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Value for Money: A Risk, Wrapped in a Mystery, Inside an Enigma

  • 10 November 2020
  • By Giles Carden

Dr Giles Carden is Chief of Staff at Lancaster University and writes in a personal capacity on the 10th anniversary of the student protests against higher tuition fees.

As I flick through the newspaper on my iPad each morning it is now routine for me to see stories criticising universities and questioning whether a higher education represents value for money. Perhaps this is the price the sector has had to pay for an expansion in student numbers and the introduction of £9,000 fees ten years ago?

A recent announcement that the Resource Accounting and Budgeting charge (an estimate of the proportion of the student loan which will never be repaid) has hit 53 per cent puts even more pressure on the government and the sector to demonstrate to the tax payers who will foot the bill, that they are getting bang for their buck. Demand for higher education places is only likely to rise as the COVID-induced recession deepens, and if numbers increase under the current fiscal model, so too will the government debt burden. With UK debt reported in July to have reached an eye-watering £2 trillion or 100.5 per cent of GDP – a level it has not been at since 1963 – the sector should expect the drive to seek value for money and to control costs to become an ever more pressing issue.

The sector now has to wake up to the risks associated with the scrutiny of value for money. So what are they? We can perhaps frame them in two different ways: measurement and cost control.

Measurement Madness

Value for money is a somewhat recondite concept and much has been written on it including this HEPI blog by Rachel Hewitt. As the Office for Students (OfS) has implied in its statements on the subject, value for money is ‘in the eye of the beholder’. The ‘eyes’ of course are several: students, government, taxpayers and employers are but a few. If we pause and consider the second of these for a moment, there are several risks to consider. The first of these is that the government is always mustard keen to measure things. Furthermore, it may well seek to distil value for money into a series of simple metrics in much the way it did with teaching quality through the Teaching Excellence Framework. As we all know, metrics have pitfalls and if interpreted without care can banish common sense and replace it with perceived bureaucratic certainty.

So how practically might the government seek to measure and assess value for money? Before we answer this question it isworth noting that according to the Higher Education and Research Act 2017, the role for overseeing value for money rests with the Office for Students. History tells us (and the misbegotten and otiose TEF evinces the point) that government agencies tend to use off-the-shelf data, often citing the argument that it wishes to reduce the burden on providers.

There are of course a number of extant data sources that the OfS could use, for example, the Longitudinal Education Outcomes, degree outcomes, non-completion rates, Graduate Outcomes survey data and student satisfaction scores and the list goes on. Each is a blunt instrument in its own right, measuring a specific dimension of performance. Even if taken together as a basket of metrics, they can present a farrago of truth which misses many of the subtleties of value for money. Indeed, the ‘Start for Success’ measure the OfS is consulting on, which uses a combination of non-completion and highly skilled employment, is a step in this direction.

Then there is learning gain to consider – what students gain from their higher education experience. Some readers will recall that in the quondam days of 2015, the Higher Education Funding Council (HEFCE), the funding and regulatory body which preceded the OfS, commissioned a series of 13 projects involving over 70 institutions to undertake research into measuring learning gain. On HEFCE’s demise, the projects were bequeathed to the OfS, and to paraphrase its conclusions there is a varying degree of awareness and understanding of the concept across the sector and there are lots of ways of measuring it that suit different purposes – in other words it’s complex!

Lamentably, there is no easy or fool-proof way of measuring value for money and whichever metrics-paved alley you wander down, the inevitable end results will be that you create some behaviours you want and some you may not want. To draw an analogy, you weigh yourself, measure your height and calculate your body mass index, the result is not good. This leads you to decide to embark on a weight loss programme. You weigh yourself every week, you lose weight but hate eating all that rabbit food and cutting out the booze and end up depressed. Weight loss might be good but depression is bad. Any metrics-based system could end up producing unintended consequences that the Government and universities do not want.

Balancing the Books

A tricky problem lies ahead for the Government managing a spiralling national debt – and the escalating cost of higher education does not help matters. As HEPI has demonstrated in an earlier paper, the demand for student places is set to rise as we see an uptick in the number of 18 to21 year olds in the population and, as I said earlier, history tells us recession increases demand for higher education. Some possible options open to the government are to make changes to the student finance system to make it more sustainable or to control student numbers or both. Alternatively, the government might opt for a method whereby value for money indicators are used to control student numbers or set maximum fee levels. (The annual HEPI / Advance HE Student Academic Experience Survey runs a question on value for money every year.)

Only time will tell how the value for money agenda will develop but, as I hope this article has made clear, the pandemic has now amplified its importance and the road ahead is fraught with potential risks for universities.

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