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The Society for Research into Higher Education

Paul Temple


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From ‘predict and provide’ to ‘mitigate the risk’: thoughts on the state and higher education in Britain

by Paul Temple

January 2020 marks the second year of the Office for Students’ (OfS) operations. The OfS represents the latest organisational iteration of state direction of (once) British and (now) English higher education, stretching back to the creation of the University Grants Committee (UGC) in 1919. We therefore have a century’s-worth of experience to draw on: what lessons might there be?

There are, I think, two ways to consider the cavalcade of agencies that have passed through the British higher education landscape since 1919. One is to see in it how higher education has been viewed at various points over the last century. The other way is to see it as special cases of methods of controlling public bodies generally. I think that both perspectives can help us to understand what has happened and why.

In the post-war decades, up to the later 1970s, central planning was almost unquestioningly accepted across the political spectrum in Britain as the correct way to direct nationalised industries such as electricity and railways, but also to plan the economy as a whole, as the National Plan of 1965 showed. In higher education, broadly similar methods – predict and provide – were operated by the UGC for universities, and by a partnership of central government and local authorities for the polytechnics and other colleges. A key feature of this mode of regulation was expert judgement, largely insulated from political pressures. As Michael Shattock and Aniko Horvath observe in The Governance of British Higher Education (Bloomsbury, 2020), “In the 1950s it had been the UGC, not officials in the ministry, who initiated policy discussions about the forecast rate of student number expansion and its financial implications, and it was the UGC, not a minister, that proposed founding the 1960s ‘New Universities’” (p18).

Higher education, then, was viewed as a collective national resource, to be largely centrally planned and funded, in a similar way to nationalised industries.

The rejection of central planning methods by the Thatcher governments (1979-1990) affected the control of higher education as it did other areas of national life through the ‘privatisation’ of public enterprises. Instead, resource allocation decisions were to be made by markets, or where normal markets were absent, as with higher education, by using ‘quasi-markets’ to allocate public funds. Accordingly the UGC was abolished by legislation in 1988, and (eventually) national funding bodies were created, the English version being the Higher Education Funding Council for England (HEFCE). Whereas the UGC had a key task of preserving academic standards, by maintaining the ‘unit of resource’ at what was considered to be an adequate level of funding per student (as a proxy for academic standards), HEFCE’s new task, little-noted at the time, became the polar opposite: it was required to drive down unit costs per student, thereby supposedly forcing universities to make the efficiency gains to be expected of normal market forces.

The market, then, had supplanted central planning as an organising principle in British public life (perhaps the lasting legacy of the Thatcher era); and universities discovered that the seemingly technical changes to their funding arrangements had profoundly altered their internal economies.

HEFCE’s main task, however, as with the UGC before it, was to allocate public money to universities, though now applying a different methodology. The next big shift in English higher education policy, under the 2010 coalition government, changed the nature of central direction radically. Under the full-cost fees policy, universities now typically received most of their income from student loans, making HEFCE’s funding role largely redundant. So, after the usual lag between policy change and institutional restructuring, a new agency was created in 2018, the Office for Students (OfS), modelled on the lines of industry regulators for privatised utilities such as energy and telecoms.

In contrast to its predecessor agencies, OfS is neither a planning nor a funding body (except for some special cases). Instead, as with other industry regulators, it assumes that a market exists, but that its imperfect nature (information asymmetry being a particular concern) calls for detailed oversight and possibly intervention, in order to ‘mitigate the risk’ of abuses by providers (universities) which could damage the interests of consumers (students). It has no interest in maintaining a particular pattern of institutional provision, though it does require that external quality assurance bodies validate academic standards in the institutions it registers.

As with utilities, we have seen a shift in Britain, in stages, from central planning and funding, to a fragmented but regulated provision. The underlying assumption is that market forces will have beneficial results, subject to the regulator preventing abuses and ensuring that minimal standards are maintained. This approach is now so widespread in Britain that the government has produced a code to regulate the regulators (presumably anticipating the question, Quis custodiet ipsos custodes?).

Examining the changing pattern of state direction of higher education in England in the post-1945 period, then, we see the demise of central planning and its replacement, first by quasi-markets, and then by as close to the real thing as we are likely to get. Ideas of central funding to support planning goals have been replaced by reliance on a market with government-created consumers, overseen by a regulator, intervening in the detail (see OfS’s long list of ‘reportable events’) of institutional management.

Despite every effort by governments to create a working higher education marketplace, the core features of higher education get in the way of it being a consumer good (for the many reasons that are repeatedly pointed out to and repeatedly ignored by ministers). Central planning has gone, but its replacement depends on central funding and central intervention. I don’t think that we’ve seen the last of formal central planning in our sector.

SRHE member Paul Temple is Honorary Associate Professor, Centre for Higher Education Studies, UCL Institute of Education, University College London. See his latest paper ‘University spaces: Creating cité and place’, London Review of Education, 17 (2): 223–235 at https://doi.org/10.18546


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“A market exit…with a material negative impact”

by Paul Temple

Our late and much-missed friend David Watson used to say that every government department should have an office marked “Cassandra”. Whenever a new policy was proposed, someone had to poke their head round the door and say, “Cassandra, what went wrong when we last tried this?”. David went on to point out that, just as the mythological Cassandra was cursed to make accurate predictions that were never believed, so policy-making would plough ahead regardless of what the Cassandra down the corridor told them about last time’s mistakes. Still, he thought, it would be nice to know in advance in just what respect a policy was going to fail.

A number of Cassandras predicted, in general terms, the disaster – or “material negative impact” [1] , in OfS-speak – that has now overtaken the 3,571 students of for-profit GSM in London. This was one of the “alternative providers”, so enthusiastically promoted by David Willetts following the 2011 White Paper. In my chapter on private sector higher education in Claire Callender’s and Peter Scott’s Browne and Beyond: Modernizing English Higher Education (2013), I invented the conditional-optimistic tense to describe the White Paper’s language about “alternative providers”: “new entrants to the sector…may have different strengths…they may offer particular well-honed teaching models…” (2011 White Paper, para 4.5). They would shake up the stuffy old university sector with a bracing private-sector ethos – although the exact problem to which they would provide the answer was never precisely set out. This was evidence-free policy-making, but with a blithe assurance that everything would turn out for the best (remind you of anything?). I suspect that the unlucky GSM 3,571 would now prefer to have been at a university with some of the boring old strengths.

The OfS email to other universities about the GSM collapse could serve as a text for a doctoral class on bureaucratic buck-passing: its message might be summarised as, “We’re only the regulator; can the rest of you do something? No, we won’t do anything to help.” The GSM 3,571 are, it is clear, on their own; OfS isn’t going to do anything constructive to clear up the mess. On the contrary, when asked “whether transferred students can be subject to special arrangements relating to the reporting of their progression, completion or in respect of other outcome data/metrics…The answer is no.” Nice.

As I noted in my 2013 chapter, you didn’t need particular insights, let alone Cassandra’s skills of prophecy, to foresee problems ahead in the “alternative” sector – because we had the worked example of the United States before us. A devastating critique of for-profit higher education there was made in 2012 in a report by Senator Tom Harkin, Chairman of the Senate Health, Education, Labor and Pensions Committee. “In this report”, Senator Harkin was reported as saying, “you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation”. The for-profit sectors in the US and the UK depend on easily-available public funding to cover student fees and light-touch regulation of institutions with minimal records of achievement and limited accountability. It is a tragedy that British politicians, driven by free-market ideology, and regulators, following politicians’ biddings, failed GSM’s students so comprehensively.

SRHE member Paul Temple, Centre for Higher Education Studies, UCL Institute of Education, University College London.

[1] Office for Students email, 21 August 2019


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