How to get money for value

May 29, 1998

The government's comprehensive spending review is at the point where leaking and spinning reach a crescendo. This year the noise is loud because the review is so important. The CSR is strategic as well as tactical and we will not see its like again this parliament.

Prospects for further and higher education are mixed. Big savings are expected from higher education through fees, selling student debt and abolishing maintenance grants. This, with the extra money promised to education secretary David Blunkett, should surely end hard times.

But will it? Further education is certainly expected to gain. The colleges get much less money per student: government social and employment programmes depend on colleges attracting unqualified people: such students need support. The government has consistently said that savings from higher education would be used for further and higher education. The question is how much further education will get and how much of it will come from higher education.

Given huge demands for other areas of education - nursery places, smaller school classes, literacy programmes, after-school clubs - there is a depressing feeling that the most higher education can expect is that per capita cuts ("efficiency gains") will be kept down to 1 per cent. Better than originally planned, this could even mean more money if renewed expansion is allowed - 70,000 of the extra 500,000 students announced by the prime minister are expected to be in higher education. But it will be a drab sort of success.

Does higher education deserve (and need) more than this, and if so how can it get it? More is certainly needed. Pay for academic staff is a disgrace. Lack of support for postgraduates puts the brightest off academic careers. Buildings are falling to bits. Institutions are dangerously near to insolvency (page 1) and, as Victoria Neumark points out (left), students are being shortchanged. Meanwhile, the United States is, as always, hunting talent (page 20). Without more money a once good system will go to the dogs.

But how to get it? The Committee of Vice-Chancellors and Principals is relying on discreet lobbying. Earlier this month it met two members of the policy unit at No 10 Downing Street and was advised to back up its case with more detail - what it is bidding for and why. The message: go for directed packages to fund deliverable outcomes.

Last week the CVCP had its half-hour with the Treasury. It went briefed to demonstrate higher education's efficiency, quality and value for money in the hope of countering the trend to tie money to specific packages. It is concerned, as always, to crank up the block grant.

A case can always be made for better core funding. Unfortunately it tends to look like producer special pleading. It may also, judging from the policy unit's advice and the views of academics in Nexus who have regular contact with Downing Street, be going against the grain of government thinking. There is a view that a more robust market line could be taken with higher education since it is the best placed bit of education to sell its services.

There will almost certainly be extra taxpayers' money for specific purposes - research (possibly tied to commercial collaboration); access (in the form of targeted funds for specified groups of students); programmes tailor-made for the University for Industry. There is much business higher education can do with the government for which it will pay.

Starting from the point of offering services is very different from arguing for block grants without strings as a good in themselves. It is to be hoped that this is what the vice-chancellors are doing.

Settling for minus 1 per cent will not solve higher education's problems. Once the spending review is over, success will indeed depend on efficiency but it will be efficiency in costing services realistically so that providing them generates extra cash to mend buildings and reward staff instead of draining universities' central resources. Happiness (and solvency) under new Labour could depend on getting money for value as well as giving value for money.

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