It’s the autonomy, stupid: Augar, admissions and market signalling

This blog has been contributed by Professor Colin McCaig, Sheffield Hallam University.

With the publication of, and ongoing fall-out from, the Augar Review of Post-18 Finance, it has become clear that there is a surprising degree of misunderstanding about various aspects of the HE market established in England over the previous decade and a half. My recently published book The marketisation of English Higher Education: a policy analysis of a risk-based system (McCaig 2018) looks in detail at how the market developed over a thirty-year period and – like a lot of us policy wonks – I have been involved in or engaged with various events and publications on how Augar fits into the current situation and the historical context. 

Two things stand out: a misunderstanding of the importance of institutional autonomy over admissions in the market; and a wilful ignorance of how the HE market operates outside the Oxbridge – Russell Group bubble. To better understand the impact of applying certain market levers, it is essential to have a greater understanding of all the factors in play.  

Institutional autonomy

The autonomy of universities is generally misunderstood. Not understanding how important autonomy over admissions is to the way that institutional prestige is reinforced is one thing; but it is compounded if allied to the belief that pulling on any policy levers can override it. On the contrary, each of the sixteen pro-market policy documents I analysed in my book reiterated the inviolable nature of autonomy: it is literally enshrined in law (e.g. Further and Higher Education Act (1992); HMSO 2004; HMSO 2017). That is not to mention that various other adjacent policy reviews, such as the Schwartz Review of Fair Admissions to Higher Education (2004) which took autonomy as its starting point.

Yet a lack of understanding by policymakers, e.g. at the time of the trebling of fees in 2010 and later when the Coalition government established a ‘Social Mobility Czar’ in the form of Liberal Democrat MP Simon Hughes, was comprehensively exposed when the Office for Fair Access (OFFA) made it clear that, sorry, but it had no powers to use fee-regulation as a means to force institutions to lower their entry requirements in the way that Ministers thought.

This is far from a semantic point. Autonomy over admissions allows those institutions that can attract the best qualified to reinforce their position at the top of the status hierarchy and allows their representative body – the Russell Group – legal cover to ignore any attempts to truly open up HE opportunities for all. The Equalities Act (2010) prevents universities (or indeed any organisation) from discriminating against people on the basis of their protected characteristics (age, gender, ethnicity, beliefs etc); but the list doesn’t include social class, which – as we all know – is heavily correlated with educational attainment at all levels up to entry to HE. The presence of institutional autonomy alone creates the conditions for a differentiated distribution of HE providers based on the average Ucas tariff points required. It also forms the basis for the market ‘rationale’ that HE delivered by some providers is ‘more valuable’ in financial terms than that delivered by others. This puts current – and perennial – discussions about Post-Qualification Admissions and Contextual Admissions into their very non-radical context, as discussed in my recent WonkHE blog.

Market signalling: the Price List

Markets rely on signalling, in the form of simple, easy to understand messages indicating where the ‘good stuff’ is and what it costs. Even without tuition fees the currency of Ucas entry requirements is, and always has been, the primary indicator of differential ‘quality’ in the system. However, when institutional league tables first appeared in 2005 (the Times Higher Education was first off the mark) they also included a number of other key metrics including those associated with research (amount of research income; proportion of staff with Doctorates; proportion of PhD students) which bolstered the position of the most established universities. The combination of entry requirements and research power acts as a double-lock that reinforces the established hierarchy: and of course such a market-based fixed hierarchy benefits the current elite, who lobbied for variable ‘top up’ fees long before the introduction of basic flat-rate fees in 1998 (McCaig 2000).

The presence of unitary, linear league tables drives public perceptions of the range of HE providers, not least the perceptions of applicant-consumers and their parents. This does not take into account the various types of excellent HEPs that, for example are ‘specialist providers’ with high entry requirements that do not do any research or that have a specific mission (e.g. as part-time institutions like the OU and Birkbeck), some of the new alternative providers that offer just a few disciplines (such as law, accountancy etc) or indeed the host of post-1992 institutions that have a regional labour market focus and offer many highly-demanded degree programmes. 

The notion of a league table implies a homogenous set of institutions all doing the same thing, with the one in 99^th position seen as the 99^th worst at ‘being like Oxbridge’. This is absurd: the market for automobiles doesn’t pretend that a small hybrid car for use in a city is better or worse than a 3-litre luxury saloon with the turning circle of a small Oxfordshire village: it’s just different. Markets have to differentiate horizontally as well as vertically; league tables are entirely the wrong metaphor. 

But a lot of very clever, usually Oxbridge educated, people seem to believe the hierarchy is natural and such rankings reflect truths about the quality of education on offer and the inherently superior nature of applicant-consumers presenting with AAAA*s. That belief system may help the elites sleep at night – that all they are doing is providing a meritocratic pathway for the ‘brightest and best’, and keeping UK HE ‘globally excellent’ – but from the outside it looks like protectionism created by a rigged market. 

Philip Augar himself seems to have swallowed whole the idea that only the few are able to access degrees: as Simon Marginson said in a recent HEPI blog:

The report is harsh about the admission of students with low scores, suggesting that some universities do this solely to boost numbers without regard for the allegedly low value of the degrees to the individual and the economy. Unless universities get their house in order, says the report, a minimum academic requirement could be imposed.

And while Augar genuflects to the notion of widening participation, as Marginson says he is queasy about the logical consequences of a thoroughgoing WP approach, which necessarily must take in students without the conventional academic entry qualifications… and notes that Augar wants to have less degrees even as our international competitors expand and offer degree education at scale.

This set of a priori beliefs about the HE sector means that Augar is puzzled by the effects of the HERA regime on institutional behaviours. His comments about not understanding why some universities in are in financial difficulties suggests he doesn’t understand the incentives created by the removal of the numbers cap from 2015/16, nor the potential threats created by the encouragement of alternative providers and the ‘risk-based’ monitoring regime of the OfS designed to expose ‘failing institutions’. It is quite clear in the HERA 2017and the preceding White Paper (DfE 2016) that new providers are there to create price competition, and should surprise no-one (least of all a banker) that competitive behaviour involves sometimes risky borrowing for investment by providers: yet Augar just sees this as ‘bad management’ as if there is no market or market-effect.