MPs blast England’s ‘failed market’ in higher education and OfS

University system ‘is not a market that is working in the interests of students or taxpayers’, committee claims

June 15, 2018
Market failure

English higher education is treated as a market by the government “but it is not a market that is working in the interests of students or taxpayers”, according to MPs on the Public Accounts Committee.

A report from the panel also criticises the sector’s new regulator, the Office for Students, claiming that it had failed to articulate what “value for money” means in higher education and had “chosen not to work with the National Union of Students”.

Meg Hillier, the Labour MP who chairs the PAC, said it was “deeply concerning that the evidence indicates government’s approach to the higher education sector is letting…students down”.

The PAC report, The higher education market, published on 15 June, was based on evidence from witnesses such as Jonathan Slater, the permanent secretary at the Department for Education, and Nicola Dandridge, the OfS chief executive.

“The department [of Education] treats the higher education sector as a market, but it is not a market that is working in the interests of students or taxpayers,” says the report.

There is “greater competition for students between higher education providers, but no evidence that this will improve the quality of the education they provide,” it continues, adding that institutions “have increased their marketing budgets to in order to attract students rather than compete by charging different tuition fees”.

On the OfS, MPs highlight that the regulator has an objective to ensure “value for money” for students, but “neither the OfS nor the department has articulated well enough what value for money means in higher education”.

Recommendations from the PAC report state that the DfE “should write to the committee by October 2018 to explain what it expects a successful higher education market to look like”.

The report also warns that young people receive “insufficient and inconsistent careers advice” and that “the incentives in the higher education market do not support widening participation” – noting “substantial drops in part-time and lifelong learning, which are critical to social mobility”.

On the OfS, the PAC further says that the regulator “has not yet articulated how it will support the varied and complex interests of students”.

The report notes that the OfS has established a student panel and plans a student engagement strategy, while stating the regulator “has chosen not to work with the National Union of Students”. The OfS board, for example, does not include an NUS representative.

“Until the OfS has sufficient clarity over what it is trying to achieve in the interests of students, it will not be able to effectively monitor and evaluate the success of its regulatory approach,” the report says.

The OfS should report back in six months to set out in detail its performance in regulating for students, and priorities in protecting student interests, the PAC says.

In response, Ms Dandridge said that the OfS shared “the committee’s assessment of the complexity and diversity of the student body. With our student panel and in other ways, we are engaging with students to understand and respond to the things they say matter to them.”

She added: “I simply do not recognise the committee’s statement that we are not working with the NUS. The Office for Students’ student panel includes the current NUS president, is chaired by a former NUS president and includes a number of other officials who are or who have been elected student union officers.

“Both Sir Michael Barber, the Office for Students’ chair, and I have a strong and positive relationship with NUS elected officers. The NUS is a major partner for the Office for Students, and we are working closely with them across a variety of issues.”

Amatey Doku, NUS vice-president (higher education), said: “While we welcome the report’s conclusions that higher education is unable to function as a market, and that information, advice and guidance is insufficient for the needs of applicants, it is clear that the solution is not a better-regulated market, but a rethink of the fundamentals of the market agenda altogether. This would truly be regulating in the interests of students.”

He warned of “real danger that channelling information, advice and guidance along the lines of salary calculators will narrow the focus of higher education too much to merely a transaction in return for a job” and called for the return of maintenance grants to provide students with adequate funding.

john.morgan@timeshighereducation.com 

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Reader's comments (3)

What did everyone expect? If you encourage or even force universities to be more business-like then they will do so. This means that their focus becomes the bottom line and their own image or status (along with lots of shiny buildings).
In other news, bears, Pope, etc. Why treat things that aren't businesses as if they were businesses and be surprised that they became more like businesses?
We have a REF; and a TEF... Perhaps we need a MEF — a university Management Excellence Framework? That could assess just how well (or not) institutions are managed, and reveal the shrinking proportion of "Tuition Fees" that are actually spent on... er... teaching.

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