The government is tightening its grip on what universities do with their money. Alison Goddard reports
Two months ago, the Higher Education Funding Council for England wrote to all institutions asking them not to close engineering departments.
"It is for each institution to decide what programmes to offer," wrote Brian Fender, HEFCE chief executive. "But it is helpful if we can keep an overview of developments in this sensitive area."
The letter was the latest development in what some see as attempts by the government to gain a prescriptive grip on higher education through the sector's various agencies.
Following the introduction of tuition fees and the increase in externally funded research contracts, universities rely less on public funding. Yet the money to institutions from the public purse via the funding councils has more and more strings attached.
Tony Bruce, director of policy at the Committee of Vice-Chancellors and Principals, said: "It certainly is the case that the government is becoming more prescriptive: The guidance from the Department for Education and Employment to the Higher Education Funding Council for England is much longer and more detailed than it used to be."
The DFEE's most recent annual letter to HEFCE was 66 paragraphs long. "The government has emphasised the importance it attaches to education, including higher education," said a HEFCE spokesman. "We welcome that, and the extra funds being invested in higher education as a result. We must then expect to have to show that those extra funds are achieving the intended improvements in areas such as widening participation, quality of learning and teaching, and improving the capital infrastructure." The funding council has tried to address these priorities by tinkering with the block grants for teaching and introducing special funding mechanisms. However, this approach has proved unpopular.
For example, HEFCE has altered the block grant for teaching to include premiums for institutions with part-time students and those from under-represented groups, as defined by their postcodes. "The HEFCE formula funding is beginning to get a bit complex, given all the levers added to it," said Mr Bruce.
"Talking to vice-chancellors, you soon pick up the feeling that there are also too many initiatives requiring too many bids for small pockets of money. We accept that the government has its agenda and we are positive about things such as access, but there is concern as to how these initiatives translate into action and whether this is a cost-effective approach."
Peter Knight, vice-chancellor at the University of Central England, said:
"The general problem that exists now is that a very large proportion of the money is earmarked for a particular purpose. Our income is from diverse sources - for example, we have a Pounds 8.5 million contract with the National Health Service to provide things such as nursing and midwifery training. We look to HEFCE to provide general money. The more HEFCE earmarks, the less flexibility we have. The problem is that the general grant is falling as a proportion of total income."
In 1998 alone, HEFCE issued seven invitations to bid for special funding for projects. It has issued four more so far this year. Some of the areas covered included improving poor estates; providing high-speed electronic links between institutions; levering cash from the National Lottery for museums, galleries and collections; and developing and implementing strategies for costing and pricing activities.
Dr Knight criticised the poor estates fund in particular. "It would be more cost effective if institutions had a general grant and were responsible for looking after their own buildings from it."
Under the present system, he added, institutions are tempted to put off improving their buildings from the general grant and wait until their bid for money from the poor estates fund is successful.
Setting up special initiatives could also encourage institutions to bid for the money purely because it is there, Dr Knight added. "Special funding may encourage an institution to bid in areas that are not consistent with its strategic mission."
Mr Bruce said: "There needs to be more co-ordination and rationalisation of how funds are allocated. The evidence on bidding is beginning to concern the sector. One of the tasks ahead will be to assess the costs of allocating money in penny packets. It is something that we will be pursuing fairly actively over the next few months."
HEFCE countered that it is keeping a close eye on the proportion of total funding that is reserved for special initiatives. "We are very conscious of the concerns of the sector about top-slicing and bidding fatigue," added a spokesman. "We are seeking to allocate and monitor (special funding) in a way which will be least burdensome for institutions."
Meanwhile HEFCE is set to introduce another set of hoops through which institutions will be required to jump: performance indicators. By the end of this year, institutions will be officially judged in areas such as drop-out rates and widening participation. Vice-chancellors are concerned that the government-sanctioned performance indicators will be used to construct league tables.
The government's close interest in higher education could also be seen as undermining academic freedom, according to Stephen Court, senior research officer at the Association of University Teachers. "If we value academic freedom, then institutional autonomy is also to be valued as the mechanism for allowing academic freedom," he said. "Yes, the government provides a lot of money for higher education, but a key role of higher education in general is to have the freedom to be critical and sceptical. The present government seems to be increasingly hands-on with how the money is used and this undermines institutions' freedom to be sceptical. To get the money, institutions have got to be players on the government's side in how they organise teaching and research."