widening Participation funding as a cost-saving measure. There are a number of funding streams associated with WP. For 2011/12 they break down as follows:

  • Widening Participation £141,630,239 (allocated on the basis of postcode data to identify students from low-participation areas, and Disabled Students Allowance data to identify disabled students);
  • Teaching Enhancement and Student Success £263,856,011 (allocated primarily on the basis of students' age and entry qualifications);
  • Other targeted allocations £203,550,592 (a grab-bag not all of which is WP-related, but including support for part time, accelerated and Foundation Degree programmes).
The WP and TESS funding goes primarily to new Universities. Leeds gets £1,106,592 and £1,141,339 respectively, which are non-trivial sums even in an overall HEFCE grant of £134,237,874 (1.7% of grant), but Leeds Met gets £1,679,582 for WP and £4,437,660 for TESS out of £63,460,810 (9.6%).

You can see how it would be painful and difficult for the coalition to withdraw this funding, however, because it directly supports the supposed Government priority of fair access for all. David Eastwood is formidably well-connected, but I wouldn't bet on him having a hotline to Santa this time.

Monday, 19 December 2011

Christmas comes early

I wasn't previously aware of Choose Humanities - a project of the New College of the Humanities, but I'm glad I've come across it now when I am in a festive mood and able to enjoy it properly. There are so many things to love:
  • The Universities tab lists posh universities but excludes not just the ex-polys, but even respectable old universities like Hull. After all, the humanities are all about the shameless recreation of hierarchies of status, aren't they?
  • The Research tab takes you to a press release telling you that '60% of the UK's leaders have humanities, social science or arts degrees'. UK Leaders, for this purpose, seem to be defined as Russell Group VCs, MPs and FTSE100 chief execs. Here we handily have deference to power to go with our recreation of status hierarchies.
  • The Blog is also a treasure. I know I'm in a weak position to criticise anyone's writing, but I don't believe I've ever managed anything quite as bad as this: argue that you should not be forced to believe what is taught but allowed to openly investigate why things such as faith and science are considered by some to be so-called ‘absolutes’, and, if necessary, to use critical thinking to non-violently, and with intellectual rigour, challenge and pick holes in arguments. The question is not to be taught what to think so much as how to think. This is what a good course in a humanities subject should do.
 So there you have the Grayling vision of the humanities in all its fullness: hierarchy, deference, cliche and the run-on sentence.

Satire fails

Thursday, 15 December 2011

Replacing Sir Martin Harris

The last time the Government had to replace Sir Martin as Director of OFFA, it reached for the most reassuring candidate available: a safe pair of hands not just from inside the sector, but well-acquainted with its more prestigious institutions.

This time, apparently, a more challenging candidate is being sought. Interesting, if true.

Friday, 9 December 2011

HEFCE Announcements on the student number control

HEFCE recently published an important Circular Letter setting out some new policy on student number controls. I'm a little late to blogging about this because of the HESES deadline, which was on Friday 9 December, but now that is past I have time to catch up.

So the key points are:
  • Specialist institutions in the performing and creative arts that recruit primarily on the basis of audition or portfolio  will be able to opt out of the AAB+ and core/margin system. This is a victory for some effective lobbying.
  • Disregard. As you may well have read, institutions (mostly FECs) charging £6k or less are now going to lose core places along with everyone else, however the first 50 places will be protected, so FECs with very small HE provision won't be forced to bid for a half dozen numbers every year. FECs with substantial provision, however, will be very unhappy.
  • E&D. HEFCE will ensure each institution’s student number control limit for 2012-13 is at least 20 per cent of their limit prior to the removal of AAB+ students, so that they can continue to provide fair access to those entering with EU qualifications and to meet their access agreement targets. This is a genuine issue which I've highlighted before (as have others), but of course there is irony in the way that HEFCE have managed the E&D issue by giving rewards to those institutions with the least diverse student bodies...
  • SIVS will be protected. No surprise there: they always are.
  • Under-recruitment: HEFCE say 'Should it be desirable to reduce future student number control limits for under-recruitment in 2012-13, we would normally expect not to do so where the level of under recruitment is not more than 5 per cent of an institution’s student number control or 25 students, whichever is the greater.' so they are not yet introducing a policy of clawing back unfilled numbers, but are setting out what it is likely to be. Since many of us have been expecting such a policy, this clarity is a really welcome development.

I would also recommend Annex B of the letter if you are a fan of bureaucratic cynicism. When HEFCE do these consultations the response is usually an immense amount of special pleading, mixed in with some complete misunderstandings of the issues. I particularly enjoyed the bids for additional funding to Price Group C subjects:

many respondents were...concerned about price group C funding, taking the view that this could not be adequately supported through income from fees alone. Again, there was a concern that this might have an impact on SIVS, in this instance modern languages. Other responses named certain subjects as being more expensive to deliver than the rest of price group C. The range of subjects mentioned was extremely broad, however: the only price group C subjects not to be characterised as exceptional were archaeology, and catering and hospitality management.
It makes me feel proud to work in a sector dedicated to the disinterested pursuit of truth.

Wednesday, 7 December 2011

Foreign students are 'damaging' economy

I've had spit-out-the-cornflakes moments with my Metro before, but seeing this headline in my paper yesterday was certainly another. The story related to a 'study' by the think tank Civitas which found (surprise!) that there are many Overseas students in engineering and related disciplines, that (apart from those which are average or below average) engineering and related disciplines have above-average starting salaries, and overseas students are more likely to leave the UK after they graduate than the British, therefore 'damaging' the British economy by taking heir skills elsewhere.

It is surprising how often you find people speaking and writing as if there was a fixed supply of university 'places', and 'places' filled by overseas students were being denied to British applicants. That may be true of specific courses at specific institutions in any one year, but at a sector level it is self-evidently nonsense, or we wouldn't have these continuous ructions about closing departments. But Civitas take a pride in their brand of pointless contrarianism, and by their standards this was really a pretty mild bit of nonsense.

What I did find quite interesting about this piece was my own reaction to it. I actually spent some time thinking whether the Civitas report merited a response. It seems to have gained very little press exposure - I can't even find that Metro put it into the web edition, but if I have concerns that a mention on my tiny weblog is going to give undue prominence to a think tank - even one as flaky as Civitas - I think it is fair to say I am having delusions of grandeur. Does anyone know a cure for those which doesn't involve invading Russia?

Friday, 2 December 2011

The updated Access Agreements

I've already posted on the institutions which have revised their Access Agreements. OFFA have now published additional details, including the names of the institutions in question. The list isn't a very surprising one. What interests me is the mix of the changes implemented.

  • an increase of £37.4m in fee waivers;
  • a reduction of £13.8m in bursaries and scholarships;
  • a reduction of £2.1m in outreach and retention measures; and
  • a reduction of £16.3m in headline fees.
These figures show quite clearly that reducing the price to Government - fees less waivers - has been the key driver here. A £53.7 million saving for the Government has been funded partly from £15.9 million less in outreach, scholarships and bursaries. In other words nearly a third of the saving has been taken straight out of students' pockets. The rest will have to be made up of larger class sizes and the like.

It may be that the market will prefer these slightly cheaper offerings. Leeds Trinity may now seem better value than Leeds Met, likewise London South Bank may seem better value than East London. But this is sheer speculation: there is no actual market process at work here. This is a point made earlier today by William Cullerne Browne, but (and I say this entirely without false modesty) six months ago by me.

Thursday, 1 December 2011

VAT on shared services

This story in the Higher barely counts as news, given that the intention to make this change was clearly signalled in the White Paper. Pretty much from the off, though, I have felt that it was in fact big news. And I still do.

The scope for economies of scale in sharing back-office functions is large. Given the sector's mixed history of outsourcing, the scope for services to deteriorate in the process, or even for outright disasters, is also large. Without anything major necessarily changing overnight, I would expect shared services to be a big issue for those of us who work in the back offices of universities over the next few years.

Wednesday, 30 November 2011

UCAS data

A couple of days ago UCAS released their year-to-date data for 2012 entry. Mark Leach has already pointed out that the year-on-year falls reported by certain media mainly tell us how strong applications were last year. The point is actually made very clearly by a couple of graphs from the UCAS release:
2012 looks different to 2011, but pretty similar to 2010.

So it is clearly too early to panic, but at the same time it is too early to relax either. Applications at this point in the year are no guide to applications at the end of the process. Even if (and it is an if) we have reason from these data to think that applicants think their first-choice universities are worth the new, much higher, fees that tells us little about how they may value second choice universities and therefore what may happen in Clearing.

Although people sometimes talk of 'selecting' and 'recruiting' institutions, almost all universities are active in Clearing to one extent or another, and plenty depend on Clearing to fill courses which would not otherwise be viable.

So I agree with Mark's stated conclusion that the 'data can not offer us any serious conclusions about why people are/are not applying for university', but perhaps I'd put greater emphasis on the remaining downside risks. That's the kind of fun guy I am.

Friday, 25 November 2011

UCL Moves East

The news that they might have to move out to Stratford has been greeted by at least some UCL staff with predictable dismay. Even with Westfield, Stratford isn't quite Bloomsbury. Colleagues at UEL probably aren't so happy either.

If this project matures (and there are some significant obstacles) it will be an interesting test of how much things are really changing in the sector. We once had clear rules and expectations for these kinds of project. HEFCE would be touched up for capital and revenue funding. In consequence of HEFCE's love of collaboration and hatred of all kinds of unseemly fuss, local institutions would be brought into the fold - preferably across the HE/FE divide. Thus we got Birkbeck Stratford (on a rather smaller scale than UCL are planning), and the New University Challenge. Now, HEFCE may no longer have the capital funding to make any real difference to what UCL want to do, and may not have much revenue funding either (although they still have control over student numbers up to a point). UCL may simply ignore the presence of Birkbeck and UEL in Straford (not to mention Newham College).

William Cullerne Browne sets out the alternative hypothesis, that it is precisely the new funding regime that will make this kind of deal a possibility. We'll see, I suppose.

Thursday, 24 November 2011

The College of Law again

Education Investor reports that there are 8 potential bidders now interested in the College of Law (although not naming Duke Street as one of them).

It is interesting that the numbers suggested, ranging from £175-£250 million are all well short of the £300 million which Apollo paid for BPP back in 2009. By 2009 the whole global collapse thing was already well established so it isn't as if that bid was made during a period of irrational exuberance akin to the dot com boom. The College of Law is at least as good a business as BPP. These numbers suggest that the reality of what Government is actually doing to liberalise HE and let in private sector players is much less appealing to the private sector in 2011, than the thought of what Government might do was in 2009. So whilst the speculations in my Duke Street post haven't held up all that well, the point I made here that the private sector doesn't really seem to be up for this revolution still seems to me to stand.

Tuesday, 15 November 2011

Core/Margin: Implementation

LOC Utah Prisoners c1885Many things have happened during my intermission from blogging. This post is about the developments specifically in core/margin. Twenty seven institutions re-negotiated their Access Agreements with OFFA, and 201 universities and colleges (mostly FECs of course) have now bid for 35,811 margin places. There are 20,000 places available and HEFCE have announced that they will allocate places to eligible bidders pro-rata to their bid numbers.

Compared to my expectations, this must constitute a considerable success for the Government's agenda. Few or none of the twenty seven will see advantage to themselves or their students from their lower fees.

For the institution, 4,000 entrants at £8,500 are worth a much revenue as  4,500 at £7,500 but cost more to teach, so to wind up ahead financially the thirty-odd HEIs bidding for places would have to win almost all the 20,000 places available (unless they are very small HEIs on average). If bids are pared down pro-rata, that is unlikely to happen. Even if it does happen this year, it is going to have to keep happening year after year as further core/margin adjustments are made. Most institutions would do better financially to tough it out at a higher fee level.

Some of the institutions may have brought their numbers down primarily by switching student bursary support into fee waivers, which gives the student lower debt repayments in the distant future (or perhaps a smaller sum written off at the end of the loan) but takes actual cash out of their pockets now.That isn't a good deal for students.

It therefore seems likely that most of the twenty seven are looking ahead to a possible future in which continued cuts from the core would put them out of business. There is an element of the prisoners' dilemma here because if the Government's policies drive a few universities into bankruptcy that is a problem for those universities; if almost all the existing universities are bankrupted, that is a problem for the Government. Because a significant group of universities have moved, and the margin numbers have been substantially overbid, Government will be emboldened to keep pushing, and institutions above £7,500 (and below AAB) will begin to feel more threatened. We can expect to see a further wave of fee reductions next year.

The upshot of this seems to me to be that the chances that the current fee regime will form a sustainable, long-term regulatory and funding basis for English HE is significantly higher than it seemed when I was last blogging about a month ago. Whether you view that as good news or bad depends largely, I imagine, on your political stance.  

Monday, 14 November 2011

Service resumed

Just a short note to say that, following a slightly longer intermission than expected, my new employer has given me permission to continue blogging so I shall probably start up again shortly.

My new role is a little broader than 'planning', but although Phil Ward has been unkind about it, I like the title I've given this blog, so it won't change.

Friday, 14 October 2011

The Interim Regulatory Partnership Group Meets

And the papers are here. Pretty thin, to be frank, although how much of that is down to a desire not to put sensitive matters on paper I can't say for certain.

Thursday, 13 October 2011

Duke Street

Education Investor reports that the private equity firm Duke Street are seeking to enter the UKHE market. Duke Street already have investments in the private post-secondary sector in Europe through EduServices, but their portfolio in the UK does not yet include such a company.

Wednesday, 12 October 2011

The University of Wales: more parallels with London

I posted a few days ago about the strong position which Leighton Andrews currently enjoys in relation to the future of the University of Wales. Clearly he knows that as well as I do, for he has now called for the resignation of the Chair of Council something over which - technically - he has no control whatsoever. A minister can no more arrange the resignation of a member of a chartered university's Council than he can fire a local scoutmaster.

Here, rather than Wales providing a precedent for London, London provides a precedent for Wales in the form of the London Metropolitan controversy. In that case HEFCE were put to immense difficulty to secure the resignation of the VC and Board, despite the clear case that public funds had been misallocated, the very severe consequent financial and reputational harm done to London Met, and the very strong leverage HEFCE had through control of future grant flows. In this case, the Minister controls little direct grant to the University of Wales as is (£704,000 in 2009/10), but rather more if you add the two other merger partners into the mix. Moreover whilst at London Met Governors and VC stood together, here Leighton Andrews is clearly seeking to separate them and side with the new VC as part of a new regime.

It will be interesting to see how this plays out. Even at the time, the resistance of the London Met governors seemed astonishing to me, but here the personal responsibility of the Chair of Council is obscure at best. In England there was very strong institutional resistance to allowing the London Met case to form a precedent, but perhaps in Wales institutional leaders are going to be fired with enthusiasm?

Tuesday, 11 October 2011

The public university: what is there to defend?

Guildford-TeachingI haven't previously commented on the alternative White Paper A defence of public higher education. At least as I understand it, the alternative White Paper and the associated campaign aren't really intended to have a near-term impact on the workaday business of funding and regulating Higher Education. For instance if you search for the phrase 'student numbers' you'll only find it twice, both times in the context of descriptions of the Government's plans and intentions. I understand this as a campaign with a longer-term view aimed at developing a political narrative that challenges the market-oriented perspective that has informed recent HE policy making by pretty much all parties. (Of course market-oriented narratives don't always lead to free market policies. As the alternative WP notes, the current Government's policy is certainly not a free market policy).

Friday, 7 October 2011

More adventures in Wales

The situation in Wales continues to provide interesting illustrations of the intersection between university autonomy, regulation and pure politics.

Wednesday, 5 October 2011

The University of Wales

Like many English people, to my shame I am only intermittently aware of Wales. My reaction on reading that the University of Wales was to get out of the validation business was therefore one of bewilderment. What else does it do? This is on a par with Apple getting out of the consumer electronics business. You can see from the accounts that over £10 million of the 9/10 revenue (which was only just over £15 million in total) came from this source - more if you count the federal support grants from University of Wales member institutions and the Funding Council grants that presumably relate mostly to this function.

Saturday, 1 October 2011

The Interim Regulatory Partnership Group

HEFCE and the SLC have established an Interim Regulatory Partnership Group. The role of the group is to manage the transition to the brave new world of regulation.

HEFCE's website tells us that
at the first meeting the group agreed the following programme of work:
  • to map the current higher education system, so that there is a clear understanding of the contribution made by all the organisations and how they interact with universities, colleges and individual students
  • to review the way that data is collected and used at present.
Two points are of interest to me about this group.

Thursday, 29 September 2011

The financial health of the HE sector

Grant Thornton presumably published this study primarily for marketing purposes. It serves to keep their name in front of potential clients. Whether it is a great advertisement, I rather doubt.

For a start there are some startling errors (GT claim the sector employs just 130,000 people, which would be less than 1,000 per university. HESA has a rather more believable figure of 387,430). Secondly there's the rather grab-bag assortment of contents: a bit about 2009-10 accounts, a bit about the impact of the new fee and repayment system on the  'representative' graduates, a bit of handwaving about the future of the sector, and a very vague sketch of how universities could outsource everything except the academics. The devil would be in the detail if only there was any detail there.

In which the regulators of English HE do not appear to advantage

In principle, I am sympathetic to the plight of the quangocrat. I was one myself once, and it isn't always easy to balance the interests of your many stakeholders. I've posted before about my appreciation for the precisely-tuned prose which results when these matters are handled with sufficient delicacy.

In the case of OFFA, it is vital to remember that OFFA was created for the single and sole purpose of providing political cover for fee increases. It has no powers whatsoever to compel any university to widen access or admit fairly. The two powers the Director does have are to refuse an Access Agreement or to administer small fines. The one is to extreme to be used, the other too petty to bother talking about.

Wednesday, 28 September 2011

Judging the debate on Labour's £6,000 fee

On the once-bitten-twice-shy principle, this blog has policy of not linking to anything written by Tim Leunig. Here, then is a link to the THE reporting disagreements between Leunig and Labour about whether the £6,000 fee policy is progressive or not. If you want to read the CentreForum analysis itself, then I direct you to Google.

Leunig's analysis is a bit of a hatchet job - in fact it reads like a rather rushed hatchet job. For instance he reports that the winners are disproportionately old which is absurd in a cohort study - both winners and losers will be the same age. What he means is that the winners will collect their winnings late in the life course because the effect of lower fees cashes out in an earlier end to repayments, not in lower repayments. He also reports that the Government is the main gainer from the proposal (because the amount of loan written off after 30 years is, on average, less), whilst simultaneously claiming that the Government will be paying out £3,000 more per student upfront (which, if I calculated correctly yesterday, isn't true). These can't both be correct statements, and in fact since the Government's 'expenditure' is the RAB charge assessed at the time the loan is made, then any write-off at the end of 30 years isn't even a paper transaction as far as Government is concerned.

Meanwhile Gareth Thomas in the THE refers to a House of Commons study which I can't find (I think this is the appropriate link, but there's nothing there) which finds 16% savings for the lowest earners. I have no idea where these come from, so for all my scepticism about Leunig I think it is too early to call this against him. Despite the title of my post, I'm not going to reach a judgement on the debate yet - if ever.

My judgement on the policy, though, is increasingly negative. It looks as if it will reduce spending on HE (at least relative to the 2012 baseline, if not the 2011 baseline) without bringing any significant benefit to students or graduates (since debts will remain extraordinarily high if everyone is charging £6k). However that judgement is subject to change if I can substantiate this 16% saving for the poorest graduates. We'll see.

Tuesday, 27 September 2011

Degree Awarding Powers

I was speaking yesterday to a colleague who works in quality assurance, and she reacted with scepticism to my view, often expressed on this blog, that the White Paper will make little difference to private providers and in particular is not resulting in new private providers entering the sector.

On further discussion, I understood that her view was that many existing providers will no longer need universities to validate their provision. As for UKBA purposes they have to be overseen by QAA anyway, they might as well go the whole hog and get their own degree awarding powers. This will have a big impact on her work, and a non-trivial impact our mutual employer's validation income.

On reflection, I think what i have published on this blog agrees with this view, but has tended to trivialise it as an issue. My thoughts have been far more focused on the impact of Core/Margin, because that is closer to my own professional area - Planning. Of course these providers for the most part already exist, but people such as BITE or LSBF becoming degree awarding institutions in their own right is not a completely trivial matter, and I have not given this issue enough prominence in the past.

Monday, 26 September 2011

The £6,000 fee cap

Ed Miliband (2010)A few thoughts about the £6,000 fees cap policy announced by Labour over the weekend, and already covered in depth here, here, here and many other places.

Firstly, the policy is 'fully costed' at £750 million to be sourced from higher corporate taxes and higher repayments by very wealthy graduates. I think institutions will find this disappointing. According to OFFA (who ought to know) the average post-waiver fee is currently £8,161. Cutting this to £6,000 will save the taxpayer the RAB charge (about £650 per student). The £750 million then needs to be split across all 1,226,950 FT Home and EU undergraduate students to make about £611 more. £6,000+£611+£648=£7,259 so, even with a generous rounding margin, this isn't enough to restore the fee income institutions are hoping for. It may be enough to restore historic funding levels.

Secondly I follow William Cullerne Brown in seeing this as likely to be one stage on the journey towards a formal abandonment of the graduate tax policy. Pure graduate taxes are, in my view, unworkable in English HE which is why politicians tend to move away from them as they approach power. However I can't find any clear statement about the future of the student number cap. John Denham is quoted as wanting to move away from the 'pernicious' core/margin model, but doesn't specify what he is moving towards - an end to numbers control, or just an end to moving the numbers about? From an institutional perspective, the numbers cap issue is really the more important one.

Since Ed Miliband has already indicated that this policy will be changed before the next election, it isn't likely to have much direct impact on anything. In one sense, as a concrete step bringing Labour policy closer to current Government policy, it should reduce uncertainty for institutions. I'm not sure that's how it will feel for us on the ground.

Friday, 23 September 2011

Comparing English and American HE

I’ve posted before about the Education Trust’s survey of US Universities that found only a tiny number of institutions with low fees, decent graduation rates, and above-average proportions of poor students. In this post I’ve excerpted a key graph from that report, and produced a companion graph of English universities by cost, graduation rate and proportion of students from lower socio-economic groups. The data definitions don’t tally up precisely (for which see below), but this provides, I think, three really powerful and interesting messages.

Thursday, 22 September 2011

Venture Capital

In comments on this post, Andrew McGettigan points me to an Education Investor story about venture capital.

Speaking to EducationInvestor, Glynne Stanfield, partner at law firm Eversheds, said he was aware of five instances where “big private equity firms” are looking at buying part or even all of a UK university.
I have to confess this makes no sense whatsoever to me. Best as I understand venture capitalists, they seek to buy or invest in businesses which can be aggressively grown in value and then sold on. Quietly taking a steady profit on a steady business is not really the VC line (or so I thought), so buying a university in heavily-regulated England makes no sense to me.
I suspect some overselling by EI. The currently-ubiquitous Matt Robb makes more sense when he says:

there are “legally acceptable routes by which universities and investors can enter into partnerships that retain the best of both worlds”
Partnership around research commercialisation - where there is high risk and a potential IPO or sale to allow the VC to cash out in the medium term makes sense and if we see anything emerge I suspect it will be this.

Wednesday, 21 September 2011

Condé Nast

Barbie Fashion ModelVia Registrarism, I discover that Condé Nast is launching a fashion college in London. This isn't exactly unprecedented. Sotheby's for instance have an education arm which leverages the exclusivity and access offered by the Sotheby's brand. To quote the Sotheby's site:

Sotheby's auction house provides students with privileged access to pre-sale viewings, talks by experts, and handling sessions. In addition, students visit the many commercial galleries, artists' studios and museums available in London. Such knowledge prepares students for a variety of careers in the art world.
 As you may have garnered from this post, I don't consider myself much of a looker and don't have much interest in fashion. I am interested to see from the BBC site, which makes this clearest, that there are no plans to offer undergraduate degrees.

I've been watching for any new private providers to announce an intention to open in the UK undergraduate market since the White Paper. So far I've seen none. Only those providers - Kaplan and BPP primarily - already committed before the White Paper seem to be coming forward. I strongly suspect that the student number cap is the  biggest single issue here.

When does absence of evidence become evidence of absence?

Tuesday, 20 September 2011

Continuing a conversation with Andrew McGettigan

When people come to my blog, it’s generally to do one of two things. Either they are searching on Google for something to do with core/margin, or they have come to read this post, which I published in response to an earlier piece of Andrew McGettigan’s about the White Paper. Andrew has now published a further article looking in detail at the case of Middlesex University, and as that piece is now on the public web, I’m going to post a response to it in the hope that it will also be useful.

I am taking the same approach as I did before, not wishing to comment on Andrew’s political commitments or values, which are in any case less prominent in the Middlesex piece. I want to offer data and a pragmatic, practitioner perspective on the issues that Andrew raises. I think in a few cases Andrew’s rhetoric in this piece is slightly overblown, but I understand that he is writing in a particular genre for a particular effect so hopefully when I comment on those examples I will manage to avoid any tone of condescension or superiority. If I fail to achieve that, I should honestly acknowledge that it is probably because the photo of Andrew that I ripped off his profile (with that prominent nose and full head of hair) [Update: Photo removed at Andrew's request] reminds me of myself when I was younger. I do still have the nose, but as I am now just a few weeks shy of forty the hair is an increasingly painful thing to be reminded of. 

Thursday, 15 September 2011

Defence and Higher Education

Judging by the response to Tuesday's post, pictures of battleships are the way forward for this blog so here is HMS Warspite, the hardest-fighting battleship in two world wars, pictured on shore-bombardment duty off Normandy in 1944.

To make some tentative connection to the original subject of this blog, I'm accompanying her with a post comparing the UK Defence and Higher Education industries from an exports and jobs perspective.

Tuesday, 13 September 2011

Government accounting

HMS Dauntless is currently parked in the dock at the foot of the University of East London's Docklands campus. She's been there since Friday, either protecting London from inappropriate celebrations of 9/11, or perhaps protecting UEL's First Week celebrations from anyone throwing cricket balls at Mach 3.

By my calculations, UEL gets about £55 million a year of UK Government funding (overwhelmingly HEFCE grant), whilst Dauntless cost a little over £1 billion (including her share of class development costs). In other words just building the ship, before any running costs, has set the British taxpayer back about 19.5 UEL-years.

Over those 19.5 years, UEL can be expected to graduate 63,653 FT students from first degree programmes (using the data in HESA Table T5 as a guide), in addition to PT and postgraduate students. There may even be some useful research into health, or maybe the Olympics if that's more to your taste. By contrast, the Type 42 destroyers that Dauntless is replacing shot down 7 Argentine aircraft and 1 Iraqi missile in total across a class of 14 over a period of 36 years. This gives us a rough statement 1 enemy aircraft=127,306 friendly graduates, although if we factor in 19.5 years of Dauntless' running costs, its more like 1 aircraft=150,000 graduates.

Heartwarming, eh?

Photo courtesy of Wikipedia, entirely without permission...

Friday, 9 September 2011

The College of Law

The College of Law is a 'private provider' because it is not HEFCE-funded. However it not only has Degree Awarding Powers and charitable status, but is also incorporated by Royal Charter like the old universities. With a turnover of £73 million and 7,131 students, it is rather smaller than most HEIs, but not small by most other standards. Delivery is from 8 sites across England and Wales.

The College decided to enter the undergraduate LLB market in January 2011 with a two-year accelerated programme. This turned out, of course, to be a bit of a miscalculation as the fees regime announced in the White Paper is not very supportive of this kind of arrangement, and the core/margin criteria even less so. The College's chief executive is accordingly complaining about the White Paper in the press.

Twelve Universities Look to Cut Their Tuition Fees (allegedly)

As I read my morning paper on the train, this wasn't exactly a choke-on-the-cornflakes moment, but pretty close. Without any clear source, it was difficult to make sense of Metro's story.

Fortunately I had my iPad to hand to check the Times Higher site, and they carry a more informative version (dated yesterday, but I didn't see it in the magazine). Twelve is the number of universities which have asked OFFA what the process for changing fees is. This is a pretty low bar for 'considering', so it is likely that most of these universities will do nothing.

Of course nothing prevents a university from offering more fee waivers than it promised to OFFA, so certain universities could come down below the £7,500 level without changing their Access Agreements. Others may have been too slow off the mark to ask OFFA what the process before OFFA published guidance. However for the most part the sums simply won't add up, as the chance of a few additional numbers won't be worth the reduced price on all core and margin numbers.

So one reassuring conclusion - there's no evidence here that many universities will actually change their fees, still less anyone come down from £9k to £7.5k - and one surprising conclusion - the HE coverage in the Higher is sometimes better than Metro.

Thursday, 8 September 2011

Bloat and the profit motive

Here is a link to the US, where things are a bit different, but this illustrates another example of a perennial issue at the root of bloated costs: the lack of a profit motive. If units (in this case a law School) are not held to account for their profits, then the institutional pressure to maximise the resources they control is unconstrained. It is sheer benefit to the Law School to have another tenured post and nonsensical to turn a post down when it is available. In the UK it is a little different, but not very: posts are not tenured as such but they tend to be permanent all the same. Other resources, such as space, IT equipment or library holdings may not even be carried on the budget of the unit that uses them.

In the UK context, most academic units will at least be under pressure to break even, although it is rare to set more demanding targets than that. Non-academic units simply have to operate within agreed budgets, so if you can get agreement to increase your budget, why wouldn't you?

Now, of course, giving profit targets (and incentives to exceed them) to middle managers in universities would clearly create some risks and issues itself, so this post isn't a call for action so much as a comment that preserving certain cultures and practices has consequences.

Wednesday, 7 September 2011


An interesting article about Blackboard, the major provider of learning management systems. As a previous WebCT user, my own institution has become a Blackboard customer by default, and subsequently become involved with Moodle, so we fit well into the general picture drawn. I have little direct knowledge of learning management systems, but I do know something about student data systems, and there you see some of the same issues with a lack of innovation in products, but seemingly insufficient profit available (and/or insufficient risk tolerance amongst institutions) to tempt in new providers and disrupt the position of the incumbents.  

Procurement people have a saying that you get the suppliers you deserve, and I think one of the important contributors to bloat is precisely our inability to procure and then benefit from really good IT. This has something to do with universities being professional bureaucracies, so it is likely to be difficult to change.

Monday, 5 September 2011

In praise of HESA

When I read stories like this one about dubious practices in published destinations data, I am reminded just how valuable the Higher Education Statistics Agency is in ensuring that we have consistently collected, reliable and auditable data collected and permanently held about all HE institutions in the UK. Not only held, but made available to all.

From the perspective of the individual on the ground, struggling to resolve data quality issues in the time and resource budget allowed, it is easy to focus on the negative. I'm very conscious of the weaknesses in my own institution's data, and I have seen plenty of examples of still greater weakness in others'.

But still, HESA ensure that no institution can redefine 'unemployment' for private advantage, or withhold the breakdown of graduate and non-graduate jobs from publication. If you wanted to test some aspect of the published data, there'd be no question of looking at your own institution's handful of forms, as Paul Campos seems to have done, you could get as much data from HESA as you needed to draw statistically valid conclusions (or, indeed, much more than that if you wanted to).

So for all its flaws, the regulatory system in the UK does deliver this one very significant achievement.

Saturday, 3 September 2011

The newspapers of the future

Matt Yglesias bravely predicts that universities are the new newspapers - by which he means that their business model is about to be undermined by technological change which is making it cheaper and cheaper for people to find information on line. My first reaction was 'how absurd'. Its pretty clear that the specific curriculum learned at university is one of the least valuable parts of the process - even in highly specific vocational fields like medicine most of that curriculum gets forgotten once you are in the job.

But on reflection I see that there is more to it than that. After all, information about what happened yesterday is only a part of the value proposition in a newspaper too. Specifically for students on professional programmes with professional accreditation requirements to meet, curriculum content is important - at least until the accreditation is achieved. New institutions like Western Governors can offer a route to that accreditation more cheaply than the traditional ones. So maybe there is a future where new entrants can undercut (some of) the functions of the traditional university sufficiently to undermine the viability of traditional business models for some or many established universities.

But I don't want to push that too far. I've had some experience of distance and online learning, and it seems to me that the model can easily be one of a few delighted students, but many more drop-outs. This is pretty much the picture at the Open University, where those students who survive to the end of the programme are amongst the most satisfied in the country, but also a minority of those who start. This makes me suspicious of the kind of journalism I linked to in the paragraph above. The positive stories of successful students are only part of the overall picture.

So maybe universities will be the next newspapers, but I think probably not. At any rate, I'm not revising my career plan yet.

Friday, 2 September 2011

The University of Stirling is losing the fight against scientific openness

I read this story with disbelief. How can we have gotten into the situation where an established British University is fighting against a tobacco multinational on issues of scientific openness and freedom of information and Philip Morris is in the right? If you review the Information Commissioner's decision notice you will see that the facts are:
  • The university undertook public health research at its Centre for Tobacco Control Research
  • Philip Morris used Freedom of Information legislation to seek underlying data about the sampling and data collection (in other words, the data needed to conduct a scientific assessment of the research in question), but did so through its solicitors
  • The university refused to provide all the data requested
  • Philip Morris complained to the Commissioner that it had not received the data requested, but the Commissioner refused to act on the basis of a technicality (because the original request was made anonymously via a solicitor)
  • So Philip Morris asked again, in their own name
  • The university wilfully misinterpreted Philip Morris' second request, and responded with a spurious request for additional clarification (which was, itself, out of time). When the requested clarification was received, they declared Philip Morris' request to be vexatious (i.e. manifestly unreasonable or disproportionate) and refused to provide data. International tobacco companies are not, I would think, being manifestly unreasonable in showing an interest in research about tobacco.
  • So Philip Morris has complained to the Commissioner again, and this time the Commissioner has found in their favour.
In submissions to the Commissioner about the case, the university claimed that it would cost them £2,908.75 to collate the data requested. The Commissioner is careful not to comment on this directly, but simply quotes Philip Morris:

if a disproportionate amount of time were required in order to produce the response to their request, this would suggest that the survey had not been carried out in an orderly manner, or that the material used to prepare the Report had not been methodically collected and analysed.
 And as I am not a Scottish government official, I can say openly that I heartily agree. How can any scientific institution seek to prevent access to taxpayer-funded data on technicalities, and then again on entirely spurious legal grounds, and then finally with a straight face claim that they cannot provide their data at a reasonable cost? This amounts to excusing your mendacity on the grounds of your incompetence.

The University of Stirling, and the Centre for Tobacco Control Research in particular, should be ashamed of themselves.

Thursday, 1 September 2011

Leeds College of Music

Research Fortnight published yesterday a story about the merger between Leeds College of Music and Leeds City College. I haven't seen this reported elsewhere so I guess it counts as a scoop, although LCM published a press release a month ago and the matter was also included in the published papers of the HEFCE Board meeting in July (I linked to this very paper myself here without commenting on the LCM issue so I certainly can't claim it...).

Unusually, the assets and liabilities of the dissolved college are not simply being handed to LCC, but are placed in a wholly-owned subsidiary company. Accordingly, LCM is still a separate going concern with managers and staff still in place as they were before the dissolution. This strikes me as a far better outcome for them than the pure merger which so often leads to asset stripping (see, e.g. Bretton Hall). Research Fortnight says that the company will also control LCM's degree awarding powers, so at first I thought that perhaps it is these powers that explain LCM's unusually effective bargaining, but it seems that LCM doesn't have degree awarding powers and awards Bradford degrees. So perhaps it was just the £6.6 million of SDF funding that LCM brought into the merger that did the trick. Or maybe LCC's senior managers are just very nice people.

Andrew McGettigan comments further on this story here, placing it very firmly in the context of privatisation. I've commented on his blog post and hope he'll explain his view more because on the face of it this seems implausible. As a charitable private company limited by guarantee, the new Leeds College of Music Ltd cannot have share capital or distribute profits which, to quote Wikipedia, 'makes this type of company unsuitable for commercial enterprises'.

Wrong but Romantic

I was looking for wrong but romantic, and the Free University of Liverpool seems to fit the bill.

Who couldn't love a project that sets out to fight back against the privatisation and deregulation of Higher Education by setting up a private HE provider outside the apparatus of state regulation? (or indeed, that uses higher education as a means to fight back against the instrumentalisation of higher education?)

I confess some of the other jokes go over my head slightly (or perhaps more than slightly). I'm not sure why the 'Foundation Degree' is six months, when the 'BA' is the standard three years. But then I'm hardly the target market either for the programme or the protest. And people as square as me don't get coverage in the Guardian on the basis of no more than a couple of blog posts.

Wednesday, 31 August 2011

A Manifesto for Higher Education

My heart warmed to Des Freedman when I read that he hoped to 'inspire debate in staff rooms, offices and tutorials'. Perhaps at Goldsmiths they still have staff rooms and tutorials, but in the rest of the sector even the office (at least the sole-occupant office in which one could have a good debate without unduly disturbing one's colleagues) is well on the way out. We dour (and, of course, bloated) roundhead administrators like to have a Wrong and Romantic cavalier come along to lighten our lives every now and again

But the mainfesto itself was a terrible disappointment. A certain level of flabbiness is inevitable in these kinds of things, but when you can't even achieve precision in what you want abolished ('Scrapping of the National Student Survey and other forms of evaluation which perpetuate cultures of ‘customer satisfaction’ and quality control') then there isn't much hope for your positive programme. And if you are going to be Romantic in your wrongness, it also helps if fewer than half of your demands are for people to give you more money and better benefits.

Tuesday, 30 August 2011

Administrative bloat in universities

Via Matthew Yglesias, I've read Benjamin Ginsberg's shorter-version diatribe about the bloated administrative costs of US universities. Ginsberg has already upset Paul Greatrix by publishing an extract from his book in the Chronicle of Higher Education.

I think Yglesias' main point is a sharp one. Ginsberg seems to assume that the purpose of universities is to spend money on their professors (UK: academics). But universities respond to their incentives and the 'best' and 'most succesful' universities are usually judged to be those with the best-qualified entrants. Even in Yglesias' alternate reality where universities are judged by their success in supporting student learning, of course, it is less than obvious that student learning is maximised by increasing investment in professors (academics) at the expense of, say, IT and library staff, or student services professionals.

I'm less inclined to echo Yglesias' praise of the Ginsberg piece. On the contrary, with its leaden sarcasm, blinding non-sequiturs, and spectacularly tendentious use of anecdote (some university administrators have been guilty of fraud, therefore university administration is a fraudulent activity?) I think it is pretty shocking that a professor at a world-famous institution such as Johns Hopkins could have written such a thing. Administrative bloat is a real issue, and deserves much better treatment than this.

Saturday, 27 August 2011

New members of the HEFCE Board

Three new members have joined the HEFCE Board. Two of them have NHS backgrounds and the third a private business background. Sir Alan Langlands, the HEFCE Chief Exec, also has an NHS background, so this significantly strengthens that voice on the HEFCE Board.

In one sense, this isn't surprising. HEFCE has a great deal of money tied up in training medics and other health professionals, and in undertaking health research in universities. The NHS too has a great deal of resource tied up in providing clinical placements to universities so there has always been a strong need for co-ordination. The person spec for these Board positions identified health sector experience as one of the key selection criteria.

What is more interesting is that BIS seems to have missed an opportunity to strengthen the Board with respect to its new role regulating the private sector in HE. This is an area where HEFCE's existing corporate culture and existing staff can expect to be challenged by the demands of the post-White Paper environment. Bringing in experience at Board level from another BIS quango with more relevant experience - maybe the OFT - would have seemed like an obvious move.

Friday, 26 August 2011

Restrictions on AAB equivalent qualifications 'may not be legal'

Reading my Higher, I see that they have caught up with the views I expressed nearly three months ago, and reported that the application of the AAB+ policy may result in unlawful discrimination. What the Higher still doesn't communicate very clearly, though, is that it is difficult to amend the policy to meet this problem. Even if HEFCE could devise a pan-European AAB+ equivalency matrix (which would hardly be straightforward in the time allowed - we are talking about Christmas 2011) the HESA codes do not exist to report qualifications such as the Arbitur to the level of detail required. If you haven't got the data, you can't operate the policy.

Of course if HEFCE had ample time, we could create new HESA codes, require institutions to amend their data collection systems to meet the new requirement and start collecting the data they want for the policy they have. But if you announced those codes now, institutions could use them for 2012 entry at the earliest. The resulting data would be reported to HESA in October 2013 and HEFCE could use it to inform student number caps for 2014/15. I don't think that is Mr Willetts' timetable.

Thursday, 25 August 2011

David Willetts lobbying universities

David Willetts has written to a number of universities to lobby for the admission of his constituents. This strikes me as highly irregular in every possible way.

Firstly, the universities are autonomous charities not Government departments ultimately answerable to Parliament. Any MP has as much business writing on behalf of constituents to his(her) local university  as he(she) does writing to the local Rotary club.  Second, the admission of students is explicitly protected by law from political interference, so this is a particularly inappropriate matter on which to lobby. And thirdly it cannot be right for a Minister to act as a constituency MP within his(her) own departmental area as if he or she held no Ministerial responsibility. Ministers must avoid even the appearance of impropriety.  

Finally, how could this have done any good? There is no way a university could lawfully take account of the ministers' letter in its admissions process so there is no way that the constituents could have been benefitted without breaking the law.

Its difficult to avoid the conclusion that Willetts was either wholly ignorant of the principles which ought to govern his (and the universities') conduct, or wholly reckless of the consequences when he wrote those letters, and 'wholly reckless of the consequences' are not comforting words to write about a powerful man.

Wednesday, 24 August 2011

Headline writing

So the headline says a fifth of graduate workers earn less than school-leavers, but the story says:

Analysis shows the median hourly pay for employees educated up to around GCSE or equivalent level was £8.68, for those at A-level or equivalent £10, up to higher education but below degree level £12.60, and for those with a degree £16.10.

Have I mentioned before that I don't understand news values?

Tuesday, 23 August 2011

More about HEFCE's approach to deregulation

I posted on Friday about HEFCE's new approach to working with institutions on their data returns. Essentially, they are shifting from an approach where we report data to them, and they audit it if it looks suspicious towards an approach where they will review our draft data as soon as we begin to test it (which we traditionally do using the online tools HESA provide), and commence an informal audit process straight away if they see cause for concern. There is also a shift away from the idea that HEFCE works through bodies such as HESA (and the QAA is another such) which are - in theory at least - owned by the sector towards the direct management of the sector by HEFCE.

In this first phase there are three specific areas where HEFCE are directing their attention:
·       Entry qualifications and the student number control
·       Research degree student numbers
·       Numbers that may inform WP and TESS allocations.

The first of these relates to the AAB numbers in the White Paper. HEFCE will be setting student number caps for non-AAB students recruited in 2012/13 on the basis of numbers of non-AAB students reported by institutions in 2010/11. These data are due to be reported by institutions to HESA in October 2011 and then by HESA to HEFCE (following various checking processes) probably in early December 2011. This means that the earliest HEFCE could provide student number caps to the institutions would be January 2012. The UCAS deadline is 15 January, so there clearly isn't that much slack in this system.

HEFCE's problem with the AABs is that historically, the quality of entry qualifications data for mature and non-traditional students is poor. See this spreadsheet for evidence of that. Now in October 2011, institutions will have a strong incentive to under-report their AABs in order to maximise their capped numbers (then in 2012 they will fully report, so that the AABs do not count against the cap), so HEFCE could use old and poor quality data, or they could use new data where cheating has been incentivised. They have chosen to use the newest data possible which, because of the established timetable, creates major risks for them. They then manage those risks by unprecedentedly early intervention in institutions data returns.

The next two bullets show how quickly we have slid down the slippery slope this represents. For research degree student numbers, HEFCE have recently decided to do away with the separate Research Activity Survey return and just rely on the HESA data. This was their own decision, allegedly to reduce burden on institutions, but now that they are looking at the HESA data anyway, they may as well check that we are getting this one 'right'. With the WP(widening participation) and TESS(teaching enhancement and student success - also effectively widening participation) allocations there isn't even any change of policy of data use this year.

HEFCE will argue that the earlier they spot a problem, the less cost and trouble to put it right, and of course this is true. But equally, shifting from the periodic audit we have at the moment to continuous audit of live data is going to create cost and trouble.

What I think will be interesting will be to see how this more interventionist HEFCE that is emerging will relate to the private providers it will have to regulate in future. Will private providers be as submissive as the existing institutions are? Unlike the universities, who still have funding to lose, HEFCE will have weaker control over the private providers. I see more cost and more trouble down the line.

Friday, 19 August 2011

Deregulation in action

HESA and HEFCE recently sent all institutions the following guidance:

Changes to validation and data checking arrangements
We are writing to you to set out details of changes to validation and HEFCE’s involvement in data quality work during the current student collection cycle. The primary responsibility for data quality remains with institutions and heads of institutions will still be required to sign off that the data are fit for purpose.
HEFCE are increasingly using HESA data to drive funding allocations and allocate student number controls. In particular the following HEFCE publications have signalled changes in the way HESA data will be used:
·       HEFCE circular 2011/20 ‘Teaching funding and student number controls: Consultation on changes to be implemented in 2012-13’
·       HEFCE circular letter 19/2011 ‘Discontinuation of the Research Activity Survey and future arrangements for data collection’.
In addition paragraph 7 of HEFCE circular letter 21/2011 ‘HESA funding and monitoring data 2010-11: web facility’ states that HEFCE may not in future incorporate post collection amendments into its funding allocations. This change means that it is now more important than ever that the data submitted to the HESA collections are correct. In order to support this, HEFCE also made it clear in paragraph 20 of circular letter 21/2011 that they would increasingly scrutinise institutions’ outputs from the IRIS system during the data collection period. HEFCE do not intend to scrutinise the outputs produced via their web-facility or through IRIS as the result of a test commit as they recognise that institutions often use these systems with partial data. HEFCE will scrutinise data from the IRIS system for both ‘committed’ and ‘Commit passed, HIN failed’ statuses in three areas:
·       Entry qualifications and the student number control
·       Research degree student numbers
·       Numbers that may inform WP and TESS allocations.
Where HEFCE have queries on any of these areas they will raise these directly with institutions. HEFCE recognises that data submitted to HESA goes through a cycle of quality enhancement meaning that there are often significant changes to data between initial commit and final sign-off. While HEFCE will compare data between submissions in order to ensure data quality is improved or maintained HEFCE do not intend to retain copies of submissions beyond the collection cycle or use them in any audit work. HEFCE do not intend to retain copies of submissions beyond the collection cycle or use knowledge gained through the in-cycle checking to inform future audit work. We encourage institutions to continue to interact with HESA’s data collection systems in the same way as in previous years to ensure that the final data are submitted on time and are of the highest quality. HEFCE expect to be able to provide further details of the process for data scrutiny during September.
In addition to the scrutiny that HEFCE will be applying to these data, HEFCE have also asked HESA to enhance the validation of qualification on entry information as these data are likely to be critical in setting the student number control for 2012-13. Details of the enhanced validation are given in annex A. HESA expects to implement these new checks in August. HEFCE plan to announce provisional student number control limits for 2012-13 in January 2012 to help institutions to plan their recruitment. Therefore, there will be no opportunity to further correct, or enhance, data between final submission of files on 31 October 2011 and the setting of provisional control numbers. The enhanced validation and checking will focus on ensuring that the qualification on entry data are complete, as missing data are likely to have a material impact on HEFCE’s ability to control overall student numbers.
By giving notice now of the detail of these changes to validation and data checking arrangements it is expected that the existing HESA student record data collection schedule will be maintained.

 If that is mostly Greek to you, what it means in practice is that HEFCE will now be monitoring our early drafts of data submissions to see what they can learn from them, and potentially intervening if they see something that makes them concerned and/or suspicious. Those of us who work in this area are exceedingly busy right now preparing for the initial data return in September - this kind of work doesn't even stop for Clearing.

In the past, we have used HESA's validation tools to check and improve our data. This means we don't have to have the same functionality as part of our own student record systems, and therefore it saves us cost and effort.

If HEFCE are looking at our draft data - even though I am sure they wish only to be helpful to institutions - we will be obliged to develop ways of emulating the HESA functionality without putting our draft data anywhere where HEFCE might see it. After all, policies change, data are not always used for the purposes for which they were collected, millions of pounds are at stake and HEFCE have been carefully only to specify their 'intentions' not to limit what they might ultimately do with these draft data. Right here you can see additional costs coming down the line for institutions as a result of the White Paper, and HEFCE taking ever more control of the sector.

Monday, 15 August 2011

Morrisons and the University of Bradford

According to the Guardian, Morrisons is planning to fund 1,000 students onto a retail studies degree. They already have 20 students a year on BSc Business and management at the University of Bradford, although there is a link on their recruitment site currently telling me that no vacancies are available on this programme.

The funding level in the Guardian story - £4,000 per head - makes no sense to me as a full-fee level even for a Foundation Degree. However Bradford had a significant award from HEFCE's co-funded employer engagement programme and the project website lists the previous Morrisons programme as one of their success stories. HEFCE would be allocating about £1,500 per Price Group D co-funded FTE in business. I don't have the details to hand, but 2011-12 is likely to be their last opportunity to fill places funded through this route, so a knock-down price might be better than giving the grant money back to HEFCE. If the places are filled in 2011/12, then HEFCE funding will continue to flow for the next few years under the planned transitional arrangements. It is therefore possibke that Morrisons managed to get this outstanding deal because Bradford were under time pressure to reach any kind of deal at all.

So rather than the shape of things to come, I think we may be seeing the last gasp of the previous Government's policy approach playing out here.

Tuesday, 9 August 2011

Foundation Degree Awarding Powers for FE Colleges

Degree awarding powers come in three flavours - taught degrees (TDAP), research degrees (RDAP) and Foundation Degrees (FDAP - in effect, a subset of taught degrees). The Higher reports that two colleges have now been awarded FDAP.

I have limited direct experience of the FE sector, having worked in HE institutions that received LSC funding in previous roles. From my perspective there seem to be two broad classes of FE Colleges which want to develop and grow major HE operations. Of these, the clearest and most straightforward are the specialist institutions - primarily in Art & Design. A steady trickle of specialist FE Colleges makes the transition into the HE sector by growing their HE activity until it is more than half the total. At least one of these, the Surrey Institute of Art & Design, is now a university in its own right. The reasons for growing the HE activity are not hard to seek - HE is better funded than FE - and the additional step into the HE sector also makes very clear sense - HEFCE, with its tradition of hands-off respect for institutional management and (at least up to now) its block grant funding principle, is clearly a much better body to work for than ever the LSC was. Reading the HEFCE Board papers will show you that these transitions are still continuing.

The two institutions gaining FDAP are quite different, as they are large (in the case of NCG very large) generalist FE colleges. Other Colleges seeking FDAP that I know of, such as Havering, also fit this mould. Here there seems little chance that HE can ever be the majority activity: at Havering it is about 1,000 students out of 7,000, at NCG 3,500 out of 40,000 (and NCG is growing at the FE end), and at New College Durham it is 16% (about 1,800 out of 11,500 learners). Havering primarily has validation through the Open University, New College Durham (I think) through Leeds and Sunderland, and NCP don't seem too keen to publish their partner names, but do mention UCLan in their annual report. Newcastle College (a subsidiary of NCG) has £11,089,410 of direct HEFCE funding in 2011-12, Havering £4,351,560 and Durham £3,725,762 (which, incidentally, is just outside the top ten for HEFCE funding of FE colleges). In other words none of them is in any sense in a 'Feudal' relationship with a local university, at least as far as I can see.

Whilst Framwellgate Moor lacks a pre-existing vocational HE provider, you could hardly say the same for either Newcastle or east London. So seeking FDAP can't necessarily be taken to be either an attempt to fill a market gap or part of a strategy of institutional transformation (as in the case of the specialist colleges). I understand it as part of a strategy to protect an established revenue stream in a relatively small group of FE Colleges.

Monday, 8 August 2011

Fraud in the HE sector

I was reading this report on fraud prevention in the HE sector on the train into work this morning. It suggests that up to £1 billion could be lost to UKHE through fraud each year, and that institutions typically have limited technical capability and a weak culture of fraud prevention. The Higher covered it here, and Paul Greatrix has some rather sniffy comment here (which kind of demonstrates what they were saying about a weak culture of fraud prevention, given that Paul is a very senior manager at a very large and prestigious university, and therefore represents the absolute cutting edge in HE management thinking).

There are obvious reasons to be sniffy. The report is a pretty basic piece of work unashamedly produced by anti-fraud professionals to drum up business. Even they don't really believe the £1 billion figure - notice how it is prominent in the press release, but not actually in the report at all...

But considered as an upper bound, I don't find the figure particularly incredible. I've now worked in four institutions, and come across fraudulent practices in all of them. If you look not just at departmental administrators dipping their fingers in the petty cash, but also at student loan fraud, research grants, fraudulent data returns to HEFCE, and all the other kinds of fraud out there then you can see that the number will start to add up. Then there are those more questionable things - I've personally seen many examples of university (middle and senior) managers procuring goods and services from their friends and business contacts without even the most basic market testing required by Financial Regulations. I've no reason to think that there was out-and-out corruption involved, but sometimes the excessive price paid does make you wonder.

Of course not all these frauds cost individual universities money - and some may even gain money for the institutions that don't get caught. You can see why it is hard for institutional leaders to have a really strong anti-fraud approach when they are more-or-less consciously cheating HEFCE on their data returns.

Things have improved. When I worked at HEFCE, we always ascribed financial irregularities on the part of institutions to incompetence, whatever the evidence might indicate to the contrary. That isn't the case any longer and HEFCE at least now undertakes more rigorous audit. Still, I think there is a lot of room to improve. If I were a senior leader, I would stick my hand in my pocket for the £4,450 (plus VAT) for my fraud resilience check - at least after I had tested this price against the market, I would.

Friday, 5 August 2011

Financial Health of the Higher Education Sector

HEFCE's recent publication reporting on institution's financial forecasts has been rather misreported, it seems to me. The Higher leads with 'sector braces for fall in numbers', the Guardian with 'half of universities predict student numbers will fall'. These stories show naivety (whether feigned or real) about how these projections are prepared, and what their purpose is. As I have spent many years working with colleagues in Finance (primarily) on annual accountability returns, I'd like to provide a slightly different perspective.

Monday, 1 August 2011

Incentives for AAB applicants

I don't really understand news values. The idea that students with AAB grades might get financial incentives to attend certain universities is all over the web and papers today (see here, here, here,  here and here, just for example) although this was clearly and centrally part of the White Paper from the start. Government wants institutions to compete for these applicants, and it is natural that some will compete on service and others on price.

What is sufficiently interesting is the identity of the institutions identified as competing on price. I've seen references to Kent and Essex. If you look at the HEFCE data, then Kent has 10% AAB students, and Essex 8% (looking at UK-domiciled only, for convenience). As AAB entrants are a relatively small proportion of their intake, giving discounts may not be financially crippling for them, whereas for institutions higher up the scale (say SOAS at 57% AAB), substantial discounts might be unaffordable. I find it quite startling that institutions like Essex and Kent now seem to find themselves below the squeezed middle, and able to play for growth in their AAB numbers in consequence.

Friday, 29 July 2011

An Insider's guide to finance

This link has been circulated by Lucy Hodson of the National Planner's Group, so genuine insiders will have seen it already.

It's an interesting and useful guide to reading a financial statement, and not too long. there are some issues that get much less coverage than I would expect, though. One key metric I always look at is the proportion of staff costs to all costs. the average in the sector is very high - 58% staff costs - and in institutions with poorly-controlled staff costs the figure can be much higher than that. Staff costs tend to increase faster than inflation due to incremental drift, even when headline pay rises are low. The combination of a below-inflation increase in funding and an above-inflation increase in staff costs when staff costs are already very high can create a continual erosion of funds for non-staff costs. As staff costs are so difficult and painful to remove from an organisation, this can be a very difficult cycle to break out of once it is established and it eats up any freedom to act at the strategic level.

By contrast the level of surplus generated in my view tells you less. When there is lots of money around, you can (and accountants do) change your depreciation policy or make provisions to hide the money, and you can also (more positively) increase your investment in maintenance and so forth; so sustained high surpluses are rare. Equally when cash is short you can change your accounting policies back and cut the maintenance budget to avoid posting a deficit or minimise the size of the deficit.