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Higher Education

Submitted by on 13 Sep 2011 – 16:52

Katy Clark MPKaty Clark MP

The higher education sector is facing an uncertain future across the UK.  In England tuition fees have been trebled, state funding for most subjects has been cut and the government is planning to introduce a market in higher education which will allow more private and for-profit providers to enter the sector. Perhaps unsurprisingly, given the fee hike that students will face next year, an estimated 185,000 students were left to chase just 29,000 university places in the clearing process this year. The UCAs website crashed under the sheer weight of people trying to access it – four times the number per second compared to last year[1].

The unstable funding situation and the delay of the higher education white paper has lead to instability in the sector. Institutions have had to publish their prospectuses and plans for the future in an uncertain policy environment, knowing change would be coming but not what form it would take. The higher education white paper was finally published in June 2011, over six months after the vote on tuition fees which was rushed through in December 2010. Despite widespread opposition from students, teachers, staff and young people the Government did not listen. Having so publicly signed the NUS pledge not to vote for an increase in tuition fees, over half the Liberal Democrat parliamentary party did just that (or abstained), giving the coalition government enough votes to push the legislation through by a narrow margin of just 21 votes.

The vote on fees and the subsequent setting of fee levels of each institution cannot be looked at in isolation. The Government’s decision to cut the teaching budget by 80% and remove state funding from all but ‘priority’ subjects meant that institutions had a funding gap they had to fill. Many would have to charge high fee levels simply to plug the hole in their finances. The Government assurance that only in exceptional circumstances would universities charge the maximum was quickly undone as institution after institution announced a fee level of £9,000 per year. Not only had the government been warned about such a situation arising, they had not budgeted for such fee levels. So many institutions charging the upper fee limit would mean a huge increase in spending on student loans. While the coalition figured out what to do, the sector waited with increasing uncertainty – would budgets be slashed further to meet this new need? Would student numbers be cut?

Add to the fees debacle the constant delay in publishing the higher education white paper and what is left is a very uncertain, unstable sector. When the white paper was finally published it announced proposals which included allowing greater access for ‘alternative’ providers to the higher education sector; relaxing the rules on who can call themselves a ‘university’ and a totally untested core/margin method of funding that would aim to instill a market where one had not naturally emerged upon lifting the cap on fees.

Of particular concern to many in the sector is the move towards a US style system with an increased slice of the sector for for-profit higher education providers. The world class reputation of higher education is being opened up to those whose primary concern is not education or student wellbeing but their shareholders. At a time when the Government is seeking to deregulate the sector and create a bigger market in education, the Obama administration has tightened the rules around how for-profit institutions operate in the US after a number of them have found themselves embroiled in law suits and whistleblower cases. One such example is Education Management Corporation. Education Management Corporation (which is 41 percent owned by Goldman Sachs) is currently being sued by the US Justice Department and four separate states in a multi-billion dollar lawsuit for alleged breach of federal regulations by claiming $11 billion in state and federal aid[2]. The parent company of UK University College BPP, Apollo Group, has also been part of congressional investigations and recently paid the government $78 million to settle a whistle blowing case (although without admitting liability). For-profit higher education provision has the potential to have serious implications for students and established institutions alike.

Current proposals implementing the core/margin model would change how higher education institutions work. The proposals would allow institutions to recruit as many students as they like, as long as they have at least AAB grades. It is estimated that around 65,000 students will be recruited in this way in 2012/13. As institutions increase the number AAB students they take, places will be lost at institutions elsewhere in the system. There will be no extra places available.

Another 20,000 places will be allocated to a contestable margin on which all providers could bid based on the level of fee they set. The government envisages anyone charging £7,500 tuition fees per year, or below, will be eligible to bid for these places. Private providers, for-profits and further education colleges are expected to bid for these places, as well as traditional universities.

Around 25% of all places will be contested in this way in the next year with plans to steadily increase the contestable margin and decrease the number of core places.

The core/margin model has the potential to put some institutions in serious hardship with the Russell Group recruiting as many people as they can at AAB while other less traditional institutions lose out. This model could further entrench a system where those who have the resources and support to achieve at A-level are almost certain of a place at university, while those who may have the potential, but not the grades, miss out. Non-traditional students who would previously have known the quality of what they were getting access to may now have to make do with a diminishing number of universities and a growing number of relatively untried providers, including for-profits who are increasingly coming under scrutiny and legal challenge in the USA.

Whist English students will face fees trebling from next year, in Wales the Assembly Government has committed to protect their students from the fee rises by paying any excess from this year’s prices, but only for Welsh students. In Scotland students continue to enjoy free higher education, but with a £200m funding gap facing the higher education system and Universities Scotland already calling for the introduction of fees, they too face an uncertain future.

At this time of great uncertainty I am deeply concerned about the effect of the Government’s changes on the future of the world class higher education system in this country.