An impoverished relation

The 'core-and-margin' policy will cost colleges dear - another unforeseen result of coalition plans, says Philip Davies

December 8, 2011

When the government introduced its "core-and-margin" model for controlling student numbers in higher education, the idea was simple. If universities were going to charge the maximum tuition fee they could get away with - rather than the average of £7,500 a year that the government had envisaged - the coalition would take away some of their student places and make them available to those institutions that were charging less than £7,500.

This would be good news for any institution providing a quality education at a lower price. It would be particularly good news for further education colleges, nearly all of which charge fees at the bottom end of the spectrum.

Colleges could expect to be prime bidders for some of the 20,000 places that would be up for grabs, which were to be created by taking away 9 per cent of places from each institution. In doing so, they would help to meet the government's aim of moving students from the pricey courses to the less expensive ones.

So beneficial did the government think this would be for further education institutions that - for the first time - the bidding process was opened up to include colleges that did not have direct contracts with the Higher Education Funding Council for England. These indirectly funded colleges had always got their students from universities, which kindly lent these institutions the numbers to run courses on their behalf. Now that was going to change. With indirectly funded colleges allowed to bid for student places in their own right, the numbers would become their own.

So far, the plan was clear. But plans, and especially government plans, "Gang aft agley, An' lea'e us nought but grief an' pain," to quote Robert Burns. And now that the bids are in, it is clear that things are unravelling.

Not a few universities, faced with losing 9 per cent of their own numbers to the margin, have decided to take back the places they had given to partner colleges in order to protect themselves.

Such an attitude is entirely understandable - and should have been entirely predictable, too. When you introduce market forces into higher education, you should not be surprised when universities behave competitively. What university faced with losing student places would not want to protect its own? Of course, some are playing fair and taking the hit along with their partner colleges. But many are not.

It seems that the government has just woken up to the problem. The avuncular business secretary, Vince Cable, who has championed the role of colleges more than most in the coalition, has issued a warning. At the recent Association of Colleges annual conference in Birmingham, he bared his teeth. "It would be a backward step if FE colleges were squeezed out of the market," he said. For good measure, he added: "Anti-competitive behaviour is simply unacceptable."

When I asked a well-placed colleague at the AoC what he thought this meant, he just shrugged his shoulders. "It doesn't mean anything. There's nothing [Mr Cable] can do except exert some moral pressure." But moral pressure is one thing to which vice-chancellors have long been immune.

Consequently, a number of colleges now face the loss of their entire higher education provision. Sure, these colleges can bid for their numbers out of the margin and hope that they get at least some of them back. But now, with the bids in, we know that for the 20,000 places available, 36,000 have been requested - so there are not enough to go around. Colleges are likely to get back just over half the number that they have lost.

Mr Cable may believe that further education colleges make a "fantastic" contribution to higher education in the country, but his desire to help them take their proper place in the academy is backfiring. "Higher education institutions will not be allowed to claw back places," Mr Cable has promised - but promises alone will not be enough to stop the decline of higher education in further education. The road to widening participation is paved with good intentions and unintended consequences.

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