The sector needs public not private investment to meet public needs, argues Roger Brown

The public-private balance of funding sources needs to be adjusted to protect the public interest, says Roger Brown

March 28, 2013

I have a confession to make. In spite of some 25 years’ engagement with higher education policymaking - at every level from senior civil servant down (or up) to professor of higher education policy - I was still surprised by the radicalism of the coalition government’s reforms, especially the introduction of full-cost fees for most courses.

They represent the continuation - and the intensification - of the series of market-based policies that began with the Thatcher government’s decision in November 1979 to end the subsidy for overseas students’ fees, and continued with the introduction of research selectivity in 1986, maintenance loans in 1990, the expansion in the number of universities in 1992 and 2004, and top-up and variable fees in 1998 and 2006, respectively. Although these changes may not yet have delivered a true market, they have certainly delivered plenty of market-like behaviour, not only by institutions and their leaders but also, increasingly, by students and employers.

What lessons should we take from our experience of these policies? What might we have done differently over the past 30 years or so if we had known then what we know now?

Research selectivity at departmental or research group level can produce impressive gains in efficiency and, probably, quality. But these not only become more and more marginal with each selectivity exercise, they also produce a whole set of negative consequences - especially for student education - that largely cancel out the original benefits. Even more importantly, research selectivity, and the way in which judgements are translated into allocations, reinforces the reputational hierarchy that is the curse of the system, and which marketisation exacerbates.

Research selectivity reinforces the reputational hierarchy that is the curse of the system, and which marketisation exacerbates

Similarly, some cost-sharing between the taxpayer and the student/graduate, combined with income-contingent state support for fees and living costs, is both efficient and equitable, bearing in mind the returns graduates have historically enjoyed. But problems arise if the private contribution goes much over 50 per cent. Allowing new providers into the system is healthy provided they meet basic criteria of quality and accountability - criteria that are not being met by a number of recent entrants. Above all, making resources go further is no substitute for an adequate level of public investment in the first place.

My biggest concern is that the current reforms will make our higher education system even more hierarchical and even less diverse than it already is, without any compensating gains in quality, efficiency or equity. We already have a system where the more selective institutions recruit mainly from private schools and upper middle-class households, while the less selective ones recruit more heavily from state schools, further education and sixth-form colleges, minority ethnic communities and other households. The AAB/ABB policy creates a new binary line, and full- cost fees put less popular subjects at risk. At the same time, diversity has been reduced as the number of specialist institutions shrinks.

It is therefore urgent that in the funding of teaching, the balance is restored between tuition fees and funding council grant, so that the broader public interest in having a full range of subjects and institutions is protected. The grant should also be used to deal with unjustified funding differentials between institutions. If this means that students from better-off households and/or better-paid graduates have to pay more, so be it.

Research selectivity should be limited to those areas where it is economically justified. Both “not-for-profit” and “for-profit” providers should be held to much stricter tests of accountability and value for money so that we can be sure that their revenues are being used to improve student education. Above all, we must get away from the view that higher education is mainly a private economic good and recover it as a public service.

Do we really want our higher education system to look like our school system?

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