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.