13 December 2017

Do we really have a market in higher education?

By Anthony Seldon

The Higher Education Bill, introduced into law in 2017, claims to put students at the heart of the system. The narrative and elements of policy are clear. Students will have access to higher quality information about the degrees and courses they wish to study and a new Teaching Excellence Framework will call Universities to account on the quality of teaching, as well as the quality of research. This is a positive step – the majority of funding UK Universities receive is from tuition fees, particularly from the UK student loans system where fees are set at a maximum of £9,250 per year.

However, in reality students don’t have much genuine choice and our HE system is largely run on models introduced 500 years ago, and tweaked on the margins for the 20th and 21st century. We have a “market” in Higher Education that does not really operate like any market in the real world. Fees are fixed, with no incentive to charge lower than the £9,250 maximum.

The burden of cost is clearly transferred to the graduate student and the taxpayer and expensive courses such as Engineering and Chemistry are cross subsidised by less expensive ones such as Law, English and Business studies – all charging the same.

Nor is there any incentive for UK Universities to introduce different models or modes of study, such as online provision, shorter two year degrees or a clear system to transfer between courses and universities during students’ studies. Students are effectively locked in, and they court significant confusion and risk if they wish to transfer.

For example, most students only qualify for four years of student finance support, so restarting a course is a step into the unknown. Universities also face risks if they try to innovate or widen their access policies to allow transfer students because the current funding model (and UCAS application system) is wedded to a September start, three year full time degree programme.

Students, their advisers and supporters have more power than ever before when it comes to choosing what to study and where to study it, and it is a buyers’ market – applications were down last year and early indications suggest a further drop is likely for 2018 entry. However, instead of innovating on models of study and price differentiation, most of the HE sector just ramps up their marketing spending to gain an increased share of the declining applicant pool.

The time has come to allow transfers between universities to be easier, more seamless and for graduate employers and advisers to be more aware of these opportunities. A flexible, forward-thinking student who has transferred university should be viewed positively, not as a flighty, failing student and potential risk as an employee.

The time has also come for two-year “fast-track” degrees, leaving students up to £25,000 better off, as announced by Universities Minister Jo Johnson on Sunday.

My own institution, the University of Buckingham, began offering two-year degrees when we were set up over 40 years ago. The formula has been tried, tested, and found to be very successful here. Witness our 25 per cent increase in numbers this year alone.

The traditional universities that have had it easy for far too long are resistant to change. Run substantially in the interests of academics, and research, they look down their noses at two year degrees. “Poor quality” is a common riposte. Well the University of Buckingham gives the lie to that, as we have been top of the teaching quality table among British universities for the last three years.

Two-year degrees will not suit all undergraduates, of course, but they are a cheaper and better option for many, including mature students and undergraduates eager to forge ahead and get their first degree without the vast acres of free time experienced by those on a three year degrees.  Students recognise that their careers and lives will change as they reach their 30s and 40s as technology, society and AI changes the way we work – their first bachelors’ degree is just that, the first stage in their post-18 learning journey.

Jo Johnson, following hard on the heels of David Willetts, an equally innovative force in HE, is changing the face of British universities in the interests of the consumer, ie the students, but without sacrificing quality, which has propelled our university sector perhaps to the best in the world.

Extensive changes are coming to universities, and not a moment too soon. Students themselves, as well as the country, will be the beneficiaries.

Anthony Seldon, VC, and James Seymour, Admissions Director, of the University of Buckingham