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There is no such thing as a safe return to student number controls – because the Treasury is too powerful

  • 8 November 2022
  • By Nick Hillman

TL; DR: Student number controls, even when dressed up as ‘tolerance bands’, are really about exercising power over autonomous institutions – and they are therefore a very dangerous tool when in the hands of a Treasury looking for savings.

HEPI, Wonkhe, the SRHE and the CGHE

There were a lot of warm words expressed about both HEPI and Wonkhe at last week’s Society for Research into Higher Education (SRHE) event on bridging academia and policymaking. It was clear from the various senior speakers present that both organisations have filled a gap in providing accessible policy-focused information.

But HEPI and Wonkhe are very different organisations, not least in their legal make up: HEPI is primarily a charity, with charitable objectives and Trustees, while Wonkhe is a private company with ‘1 active person with significant control’. Each organisation is better for the existence of the other one, showing the benefits of competition in action.

There’s a notable distinction between the two organisations’ output on some really big issues, including topical ones like free speech. For example, Wonkhe launched a full-throated attack on HEPI’s most recent (peer-reviewed) report on the issue, attacking it as ‘troubling’, full of ‘problems’ and ‘weird’.

There is, evidently, a fairly big difference of opinion here. It would not be much of a caricature to say HEPI’s output has tended to say there is a bit of a problem regarding free expression on campus – not a crisis but an issue nonetheless. Meanwhile, Wonkhe’s response has tended to be more sceptical about doing more to protect free expression.

Another area where a deep difference of opinion has grown up is around student number controls in England. Both HEPI and Wonkhe are broad churches and publish a range of views. Yet the balance of evidence from HEPI has tended to defend the removal of student number caps and the balance of evidence from Wonkhe has tended to say the opposite, with considerable support expressed for some sort of control – though largely as a stabilisation measure rather than because anyone at Wonkhe wants to stop willing learners from accessing higher education.

For example, two different Wonkhe staff writers, have written:

I’m attracted to a more controlled model of managing year on year difference between recruitment (https://wonkhe.com/blogs/student-number-controls-wont-fix-higher-education-in-the-uk/)

the sector’s predilection for viewing SNCs [student number controls] as an encroachment of institutional autonomy will always be the enemy of transparency and fairness (https://wonkhe.com/blogs/conditional-unconditionals-are-dead-but-is-the-damage-already-done/)

Most recently, this HEPI / Wonkhe disagreement on student number caps has centred around the Dearing report of 1997. This is because yet another important body focused on higher education policy – the brilliant Centre for Global Higher Education (CGHE) – hosted an event at the UCL Institute of Education last Friday to mark the twenty-fifth anniversary of the Dearing report’s publication.

Over the weekend, I posted a polished-up version of the remarks I made at this event, which noted among other things that the number one recommendation of the Dearing report was the lifting of student number controls. This is notable in part because it is rarely spoken about when Dearing is discussed and because the New Labour Governments that implemented Dearing stuck with number controls.

Tolerating tolerance

In response to my comments, David Kernohan of Wonkhe posted his thoughts about Dearing. He concluded not for the first time that the removal of controls on student numbers around five years ago has been a bad thing: specifically, the demise of the old tolerance band allowing only limited annual growth in ‘funding that follows the student was a real loss to institutional strategic planning.’

As with everything David has to say, this argument has much going for it. But to me it is missing one crucial thing that is likely to seem abundantly clear to anyone who has seen how the Treasury works up close. When there is a fiscal crisis (as now), the Treasury is tempted to pull any policy lever already in its hands that can deliver quick savings.

From the perspective of higher education, a tolerance band can seem a nice tool to smooth out radical year-on-year shifts in student demand:

  • Put at its most simple, if university A is ripe for expansion and similar-sized university B is struggling, letting the former grow by up to 5% a year but no more is likely to limit the drop in demand for the less popular place.
  • If, in the event, university A grows by the maximum 5% but still has to turn some people it wants to accept away who end up enrolling at university B, where the intake falls by only 3% as a result, you’ve smoothed out the extremes while still enabling overall sector expansion.

This situation seems very far from ideal to me because it seems to put the interests of institutions above the interests of students. As David Kernohan says in his best piece on the issue: ‘Would it limit some access to higher education – yes, it would.’ There are other ways to help a struggling institution than pushing people who are less keen to study there to enrol. But nonetheless tolerance bands are clearly a policy lever on which the opinions of reasonable people can and do differ.

The challenge comes when Treasury civil servants note they can play around with tolerance bands and the like. What if the maximum 5% potential growth at each institution is set only at 2% next year or if the band is operated in such a way that, even if every institution expands to the maximum it can within the rules, there is still surplus demand and some good potential students are shut out?

In short, from the perspective of people with responsibility for fiscal policy, tolerance bands are primarily a lever for control rather than a nuanced tool for managed expansion. And if it looks like a duck, swims like a duck and quacks like a duck, it is a duck. 

Let’s not forget the Treasury used student number controls to save money in the last financial major crisis:

  • Immediately on taking office from Tony Blair, Gordon Brown made student maintenance grants more generous.
  • But his administration got their numbers wrong, underestimating the true cost, which started to land just as Lehman Brothers collapsed and the financial crisis began.
  • In an attempt to balance the books, the Brown Government cut planned student numbers directly (and indirectly via the introduction of the penal Equivalent and Lower Qualification rule while simultaneously toughening up the rules on entitlement to maintenance grants).

As the Guardian reported in October 2008, ‘The cap on student numbers for next year has also been set at 10,000 additional places – 5,000 fewer than expected.’

On coming to power, the austerity-obsessed Coalition were similarly parsimonious. This time, the Guardian reported: ‘The number of places on degree courses in England will be cut by 10,000 by 2012’.

Student number caps as the Chancellor’s plaything

Perhaps you need to have been a fly on the wall to understand fully just how powerful and short-termist the Treasury can be when it comes to such decisions. The Government for which I worked supported number caps for every single day of the three-and-a-half years I worked for them – except for my very final day in post, when the removal of student number caps was announced as part of the Autumn Statement of December 2013. (For a very brief moment, the stars aligned thanks to a Chancellor, George Osborne, that loved universities, thanks to a sense that there was a productivity crisis that having more graduates could help tackle and thanks to there being a falling number of 18-year-olds, which limited the financial risks.)

I’ve seen how student number caps get used as a plaything of Treasury civil servants from inside Whitehall and it is not a pretty sight. Perhaps the situation will be different in the future if the Treasury once more get to exercise the power to control student numbers; after all, my Whitehall experience is nearly a decade old. But somehow I doubt it because some things about public policy are immutable – and that includes much about the way the Treasury operates, especially in a crisis.

Number ‘controls’ are really about power over autonomous institutions, which is why the Treasury has tended to like them; it’s also why the far left, like elements of the UCU, like them even more. Dressing up any new controls in the clothes of the old tolerance band is very unlikely to change things as much as Wonkhe’s commentary would have you believe.

Painting an institutional tolerance band as something altogether different to a student numbers cap is like saying a one-child policy with a tolerance band limiting every family to no more than two children is not actually a cap. Yet limiting the size of every household, like limiting the size of every university, still adds up to an overall population limit.

The paradox that (perhaps) explains the differences of opinion

There is one likely explanation for the difference of opinion over student number caps.

It is often – probably rightly – said that the higher education sector leans towards the left politically. It is also often said – again possibly correctly – that the country (England) leans in a more rightward direction. This can produce a certain naïvety in the higher education sector when discussing policymaking, with an ill-thought through faith in Whitehall and big government that rests on a misunderstanding of where power lies and how it gets used.

People were, in my view, wrong to think Ed Miliband’s £6,000 fee cap would not have produced a drop in per-student funding, on the assumption that the Treasury would always make up the difference. Similarly, it seems to me a major tactical error now to minimise the disadvantages of a return to student number caps – whether or not they are dressed up in the bureaucratic language of ‘tolerance bands’. It might all be okay for a year or two after they are implemented, though perhaps not even that long in the current financial crisis, but then what?

This is more relevant now than ever, given demand for higher education is expected to continue growing fast for years to come and given recent Ministers have threatened to set new limits on access to degrees.

Indeed, I would go so far as to say lobbying for (or just repeatedly floating the supposed benefits) of any new student number controls could end up having the same effect as giving Treasury civil servants the PIN code to your institutional bank account. My advice is simple: DON’T DO IT!

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