A decade on from the Higher Education & Research Act (HERA), it’s time for the new sector champions to arise 

Today’s blog was kindly authored by Daniel Gilbert. He was Special Adviser to Jo Johnson, former Minister for Universities and Science and is now a Partner at consultancy Shearwater Global. 

Yesterday’s HEPI / AHEP / TechnologyOne webinar on ‘Invest now or pay later? The future of professional services in higher education’ is available to watch on our YouTube channel.

Higher education is in a bind. Our universities are renowned globally, driving billions in exports and powering world-class research. Yet listen to the domestic conversation – as I did recently at the party conferences – and you hear a jarringly different story: a narrative that too often characterises universities as part of the problem in British society, rather than a solution to our challenges. 

There are, without doubt, some home truths that we need to confront. The most pressing of these is related to the jobs market, with graduates making up 15% of the 1 million NEETs. But it is easy in such a climate to lose sight of a basic truism. No ambitious country anywhere in the world is actively looking to shrink its university sector. As we approach the tenth anniversary of the Higher Education and Research Act (HERA) – the legislation that shaped the regulation of the sector as it exists today – it is a timely moment to reflect on why the reforms came about, what they achieved, and what should come next. 

Unfinished business from the Coalition era 

First, a personal recollection. Ten years ago, winding back through several machinery of government changes, I was a newly-minted Special Adviser for Jo Johnson in the former Department for Business, Innovation & Skills. We arrived in the department with a small majority, unshackled from the constraints of coalition, and a clear vision set out in the manifesto which Jo had responsibility for drafting: 

We will ensure that universities deliver the best possible value for money to students: we will introduce a framework to recognise universities offering the highest teaching quality; encourage universities to offer more two-year courses; and require more data to be openly available to potential students so that they can make decisions informed by the career paths of past graduates.

We will maintain our universities’ reputation for world-class research and academic excellence. Through the Nurse Review of research councils, we will seek to ensure that the UK continues to support world-leading science, and invests public money in the best possible way.

The logic was twofold. The increase in tuition fees and removal of the student numbers cap required a new approach – one that shifted away from a funding council model that carved up grants, and towards a regulatory framework that incentivised outcomes. What followed was the Office for Students and Teaching Excellence Framework. 

On the research side, budgetary protection was a rare good news story for the Conservative government, but there was a nagging feeling that the sum of the parts added up to less than the whole. This led firstly to a planned research council merger (“Research UK”) and then to a supercharged UKRI, encompassing the dual support system and Innovate UK. For the Treasury, I sensed this was partly a tidying-up exercise. From a Special Adviser’s perspective, it was an opportunity to spend less time vetting a plethora of council board vacancies when attention should be on a joined-up research strategy. 

Legislation was never guaranteed – we had to make the case 

HERA may have had manifesto cover, but a slot on the parliamentary calendar was not guaranteed. We were acutely aware that an HE bill was a political risk. It would be a target for opposition amendments and the proposals were never likely to inspire Conservative backbench enthusiasm. We still needed top-tier political consent. 

There was a scenario in which HERA never happened, and HEFCE survived. The breakdown in relations between the department and the funding council was an open secret at the time. I remember it being difficult to see something as basic as HEFCE’s media grid. As a backstop exercise, officials had scoped the non-legislative means of achieving similar policy ends. An ambitious HEFCE could have saved itself by using its existing powers in a more creative way. But in practice that was only ever an incomplete option and would have required consistent ministerial direction. So we consulted first, taking care not to reveal our hand on legislation, while making the case for a bill internally. 

From green paper to white paper: success as a knowledge economy 

The title we chose for the November 2015 green paper sent a clear signal about our priorities: Fulfilling Our Potential: Teaching Excellence, Social Mobility and Student Choice. In the language of the Cameron government of the time:

These proposals reflect our mission as a One Nation Government to ensure everyone from all backgrounds can reach their full potential.

That document was careful to avoid committing to a bill. Over that Christmas, the case for a legislative slot was made behind the scenes both to the Prime Minister and Chancellor, aligning HERA to the Treasury’s long-term economic plan and the urgent productivity challenge. It was a lesson in the art of political weather-making watching Jo Johnson at work. At a time when politicians are so often denigrated, the last Conservative Government benefitted from a number of highly capable ministers covering education. It is fair to say that HERA could not have happened without Jo’s vision and determination – not least in the midst of an EU referendum and change of Prime Minister. 

With political backing, the parliamentary counsel got drafting. To the surprise of the sector, a bill was ready immediately after the Queen’s Speech of May 2016. I had taken my laptop to a now-closed Café Rouge to finesse the white paper’s foreword and brainstorm ideas for the title. There was a quiet part of me that was pleased with the Blairite overtones: Success as a knowledge economy. You can hardly imagine a politician embracing that phrase now. The opening two pages are still worth reading a decade on. They demonstrate the clarity of the vision – and how we tried a decade ago to get ahead of issues that still rankle now: 

If we are to continue to succeed as a knowledge economy…we cannot stand still, nor take for granted our universities’ enviable global reputation and position at the top of league tables. We must ensure that the system is also fulfilling its potential and delivering good value for students, for employers and for the taxpayers who underwrite it.

Legacy – TEF comes of age 

The HERA settlement has proved remarkably durable. Successive governments of different political stripes have maintained its core pillars. Several changes of governments later, it is notable that the OfS is clearly doubling down on the TEF in its consultation on the future quality system. 

If you look at the full span of what happened in those few years (not just HERA itself), then a picture emerges of a remarkably prescient agenda. The OfS and TEF were explicitly about value for money and good graduate outcomes. The legislation for publishing Longitudinal Educational Outcomes data established a means to link student loans to HMRC employment data. The first inflation-linked increase in tuition fees, which took place in 2017, was a financial sustainability measure, sadly not repeated for around a decade. The launch of earn-as-you-learn degree apprenticeships began to break down HE / FE barriers and foreshadowed the Lifelong Learning Entitlement. If HERA hadn’t been introduced a decade ago, a government today would need to create it. 

The most contentious elements related to market entry. We were keen to encourage new providers like NMITE to bring something distinctive to the market. Given everything that’s happened since, it is no surprise that the Post-16 Education and Skills White Paper focuses on collaboration and financial sustainability rather than market opening. But the predicament the sector finds itself in today was a consequence of what came later. In reality, financial stability was integral to the HERA approach. The “English Votes for English Laws” procedure (known as EVEL and now rescinded) was used in the Commons to uprate fees in 2016. Thereafter, income was allowed to decline while the international student market remained restricted, before being liberated, and then restricted once more. 

I have never bought the argument that liberalisation and quality were opposing bedfellows. The OfS was always intended as a quality booster, and we’ve seen in its new leadership – Directors of Higher Education in BIS a decade ago – a determination to tackle “pockets of poor provision” within the HERA framework. Their latest proposals can be summarised as TEF with Teeth: adding new post-study metrics on use of skills and earnings, and using TEF ratings to shape student recruitment numbers. Where there will be some debate is on restricting access to DAPs. Whatever the outcome, it would be a shame if we ended up with a system that made it harder to acquire DAPs but did not apply equal emphasis on encouraging innovation in the system. 

With the benefit of hindsight, we could have done more on innovation 

Promoting innovation was always a key plank of the HERA reforms. We only scratched the surface of what this could mean in terms of teaching and learning. With hindsight, more could have been done to build capacity in new institutions and encourage uptake of accelerated degrees. In practice, there was little fiscal wiggle room at the time. 

English devolution has also blossomed in the decade since HERA. Universities have responded with bigger thinking on their civic contribution, but the system itself offers few formal incentives for this. If HERA were before Parliament today, I expect MPs and Peers would want to look at regional collaboration and skills planning as part of the general duties of the OfS. How soon this happens depends on whether the new government follows through on the proposal to legislate for annual fee indexation. (As a side note in these heady Burnham days, there was an alternative universe in which we based the OfS in Manchester, the heart of the Northern Powerhouse. It was discussed at the time, but the cost and expertise in HEFCE made that too difficult.) 

Where the sector must urgently assert itself is in embracing the skills agenda and dismantling the unhelpful binary of higher versus further education. We need both political and sectoral leadership to change the public conversation about higher education. Visit institutions in any part of the country and you’ll find university departments producing nurses and social workers, teachers and engineers, pharmacists and physiotherapists. A substantial proportion of higher education is already technical and professional, and some of that HE is delivered in FE settings. The HE-scepticism that I heard at events across the party conferences is not based on reality. It is a false caricature that eats away at the sector’s reputation. 

Was 2016 the high-point of political sponsorship of HE? 

A decade on from HERA, we are at another turning point for the sector, with new leadership at the Office for Students and a new funding strategy at UKRI. We are also at a high point of external scrutiny of what universities are for. 

It’s worth remembering that the HERA reforms were controversial at the time. There was criticism about the marketisation of higher education and fears about political interference in the research base. In hindsight, however, that was probably the high-point of political sponsorship of HE. Today, whichever party spokesperson you talk to, you get the faint impression that pride in our higher education sector can only be muttered awkwardly and in hushed tones. That’s the part that’s got to change. Whether it’s innovative new providers or ancient research-intensive institutions, higher education is a huge national asset. Ten years on from HERA, it’s time for the HE heroes to emerge.