Missing variations on a funding theme with a bitter twist of experience

January 27, 1995

In recent years there has been much debate about the funding of the higher education sector, yet surprisingly little about the equitability with which funds are allocated for teaching at an institutional level.

With respect to England, this may in part at least be due to the complexity of the funding methodology adopted by Higher Education Funding Council for England, although such complexity has not precluded other parts of the public service from developing funding regimes where the principle of equal pay for equal work is explicitly acknowledged, for example, in health care and further education.

Peter Knight's THES article on "winners and losers" in university teaching is therefore a welcome and timely contribution to a debate which should now be pursued more systematically. If there is a link, no matter how indeterminate, between levels of resourcing and the quality of the student experience, and if a common system of quality assessment is rightly to be sustained, how can the present "huge spread" (Dr Knight's words) in funding be justified, especially when the sectoral resource for teaching is planned to reduce appreciably over the next few years? The scale effect of the variances from the mean shown in Dr Knight's tables will perhaps be more readily appreciated if they are expressed not on a per capita basis, but in relation to an institution's student population: the more students the greater the effect. Thus at Luton it is estimated that the gross shortfall below the sectoral mean is of the order of Pounds 10 million.

Moreover, these calculations fail to take account of the fact that much of the expansion of student numbers in many institutions of higher education has been achieved with accommodation purchasers or leases financed out of the revenue budget. Evidently, this further reduces the real resources available for teaching, and the cash reserves from which useful interest might otherwise be generated.

The University of Luton has acquired in this way, since incorporation in 1989, properties (new Learning Resources Centre, teaching and office space) with a capital cost of around Pounds 15 million. Similarly, in those higher education institutions where the bulk or a sizeable part of the student residential accommodation was built with long-term loans -- as opposed to public funds -- there is no net income available to supplement the teaching budget. Taking the Luton example again, approximately 1,800 bed spaces have been built in recent years at a cost of more than Pounds 20 million, income from which is, of course, committed to the costs of leases and maintenance.

Last, there is the issue of research funds and the degree to which they may, in practice, "subsidise" teaching. Dr Knight's analysis indicates that few, if any, of the traditional universities which did well in the research assessment exercise operate with relatively low funding levels for teaching, i.e. there is no evidence here to support any strategic cross-subsidy. Nor, however, is there evidence to demonstrate that it does not occur. The important point is surely that traditional universities with comparatively large research income tend also to be those which enjoy much higher than average funding for teaching. At the very least, this is bound to impact on student: staff ratios, access to laboratory equipment and the availability of generic learning resources.

To conclude, consideration of the allocation of public funds between HEFCE institutions has seemingly been overshadowed by a greater concern about the size of the total quantum available for distribution. On the assumption there is indeed a genuine commitment to wider access and higher participation rates -- quite apart from concerns about the "level playing field" -- then it seems necessary to enquire whether this unsatisfactory state of affairs should be allowed to continue, now there is a more general awareness of the magnitude of the funding variations.

D. T. JOHN Deputy vice chancellor University of Luton

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