At the end of 2013, George Osborne announced the end of student number caps. In future, universities will be free to recruit as many students as they want. But it remains unclear how the change will be implemented, how it will be paid for and what it will mean in practice. In this important new report, Unleashing student demand by ending number controls in Australia: An incomplete experiment?, HEPI considers how the same policy worked when it was rolled out in Australia.

It is written by Andrew Norton, Programme Director in Higher Education at the Grattan Institute in Melbourne, and the co-author of a recent review of the demand-driven system commissioned by the current Australian Government.

The report discusses:

  • Cost over-runs: ‘successive Budgets under-estimated the demand-driven system’s cost.’ (page 22)
  • Expansion across the board: ‘[Enrolment growth] was across all socio-economic groups, across country and city, across all university types and the vast majority of disciplines.’ (page 25)
  • More students with low prior attainment: ‘their numbers have increased substantially from a low base and are likely to continue doing so.’ (page 29)
  • No impact on the quality of teaching: ‘[Analysis of student survey results] did not find any evidence of either problems or unusual improvements.’ (pages 30-31)
  • Potential opportunities for alternative providers: ‘Opponents of system extension have not, in my view or that of previous reviewers of higher education policy, demonstrated systemic quality problems in the non-university sector.’ (page 35)
  • A connection between removing number controls and fee levels: ‘While a demand-driven system is not inherently linked to fee deregulation, it does lessen some concerns about removing constraints on prices.’ (page 42)

In a Foreword, Nick Hillman, the Director of HEPI, draws a contrast between the decades taken to prepare the ground for a demand-driven system in Australia and the speed with which the decision was taken in England.

Nick Hillman said:

‘Removing student number controls is a logical conclusion of the liberalisation of higher education that has taken place in England under the Coalition. In effect, undergraduates hold vouchers worth £9,000 and universities are expected to compete for them.

‘But the policy of removing student number caps was put together quickly and remains fuzzy. There are uncanny parallels between the English and Australian higher education systems and, when Australia followed a similar path, the results were unexpected. More students enrolled than were predicted, the costs spiralled and there have been knock-on consequences for the whole higher education debate.

‘There are strong arguments for giving applicants and universities more freedom to find the best possible match. But it would be naïve to think the policy will be simple to roll out, especially if higher education suffers further cuts after the 2015 election. England rapidly needs to consider the positive and negative lessons from the Australian experience if the policy is to be a success.’

Andrew Norton said:

‘Australia’s demand-driven system has increased access to higher education across the socio-economic spectrum and across the country. It has improved the match between students’ interests and the courses they take. University leaders say that increased competition has focused their attention on the student experience.

‘Despite these successes, the demand-driven system’s initial design has led to some problems. By only applying to bachelor degrees, publicly-funded access-to-HE courses that help students with weaker academic preparation are only available in limited numbers. By only applying to public universities, student choices are skewed and low socio-economic status students end up paying full-fees in non-university colleges. The government now proposes to fix these problems, but its reforms are caught up in a controversial policy package that includes deregulation of student charges.’

Notes to Editors

1. On 5th December 2013, George Osborne said: ‘Access to higher education is a basic tenet of economic success in the global race. So today I can announce that next year we will provide 30,000 more student places – and the year after we will abolish the cap on student numbers altogether.’ This means young people receiving their A-Levels results on Thursday, 14 August 2014 who have applied to go to university this autumn will benefit from the change, although the full effect will be felt by those taking gap years or taking their A-Levels examinations next summer.

2. In early 2014, HEPI started a project comparing the English and Australian higher education systems. So far, a pair of reports has been produced that compare the student loan systems in the two countries and we have held a conference with Professor Bruce Chapman, the architect of the Australian student loans system. On Wednesday, 26 November 2014, Professor Paul Wellings, the former Vice-Chancellor of Lancaster University and current Vice-Chancellor of Wollongong University in Australia, will deliver the HEPI Annual Lecture comparing higher education in the two countries.

3. HEPI won the ‘One to Watch’ category in the Prospect Think Tank of the Year Awards 2014.