Evidence to Policy

Dispatches from the digital chalk face

 

So with another wonkfest having drawn to a close, the editorship passed to Debbie McVitty, the Minister being grilled and the implications of Brexit for HE still no clearer here’s a snap verdict of the beating heart of the sector.

The first day began with Mark Leach our host and outgoing wonkHE editor rallying the assembled cadre of HE policy bods with the cry – ‘The revenge of the expert starts here.’

All the talk in the margins was filled with salacious speculation on which south coast institution is about to fall over and whether Philip Augar was simply testing the water with £6.5k fees leak over the weekend or whether it was actually the sound of the starting pistol being fired on a race to lower fees.

A common theme across both days were that the sector needed to be more confident about the quality of its education product. The UK’s HE sector is globally renowned and well placed between mass, moderate quality undergrad education (see Spain, Italy) and very high cost, high quality (see US, Australia). This positioning should continue post Brexit to be an attractive offer to the global student body. Some plucky soul even ventured that the sinking pound might make that offer even more attractive to some price conscious students, which is certainly one way of looking at things.

The Economist’s Anne McElvoy meandered into the differential fees minefield with a lightness of touch that comes with being dislocated from reality. ‘Why should students pay the same for some courses that cost less to deliver?’ she pondered happily ignoring that goods and services are priced on what a customer will pay, not on the cost to the producer. As the government is keen to remind the sector at every turn since the cap came off and fees went up, student numbers have grown not fallen, so clearly the customers are willing to pay £9k. McElvoy ignores institutional cross subsidy of courses, the desire for universities of to provide the graduates needed by industry (i.e. more expensive STEM courses) and the social mobility remit of universities (cheaper courses in areas that employers don’t want is hardly progressive). But hey let’s not let these difficult, complex and competing demands get in the way of a policy that will resonant with a Middle England in snap election manifesto. While some in the Q&A session put forward that government would have to make up the difference where courses fees were cut. Others weren’t so sure. When one eyes the other parts of the State currently making their case for additional funding in the Spending Review, it doesn’t look favourable for the HE sector. Up against the perennial call for more funding for the NHS or the substantial MoD overspend on the new Dreadnought submarine programme or the lumbering edifice of Universal Credit to name but a few the chances of the relatively austerity insulated HE sector being remunerated for loss of earnings seems remote. 

But don’t worry about fees because in actual fact it’s all actually much, much worse than that.  All the talk about £6.5k fees is simply surface stuff. Andrew McGettigan exposed the illusory groupthink compact between government and the HE sector about fees. Namely (& say it quietly) we all know that most students don’t pay back their loans which are underwritten by the government. With a piece of nifty accounting George Osborne shifted the debt from the State to individual students while continuing to count the interest paid to the SLC as revenue to the Exchequer. This effectively reduced the national debt (some argue helping maintain the nation’s AAA credit rating which was policy goal #1 in the Treasury in during  the 2010-15 government) while insulating the sector from the austerity seen in other parts of the State.

So far so sneaky, so why peak into the horror now?

The ONS is currently adding the finishing touches to a report on student finance which is slated for release on the 17th December (ho, ho, oh no!Ed.). In fact according to Maike Halterback from London Economics whopping 86% are predicted (between 2040-2050) to have some write down needed on their loan, while 24% will only ever pay interest and not even nibble at the capital element of their ‘loan’. If you are brave you can view her presentation here. As the terrifying analysis by the team at London Economics made clear however there is zero political appetite to address this issue by bringing the debt back on the nations books anytime soon. Rather continue with the illusion by receiving the interest payments to SLC as income and keep the debt remaining with the student for as long as is possible. When the first of the 30 year time limited loans start to get written off we will see a significant and rapid growth write offs. The estimated write off by 2050? £24.6b (or roughly the equivalent to UK government spending on Transport in 2016 – not taking into account inflation). The cost to the Treasury to bring this on to the books now? In money - £2.9b. In political capital – missing the Chancellor’s deficient targets for this Parliament. So while for the nation it makes financial sense to address this issue now by say increasing the term of the loan, politically it is highly unpalatable. As long the government can ride out the impact of the ONS report (which a week before Christmas I’d imagine they can) then this fundamental flaw at the heart of the national financial model for funding the HE sector will continue to be filed under TH;DT (Too Hard; Don’t Try).

Day two kicked off before the wind swept Ravensbourne University Campus had even opened its doors with Office for Student’s Chair Michael Barber adding fuel to the ‘south coast insolvency speculation’ on the Today Programme with his very clear statement that OfS would not countenance a bailout for any institution. Not that there is an acknowledgement that the splash in the ‘i’ was true either. Across London HE wonkers, in thoroughly affordable hotels, listened into the Chair of the OfS’s articulating the line du jour ‘autonomy = fiscal responsibility’ (regulator speak for ‘you break it, you own it’).

As with any HE sector event the Russell Group of institutions like to huddle in a corner and say ‘this is all fine for them but what about us?’ And so at little after 08.00 we duly huddled around the granola and pastries in a meeting room with commanding views overlooking the atrium where our colleagues from the sector arrived and registered( I kid you not) for a spesh briefing arranged by the Russell Group Political Affairs Network (kudos Miles. A, Nottingham). Tim Bradshaw (Chief Executive of the Russell Group) did a turn about the current 5 pillars of doom as he saw them for the RG institutions (and by extension the sector as a whole) which only added to the sense of woe conjured by Barber earlier. Then came Dianna Beech (Policy Advisor on HE to Sam Gyimah) to make the case that she was the sector’s interlocutor to the self declared Minister for Students. While it’s worth more than my institutions annual contribution to the RG coffers to divulge any of the content of this meeting, what I will say is if your institution’s Admissions strategy is to issue vast numbers of unconditional offers to prospective students then you might want to have a think about that before 2019-20.

And so to back to Barber. This time in the flesh, fresh from the BBC and on stage with Debbie McVitty. Packed to the rafters, with standing room only, the main stage gave a platform to Michael Barber who reiterated the ‘autonomy = fiscal responsibility’ line, explained that the regulator doesn’t do bail outs and opened up space for institutions to lobby the Augar Panel directly re fees (which I’m sure the clerk of the inquiry will be grateful for). Bouncing straight out of the no bailouts message he paused briefly to note that some institutions needed to do more work on their Student Protection Plans. Which reassured neither prospective students, parents and institutions that in the event of financial meltdown anyone will get away unsinged. He did throw a bone of praise to the sector citing last month’s media excitement generated by the discovery of the world’s oldest intact, ancient Greek boat in the Black Sea.  Frustratingly he didn’t note that the PI was Prof Jon Adams of the University of Southampton’s School of Archaeology so we missed a chance at capturing an impact artefact that demonstrated how innovative research has informed the policy process for our REF submission. Never mind perhaps next time. There was also some initially reassuring sounding news that 182 higher education settings have registered with OfS and to date none of them have been flagged as financially vulnerable. When pushed by Debbie McVitty  however he did clarify that these were ‘settings’ not universities. With that any reassurance evaporated. Tuesday was turning out to be quite tough going.

I hunted around for some light relief and found a ‘HE Beyond Brexit’ debate. Being that our visa system makes it a horrible experience for students to get here, relatively intrusive for them while they are here and nigh on impossible for them to stay here once their studies finish UK institutions should be investing now in Virtual Learning Environments to deliver content overseas. Said the woman from a VLE platform company. The Swedish man from the OSCE noted in accentless English that the UK’s woeful proficiency in second languages presents both a short term and long term challenge to the sector (not to mention the country). The hopeful chap from UUK said that we needed a whole government approach to identify expertise gaps that could be filled by recently graduated international students, build a friendly post-graduation environment for international students to live and work, and make it easier for students to get visas for nations that the UK wishes to enhance its strategic relationships with. I for one look forward to the (Go) Home Office rushing forward to be involved with that interdepartmental working group. This good idea for the sector will need to find another government before it has a chance of becoming policy…

Having oddly not found comfort in a session about Brexit I decamped to the main stage to stake out a good spot for Sam Gyimah being interviewed by Mark Leach. This gave me the opportunity to enjoy the last half hour of Glyn Davies (the outgoing VC of University of Melbourne) trying out a draft of his valedictory speech rather than the billed topic for his session. No matter, it’s a good speech, if you are in Melbourne next year I recommend you check it out. Humble, thoughtful and filled with the lightness that I guess one can have when your hand is on the push bar of the emergency exit.

The tranquillity of someone else’s nostalgia disappeared as the lights came up and folk from other sessions flooded in to see the Minister’s keynote. The excited chatter of the sector, buoyed by caffeine, bounced off the hard concrete walls of the beautifully utilitarian Ravensbourne University London campus. As abruptly as the lights came up they went down, as did the volume of my compatriots.  The politician and the policy wonk on the platform poised for a pugnacious, pugilistic encounter of the rhetorical kind. (When I say poised they more perched, in uncomfortable modern looking seats. And rather than being separated by their snarling corner boys, instead a faded low table with a large jug of water was all that kept them apart. But the atmosphere was a bit confrontational, in a jovial kind of way).  Leach, the outgoing wonkHE editor, empowered by an audience of his policy peers willing him on and with a Minister in easy reach didn’t pull his punches.  The first few questions rained down in quick succession. The audience showed their appreciation for our hosts’ technique by tittering at the Ministerial sized traps barely concealed within the  questions;  ‘If, as you say, ‘a degree is worth investing in’ what return would you expect on your investment, Minister?’. ‘If a half a billion pound employer collapsed in your constituency wouldn’t you lobby the minister to responsible for a bail out, Minister?’. ‘The Chair of the OfS has been very clear that they won’t bail out an institution in jeopardy, so would we expect DfE to step in that situation or would it be the Treasury directly, Minister?’

Gyimah seemed to be on the ropes, swinging wildly and failing to connect (with the audience). The Minister did manage to chalk up one laugh from the crowd when his mask slipped and he spluttered ‘Well that’s what we call in the business a lose/lose question’, Leach parried ‘I’ve got a few more of those Minister’ and quick as a flash Gyimah came back ‘I’m sure you have’. If he had been expecting a lighter time of it he had by this point dismissed that notion. In an expression of technological whimsy the automatic air conditioning had kicked in due to the sheer number of bodies in the auditorium. It dislodged a few solitary strips of gold ticker tape (a leftover from some undergraduate festivities no doubt) which lazily floated down from the heavens glinting occasionally in the lights underscoring poignantly the note of sadness that had resonated throughout the conference. Distracted I looked back to the stage to find that Gyimah seemed to have found his stride. He pushed the ‘autonomy = fiscal responsibility’ line, pivoted beautifully away from ‘So if some courses fees will go down will others go up?’ and ducked ‘should the cap be reintroduced’ using the tried and tested ‘let’s wait until the Panel reports’. For a few moments he had momentum.

Then it was over.

There was no knockout blow, but as the crowd filed out the consensus seemed to be that, he’d been a good sport and not nearly as terrifying as Michael Barber. And somewhere a SpAd was happy with their management of the news cycle…

 

Gareth Giles

Manager, Public Policy|Southampton