Some controversial wording in the HEFCE funding consultation

As I reported here, HEFCE have now issued their consultation document on funding changes initiated by the White Paper, and it contains some words which will, I think, be controversial in the sector:

Our current teaching funding is allocated as part of a block grant, which institutions are free to spend according to their own priorities within our broad guidelines[1]. Since HEIs and FECs are autonomous bodies that set their own strategic priorities, they are not expected to model their internal allocations on our funding calculations. We expect this principle to continue to apply in 2012-13. 

We will continue to recognise the autonomy of institutions. However, as teaching funding becomes more targeted, we will consider introducing further guidance or requirements as to how it is used, particularly taking into account any legislative changes that affect our funding powers.

---

[1] For full details of HEFCE’s current funding methods see ‘Guide to funding: How HEFCE allocates its funds’ (HEFCE 2010/24).

 That word 'recognise' is rather delicate, but clearly this indicates an intention to restrict institutional autonomy in a very straightforward way.

The sector can be expected to be very upset by this, but at the end of the day HEFCE already has a very wide power to set conditions on its grants, and the only way to avoid coming under that power is not to take the grant.

Core and Margin: more on AAB

You may have seen today's Higher, which estimated the number of AAB students in certain institutions by looking at people with 450+ UCAS tariff points. Obviously 450 points is significantly more than you would get from 3 A-levels at AAB, but very highly qualified young people will tend to have other tariff-bearing qualifications such as Grade 8 in one or more instruments, or a British Horse Society certificate.

I have spoken to colleagues at BIS who confirm that the exact methodology will be for HEFCE to consult on, but their policy intention in writing 'the equivalent of AAB or above at A-Level' in para 4.19 of the White Paper was not to refer to the UCAS tariff. Presumably they wanted to leave some flexibility to include qualifications which elite institutions do recognise (such as International Baccalaureate).

Then, literally whilst I was writing this post, HEFCE published their consultation and set out the rules in Annex C. UCAS tariff has nothing to do with it. They have also promised institutional-level modelling of the impact, which will be great to see.

The implication of using a very restricted set of AAB equivalences, as HEFCE propose to do, is that there will be even less impact outside the elite from this measure. I'll wait until HEFCE publish their model before I write more, but I will note that HEFCE have expressed concern about subject provision and Equality & Diversity impacts from this policy. I think they are right to fear both.

The White Paper in six bullet points

Once you have stripped out the rhetoric and the ritual gestures - yet another pledge to 'examine' post-qual admissions for instance - the policy meat in the White Paper can be boiled down to six bullet points. And they are these:

• Under the core/margin model, a proportion of all institutions' student numbers will be removed by formula and reallocated through a bidding process controlled by HEFCE. In the first instance only cheap institutions (primarily FECs) will be allowed to bid. As I said earlier, this is a decisive rejection of the market model. Student numbers will be planned and controlled centrally by a Government agency, and popular institutions will not be allowed to expand unless Government wishes to let them, whilst unpopular institutions will be sustained.
• Charity or employer-sponsored students who make no claim on the public purse will be exempt from student number controls. Whilst the attention so far has focused on employers, I think there is real scope for charities to do something interesting here.
• VAT on shared services is finally going to be addressed. This will make it radically more cost-effective for institutions to share backroom services, which is big news for those of us who work in the back rooms of universities.
• Degree Awarding Powers and University Title are to be liberalised, and it is to be made easier for institutions to change their corporate form (e.g. from a charted corporation to a limited company). On the other hand new powers will be sought to suspend or withdraw degree awarding powers. I've said before that DAPs are a side-issue for new providers, but this will be a big issue for existing providers, and the scope to change corporate forms will make it much easier for the often-talked about privatisation of a current university to happen at some future time.
• Deregulation. Like most, the current White Paper shows no understanding of what makes regulations expensive for institutions to comply with. Here's a hint. having less certainty when QAA will turn up, but knowing that they have more power to do nasty things to you when they do is not going to help Vice Chancellors sleep at night.
• HEFCE. From 2013 onwards, HEFCE are going to regulate all existing and new providers, and fund all not-for-profits. Many of the existing 'private' providers are not-for-profit and will become eligible for HEFCE funding. All will be able (subject to OFFA agreement) to charge up to £9k from 2013. All will be subject to student number caps in future. HEFCE will have a dual mandate to regulate but also to fund and, through funding, to pursue a specific Government agenda. The move away from a block-grant (in public HEIs) or a direct commercial relationship with students (in privates) to an ever-increasing 'margin' of student numbers allocated through annual competitive bids to HEFCE places HEFCE very firmly in the driving seat of the sector from now on.

In the immediate future, growing private provision will itself be a government priority, so private providers should be able to get reasonable allocations of 'margin' places in the first few years. In the middle-to-long term, however, HEFCE will come to constitute a key obstacle to their growth plans (just as HEFCE is a key obstacle to my current employer's growth plans) and they will therefore require a high level of expertise in HEFCE-management to overcome this obstacle, or at least to mitigate the impact. I think it's fair to say that 'students at the centre' was the wrong title for this White Paper.

The White Paper - an initial reaction

I'm spending this morning on the line-by-line analysis of the White Paper for my employer that I can't really post here, although I'll put up some edited highlights.

But before getting lost in the line-by-line stuff, I think its important to note that this White Paper is a complete rejection of deregulation and market-based competition in UK Higher Education. I wouldn't call it an 'unprecedented' extension of central planning, (a) because that would be melodramatic and (b) because there are actually a number of precedents, but I think 'significant' would be a suitable word.

More later

I wouldn't normally link to Tim Leunig, but

Here he is on the White Paper, and for once I think he is right. Core/Margin will make little difference to anyone if the margin is 5%

Update 14 July 2011. I heartily regret giving Leunig this link becasue he was, as ever, wrong. I've since blogged on core/margin here, here,  here, and here, so pretty clearly I think core/margin is a big deal.

Traffic to sites in the long tail

He's talking about me.

I found the animated version less helpful, but YMMV.

In praise of OFFA

I too received one of these carefully worded emails in my day-job capacity, and I have to say my instinct was not to grumble about being asked to do more to widen participation - after all my employer is a charity and its educational work should therefore (in an ideal world) benefit primarily the disadvantaged - but to admire the care with which the wording had been constructed.

"Our aim is to improve the performance of the sector as a whole and we therefore need you to improve your absolute performance … as well as measure how you are doing compared to others," the watchdog wrote. "Please consider this issue as soon as possible and make any amendments you think appropriate."

OFFA has a delicate line to tread between Government's policy aspirations and its own sharply limited powers. Its one real power - to refuse to agree an Agreement - is a nuclear one and would almost certainly be challenged in law if ever exercised (after all, a medium sized university will lose £10 million or more for every year it goes without an Access Agreement - even lawyers don't cost that much). I really admire the way that OFFA are treading that line so carefully.

Private loans

I'm not clear what's supposed to be secret about this, but I suppose it makes for a better headline.

The banks are said to be keen provided someone else takes the risk. That's hardly a surprise. Anyone ought to be keen on a business deal in which someone else takes the risk and leaves you only the rewards.

Government probably can't take the risk. The risk is - in effect - the RAB charge that David Willetts is already paying and there will only be scope here through something that amounts to regulatory arbitrage - in other words to a different basis of calculation that comes out with a different £ figure for the same risk.

Institutions can, but why should they? The banks will want to do business with elite institutions because their students get the best jobs, but elite institutions (assuming the AAB plan goes into effect) will have uncapped access to the state-funded loans, for free. At best, if they share my view about the legal risks of the AAB plan, private loans will give elite institutions that wish to grow their FTUG numbers a way to get uncapped numbers for all qualified entrants.

I suspect the set of elite institutions that wish to grow FTUG numbers and agree with Andrew Fisher is a small one.

There may be scope for non-elite London institutions to be involved, simply because their graduates tend to earn better at least at the start of their careers (due to London Weighting), and some of these may wish to expand - in fact many of them certainly do. Will the banks and the institutions be able to agree on a value for what the risk is in these cases? We have good data at the institutional level six months after graduation, but not thereafter. My instinct is that it will be difficult to get enough longitudinal data determine the level of risk at all accurately (there is a certain brute unknowability about the future). Banks may find the residual risk well within their tolerance, since lending money is what banks do for a living, but the institutions may not.

There may be a middle way where the Government (in effect) bribes institutions to accept the risk - the bribe may be less than the RAB charge would have been. Thus overall numbers can increase as less risk-averse institutions expand. Provided the bank-funded loans have exactly the same terms and conditions as the Government-funded ones (and why wouldn't they, if the institutions are paying the banks for the extra risk this involves?), then the distributional issues are resolvable.

Legal challenge to fees

I can't see that this has much chance of success, at least on the face of it. The argument that

those from ethnic minorities could be discriminated against by the change and that the government failed to give due regard to promoting equality of opportunity, required under discrimination law.

looks more convincing in plain English than in law, I suspect. That said, anything is possible in a judicial review process.

Realising business benefits through the use of benchmarking

I attended a seminar at Cheltenham on Friday as part of the HESA project on benchmarking. Far and away the most impressive presentation was from Helen Galbraith on the use of benchmarking between different academic units at Bristol as part of the major reoragnaisation they have put in train there. What I really appreciated about this was the attention given to administrative processes at a detailed level, rather than yet another high-level comparison of NSS scores or staff/student ratios.

I was also struck by the presentation from Thomas Loya at Nottingham. He described an extraordinarily detailed investigation of course costs at the module level that - as far as I could tell from his presentation - reached the conclusion that modules with few students on them lose money. Nottingham - again as far as I could tell from what he told us - had struggled to turn this insight into action, and accordingly was going to spend yet more resource on an even more detailed examination of course costs.

What I take from this is that knowledge is only power in the hands of powerful people who wish to use it.

A Conversation with Andrew McGettigan

Andrew McGettigan published a valuable article on the Government’s proposals for new providers here, and a specific blog post on regulation here. In the blog post he quoted an article by Roger Brown, one of many in which Brown has cast doubt on the possibility of an efficient market functioning in the HE sector.

Andrew and I then exchanged some long comments in his blog. This post is intended to continue that conversation at greater length, and maybe with greater care than some of my previous blog posts because there are a number of issues in play between us. I call it ‘conversation’ rather than ‘argument’ not because we agree about everything but because ‘arguments’ on the web sometimes get out of hand. I don’t mean to imply that Andrew and I have actually met and talked, or that we are ever likely to. 

Andrew identifies two key points of contention between us. One might be called political, in that when he looks at the old dispensation in UK HE he sees something relating to the post-war British welfare state which is worthy of preservation whereas when I look at the old dispensation, certainly in Undergraduate education, I see a bulwark of the British class system which is ripe for destruction. This means he is frankly opposed to the new dispensation, whereas I am ambivalent. I think that in many ways it is unlikely to be worse than what we have now. Having noted this, I propose to take it no further. I think I can easily demonstrate what I mean if (very improbably!) anyone disagrees with me on the point of fact that UK HE is a bulwark of the class system. If anyone disagrees with me on the point of value, they are welcome to do so. It isn’t my intention to use this blog to persuade people to share my politics.

So the second outstanding issue relates to regulation, which is something this blog is about. In essence Andrew sees degree awarding powers as playing a key role in the regulation of the sector, and specifically relaxing the criteria for the award of such powers as a key plank in the government’s reforms. I think David Willetts may well agree with Andrew, but in my view they are both wrong. This matters deeply if you happen to share Andrew’s politics because if you fight this battle, you will lose the war and David Willetts will find (perhaps to his surprise) that he can deliver all the change he wants to deliver with the DAP regulations as they already exist. It also matters even if you don’t share Andrew’s politics, because a focus on the DAP issue leads you to look in the wrong direction and attend to some of the wrong competitors.

BPP going into the campus management business

This leaves me flabbergasted. BPP's core competencies are in teaching. Its track record shows that it is better than many public universities at delivering professionally-focused programmes in a professional way. But what background does it have in estates, procurement, IT and facilities management? They don't even have a campus of their own. Their existing business model relies on a distributed set of small, city-centre training venues (not that I'm knocking that, it seems like a really powerful business model, I just don't see how it demonstrates the core competencies to run a leafy suburban university campus).

I can't see anything specific on the BPP site, so maybe this is just loose talk. On the other hand there's a temptation to put this together with what Jon Baldwin has been saying and make conclusions, and I can't wholly resist that temptation.

University of Wales validations

If I were a private provider this would drive me mad. Here is a clear example of a case where degree awarding powers have been used recklessly yet, because public HEIs have their degree awarding powers in perpetuity, there seems to be no punishment beyond some bad publicity. A private provider, by contrast, would have to get their degree awarding powers renewed every six years and would surely fear losing them after a debacle like this.

More Select Committees

I've linked previously to the PAC committee, here is a link to recent evidence sessions by the BIS committee. The standard of witness that select committees get is generally high, but I particularly recommend Barr, Dearden and Conlon, here. They are well worth your time to read.

Shared Services

I've posted before that I find this surprising, but here is Warwick's Registrar again quite clearly saying that he wants to outsource Registry functions, and expects to join with other institutions in doing so.

I can't help but see this as evidence that the 'traditional' university administrator (and I am one of those) is losing status in the sector. You don't outsource high-status activities which are central to the career paths or self-identities of senior managers. You do outsource cleaning and security. I'm also surprised because data management and data returns are so full of risk to universities at the moment (unlike, say, cleaning) that I would have expected institutions to be determined to keep close control.

That said the purely technical prospects for this kind of shared service are good, and the private providers in particular should really welcome a service like this (if it was genuinely cost-effective). I wonder if that is part of the model?

Risk management

When Ferdinand von Prondzynski says:

Those who manage risk registers may feel that their efforts produce sounder policies, as indeed they possibly do. But they also breed an atmosphere of strategic timidity in which the unknown is regarded with suspicion.

He's talking about me. And to be honest this is one of the attitudes I often see in senior university managers that I find personally irritating, so I had better be careful in exactly what I say.

Taking a risk when you understand what the risk is may require courage. Taking a risk that you don't understand can only be foolhardy. It's difficult to respect those who seem to see foolhardiness and timidity as the only options available to them.

Housekeeping

As there are now quite a few posts on this blog, I have gone through adding labels. I'd welcome feedback from readers about whether the labels I've used make any sense to you.

The LSE £8,000 fee

Can't resist blogging about this, even though as far as I can see the story is based on an Academic Board vote after the Access Agreement has already been submitted, so not only too late, but by a committee with no power over fees setting.

http://www.guardian.co.uk/education/2011/may/11/london-school-economics-vote-8000-fees

http://www.bbc.co.uk/news/education-13360126

However it would certainly be funny to see the LSE position itself as a low-cost provider - London's second-cheapest after LMU at time of writing.

The takeaway lesson for policy makers is that markets don't work if players don't obey market rules. A supplier is 'supposed' (if I can simplify slightly) to charge as high a price as he or she can get away with, and make as many units as he or she can sell, but HEIs have non-market values and may therefore choose lower prices or decline to expand provision even where they could do so at a profit.

That said, LSE has not been shy about setting very high fees for Overseas and Postgraduate study - Postgraduate Home fees already range over £25k in certain cases. I suspect the £9,000 fee is what was put into their Access Agreement. Whilst institutional values have an impact, I think that government regulation (specifically the student number control) is still the key factor preventing the emergence of a market in UG fees.

UCU Report on private providers

It is tempting to file this under 'turkeys not voting for Christmas', but I thought it was worth reading at least, before I dismissed it.

Having read it, to be honest I have even less respect. Rather than consult with genuine experts, UCU have surveyed professors seemingly at random over the web. They tell us how many responded, but not the response rates, or any data about how representative of professors their sample is, so even as a survey of professorial opinion, it seems pretty weak tea. Why professors have more valuable opinions than any other UCU members, I can't see they tell us. There's no genuine new information about the providers themselves here.

Sometimes you can judge a book by the cover.

The Key Information Set

HEFCE have published more data on the Key Information Set. Some quick highlights are:

1. The definition of a contact hour:

any activity that a student has to attend or undertake at a fixed point and that has no flexibility for when it is undertaken, and where the student also has access to an available staff member. This would include lectures, tutorials, seminars and online discussions that take place at a specified time.

I predict widespread adoption of  online discussions that take place at a specified time as a cheap way of driving up reported contact hours.

2. The role of private providers. Currently only a few subscribe directly to QAA and are covered by this requirement, but where they are in partnership with UKHEIs then the HEI will be responsible for ensuring that data are collected and published on the partner's website. As most of these partners will be migrating to direct subscription to QAA (but only getting their own degree-awarding powers much later, or not at all) there is ample scope for confusion here, as I've discussed before.

3. For modular courses (which is most courses) the reported contact hours and assessment methods should report a 'typical path' (para 74). I can see scope for substantial gaming here to present the most advantageous 'typical path' by concentrating resources on certain modules.

4. But the key issue is still the definition of a 'course'. HEFCE think there are just 23,904 'courses' (that is unique combinations of institution, subject, mode of study and qualification) in England. Even at that level, some 'courses' reflect aggregation of data across two years, or across very high-level subject groups. Data like this will fundamentally not be comparable between institutions. Suppose institution A has a set of Media Studies programmes which are very theoretical, and institution B has some theoretical programmes, and some practical, skills-based programmes. At these levels of aggregation, institution B's students will seem to have better employability outcomes and more contact hours if an average is taken across all programmes even if on the theoretical programmes which are actually comparable the contact and outcomes are very similar. So applicants choosing between institution A and institution B for a theoretical Media Studies course will be actively and seriously misled by the KIS.

Uncapping the elite institutions

The idea of uncapping recruitment for high-tariff applicants has appeared again in the Higher. This is good news for me, because it allows me to recycle a previous post. I'm told this is good for search-engine optimisation.

You can see why this is attractive to Government. Almost all AAB-and-above students already enter HE, so by uncapping them at the individual institutional level they are unlikely to see more numbers in the sector overall; therefore removing caps at this level is unlikely to cost Government any money. Moreover shifting the balance so that elite institutions have to compete with each other for applicants, instead of applicants having to compete for places as they do at the moment, would also be desirable for Government.

For the elite institutions, though, this would be a very undesirable development. Firstly most elite institutions wouldn't want their Undergraduate provision to grow at the expense of postgraduate and research, because this would distort their mission. So they would see a real threat of losing numbers, but not an attractive opportunity to gain numbers. Secondly, even if some institutions decided to go for this growth opportunity, they would face very significant legal risks.

Remember that many applicants have no A-level tariff, or have tariff as just a part of their qualifications. These could be older applicants who have done Access courses, or foreign applicants (French people, let's say): they are not necessarily poorly qualified applicants and might well meet the institution's criteria for an offer.

The Equality Challenge Unit gives us a helpful definition of indirect discrimination.

Indirect discrimination occurs when a provision, criterion or practice is neutral on the face of it, but its impact particularly disadvantages people with a protected characteristic, unless the person applying the provision can justify it as a proportionate means of achieving a legitimate aim. Ultimately, if tested, it will be for a court of law or tribunal to determine what is justifiable.

So to give a place to an applicant with AAB-level tariff points, whilst refusing another to a highly qualified applicant from France, or an older applicant, is likely to be unlawful indirect discrimination on the grounds of race or age especially where the institution cannot show that this discrimination is down to the exercise of academic judgement about the precise qualifications required for the course (e.g. if you have admitted other French people onto your remaining capped numbers). Now as an elite institution you might be able to afford an outstanding lawyer who could argue that maximising your revenue was a 'legitimate aim' in the meaning of the Equality Act 2010, but why would you risk the cost of going to law?

Therefore I would expect to see very few or no elite institutions taking the line that their courses were full except to applicants with tariff over AAB.

The Independent Adjudicator's annual report

Press coverage of this report seems to focus on the rise in complaints (see here and here), but it is so tortuously difficult to raise a 'complaint' with the OIA that I think this language is seriously misleading. More business for the OIA may well mean more complaints in the plain English meaning of the term, but the OIA's business is such a small proportion that there's really no way to tell (were there really just 1,341 complaints about universities last year? Of course not).

I'd rather comment on two different issues in the report. Firstly the (ahem) robust view the OIA takes on the Browne review:

Lord Browne’s ‘Chapter 6’ proposals to create a new, uncosted, ‘super-quango’ of merged regulatory bodies (including the OIA) failed basic tests of evidence-based policy-making. The review ignored the experience of recent regulatory reform in legal and financial service sectors where policy planning effectively combined the need to create joined-up regulatory arrangements with respect for the integrity of independent complaints resolution. Happily, universities and students’ unions have recognised and rallied strongly behind the imperative of a continuing and independent OIA as a central ingredient of validating key aspects of the student experience in the new arrangements.

which certainly isn't the kind of language I'd use in my annual report. Clearly the OIA values its reputation for independence.

Secondly some of the case studies which need to be publicised as widely as possible as indications of just how awful UKHE can still be sometimes.

Case 6: S was pursuing a DipHE in Nursing. At the final placement review meeting S was told that she had failed the placement and the course because she had not met the module outcomes for the placement. S wrote an informal letter of complaint to the Course Leader and her complaint was passed to two other members of staff before being passed back to the Course Leader 8 weeks later. The Course Leader wrote to S stating that she had investigated S’s complaint and reviewed the practice documentation, and had concluded that
S’s complaint was unfounded. S was not told she had the right to proceed to the formal stage of the complaints procedure or that there was a 5 day time limit for doing so. It instead asked S to confirm within 14 working days if she was satisfied with the outcome of her complaint or to contact the Course Leader or Students’ Union if she was dissatisfied. S rang the Course Leader indicating that she would be seeking advice from the Students’ Union. S was not told that she was already out of time to make a formal complaint,
nor was she advised how to make one. 8 weeks later, when S learnt she had been given a lesser award, she made an academic appeal. The University issued a Completion of Procedures Letter saying S’s academic appeal was out of time and that the complaints procedure had been completed because she had not pursued a formal complaint within the 5 day deadline and the matter had therefore been closed.

How poor is that? yet the OIA only found this student's complaint partly justified...

How to start your own private provider

I think this is supposed to be funny.

Measuring access

BIS is consulting on a new statistical indicator for widening participation - the proportion of young entrants previously in receipt of free school meals (FSM). They can calculate this by matching the individualised HESA data from universities and colleges to the individualised schools data from previous years. If you have a Jiscmail account you can read Mike Milne-Picken's detailed analysis on the Admin-Planning list.

The existing measures are Socio-economic class (NS-SEC), state school, and low participation neighbourhoods, all of which are derived entirely from the HESA data provided by institutions. SEC in particular is troublesome and getting more troublesome, because applicants are increasingly unwilling to answer questions about their (or their parents') occupations, or they answer them untruthfully because they think that middle-class parentage will count against them in the admissions process. Whether or not you went to state school is fairly uninformative about social disadvantage. The postcode data are easy to collect but, especially in London, there are weaknesses where rich and poor people live too close together.

From my perspective, through, the main weaknesses of the existing data are their poor coverage of PT students and mature FT entrants. PT entrants will not usually pass through UCAS so the SEC data are not usually collected, whilst neighbourhood data is particularly unreliable if it describes the area where you currently live rather than the area where you were brought up. The FSM measure will be even worse for this group than our current approaches, though, because matching to decade-or-more-old schools data will be effectively impossible.

Young FT entrants are obviously an important group, but so are mature and PT entrants, and so often the young full timers seem to hog all the limelight. The mature and PT entrants are not like the young entrants, in particular they are from different ethnic and social groups - precisely the kinds of differences that should be relevant to WP policy. If the published data concentrate even more attention on young students, that cannot lead to good policy making.

A second problem relates to transparency. Rightly, the schools data is not going to be shared with institutions, so we will not know which of our students are FSM or not-FSM. This will be a big frustration to university managers who can currently tell pretty easily who their WP students are - at l;east among that young FT group.

Given the increasing weakness of the NS-SEC data, FSM may be the right solution. I suppose my hesitation is that I see it as a solution to the wrong problem.

Graduate employment

http://www.tnr.com/article/economy/89675/bad-job-market-media-wrong-college-degree?page=0,0

Although this article is specific to America, the moral panic about graduate employment and employability exists in the UK too. An issue I'd like to blog about at greater length some other time.

Interesting if true

http://exquisitelife.researchresearch.com/exquisite_life/2011/06/cameron-summons-englands-universities-to-crunch-tuition-fees-meeting-tomorrow.html

not yet on BBC or Guardian, or THES sites, but a pretty full report.

Update Friday 10 June:  Guardian now has this story too

Studying abroad

This strikes me as miserable. That only 400 UK residents should even have applied when my university alone has 198 Greeks, 536 Nigerians or 155 Sri Lankans (not to mention 739 Indians) actually enrolled shows how much more work still needs to be done to undermine our absurd British parochialism. Hopefully the data will be better next year.

HESA and the private providers

Asking a couple of questions about these data for my not-progressing-very-quickly series on private providers has just led to a very interesting phone conversation with a HESA official whom I shall not name.

Firstly I was wondering why some major private providers like Kaplan International and INTO were not included in the HESA data. The answer is quite simple, although it really surprised me: where private providers were deemed to be doing 'preparation' courses for University entry, they were deliberately excluded from the scope of the project.

Secondly a more technical point. I was concerned that there would be double counting of students because many students at private providers are on programmes franchised from UK public providers, and those public providers may consider the students at their partner institutions within the coverage of the HESA Student Record (the standard data set from which performance indicators, NSS and other nationally-published data are derived). This depends on the term of art 'registration' which is defined (should you care) here and here. HESA confirmed my view. If everyone has a clear understanding of what 'registration' means to HESA and HEFCE, then there will be no possibility of double-counting, but in practice there is likely to be a fair amount of double counting, because private providers  probably don't understand 'registration' in this highly technical sense. This is a known issue with HE/FE partners where only one body should report student data, but very often both do, and private providers are very unlikely to understand these issues better than the data professionals in FE colleges.

Why are these fantastically obscure HESA technicalities of any interest? The answer is that the UK Border Agency is obliging all private providers to be regulated by the Quality Assurance Agency (QAA), which in turn is likely to mean in future that they will all have to return data to HESA. However HESA's idea of who is 'registering' the students is very different from UKBA's idea of who is 'sponsoring' the visa. At one time public institutions thought that they might be regarded as the sponsors of all their private partners' students, and were very concerned about it indeed. They would almost certainly terminate all their partnerships rather than accept the responsibility of sponsorship. These technicalities are therefore likely to lead to an almighty brawl in the not-too-distant future simply because there isn't capacity for everyone to meet their obligations with the precision required to make the data add up.

The 680-odd existing private providers are all going to have to hire somebody with a strong understanding of HESA data requirements in the near future. I doubt there are 680 such people in the whole world, but as I was only just saying that I expect our VCs to love us less in future, it is good to know that someone else will be loving us more. In practice, I suspect that many of the very small providers out there simply won't be able to support the addition to their costs of providing the specialist IT systems and expert staff needed to report data to HESA and will have to go out of business.

Oxford vote of no confidence in David Willetts

Does this make any difference to anything? Mark Leach says no. He is right, of course, that the real debate about the contents of the White Paper is taking place amongst a very small group of politicians and their trusted advisors. He forgets two factors. Firstly those politicians are very sensitive to public opinion. You only have to remember as far back as May to see that.

The second is more interesting. Once the White Paper has been delivered, most of the policy in it will be delivered not be legislation, but by existing sector agencies - HEFCE, QAA and the like. They will implement some compromise between the Minister's stated intention, their own policy and traditions, and the things which seem acceptable to their stakeholders. An example which sticks in my memory because it led to a lot of work for me personally is a former White Paper. The intention was to allow much easier access to the title 'University', but by the time QAA had finished implementing this policy, it didn't feel much easier to me.

So the political theatre does matter if it reflects the opinions of key stakeholder groups either for politicians or quangocrats. I suspect the Congregation of the University of Oxford isn't a key stakeholder group for either of those, but perhaps I am wrong.

The power of HEFCE

The PAC report also deserves a post on the power of HEFCE. HEFCE has really only one power: the power to place conditions on grants. It’s clear enough that this power varies in proportion both to the size of the grants and to their relative importance to the recipients. When you hand out grants worth £7 or £8 billion, which are 30-50% of the turnover of the universities that receive them, then the power to place conditions on those grants is a Hulk-like superpower.

As an example of this, consider Equivalent Level Qualifications (ELQs). The Secretary of State is forbidden by law from setting conditions on grants relating to students’ qualifications on entry yet through ELQ policy he instructed HEFCE to do so and it did so, and institutions put up with it. It needs a very strong incentive indeed to challenge your regulator when your regulator is also your principal funder.

Similarly the cap on student numbers is nothing more nor less than a condition of HEFCE grant.

When HEFCE does decide to punish an institution for infringing a condition of grant, it can currently do so merely by adjusting future grant flows. Even when funding is reclaimed the net flow of funds is still from HEFCE to the institution. There is no need for a legal enforcement process because an immediate, painful penalty can be implemented by simple administrative action. And in better days, compliant institutions could be rewarded with Additional Student Numbers or Strategic Development Funding.

The White Paper is going to have to give HEFCE (or some other body) explicit powers to regulate institutions – both the current HEFCE-funded set and also, perhaps, the private providers in receipt of student loan support. This will seem like a large increase in HEFCE’s (or whoever else’s) powers, but in practice it is likely to involve a large decrease  both because the power of discretion will be much less and because the costs of failure to comply will be much lower. 

For professional planners this is both good and bad news. Bad, because when HEFCE becomes less powerful our detailed knowledge of how to manage its requirements will become less valuable for our institutions. Good, because when HEFCE becomes less powerful it will have to respond by taking fewer risks and doing more explicit regulation. So our jobs will be safe, even if our VCs value us less.

Public Accounts Committee: Regulating financial sustainability in higher education

The select committees are one of the least-embarrassing parts of the British system of democracy. Their operations are very transparent, they generally secure a high standard of witnesses and, in the case of the PAC they have the support of the NAO, which generally produces first-rate reports. The committees themselves can be anecdote-driven and the quality of questioning is not always high, but it beats PMQs.

The PAC report on financial sustainability in HE is here. The relevant NAO report is here. You will see that the NAO were rather more positive about HEFCE than the Committee.

The published report includes the transcript of the oral evidence sessions, but prior to publication you could also have read the transcript here. This is often a valuable way to glean things of value when Ministers and their key officials are giving evidence. For instance on p.9 of the evidence, Alan Langlands suggests that student numbers caps will last ‘probably only for the next two or three years’. This isn’t earth-shattering in itself but stated so matter-of-factly it does tell us a good deal (compare and contrast Martin Donnelly squirming on what might be in the White Paper).

Another very interesting exchange is on p.20. The NAO report mentions that in the event a publicly-funded University becomes insolvent, the Government might be left on the hook. Both Donnelly and Langlands are very careful in what they say on this point, Donnelly says the ‘legal structures’ and ‘process’ for such an institutional failure would be entirely normal private company or charitable ones (this depends on the exact corporate form of the HEI in question). Langlands says there are ‘absolutely no express guarantees from either the Secretary of State or HEFCE’. In other words both try to give the impression that they disagree with the NAO more than, in fact, they do. No-one in their right mind would want to test this particular speculation in a court of law so it is worth remembering this issue when think-tanks suggest universities should be left to go bust if they fail in the marketplace. Anyone who suggests that doesn’t really know what they are talking about.

A small blogging milestone

At 7 am this morning I achieved my hundredth page view. Given that this will be my eighteenth post, that makes an average of about 6 views per post. It's far to say that total domination of the Internet is a way off yet, but I feel a small sense of validation. Thank you to those of you who are reading.

My next target is a first ever comment. Baby steps.

New College of the Humanities Again

Looking at my last post I find that I am really unsatisfied with it. Too much instant reaction and not enough fact - let alone analysis. The only good thing in it is the link to Crooked Timber - and that was an afterthought. Next time I need to think harder before posting.

So here is a more considered post with some actually useful information in it. Firstly I want to emphasise the lack of novelty about what NCH is doing. Whatever Terry Eagleton may say, this is hardly the thin end of any wedge. Regents College and the University of Buckingham already cater for a home/EU Undergraduate intake at substantially higher fees than the public sector. Profit-making institutions like Kaplan offer the University of London International Programme - and it makes sense to do that because the University of London is a recognised brand to have on your degree certificate. The cohort (say 200 students) is supposed to be split across five degrees, none of which will be a very large programme, so at the teaching and learning level I can't see much to get excited about.

So there is only very limited novelty here, in that the other high-fee private providers are non-profit-making, and the other profit-making UoL International resellers choose a lower price-point. The rest is marketing - and not all of the Professors being used in the marketing seem to feel entirely happy about it. (and just to be clear - the College is profit-making New College of the Humanities Trust is a separate charity which exists to give scholarships and prizes to the College's students)

Given the level of the fee, there is really nothing in current Government policy which has made this project either more or less possible than it was two years ago. Private providers can access loans up to the £6k level if the Secretary of State chooses to let them, but not beyond. Again, to emphasise that Regents and Buckingham have been on this territory for years.

Birkbeck have not welcomed this development, and you can see why. Other commentators seem to me to have over-reacted. It just isn't the case that

Although the New College will award degrees through existing UoL structures, the private nature of the institution presumably indicates that degree-awarding powers are to be deregulated, allowing any private university to offer whatever they like at whatever cost

The College operates under rules and regulations as they have existed for years. Even if it meets its growth targets, it will be smaller than many existing for-profits. The only thing that is new about it is the level of coverage in the Guardian.

There may be enough demand to sustain this as a very small institution catering to those well-off students too proud to go to any but the most prestigious institutions, and not quite able (or lucky) enough to get into those. If it does that, it will be by building up a brand during the (probably quite limited) period in which FTUG places are capped at those Universities. Following the rule that there's no such thing as bad publicity, my recommendation to all those opposing the College at the moment would be to make sure you never talk about it again.

New College

It would be easy to dismiss AC Grayling's new liberal arts-style college as a vanity project, pure and simple. After all this man's last project was to write his own version of the Bible.

But just because it is easy doesn't mean that it is wrong. If you want a liberal education in London with strong pastoral care in a small community you could go to Heythrop for a lot less money, or Regents in the private sector.


Which is not to say that I disagree with WonkHE. The scale of this project is so small that it might well be able to find some sustainable demand, at least in the medium term. There is currently an undersupply of elite higher education so if they successfully build the brand as an elite one, then they may very well be able to find a couple of hundred applicants a year. Either way, on this scale I can't see it making much difference to anyone.

Edited to add a link to Crooked Timber, where you will find a much better post than this one on the same issue.

The White Paper

This post somehow got stuck at draft stage and I didn't notice. Now published late, and long after anyone will have lost interest. Hey ho.

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Via William Cullerne Browne I learn of two further ideas allegedly under consideration for the White Paper. One is to allow over-quota recruitment to students with very high tariff points, and the other to allow over-quota recruitment to institutions charging very low fees. Alongside the off-quota proposal briefly floated by David Willetts this week, this shows (or seems to show) that BIS now understand that their own student number capping policy is the key stumbling block to achieving the fees market that they want.



WCB says in the same post that the core-margin option has been dropped, which leaves me a little non-plussed. Both these ideas look like ways of implementing core-margin to me, given that institutions have their core numbers capped by the SNC, but can grow at the margin if they meet certain criteria...



The essential problem with the high-tariff option is that it cannot be made to work. A significant minority of HE entrants have no tariff points at all, or have both tariff points and other relevant experience. See the HEPI report for some numbers. These could be people educated outside the UK, older applicants or just applicants with non-tariff bearing qualifications: they are not necessarily poorly-qualified applicants. So even if you could get elite universities to use UCAS tariff for their admissions decisions (which not all do by any means), the application of this policy would result in unlawful discrimination.



There's no essential problem with the low-fee option, but there is a practical problem because there are only a very few institutions charging low fees. Assume that in London LMU is allowed to expand, whilst UEL, Middlesex, LSBU and other institutions well north of £8k are not. Given the undersupply of HE in London, LMU will have to expand numbers very significantly in order to leave the others with enough unfilled places to make them reconsider their fees policy.* Clearly Middlesex with its current numbers at £9k is better off financially than LMU with 20% more numbers at £6k. I'm not sure this would even be enough to persuade the current low-fee institutions to stay low-fee if they see their peers doing OK at much higher fee levels.



If these are the best ideas in circulation, then I think we will be waiting a while for the White Paper.





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* I am assuming that overall demand for HE will not collapse in the face of 9k fees, which of course it might. But if it does, then no policy intervention would be needed to bring down fees at less prestigious institutions.

US and UK comparisons

There are apparently only five US institutions which recruit substantial numbers of low-income students, charge them fees in proportion to their wealth, and have graduation rates over 50%. In the most recent HESA data, just one UK institution (UHI) had a graduation rate below 50% (Birkbeck's value in the data is misleading because of data anomalies). Thanks to the wisdom of our Government all our (FTUG) students pay income-contingent fees, and fully half of us are average or above-average in our proportion of low-income students.

Food for thought.

BPP writedown

Regents is next on my list of private providers, but this story confuses me enough to make me post.

The relevant SEC filing is (I think) this one which is more than two months old, so how come the Higher is reporting it only now? I've no answer to that one.

I'm not an accountant, still less an American accountant. I can cope with profit and loss, but balance sheets are a bit beyond me, so caveat lector. Nonetheless the goodwill written off by Apollo seems to me to fit alongside the share buyback and loan repayment that are also evident in the same report. That is I think they relate more to the increasingly risk-averse stance being taken by the parent company than any real change in BPP's short or mid-term prospects. There are good reasons for Apollo to be acting in this way just now, as is well-enough known.

In contrast, its hard to see what might have happened in the first quarter of 2011 to weaken BPP's prospects. It's true the White :Paper was delayed, but Apollo bought BPP before the White Paper was dreamed of. And whilst the Government didn't introduce £6,000 loans for the private sector until April, BPP and Apollo must have known which way the wind was blowing.

So I don't think this story is going to make much difference to the post about BPP I am planning for some time next week.I think their prospects in the UK market are very positive.