Dr Rhiannon Birch, SUMS Managing Consultant
Dr Helen Carasso, SUMS Associate Consultant
During the days of HEFCE, it was always interesting to see which announcements came out at 5pm on a Friday, so a Monday teatime announcement of changes to tuition fees in England respected this longer tradition. At SUMS Consulting we listened to the announcements with interest.
However, a look at the detail reveals how much more there is here than just headline fee changes. Index-linking fees isn’t a new idea it goes back to post-Dearing and the original implementation of the 2004 Act. What is new is that the medium-term objective is to make the fee increase automatic, rather than through a statutory instrument which will oblige the Government to make further changes irrespective of any political pressures for a fee freeze. However, a modest but sustained increase in income comes at a price. We explore three of the most significant announcements.
A blunt view of quality
By linking maximum fees to TEF achievements, the Government is tying this significant threshold to judgments made through a very broad-brush approach to quality at an institutional level. It is also creating another way (beyond the REF) in which funding is likely to become concentrated (e.g. Gold TEF institutions can charge more to teach low-cost subjects than Bronze ones can to teach high-cost lab sciences). Combining this ‘reward’ with student number controls is a means to directly control the size, shape and type of institutions allowed to thrive. In this context some of the work we did with the OIA to explore provider exit seems rather prescient.
Furthermore, as fee level or ‘price’ within the HE sector is widely associated with perceptions of quality there is the potential for this measure to seriously disadvantage newer/smaller/emerging providers and institutions with pockets of excellent provision hidden behind a Bronze institutional TEF rating. Institutions will need to look again at teaching quality overall and play the revised TEF game well to be successful. Robust evaluation mechanisms, action planning and taking a holistic view of academic performance through the lens of the OfS metrics will be key.
Regional specialisms
The new vision is of a sector with fewer full-spectrum providers, more collaborations and more specialist institutions, working within the legal framework on competition. Providers are encouraged to make decisions based on a broader view of provision within their regions which may lead to increased regional ‘divvying up’ of subjects which will restrict student choice in the subject, location and type of institution which is right for them. The change of approach which will also reduce opportunities for inter-disciplinarity and innovation. This is clearly an area where portfolio reviews, course coding and long, hard looks at the cost of delivering different activities will be important. And research doesn’t escape, with emphasis also placed on the importance of full cost recovery in research. How the university ‘money-go-round’ works in future will change.
Focus on supporting the UK
However, possibly the most ethically challenging announcement is the creation of an International Student Levy and its use to provide maintenance grants for UK students. A return to means-tested grants could be a significant element of increasing the diversity of participation in higher education. But international students offer so much to their institutions beyond their fee payment and their interest in study in England is likely to be further reduced by the double whammy of even higher fees and UKVI hurdles. So it is disappointing, and potentially divisive, that the proposal is to support a group of home students at the expense of their international peers. Many in the sector were already eyeing transnational education as a route to income diversification and if the students don’t come to the UK, will we see a resurgence of interest in international partnerships to enable cost effective delivery outside the UK?
A tertiary sector?
At a time when institutions are being encouraged to review their provision and concentrate on their areas of strength, the OfS will be supported in enhancing its management and governance conditions of regulation. Universities will be encouraged to identify appropriate collaborations, potentially enabling them to reduce their own activities in certain areas. And there is promise of a raft of changes to ensure that the sector’s provision is structured in a way that will enable students to make the most of the flexibilities that the Lifelong Learning Entitlement (LLE) offers. Among these is the need to create paths to smooth transition from FE – maybe the foundation for a tertiary sector in England? However, the changes could also drive greater competition with institutions in the rest of the UK who want to capitalise on access to new funding such as the LLE and those who are most comfortable with development of modular provision. From our work with tertiary institutions, we’ve seen first-hand the benefits and complexities of this model. Not least the financial and resourcing impact of shorter courses.
In summary, there is more funding on offer but it will come at the price of significant change to the sector defined by Government and implemented by the OfS.
What does this mean for your institution?
The White Paper presents a complex mix of opportunities and challenges. From TEF-linked fees and student number controls to the international student levy and push towards regional specialisms, the one thing institutional leaders cannot do is breathe a sigh of relief and hit the brake on efforts to transform and innovate. These changes will affect all providers, but not equally, each response will need to reflect your institution’s particular mission, strengths and place.
While we’re working with institutions across the globe, we’re keen to hear how you’re thinking about responding to these developments. What are the strategic implications for your portfolio decisions? How are you weighing up the costs and benefits of the TEF changes? Are there opportunities for collaboration that could help navigate the uncertainties ahead? Whether you’re a member (or not!), we welcome a conversation at consulting@sums.ac.uk as we explore these questions together.
