What does ‘value for money’ mean for English higher education?

Andrew McRae explores what effects the value debate could have on the structure of the sector

February 22, 2018
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The term “value for money” is now deeply entrenched in public discourse about higher education in England. It is written into the Higher Education and Research Act. It is the subject of an inquiry by the House of Commons Education Committee. It is at the centre of what the Office for Students describes as a “major piece of research” that it has recently commissioned, intending to probe students’ perceptions of value for money to “inform” how the new regulator “takes forward its legal responsibilities to promote” it. And no doubt it will in turn inform the thinking of Sam Gyimah, England’s new minister for universities, science, research and innovation, as he implements the review of student finance and university funding announced this week.

But one element absent from this debate, for all the heat it is generating, is an agreed definition of “value for money”. Too many fundamental questions are routinely dodged. When we talk about “value” in this context, are we really thinking only about the material return of an undergraduate degree to an individual – as opposed to the wider impact of a vibrant university system? Whose “money” are we even talking about? And are we happy with individual perceptions, or are we looking for objective evidence?

Given this lack of clarity, it’s worth pausing to consider where we are and how we got here. It’s also timely to reflect on the risks carried by these three little words. Nobody, least of all academics, wants universities that are not providing value. But if “value for money” continues to mean radically different things to different people, this peculiarly English debate is unlikely to lead to a better place.

I say “peculiarly English” because while other countries debate the funding of higher education in various ways, it is difficult to find anything comparable to England’s “value for money” terminology. That is no doubt partly because nowhere except the US has such high undergraduate tuition fees; the debate can be traced back to the 2012 trebling of the cap to £9,000 a year.

In the wake of this change, The Daily Telegraph made an early attempt to assess value for money, producing a table that combined each university’s tuition fees with its position in The Complete University Guide ’s league table and the cost of its accommodation. Given the relentless increases in the cost of university accommodation, this appeared to make sense; but it didn’t last. Then, in 2015, The Complete University Guide itself trialled a “value for money” index, created by isolating universities’ spending on facilities and academic services. This produced a somewhat eccentric top five of Bucks New University, the Royal Agricultural University, the University of Northampton, Durham University and the University of Hertfordshire. It duly sank without trace.

The Higher Education Policy Institute’s Student Academic Experience Survey, which has been in operation since 2006, has achieved far greater levels of attention within the media and with politicians, despite being completed by just 14,000 undergraduates in 2017. That is less than 5 per cent of the number completing the National Student Survey, whose impact on league tables and the teaching excellence framework guarantees it a vastly higher profile within universities.

In its early years, the Hepi survey attracted attention mainly for its valuable data on students’ work patterns. Indeed, very recent analysis by Tim Blackman, vice-chancellor of Middlesex University, has demonstrated its continuing value in this respect, using it to argue for the importance of independent study and pointing to the risks of two-year degrees. But it has blasted into the mainstream through its “value” question. Specifically, in the 2017 version of the survey, it asks: “Thinking of all the things you’ve been asked about in this questionnaire so far, which statement best describes your view of the value for money of your present course?” Hence the survey’s definition of “value for money” is not so much explicit as implicit in the context of those preceding questions. These cover matters such as contact time, assignments and feedback, and the quality and qualifications of teaching staff.

Interestingly, in 2017, the immediately preceding question asked: “Universities are now allowed to raise their fees in line with inflation to £9,250 if they meet certain teaching standards. Do you think this new fee should apply to [your university]?” Given this trajectory of questioning – the sort of thing that might raise eyebrows in a court of law – it is perhaps not wholly surprising that the responses should have suggested a declining sense of value for money.

The headline finding, repeatedly rehearsed in the months since the results were announced, was that only 35 per cent of respondents rated their degree as being “good” or “very good” value for money. When students face the question again this coming spring, the constant media attention given to the issue over the past 12 months will surely only weight the scales still further.

The other key factor that has shaped the debate on value for money has been the increased availability of graduate employment data. The Destinations of Leavers from Higher Education survey has steadily risen in status over the past decade or so, and it now feeds into most university league tables. The release of graduate salary figures over the past two years, via the government’s Longitudinal Education Outcomes programme, has also captured public attention. The concept of “low-value” degrees, now prevalent in popular commentary, tends to gesture loosely in the direction of such data. In actual fact, the data have tended to show that, although there are a handful of outliers – disciplines and institutions – at each end of the spectrum, the vast majority of graduates find that there are job opportunities and graduate premiums there to be seized. But rules of evidence are not strictly observed in this discourse.

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At a time of economic and wage constraint, cutting hard into the expectations of millennials, it is perhaps understandable that value should be rendered so consistently in financial terms. The cost of higher education weighs very heavily on young shoulders. And in the context of the political and cultural instability of 2017, with the opposition Labour Party committing itself to abolishing tuition fees, it is equally predictable that students and their families should linger in their thinking on concerns of value for money. Yet it remains striking – even as the OfS inquiry swings into action – quite how weakly grounded in reality many of the popular complaints actually are.

A remarkable amount of commentary, especially from government, begins with data from the Student Academic Experience Survey, as if its implicit definition of value for money was self-evident all along. Discussion has also been swayed over the past year by evidence that many students now leave university with more than £50,000 of debt. Although the figure was not far short of this amount before, and while a student’s overall debt makes no difference at all to his or her monthly loan repayments, £50,000 was a sum that seized imaginations.

This miasma of anxiety led to reports such as The Higher Education Market, published in December by public spending watchdog the National Audit Office, which fretted over the lack of variation in fees and made some headline-grabbing comparisons between higher education and financial services. “If this was a regulated financial market we would be raising the question of mis-selling,” Sir Amyas Morse, the NAO’s comptroller and auditor general, said. While such concerns seemed like old news to many people in the sector, the attempt to apply the logic and methods of the market to higher education was significant. Like the OfS itself, with its focus on the interests of students as consumers, this report positioned higher education as almost entirely transactional in character.

The ongoing inquiry into value for money established by the Education Committee stretches matters further. Taking its cue, as one might by this point expect, from the Student Academic Experience Survey, it is considering: graduate outcomes and the use of destination data; social justice in higher education and support for disadvantaged students; senior management pay in universities; quality and effectiveness of teaching; and (through a curiously circular rationale) the role of the OfS. Quite how some of these matters relate to value for money might escape sceptical observers. Perhaps the key lesson is how this discourse, once given credibility and licence, can become an umbrella under which all manner of concerns might be sheltered.

The OfS’ consultation exercise on its regulatory remit, launched last autumn, suggested an intriguing new direction in the debate. Value for money is not just a matter for students, the consultation document suggested, but also for taxpayers. This line had been rehearsed by Jo Johnson, Gyimah’s predecessor, in a speech in the summer, and in essence follows the money trail, since roughly 35 per cent of the cost of the average undergraduate’s education is likely to fall on the state. Yet it perhaps leaves the door ajar to a more comprehensive appreciation of the value of universities within a nation. As Johnson himself stated, universities today are not merely suppliers of degrees; they are expected “to help drive national prosperity and advance individuals’ life chances”.

This is the argument of the universities themselves. Universities UK routinely produces statistics demonstrating the net national benefits produced by expenditure on higher education. It’s an investment, UUK argues, not a cost. The university sector, in the most recent calculations, contributed £21.5 billion to UK gross domestic product: 1.2 per cent of total GDP. Even more recently, Hepi (funded partly by universities, of course) commissioned its own report, in collaboration with Kaplan, which calculated that international students alone were worth £20 billion to the UK economy, even when the extra burden they impose on public services is taken into account. Other countries take this sort of thing for granted in any consideration of the value of higher education. Australians, for instance, routinely speak with pride about higher education as a leading export industry, and they consider the UK’s indifference to international students with open-mouthed incredulity.

One of England’s more articulate and passionate vice-chancellors, the University of Sheffield’s Sir Keith Burnett, consistently maintains that figures, whether wielded by the NAO or UUK, are not enough. In particular, he stresses the importance of the international reputations of universities, and the need also to consider research activity in relation to the cost of teaching. These are arguments welcomed by academics across the sector. “If a parent wants ‘better value for money’ in the sense that they long for their child to be taught by truly great thinkers,” he writes, “then they need to think of education in its fullest sense. Perhaps they should be concerned at the erosion of resource for the kind of work which won their child’s university and department international respect.”

It is possible that Burnett’s arguments will gain traction and that popular discourse around English higher education will return to historically more familiar territory. But this remains a challenge. In the midst of a media storm about student debt, it is demonstrably easier to place alarmist stories about the salaries of vice-chancellors than to present evidence about the value, to students and the nation alike, of a well-managed and highly regarded university sector. And, for both commentators and legislators, it is very tempting, when considering value for money, to separate the education functions of a university from all else.

It can be argued that English higher education has enjoyed a relatively easy ride through the era of austerity. While other sectors – health, schools, local government – have suffered severe cuts, the tuition fee arrangement of 2012 was universities’ “get out of jail free” card. Arguments have also been won, with successive universities ministers and chancellors of the Exchequer, over the value of research funding. These victories have brought a measure of stability, but they have also bred resentment, fairly or unfairly, within wider society. In such precarious times, the discourse of value for money poses some undeniable risks.

One of those is now written into the structures under which English higher education is managed. In 2016, the sector was in effect split between two government departments: the teaching functions shifted into the Department for Education, and research was left behind in the Department for Business, Energy and Industrial Strategy. Hence, the OfS is more narrowly focused than its predecessor, the Higher Education Funding Council for England. It has some oversight – rather vaguely defined – of the nation’s “research base”, but, otherwise, research falls to another new body, UK Research and Innovation, and its subsidiary, Research England.

Therefore, when the OfS focuses on value for money, it is not easy for it to encompass the overall functions of universities, including research, postgraduate study and community and industrial engagement. As Burnett says, these matter hugely in terms of institutional reputations, which, in turn, matter hugely in terms of attracting international students. By contrast, the isolation of the home-student education function invites reductive appreciations of universities. It leads to questions about why they can’t deliver their products more cheaply and swiftly. Far from representing a smart national investment, universities, MPs can now be heard asserting, are “ripping off” their consumers. Once the value of higher education is equated with the cheap delivery of skills, such arguments are perfectly logical, and it is not clear how the OfS could challenge them even if those in charge were minded to do so.

In these forms, the value for money debate could have wildly unpredictable effects on the unfolding structural change within English higher education. Commentators tend to overlook the intensity of competition within the system. In recent years, some universities have expanded rapidly, while others have struggled, year by year, to recruit their target numbers. Research funding is also being concentrated relentlessly into the hands of a minority of institutions. In this context, it becomes easy enough to see how a discourse of value for money could be used to drive through sweeping reforms, such as differential fees, the formal downgrading of research at some universities and even institutional closures.

The Oxford English Dictionary defines “value for money” in terms of “reasonableness of cost of something in view of its perceived quality”. It isolates the relationship between a buyer and a seller, focused on the quality of a commodity. But degrees are a peculiar kind of commodity. Young people studying for one are years away from reaping the likely economic and social rewards, and their success is dependent as much on their own commitment as that of their lecturers. It is therefore an open question how they can possibly be expected to make an informed judgement on the value for money of those degrees.

Yet such judgements now hold the potential to redraw the landscape of English higher education. The major review of funding, apparently resisted by Johnson and his sacked former boss, Justine Greening, looms large in 2018. It is being cheered on by influential Tories asserting, against conventional logic, that it will at once make fees “lower” and universities “better”. A secure government might assert greater, more mature influence in such an environment. Yet at a time when universities are being sucked relentlessly into more profound debates about the kind of country England’s citizens want, this seems unlikely. 

Andrew McRae is professor of English and dean of postgraduate research and the Exeter Doctoral College at the University of Exeter.

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