- This blog is an extract from a speech that the Director of HEPI, Nick Hillman, recently made to the Board of Sheffield Hallam University.
- The issues in the speech will come up at this week’s HEPI Annual Conference, with keynote speakers including the Shadow Minister Matt Western MP, the awarding-winning author Professor Rob Ford (University of Manchester) and the Chief Executive of the Office for Students Susan Lapworth – plus the launch of the HEPI / Advance 2023 Student Academic Experience Survey. It is (just) not too late to book a place and institutions that support HEPI’s work are entitled to more than one free place.
I have been given a wide brief for this speech. So I began my preparations by going back to see what I said when I last spoke to the Hallam Board, back in 2017. I started my remarks then by noting the level of flux in higher education policy.
We were on our third Universities Minister in three years, which seemed a lot at the time. But given we have had another three in the past year alone, along with five Secretaries of State for Education and three Prime Ministers, the period when I last spoke to you has retrospectively come to resemble a time of remarkable stability and calmness.
Intriguingly, given the political upheavals of the past few years, the other issues I spoke to you about in the autumn of 2017 have not changed much. For example, back then there was considerable uncertainty over many higher education policies. Indeed, the day before I spoke to you, Theresa May had announced there was to be a review of post-18 education – that became the Augar review, which reported in early 2019.
Four years on, we are still waiting for the Government to tell us how they intend to implement much of Sir Philip Augar’s report. Ministers held a consultation on this that ended over a year ago, in May 2022 – or two Prime Ministers ago in old money. It flagged the possibility of new minimum entry requirements, new student number caps and a new lower fee cap for Foundation Years. I have my fingers crossed that we will soon have an announcement on what Ministers plan to do in practice – though, like the Grand Old Duke of York, we have been marched up to the top of that hill before and, whatever is decided, there will be limited time to implement any changes before the next election.
As the press keep pointing out, Rishi Sunak has no more than 18 months to pull back his party’s position in the polls. Yet big higher education reforms take a minimum of two years, so it will be hard for him to make significant changes to our own sector – should he want to do so – in that time.
Back when I last spoke to you in 2017, there was also uncertainty about what Brexit might mean for our relationship with the EU on research funding. Incredibly, this is still not resolved six years on.
Back in 2017, there was also a political row going on about international students – since then, the Government has successfully relaxed the rules on things like post-study work, but the expected positive response from learners and institutions has now scared the horses and we are seeing another crackdown that takes us some way closer back to the Theresa May years.
With Universities UK International, Kaplan and London Economics, we recently published a major new report on the net economic benefits to the UK of international students, broken down for the four parts of the UK, to a regional level and also right down to a parliamentary constituency level. So we can see, for example, that 30% of first-year students in Yorkshire and the Humber are from overseas, that they bring around £3 billion of spending power with them and that they are worth £273 million in the single constituency of Sheffield Central alone. It is a story of remarkable achievement.
Yet the Home Office say this expansion has been too far, too fast and too focused on those countries from which students are more likely to bring dependants with them. That is far from the whole truth. In reality, it is a story of an autonomous sector responding brilliantly well both to the Government’s own official target of recruiting ‘at least 600,000’ overseas students and ministerial strictures to diversify away from an apparent past over-reliance on China. Institutions responded by recruiting far more students from places like India and Nigeria.
These new students are more likely to bring dependants with them because of the demographic structures of their own home societies. We have to be honest about the substantial pressures this can put on public services, such as on primary schools when international students bring young children with them – that’s one reason why we publish the net numbers for the benefits that international students bring, with the costs taken off, alongside the gross ones. But equally, it has not been well understood that dependants have only been able to come here if the student and their dependants have had sufficient financial resources to look after themselves. Some of the recent discussions risk leaving the false impression behind that UK universities are recruiting hundreds of thousands of undergraduates with lots of dependants who then live entirely off the welfare state at the cost of British taxpayers. That is not anywhere close to the truth.
In my view, and as I have been saying repeatedly for years, the way to bring stability and sense to this whole policy area is to start sharing policy responsibility for it across Whitehall. Instead of giving the Home Office all the control, policy on international students should be shared with the Treasury, the Foreign Office, the Department for International Trade and the Department for Education, and overseen by someone senior at the centre, in Number 10 or the Cabinet Office. It is the approach they take in some other countries.
International students bring lots of money to the UK but they also bring other benefits, including a more diverse learning environment. If they return home, the UK benefits from the extra soft power and, if they stay to work after their studies, they help to fill in the UK’s skills shortages. Their presence helps make courses viable that otherwise it would not be possible to run.
So international students are a big part of the reason why the UK higher education sector has weathered the stormy weather of Brexit and COVID as well as could have been hoped. To take the bluntest of all metrics, no university has (yet) gone bust, despite many forecasts two or three years ago that a number were about to go under. There were new data out recently from the Office for Students confirming that, on average though not at every single institution, the sector is in good financial health.
Nonetheless, not everything is rosy. League tables have their faults but they do enable us to make rough comparisons with other countries and you may have seen that in one new global league table, nearly sixty per cent of UK universities performed less well than last year.
In my view, the biggest problem here in England (but also elsewhere in the UK) is that the funding model for teaching undergraduates has become silted up by a combination of high inflation and political timidity. Together, these factors have eaten away at the income universities receive for teaching home students.
Others disagree with this. They say the whole system is kaput. They are generally fuzzy on what should replace it, but some claim we need a graduate tax, while others say we should simply abolish fees and yet more say we should set up a new cross-party review to see what emerges – as if the answers to higher education’s challenges are not already lying in wait in the pages of the past Dearing (1997), Browne (2010) and Augar (2019) reports.
I don’t agree with the doom-mongers because the model we have has worked well over the past decade, in particular in allowing there to be more student places at a time of rising demand. Even the Labour Party in England, which has spent a decade fiercely opposing fees of £9,000 / £9,250 while its sister party in Wales has been implementing fees of the same sort of level, now say they want to keep the English system in place, albeit with a few backend tweaks to the repayment rules.
But the system we have has not kept up with the times – and specifically with inflation. It is close to derailment as a result – and there simply isn’t time to muck about. As Harold Wilson rightly said, reviews tend to ‘take minutes and waste years’.
The simplest thing to do, which would retain the benefits of the current system, would be to increase fees to take inflation into account. Any politician who balks at the idea of simply voting for higher fees soon, either before or more likely after the 2024 election, should remember two things.
- First, that the higher fees introduced in 2012 were set at the equivalent of £13,000 in today’s money – no one is expecting that much now, but why is it that the Coalition were able to support proper funding for teaching home students while a Conservative Government with a stonking majority is not brave enough to do so?
- Secondly, our legislators should remember that the main alternatives, like introducing a graduate tax, are unlikely to be any easier politically – new taxes being notoriously unpopular – and others, like abolishing fees, would mean restricting student places and an even worse maintenance package during a cost-of-living crisis.
In the meantime, while the politicians are deliberating on (or, more accurately, dodging) the issue, universities are left to grapple with the fact that they have less money to educate each home student. This may force them to be more innovative, which in many ways is no bad thing. But it exposes further contradictions. It means, for example, less money for research, as teaching sucks up resources – and at a time when the Government says it wants the UK to be a Science Superpower.
You can run a university on a lower unit-of-resource and by ‘piling them high and selling them cheap’, but the education will be less good – the same as schools are less good when you underfund them. I know this from personal experience as I went to university in the 1990s, before fees had been reintroduced. Few staff knew who I was, the lectures were over-crowded and the campus was tatty. I still had a great time socially but all those things politicians say they want to see more of – like more contact hours, more assessments and more mental health support – become out-of-reach if there is less money available to educate each student.
One other point on finances. As we recently showed in a report produced for HEPI by SUMS Consulting, our sector has an odd employment model: one in which staff on permanent contracts get a really really good package when it comes to things like pensions, leave and sick pay – on average, their pensions are five times better than average and their sick pay is 13 times better. No wonder they are so keen on striking each year to defend it!
On the other hand, compared with other sectors, we have a much lower proportion of staff on permanent contracts, and there is a problem of precarity. So in my Foreword to the SUMS report, I argued for some rebalancing so that life is easier for academics early in their careers. This may mean slightly less good terms and conditions for some but more opportunities to have a permanent contract for others. Biting the bullet on such things and showing ourselves keen to reform conditions in our own sector – thereby showing a willingness to use our autonomy to tackle problems in our own back yard – is perhaps the single best way to persuade policymakers to stop beating up on us.