The impact of universities on the UK economy

A big impact indeed

EconomicImpactOfHigherEducationInstitutionsLrg

This new Universities UK report on the impact of universities on the UK economy really is a very interesting piece of work which covers the sector’s increasing impact in terms of output, contribution to GDP, job creation, and overseas investment. It also looks at the knock-on effects of expenditure by universities, their staff, and international students. The report finds that in 2011–12, the UK higher education sector:

• generated over £73 billion of output – up 24% from £59 billion in 2009

• contributed 2.8% of UK GDP in 2011 – up from 2.3% in 2007

• generated 2.7% of all UK employment and 757,268 full-time-equivalent jobs

• generated £10.7 billion of export earnings for the UK

• received less than half its income from public sources

The report also compares HE’s contribution to GDP to that of other sectors:

Higher education’s contribution to GDP (O) is clearly significant. Further analysis was undertaken to assess the impact of universities on GDP compared with a number of other UK sectors. As Figure 11 shows, the higher education institutional contribution to GDP (O) in 2011–12 was comparable to that made by legal activities, greater than that of office administration and less than telecommunications. The industry figures were sourced from the ONS Use Tables for 2010 and hence should not be regarded as a direct like-with-like comparison as the higher education figures are for the year 2011–12. However, Figure 11 is broadly indicative and is helpful in illustrating the relative position of universities in terms of their contribution to GDP. This is an industry-to-industry comparison (ie the secondary GDP generated by the universities or their students is not included).

 

HE v other sectors

It’s a really impressive piece of work and reinforces the critical place of higher education in the UK economy. The report is also accompanied by a set of more detailed reports which examine the impact of universities on the economies of the English regions. All very helpful and interesting.

Money, Money, Money

HE Income and Expenditure 2012/13

Perhaps not the most exciting publication of the year to date but nevertheless some interesting information in the new Higher Education Statistics Agency report on Income and Expenditure of HE institutions.

HE Finance Plus 2012/13 shows that the total income of higher education institutions (HEIs) in 2012/13 was £29.1 billion. Funding bodies provided £7.0 billion of this income, while tuition fees and education contracts contributed £11.7 billion.

This handy chart shows the proportions of total income of UK higher education institutions by source in 2012/13:
PR201_Inc_721w

The total increase in income over 2011/12 was 4.5%.

And then there is also this helpful summary of total expenditure.
PR201_Exp_485w

Unsurprisingly, the bulk of spend (just over 55%) is on staff. Total spend has increased by 4.7% over 2011/12 and expenditure on staff has risen by 4.1%. It will be interesting to see how this global profile of total spend changes in subsequent years.

One thing is absolutely clear from this summary: with growth in spend outstripping income by 4.7% to 4.5% the position is unsustainable. And it’s only going to get worse in terms of teaching funding. So either institutions will have to find new ways to raise more money or reduce expenditure. The future doesn’t look very bright. It’s a rich university’s world.

The 2014 Grant letter: another epistolary triumph

And the wait was finally over

The Secretary of State for Business, Innovation and Skills has written to HEFCE with the Department’s annual message on funding and helpful bag of instructions. As excitement in the sector reached near fever pitch, the contents were being live-tweeted by @TimesHigherEd while everyone else waited to get hold of a copy.

The much-delayed letter does not contain much of what you might describe as good news although there is some modest improvement on the capital front. Additional student places and the removal of student number controls altogether from 2015-16 are confirmed:

The settlement will mean reductions in funding for higher education institutions in 2014-15 and again in 2015-16 beyond those accounted for by the switch to publicly funded tuition fees. The Government has asked HEFCE to deliver the reductions in ways which protect as far as possible high-cost subjects (including STEM), widening participation (which is funded via the HEFCE Student Opportunity allocation), and small and specialist institutions.

HEFCE is asked to continue its work with the Research Councils and others to support internationally excellent research and the delivery of the impact agenda through the dual-support framework. The ring-fenced settlement for science and research means that recurrent funding is maintained at £1,573 million, the same cash levels as 2013-14.

Overall, the amount of capital funding for teaching and research will increase in 2014-15 to £440 million.

The grant letter confirms the Government’s provision of a maximum of 30,000 additional student places in academic year 2014-15 for HEFCE-funded institutions. The student number control will be removed entirely from 2015-16, and the Government has asked HEFCE to ensure that higher education institutions maintain the quality of the student experience in these circumstances.

Bur enough of the content, what about the important stuff like length? At 22 paragraphs, excluding the covering letter, or 26 if you include the substantive comments in the letter, it is shorter than any of its three predecessors from the BIS duo which have come in at 36, 35 and 28 paragraphs long. It is pleasing though that the Secretary of State’s signature remains as cheerful as ever (see below).

It is far from the shortest on record though which is the initial 10 paragraph punt from back at the start of the Coalition journey. As this utterly pointless graph (now in need of an update) shows, the long term trend is reduced grant letter length.

The length of Grant Letters to HEFCE down the years

The length of Grant Letters to HEFCE down the years

So much for this year then, what of the past?

The earlier post on this topic back in August 2010 noted:

The most recent funding letter of June 24 2010 from Vince Cable and David Willetts to the Chairman of HEFCE is distinctive for three main reasons. First, and unsurprisingly if dispiritingly, it outlines the first major tranche of savings to be made in the 2010-11 financial year. Secondly, it is extremely short – indeed at 10 paragraphs and just over two pages it is the shortest funding letter to the Council in at least 14 years and undercuts all letters under the previous government by some way. Thirdly, it is the first such letter to be signed by both the Secretary of State and the relevant Minister. And thank goodness too or some of us might never have seen this fascinating signature:

Of course those with longer memories will have fond recollections of the briefest of grant letters from the University Grants Committee (UGC) which simply set out the amount of money available for disbursement. Many will long for the golden age of five year funding settlements under the UGC. Whilst it could reasonably be argued that the UGC served as an effective buffer between the state and the universities, the options for the Higher Education Funding Councils, and in particular HEFCE, are much more limited as the directives from government on spending have become ever more detailed and prescriptive. Fortunately though we are able to examine all of the details of these as HEFCE has a nice collection of funding letters going back to 1996.

This decidedly dubious summary of these letters draws on this collection but refers only to English funding allocations. I’m sure the other funding councils receive similar missives from their respective governments but it is beyond my capacity to deal with them I’m afraid.

The length of funding letters has seen two peaks in the last 14 years: January 2003’s letter was 73 paragraphs long and the December 1998 note ran to 66 paragraphs. The November 1999, November 2000 and December 2001 letters ranged from 40 to 46 paragraphs but the January 2004 letter and subsequent missives tend towards the more traditional brevity of only 15-25 paragraphs of instruction to HEFCE.

Just for completeness then here are some of the details about English Higher Education’s most exciting epistles:

  1. The first letter in this series is the last prepared under the previous Conservative government, way back in November 1996. This 41 paragraph note (signed by a Civil Servant) covers: linking funding to assessment of teaching quality, expanding part-time provision, the importance of closer links with employers, not wanting to see longer courses, a planned reduction in student numbers by 2,000 for the following year and keeping the participation rate at around 30%. Some interesting parallels here with the most recent letter from the current government perhaps?
  2. The December 1998 letter is the first New Labour funding letter. At 66 paragraphs it is one of the longest in recent times and the last one to carry the name of a senior Civil Servant rather than the Secretary of State. Topics covered include sector spending, lifelong learning, increasing participation, maintaining quality and standards (a recurring theme down the years), widening access, promoting employability, research investment, capital spend, tuition fee arrangements and Year 2000 issues (we were all worried then).
  3. The November 1999 letter, 43 paragraphs long, provides David Blunkett with the opportunity to wax lyrical on the importance of maintaining quality and standards, increasing participation and employability, widening access, equal opportunities for HE staff, dealing with student complaints, new capital funding, pfi/ppp opportunities, research funding and HE pay.
  4. David Blunkett, in his November 2000 letter, which runs to a sprightly 46 paragraphs, makes some big points on widening participation as a key priority, business links and the e-university.
  5. In November 2001 Estelle Morris provides a neat 40 paragraph letter which gives lots of direction on widening participation, maintaining quality and standards, strengthening research, the importance of links with industry and communities, as well as something on the value of the e-Universities project (remember that?) and, last but not least, social inclusion.
  6. January 2003 represents the high water mark of recent funding letters: in 73 action packed paragraphs Charles Clarke, in his first outing as Secretary of State, is clearly keen to lead the way. The letter covers, among other things, improvement in research, expanded student numbers, foundation degrees, widening participation, improving teaching and learning and increased knowledge transfer. As if that were not enough we also have the establishment of the AHRC, the introduction of a new quality assurance regime but with reduced burdens for institutions (yeah, right), credit systems, FE partnerships, expanded student numbers and new investments in HE workforce development. A real blockbuster of a letter.
  7. The January 2004 message from Charles Clarke comes in at 20 paragraphs in just over 4 pages with reducing bureaucracy, building research and quality and standards and the establishment of Aimhigher as its central features.
  8. December 2004 brings a Christmas treat from everyone’s favourite Santa, Charles Clarke. With just 16 paragraphs and 4 pages of direction Clarke stresses the importance of maintaining the unit of funding for teaching, controlling student numbers and making efficiency gains.
  9. The January 2006 letter, a first and last offering from Ruth Kelly, comes in at a modest 15 paragraphs and 4 pages. No huge surprises in the text with employer-led provision, more widening participation, additional research and capital funding and a strong steer on reducing bureaucracy being the primary features. Additional points to note include equal opportunities for HE staff, efficiency gains, the new conditions which accompany the new tuition fees regime and reference to access agreements. What’s not to like here?
  10. January 2007’s is a punchy 19 paragraphs and merely five pages from Alan Johnson (his one and only letter). Despite the wordiness there isn’t a huge amount in here beyond employer engagement, growing foundation degrees and a lot on widening participation.
  11. January 2008: as with its successor letter this one is 24 paragraphs and 7 pages long (and note the online version on the HEFCE website is erroneously dated 18 Jan 2009). In this funding letter Denham indicates that his priorities are increasing student numbers, developing employer part-funded provision, and widening participation. The letter also refers to encouraging HE to develop stronger links with schools and colleges, greater investment in research, the importance of STEM, a green development fund, closer measuring of performance, and the establishment of the fund-raising match-funding scheme.
  12. January 2009’s letter is 7 pages and 24 paragraphs long and in it John Denham seeks to encourage HE to support the economy through recession, wider engagement with business, promote employer-led provision, innovative ways to support business, promotion of STEM subjects and widening participation and extending fair access. Additionally, there is the confirmation of the ‘university challenge’ with 20 new HE centres to be established, emphasis on the maintenance of quality and standards, plans for continuing to reduce regulation, commitment to dual support as well as the development of REF, steps to tackle climate change and bearing down on over-recruitment by institutions.
  13. The December 2009 letter from Lord Mandelson comes in at 15 paragraphs. This short note follows up on Higher Ambitions (which, in case you had forgotten, “sets out a course for how universities can remain world class, providing the nation with the high level skills needed to remain competitive, while continuing to attract the brightest students and researchers”) and also covers the Economic Challenge Investment Fund, wider and fairer access to HE, increasing the variety of undergraduate provision, new funding incentives to deliver higher level skills, developing REF, new developments in quality assurance including the publication of a standard set of information for students, engaging with communities and penalizing institutions which over-recruit students.
  14. June 2010 sees the first funding letter from the new coalition government: Cable and Willetts give us 10 brief paragraphs covering initial savings, efficiencies and cuts but also 10,000 extra places (but with strings).

So, that’s your lot folks. All you never wanted to know about 15 years of funding letters.

The Imperfect University: Sectoral change since Robbins and into the future

All change please! Sectoral change since Robbins and into the future

Rewriting Robbins? The very thought

I recently agreed to give a presentation on this theme at an event entitled “Rewriting Robbins” by those lovely people at SGP Martineau.

You can find the full details of the event here  and my rather fetching but nevertheless superficial parade of pictures here:

Apologies in advance

Having agreed to deliver such a presentation I quickly realized the mistake I’d made but by then it was too late. It was of course ridiculously presumptuous to undertake such an exercise and even to contemplate commenting on Robbins with the benefit of 50 years of hindsight seemed like an outrageous impertinence. So, apologies in advance for any offence caused.

There was recently a very good piece in the Times Higher on Robbins. Among the many interesting points was a recollection from one of his committee members, Claus Moser, that Robbins wrote nothing down during the many sessions of the Committee, preferring to commit data to his phenomenal memory. He then went off and wrote the whole report pretty much by himself. Another key factor was that is was intended to be thoroughly evidence-based. And you can see in the rigour of the investigations and the detail of the appendices that this was carried through. Robbins didn’t want to make recommendations which weren’t properly grounded.

Going for growth

A fundamental principle was the need to expand in order to meet the future needs of the country and the demand from a post-war population boom. He anticipated an increase in the APR from 8% in 1963 to 17% by 1980 meaning 216k students in 1962-3 rising to 560k by 1980-81.

And in facilitating this expansion the most famous Robbins Principle was invoked:

courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so.

Part of the growth could be met by the new universities already under development or planned but there would still be a need for more places so Robbins proposed a range of additional institutions:

It may be that most of the university places that are required in the next ten years can be provided by such developments. But if no further steps are taken, the situation will thereafter be irretrievable, for universities take long to establish. We therefore recommend the immediate foundation of six new universities, of which at least one should be in Scotland. Another would be the new Special Institution for Scientific and Technological Education and Research. Such new foundations might provide 30,000 places by 1980. The remaining places should be provided by the advancement to university status of some ten Regional Colleges and Colleges of Education. If the scale of these recommendations should seem over-ambitious, we would remind the sceptics that demographic projections beyond 1980 suggest no lessening of the rate at which the demand for places will grow.

Robbins cover

In short the growth would include:

  • Six new universities should be established at once so that they can provide about 30,000 places by 1980/1.
  • Teacher training institutions should become proper Colleges of Education and aligned with universities
  • Three special Institutions for Scientific and Technological Education and Research should be created.
  • Two postgraduate business schools, providing courses in management, should be developed, each in association with a university or a Special Institution and close to a large business centre.
  • Scottish Central institutions – the most advanced should become universities
  • A further 20,000 university places should be provided by giving university status to some ten Regional Colleges, Central Institutions and Colleges of Education.
  • And in addition he proposed that the CATS, the Colleges of Advanced Technology should all become universities, each with 3-5000 students

(All of this is set out in Chapter X of the report although I must be honest that I found some of the institutional types difficult to disentangle on occasion.)

CATS and non-CATS

And sure enough in1966, the CATS became universities. Some of these are obvious, others less so:

images copy

Cats

  • Birmingham CAT became Aston University (the first designated College of Advanced Technology (or CAT))
  • Loughborough CAT became Loughborough University
  • Northampton CAT (London) became City University
  • Chelsea CAT became Chelsea College of Science and Technology as part of the University of London then later was subsumed into King’s College London
  • Battersea CAT became the University of Surrey
  • Brunel CAT became Brunel University
  • Bristol CAT became the University of Bath
  • Cardiff CAT became part of the University of Wales, then Cardiff University
  • Salford CAT (the Royal College of Advanced Technology) became the University of Salford
  • Bradford Institute of Technology became University of Bradford

And just to complete the picture, the other universities founded in the 1960s:

Not Cats

Not Cats

1961   Sussex
1962   Keele
1962   Swansea
1963   East Anglia
1963   Newcastle
1963   York
1964   Lancaster
1964   Strathclyde
1965   Essex
1965   Kent
1965   Warwick
1966   Heriot-Watt
1967   Dundee
1967   Stirling
1969   Open
1969   Cranfield

Beyond Robbins: things really have moved on

Although the changes set in train by the report were substantial and far-reaching, since Robbins there has been a transformation in both the scale and reach of institutions (as well as total student numbers and the composition of the student body, which I didn’t cover here as they were addressed by others at the conference).

In looking for growth in existing institutions Robbins was anticipating universities of up to 10,000 students not the level of 30,000 which he associated with the big federal systems in the US. 10,000 students was big though:

In modern conditions it is desirable that universities should be large enough to have an adequate division of labour within departments and to make economical use of buildings and equipment.

But if we look at the sector in the UK now we have over 100 institutions with more than 10,000 students. More than half of these have over 20,000 students enrolled and leaving aside the Open University around a dozen have more than 30,000 students. A completely different scale.

What is also fascinating is to look at the growth in institutional numbers too. We have a huge growth during Robbins’ time but then a period of some stability before renewed and continuing expansion as this crude chart of UK university numbers demonstrates:

Number of universities

Number of universities

Beyond scale there are of course many other differences these days – from the pace of change to the volume of regulation and from the interconnectedness of institutions and activity to the sheer complexity of operations. In addition there is the international dimension: whilst the Committee accumulated plenty of learning from other countries it really didn’t anticipate our internationalized institutions or scale of global activity. The fact that there are now more than 435,000 students from overseas studying at UK universities and not a greatly smaller number studying for UK HE qualifications in other countries is a most remarkable transformation.

Moreover, whilst we might in the UK fret about mergers and takeovers and whether or not to establish campuses overseas in the meantime dozens of institutions from other parts of the world are establishing outposts and branches in the UK (mainly in London). Higher education is very much a global activity now.

What does the future hold?

So that was then and now, but what of the future? Predicting the future in higher education is of course a mug’s game. You can never win. However, it is difficult to resist the opportunity to take part.

So in a completely flawed and unscientific attempt to set out what might happen I offer four possible versions of the future:

The Wild West

Version 1 is the Wild West. It starts with the OFT smashing its way through our cozy higher education set up and leads to takeovers, merger mania and chaos with lots of institutions being allowed to go to the wall and many more private for-profit institutions springing up all over the place (every supermarket has one).

Government removes all attempts to manage the system and there is no meaningful  regulation. The QAA is abolished, no need for any funding councils and there are no more committees of the great and good to pontificate on higher education. Anyone can set up and call themselves a university but in this environment only the richest, strongest and nastiest survive.

It’s the ultimate free market. In other words, higher education anarchy.

Private Frazer

Private Frazer scenario

Private Frazer scenario

Version 2 means that, unfortunately, we’re all doomed (which was Dad’s Army’s Private Frazer’s famous but rarely deployed catch phrase). The MOOC providers will win and kill most traditional universities. As Sebastian Thrun, founder of Udacity, predicted a few years ago there will be only 10 universities left in the world in 50 years’ time. Of course universities only have themselves to blame having nurtured, supported and then allowed the MOOC providers to disrupt the system. So if there are only going to be 10 around the world how many will be left in the UK? Oxford? Cambridge? The Open University?

(Fortunately this scenario is looking quite unlikely, Thrun is rapidly recanting and it could be that the MOOC bubble is already bursting.)

Regulated mediocrity

Version 3 represents something of a straightjacket with a levelling down to leave us with lots of rather similar universities, all beset and overwhelmed with ludicrously excessive bureaucracy designed to keep every stakeholder happy. We have ever more regulation overseen by a host of super-regulators, meta-regulators and regional regulators. It feels a bit like every aspect of university life is directly governed by the QAA.

Moreover, immigration regulations mean there are next to no international students and there are rigid targets for everything from widening participation to detailed specification of class contact hours, SSRs, assessment turnaround times, exam duration, graduation ticket fees and academic dress.

Students have more information available to them than has previously been written in all of human history and spend substantially more time filling in surveys on their experiences than undertaking any learning.

All too credible I fear.

Wildflower meadow

The final version is something a bit closer to a higher education ideal (relative to all of the others that is). It offers a lightly regulated and managed environment, well-tended, all collegial and harmonious. Many different flowers bloom and institutions co-exist in a state of delightful equilibrium. There is a perfect balance between teaching and research, the widening participation job is done and there is an optimal balance of different kinds of institution with different missions.

This is the future (we hope)

This is the future (we hope)

Some universities come and go, some last, some spread their wings but overall there is a perfect balance between market and regulation. It really is higher education nirvana.

Into uncharted territory

It is though very unclear what the future holds. Monsters, in the form of as yet unknown Ministers for Universities, and wild uncharted lands await. But we could do worse than note some more words of wisdom from half a century ago from Robbins:

The fundamental question that we have to answer is whether a system of higher education in the sense in which we have used the word ‘system’ is desirable. As we have said, it is misleading to speak as if there were already a system in this sense. Higher education has not been planned as a whole or developed within a framework consciously devised to promote harmonious evolution. What system there is has come about as the result of a series of particular initiatives, concerned with particular needs and particular situations, and there is no way of dealing conveniently with all the problems common to higher education as a whole.

Our point is that the central decisions that have to be made should be coherent and take account of the interests of all sectors of higher education, and that decentralised initiative – and we hope there will always be much of this – should be inspired by common principles.

Wise words?

Unfortunately, we couldn’t just leave it there. The whole series of Robbins quotes offered during this event (and bandied around more widely) led me to speculate on the possibility of a new parlour game which tested whether one was reading a real Robbins quote or a made up one.  If you can bear it then do see the earlier post on this great new game the whole faculty can play: Robbins or Bobbins?

With the most profound apologies to Lord Robbins and all of his great works.

Show and Tell: The Office of Fair Trading is Looking at Universities (again)

And they are looking for a lot of information.

Back in October 2013 the Office of Fair Trading (OFT) issued a call for information on the undergraduate part of the higher education sector in England.

This follows the earlier look (outcome awaited) at terms and conditions in relation to student debts and universities’ practices in relation to withholding conferment of degrees. So what is it they want to know? Quite a lot it seems:

Universities play a crucial role in the UK economy. They contribute directly to economic growth, employment and local economic activity, delivering skilled workers into the wider economy, and contributing to export earnings. In many respects, UK universities are world leaders in research and teaching.

In launching this project, the OFT wants to understand whether universities are able to compete effectively and respond to students’ increased expectations, and whether students are able to make well-informed choices, which would help drive competition.

index

The OFT is particularly interested in receiving information about how universities compete, the impact regulation has on universities, and the student experience of the current system.

We will be engaging with higher education providers, students, employers, government and regulatory organisations and others with an interest in the higher education sector over the next 10 weeks by issuing information requests, arranging roundtable discussions and holding bilateral meetings. We will also be inviting comments from any other interested parties.

Once information has been gathered and submissions have been received, we will analyse the evidence we have collected in order to determine whether there is any evidence of  competition or consumer problems and whether any further action is warranted.

The focus on competition for undergraduate recruitment is an interesting one given the fee cap. But it will also be fascinating to see how they address the continuing growth in the regulatory burden on universities in this context. And we can only speculate what further action they may wish to take in the light of the findings…

More information on the call for information is in the OFT launch document.

Shared Services in the USA

It’s probably not quite what they were hoping for.

Inside Higher Ed reports on a bold plan at the University of Michigan to address shared services within the institution. The idea must have seemed such a good one at the time – centralise large parts of departmental administration into a single place in order to improve productivity and save money ($17m was the planned saving). The approach, described rather unfortunately as “lift and shift” seems to have run into a few problems though:

For one thing, department chairs were kept in the dark about the effort and then given what faculty members have described as “gag orders” to prevent them from talking about it. Now professors and graduate students are speaking out publicly, and it’s clear they are unhappy about losing staff members with familiar faces from down the hall to an off-campus facility.

For another, the plan is no longer expected to save nearly as much as once hoped: just $2 million or $3 million in its first year and $5 to $6 million per year in the near term, according to a university spokesman.

University of Michigan August 2013 210 (Weill Hall)

They probably didn’t move to this building

That savings doesn’t factor in $1 million a year the university will pay to lease a new building to house the staff in one place. Or the $4 million the university expects to spend fixing up that building. Or the $11.7 million contract Michigan has with the consultant Accenture for advice about how to save money. All told, an effort to save money might barely break even in the short term, though officials expect savings to ramp up in the long term.Michigan is just the latest campus to turn to “shared services,” a cost-saving approach being tried at an increasing number of colleges across the country, including the University of California at Berkeley, the University of Kansas, the University of Texas at Austin and Yale University.

The idea is simple. Instead of each academic department having its own staff to handle bookkeeping, departments should rely on a pool of staffers. The theory is each of the employees in the pool could specialize in quickly dealing with certain paperwork instead of trying to be jacks-of-all-trades in departments across campus. One staff member would get really good at travel reimbursements, for instance, while another focuses on payroll.

So, all a bit messy. Whilst such shared service developments can work it does rather seem as the consequences of this kind of big bang approach might not have been fully anticipated in this case. It will be interesting to see if the promised savings do materialise. And whether the departments get the right level of service too.

Betting the farm. On a stadium.

How one university is going for broke with a new stadium.

Inside Higher Ed has an interesting story about Colorado State University’s plan to solve all of its problems with a new stadium. The University is, in common with many other public institutions in the US, in a difficult financial position. But the response at Colorado State is a distinctive one – they are planning to build a new football stadium at a cost of $226 million as the way out of the crisis.

So, what’s the plan?

Colorado State is a middling football team in the Mountain West Conference, competing against respectable but not stellar athletic programs. The stadium plan relies on the hypothesis that if the university has great facilities, it will be able to recruit better athletes, sell more tickets and (this is the end game) attract more out-of-state students to help make up for a steep drop in state funding.

“At the end of the day, athletics is part of what drives national attention for the university,” said Kyle Henley, director of public relations and business and community development for the Colorado State system. “We’re a university on the rise and fundamentally, at the end of the day, if we’re not part of that national conversation at the athletic level, we’re missing out on opportunities.”

Yet some sports economists and faculty members who say they’re being stonewalled by the administration are warning against the gamble.

Colorado State President Tony Frank has vowed to keep the process public, and CSU System Chancellor Mike Martin said “the fact that we haven’t publicly debated those folks, doesn’t mean [their economic projections] aren’t relevant to our discussions.”

It’s a bold move but really seems like an extraordinarily optimistic and expensive gamble. It’s hard to imagine a similar move happening in the UK.

Higher education funding letters: another bundle of joy

On government HE funding letters

The Secretary of State for Business, Innovation and Skills has written to HEFCE with the Department’s annual message on funding and helpful bag of instructions.

The letter

sets out Government funding and priorities for HEFCE and for higher education for the second year of the new financial arrangements for higher education in England. The Government’s vision for higher education, outlined in the higher education white paper ‘Students at the heart of the system’, remains, and HEFCE is asked to continue to support learning and teaching activity, quality assurance, widening participation and an enhanced student experience. HEFCE will also continue our support for postgraduate provision.

Super. More instructions.

Not only does it offer even more directions to HEFCE, at 36 paragraphs and eight pages it is the second longest of the four to date issued by the Secretary of State and the Minister and confirms a return to the sterling epistolary efforts made by the previous government.

Last January’s effort really set the standard though – although it contained 35 paragraphs was in fact nine pages long. The December 2010 was somewhat shorter at only 28 paragraphs and can be seen as the BIS duo just getting into their stride.

The earlier post on this topic back in August 2010 noted:

The most recent funding letter of June 24 2010 from Vince Cable and David Willetts to the Chairman of HEFCE is distinctive for three main reasons. First, and unsurprisingly if dispiritingly, it outlines the first major tranche of savings to be made in the 2010-11 financial year. Secondly, it is extremely short – indeed at 10 paragraphs and just over two pages it is the shortest funding letter to the Council in at least 14 years and undercuts all letters under the previous government by some way. Thirdly, it is the first such letter to be signed by both the Secretary of State and the relevant Minister. And thank goodness too or some of us might never have seen this fascinating signature:

Of course those with longer memories will have fond recollections of the briefest of grant letters from the University Grants Committee (UGC) which simply set out the amount of money available for disbursement. Many will long for the golden age of five year funding settlements under the UGC. Whilst it could reasonably be argued that the UGC served as an effective buffer between the state and the universities, the options for the Higher Education Funding Councils, and in particular HEFCE, are much more limited as the directives from government on spending have become ever more detailed and prescriptive. Fortunately though we are able to examine all of the details of these as HEFCE has a nice collection of funding letters going back to 1996.

This decidedly dubious summary of these letters draws on this collection but refers only to English funding allocations. I’m sure the other funding councils receive similar missives from their respective governments but it is beyond my capacity to deal with them I’m afraid.

The length of funding letters has seen two peaks in the last 14 years: January 2003’s letter was 73 paragraphs long and the December 1998 note ran to 66 paragraphs. The November 1999, November 2000 and December 2001 letters ranged from 40 to 46 paragraphs but the January 2004 letter and subsequent missives tend towards the more traditional brevity of only 15-25 paragraphs of instruction to HEFCE.

Just for completeness then here are some of the details about English Higher Education’s most exciting epistles:

  1. The first letter in this series is the last prepared under the previous Conservative government, way back in November 1996. This 41 paragraph note (signed by a Civil Servant) covers: linking funding to assessment of teaching quality, expanding part-time provision, the importance of closer links with employers, not wanting to see longer courses, a planned reduction in student numbers by 2,000 for the following year and keeping the participation rate at around 30%. Some interesting parallels here with the most recent letter from the current government perhaps?
  2. The December 1998 letter is the first New Labour funding letter. At 66 paragraphs it is one of the longest in recent times and the last one to carry the name of a senior Civil Servant rather than the Secretary of State. Topics covered include sector spending, lifelong learning, increasing participation, maintaining quality and standards (a recurring theme down the years), widening access, promoting employability, research investment, capital spend, tuition fee arrangements and Year 2000 issues (we were all worried then).
  3. The November 1999 letter, 43 paragraphs long, provides David Blunkett with the opportunity to wax lyrical on the importance of maintaining quality and standards, increasing participation and employability, widening access, equal opportunities for HE staff, dealing with student complaints, new capital funding, pfi/ppp opportunities, research funding and HE pay.
  4. David Blunkett, in his November 2000 letter, which runs to a sprightly 46 paragraphs, makes some big points on widening participation as a key priority, business links and the e-university.
  5. In November 2001 Estelle Morris provides a neat 40 paragraph letter which gives lots of direction on widening participation, maintaining quality and standards, strengthening research, the importance of links with industry and communities, as well as something on the value of the e-Universities project (remember that?) and, last but not least, social inclusion.
  6. January 2003 represents the high water mark of recent funding letters: in 73 action packed paragraphs Charles Clarke, in his first outing as Secretary of State, is clearly keen to lead the way. The letter covers, among other things, improvement in research, expanded student numbers, foundation degrees, widening participation, improving teaching and learning and increased knowledge transfer. As if that were not enough we also have the establishment of the AHRC, the introduction of a new quality assurance regime but with reduced burdens for institutions (yeah, right), credit systems, FE partnerships, expanded student numbers and new investments in HE workforce development. A real blockbuster of a letter.
  7. The January 2004 message from Charles Clarke comes in at 20 paragraphs in just over 4 pages with reducing bureaucracy, building research and quality and standards and the establishment of Aimhigher as its central features.
  8. December 2004 brings a Christmas treat from everyone’s favourite Santa, Charles Clarke. With just 16 paragraphs and 4 pages of direction Clarke stresses the importance of maintaining the unit of funding for teaching, controlling student numbers and making efficiency gains.
  9. The January 2006 letter, a first and last offering from Ruth Kelly, comes in at a modest 15 paragraphs and 4 pages. No huge surprises in the text with employer-led provision, more widening participation, additional research and capital funding and a strong steer on reducing bureaucracy being the primary features. Additional points to note include equal opportunities for HE staff, efficiency gains, the new conditions which accompany the new tuition fees regime and reference to access agreements. What’s not to like here?
  10. January 2007’s is a punchy 19 paragraphs and merely five pages from Alan Johnson (his one and only letter). Despite the wordiness there isn’t a huge amount in here beyond employer engagement, growing foundation degrees and a lot on widening participation.
  11. January 2008: as with its successor letter this one is 24 paragraphs and 7 pages long (and note the online version on the HEFCE website is erroneously dated 18 Jan 2009). In this funding letter Denham indicates that his priorities are increasing student numbers, developing employer part-funded provision, and widening participation. The letter also refers to encouraging HE to develop stronger links with schools and colleges, greater investment in research, the importance of STEM, a green development fund, closer measuring of performance, and the establishment of the fund-raising match-funding scheme.
  12. January 2009’s letter is 7 pages and 24 paragraphs long and in it John Denham seeks to encourage HE to support the economy through recession, wider engagement with business, promote employer-led provision, innovative ways to support business, promotion of STEM subjects and widening participation and extending fair access. Additionally, there is the confirmation of the ‘university challenge’ with 20 new HE centres to be established, emphasis on the maintenance of quality and standards, plans for continuing to reduce regulation, commitment to dual support as well as the development of REF, steps to tackle climate change and bearing down on over-recruitment by institutions.
  13. The December 2009 letter from Lord Mandelson comes in at 15 paragraphs. This short note follows up on Higher Ambitions (which, in case you had forgotten, “sets out a course for how universities can remain world class, providing the nation with the high level skills needed to remain competitive, while continuing to attract the brightest students and researchers”) and also covers the Economic Challenge Investment Fund, wider and fairer access to HE, increasing the variety of undergraduate provision, new funding incentives to deliver higher level skills, developing REF, new developments in quality assurance including the publication of a standard set of information for students, engaging with communities and penalizing institutions which over-recruit students.
  14. June 2010 sees the first funding letter from the new coalition government: Cable and Willetts give us 10 brief paragraphs covering initial savings, efficiencies and cuts but also 10,000 extra places (but with strings).

So, that’s your lot folks. All you never wanted to know about 14 years of funding letters.

The Imperfect University: First for the chop

The Imperfect University: Some people really don’t think much of administrators

Last year I wrote a piece for Times Higher Education on the problem with the term “back office” and the often casual, unthinking use of it in order to identify a large group of staff who play a key role in the effective running of universities but who are the first to be identified for removal or outsourcing in financially challenging times. But what do we mean by the back office?

In a university context, it is generally taken to mean those staff who are neither engaged in teaching or research nor involved in face-to-face delivery of services to students. So they might be, for example, working in IT, human resources, finance or student records. Or they might be the people who maintain the grounds, administer research grants or edit the website.
Too often, their somewhat anonymous roles mean that they are treated as third-class citizens in the university context. Because they are out of sight and largely out of mind, most people really don’t know what they do; as a consequence, it becomes much easier for others to write them off and offer them up as the first to be sacrificed when cuts have to be made. Back-office staff do not have an obvious income line and can easily be regarded as expendable. The attitude is resonant of the Victorian view of those “below stairs”. This perception (or lack of perception) is unhelpful, and not terribly good for morale – particularly among those who are so casually dismissed as being “just back office”.

Two recent reports offer a striking example of this. The first is an Ernst & Young report on the “University of the Future” which has found that the current public university model in Australia will prove unviable “in all but a few cases”.

A story in The Australian quotes the report’s author:

“There’s not a single Australian university that can survive to 2025 with its current business model,” says report author Justin Bokor, executive director in Ernst & Young’s education division.

“We’ve seen fundamental structural changes to industries including media, retail and entertainment in recent years – higher education is next.”

The study compared ratios of support staff to academic staff across a selection of 15 institutions and found that 14 out of 15 had more support staff than academic staff. Four of the 15 universities have 50 per cent or more support staff than academic staff, and more than half have at least 20 per cent more support staff.

The report warned that this ratio “will have to change”.

The report, which can be found here, doesn’t give any details on the definition of “support staff”. However, I would guess that it is a sum of all staff who are not academics (the definition of academics can often be unclear too). I must admit though that I’m not surprised that there are more support staff than academics in most institutions simply because of the sheer scale of university operations. I suspect that the variations are largely down to how staff are counted and categorized and differences in physical and organizational structures.

Despite this definitional imprecision, the report’s author is confident in asserting that universities need to cut:

Organisations in other knowledge-based industries, such as professional services firms, typically operate with ratios of support staff to front-line staff of 0.3 to 0.5. That is, 2-3 times as many front-line staff as support staff. Universities may not reach these ratios in 10-15 years, but given the ‘hot breath’ of market forces and declining government funding, education institutions are unlikely to survive with ratios of 1.3, 1.4, 1.5 and beyond.

Leaving aside the fact that many professional staff, for example those involved in student recruitment, careers work, counseling, financial advice, academic support, security and library operations are unequivocally front-line, the idea that the other staff who help the institution function and who support academic staff in their teaching and research are merely unnecessary overheads, ripe for cutting back, is just not credible.

Then from the US we have another report, quoted in the Chronicle. This report, produced by a pair of economists, has identified the ideal ratio of academic staff to administrators needed for universities to run most effectively. It is 3:1 and therefore makes the Ernst and Young proposition look decidedly half-hearted. However, as the article acknowledges, the definitional problems are far from insignificant:

The numbers are fuzzy and inconsistent because universities report their own data. Different institutions categorize jobs differently, and the ways they choose to count positions that blend teaching and administrative duties further complicate the data. When researchers talk about “administrators,” they can never be sure exactly which employees they are including. Sometimes colleges count librarians, for example, as administrators, and sometimes they do not.

“Look! If I just cross all these people out then we can employ an extra professor!”

Even in the UK, where there is fairly robust collection of staff data by HESA, definitional problems remain. As this earlier post noted there is significant scope for misinterpreting staff data and overstating the growth of the number of managers versus the number of academics working in universities.

These matters are exacerbated in the US for the reasons above and the comments below the piece give an indication of some of the major holes in the economists’ proposition. Nevertheless, the Chronicle finds some willing to support the proposal for an ideal ratio:

Some advocates of increasing the proportion of faculty at universities say they support the researchers’ goal of setting a three-to-one ratio of faculty to administrators.
Benjamin Ginsberg, a professor of political science at the Johns Hopkins University and author of The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters (Oxford University Press, 2011), has argued that universities would be better off with fewer administrators, people he calls “deanlets.”
The three-to-one ratio “makes a lot of sense,” Mr. Ginsberg said, because it would shift the staff balance in universities. “If an administrator disappeared, no one would notice for a year or two,” he said. “They would assume they were all on retreat, whereas a missing professor is noticed right away.”
Richard Vedder, director of the Center for College Affordability and Productivity and a professor of economics at Ohio University, said shifting the balance back toward faculty is key to keeping universities’ missions focused on teaching, as opposed to becoming too focused on other activities, like business development or sustainability efforts.
“We need to get back to basics,” said Mr. Vedder. The basics are “teaching and research,” he said, “and we need to incentivize leaders of the universities to get rid of anything that’s outside of that.”

Administrative staff – not unnecessary overheads

This is just ridiculous rhetoric and really we should just discount it. However, such views are, unfortunately, not that uncommon and do have to be challenged.

In order for the academic staff to deliver on their core responsibilities for teaching and research it is essential that all the services they and the university need are delivered efficiently and effectively. There is not much point in hiring a world-leading scholar if she has to do her all her own photocopying, spend a day a week on the ‘phone trying to sort out tax issues or cut the grass outside the office every month because there aren’t any other staff to do this work. These services are required and staff are needed to do this work to ensure academics are not unnecessarily distracted from their primary duties.

Although provision of such services is not in itself sufficient for institutional success, it is hugely important for creating and sustaining an environment where the best-quality teaching and research can be delivered. If a university chooses to dispense with the professional staff who deliver these services in order to pursue a mythical ratio then it might find it’s rather hard to hold on to those outstanding academics for very long.

Most recently there is a piece in THE reporting on the launch of the “Council for the Defence of British Universities” which notes that

The council’s initial 65-strong membership includes 16 peers from the House of Lords plus a number of prominent figures from outside the academy, including the broadcaster Lord Bragg of Wigton and Alan Bennett. Its manifesto calls for universities to be free to pursue research “without regard to its immediate economic benefit” and stresses “the principle of institutional autonomy”. It adds that the “function of managerial and administrative staff is to facilitate teaching and research”.

Now whilst I do of course agree that this is a fundamental part of administrators’ roles and it is splendid that the great and the good do accept that administrators exist, there is something here in the tone of this comment that makes me think that some might take this to be that we should be “seen and not heard”. I do hope not.

Austerity in the USA

Savings needed at US Universities

University World News. carries a piece by William Patrick Leonard, vice dean of SolBridge International School of Business in Daejeon, Republic of Korea, suggesting that US Higher education institutions need to rein in their costs. The traditional approaches to meeting financial shortfalls, raising tuition fees or increasing student numbers, are, it is suggested no longer justifiable:

The third internal budget balancing tool, cutting costs, has been the least favoured. It can negatively influence programmes and hence careers. I suggest that many institutions, large and small, have found it politically easier to increase revenue rather than control costs.

They have tended to resist seriously questioning the viability of ineffective or inefficient programmes and services. Simultaneously, many have increased their continuing cost burden by enhancing existing programmes and services as well as adding new ones.

This reflects perhaps the different structural set up and culture of US higher education but the contrasts with the position in the UK do seem rather stark. In particular, after several years of significant financial challenges in this country and in anticipation of many more to come, all institutions have had to make savings. Fees are capped and increasing enrolment is only realistically possible through growing international student recruitment which in itself is more challenging than ever because of visa regulations. So, in the UK we have been dealing with the need for reducing spend for some time.

 

Simplistically, institutional costs may be crudely subdivided into two categories – external and internal.

The external costs are composed of purchased goods and services. Unless the institution has the power to negotiate price, its utility, insurance, contracted services and consumable costs are largely beyond its control. External costs are strongly influenced by the internal costs that institutions should have more control over.

The place to start is internal costs. In American higher education internal costs are governed as much by unquestioned culture as by contractual obligations. Institutions have tended to regard the traditional mix of faculty, curriculum, calendar and infrastructure as immutable. This has been accompanied by an exaggerated sense of entitlement to external support.

The majority of US higher education institutions can no longer rely on the historic levels of government support or philanthropic largesse. Nor can they depend on the continued utility of tuition fees and enrolment increases to align revenue with their immutable culture-driven costs.

I suspect this is a reasonably accurate assessment of the position. Whilst we are now used to the challenges of savings needs in the UK (and indeed are not experiencing them for the first time), it will be a bit harder if there is no prior knowledge of how to respond. Having said that, after many years of growth there is likely to be significant scope for savings.

The Imperfect University: The Cult of Efficiency

The cult of efficiency

I’ve recently been reminded about a great book recommended to me by my former supervisor, Nigel Norris. Half a century since its publication it remains a fascinating read and sits midpoint between two eras of educational change which, perhaps surprisingly, seem to have a lot in common. (Note that a large part of what follows is taken from my book Dangerous Medicine: Problems with quality and standards in UK higher education which is available for Kindle via Amazon at what I’m sure we’d all agree is a very competitive price.)

Callahan’s book, Education and the Cult of Efficiency, published in 1962 offers a salutary warning about the hazards of imposing inappropriate models in education. When I first looked at this I was interested in the ways in which industrial quality assurance frameworks seemed to be enthusiastically adopted by some in higher education with little regard for context, with one of the main drivers for the application of industrial models to HE being the belief that efficiency and economy will result.

The economic imperative is one which has been vested in higher education with ever greater force since the early 1970s but has forerunners in other spheres too. Callahan’s detailed and in many ways prescient study, shows the effect of scientific management, Taylorism, on US schools in the early part of the last century, the effects of which were felt in the American education system until the 1960s.[i] The essence of the problems this approach caused are articulated as the promotion of cost accounting over educational value and these ideas permeated the whole education system including the universities. The notion developed of schools as ‘service stations’ which represented the ‘natural outgrowth of years of business influence’ and the idea ‘that the public should provide the specifications for the educational ‘products’ which were turned out by the schools’.[ii] These concepts provide interesting parallels with the educational landscape in the UK today.

The primacy of the world of business was as real in the US of the second decade of the last century as it is in the UK today with ‘the community’ and ‘the business community’ being seen by many school administrators at that time as synonymous. Students were expected to undertake service for their communities (which often meant cheap labour for local employers) and there was a strong emphasis on the importance of student thrift. The response by school administrators, in the face of a critical public which was concerned with economy in public spending, was to turn educators into technicians producing products to specifications.

Administrators therefore embraced economy measures and accepted increased class sizes based on ‘evidence’ that large classes did not diminish performance, a situation which remained in US schools until the 60s. One of the side-effects of this economy drive was a disproportionate focus on the trivial and measurable, a development supported by the training given to school administrators in graduate schools of education. This resulted in work which focused on measuring, for example, toilet paper use, ink consumption and heating savings.[iii] As late as 1938 a text on the principles of school administration included specific instructions on how a janitor should dust desks. Callahan cites Flexner who shows that the emphasis on service, selling education, mass production and measurement of trivia was equally widespread in US higher education at this time.[iv]

Overall, Callahan characterises the impact of scientific management as tragic with education ‘adopting values and practices indiscriminately and applying them with little or no consideration of educational values or purposes’. The wholesale adoption of basic business values and techniques represented a serious mistake in education and in the period from 1910-1929, when efficiency was demanded, what was actually meant was lower costs with no reference to the quality of the ‘product’. At this time the public was suspicious of public institutions and in awe of the world of business (before the stock market crash) and saw scientific management as an appropriate solution. Administrators were, in this context, entirely complicit with this misapplication of business processes and values. The impact of this period was widespread and enduring (despite the depression), as those trained during this period went on to hold positions of power for many years, and the ideas remained dominant into the 1960s with an emphasis on business and technical values at the expense of the educational. Similar societal factors can be seen in the UK in the 1980s onwards which perhaps helps to explain the potency of industrial ideas in education in this country too.

Looking forward, it is possible to envisage a (not very attractive) future in which most of our schools are ‘free’ and, in the absence of any other direction, turn to inappropriate models and measurements and follow a 21st Century version of Taylorism in order to deliver ‘products’ which it is believed the country needs. Whether or not such a scenario comes to pass it is to be hoped that a similar cult of efficiency will not take hold in higher education.


[i] Callahan, R E (1962), Education and the Cult of Efficiency, Chicago: University of Chicago Press.

[ii] ibid, p227.

[iii] ibid, pp242-3.

[iv] ibid, p243, referring to Flexner, A (1930), Universities America, English, German, New York.

From National to Global Universities

A nice piece from David Wheeler in the Chronicle of Higher Education on some of the challenges for universities in going global:

Universities, like companies, may need to make the transformation from being a national brand to being a global one. Siemens, once thought of as a German company, now says that it is “a global powerhouse in electronics and electrical engineering, operating in the industry, energy, and health-care sectors.”

Global brands can be adapted to various local markets, while still staying globally integrated. I just gave away a collection of international Coke cans, consisting of many different shapes and bearing Arabic, Chinese, and Spanish words, among others. But they were all instantly identifiable as Coke cans.

As some universities seek to be global, they often emphasize that a degree in one country will be exactly identical to a degree in another. I’m left wondering if a little more flexibility might be in order.

Human-resources departments may need to rise in importance as universities seek to become more global. The complexities of managing different people in different places are high, and human-resources departments, which are often simply the servants of academic departments at many universities, need to acquire and share their expertise on how to manage a mix of expatriates and local workers in a variety of countries.

I think this flexibility point is well made. Institutions do have to adapt to the environment in which they are operating. Education cannot be entirely context independent. Academic standards do, of course, have to be consistent. So, whilst term dates may be different and the timetable may look a little unusual, the curriculum, learning outcomes, assessment and examinations, admission requirements and academic staff qualifications, to name but a few components, do have to be directly comparable to ensure that the standards of awards and the quality of the student learning experience are maintained. These are fundamental to sustaining the institutional brand.

An earlier post noted the continued growth in branch campus developments by universities. All of the issues faced by global corporations, from maintaining the brand to developing HR operations, are shared by universities looking to grow a presence overseas. But it is very difficult to do this alone:

Lastly, I think that universities can learn from corporations about how to better manage partnerships. It’s a bit of a cliché, but I would be remiss if I didn’t say it: Universities approaching partners need to think of programs that would benefit both parties. Approaching a computer company and asking for money or machines to take back to the university doesn’t work for the company, without some benefit being offered. Companies have their own problems to solve.

The issue of partnerships is crucial. Any institution looking to establish a genuine global presence is not going to be able to do it alone and will in all likelihood require government backing as well as other partners to help with infrastructure development and navigating through a different policy and legal environment. None of this is straightforward but can be done and does bring rewards. In the long run.

There is an interesting link here to the recent story about the UK Universities Minister’s discussions with Goldman Sachs about ways to support offshoring opportunities for British HEIs. Branch campuses are not the solution to domestic economic travails but they are a serious option for universities looking to establish a global brand. Although there are many challenges associated with such developments, the benefits are significant.

Offshoring opportunities – a real alternative?

Minister proposes overseas campuses as alternative to international student recruitment

Times Higher Education reports that David Willetts seems to be pushing overseas campus expansion – with private finance support – to compensate for reduced international student recruitment resulting from government immigration policies. The idea features, not for the first time, in a speech on international higher education he delivered at the Goldman Sachs-Stanford University Global Education Conference on 20 June:

His call for universities to seek alternative financing for expansion overseas comes amid a drive for every government department to identify sources of economic growth.

The minister is also seeking ways for UK universities to maximise the number of overseas students they teach abroad. The government’s tougher immigration controls threaten to cut the number of students able to enter the UK for study at universities.

Mr Willetts said: “Our universities are internationally recognised: they are a great British brand. We can do more to take advantage of our position. Our universities are well financed for what they do but underfinanced for big expansion. I want to see investors from Britain and abroad helping our universities access these big overseas markets. I know that companies like Goldman Sachs who have organised this conference…are keen to investigate this possibility.”

The minister hopes that Goldman Sachs will be able to identify private investors willing to finance developments such as overseas branch campuses and distance-learning operations.

A previous post reported on an earlier speech by Mr Willetts on the issue of internationalisation. He is undoubtedly serious about the proposition. And he is right to point to the success of the University of Nottingham and others in establishing campuses overseas. However, there are several fundamental problems with this notion:

  1. The income generated by overseas campuses will do very little to offset losses from underrecruitment of international students in the UK. Even where it may be possible and appropriate to repatriate surpluses, the sums involved will not get anywhere near the level of international student income currently received by UK universities.
  2. The de-diversification of UK campuses resulting from the decline in international students will harm the learning experience for all.
  3. Building, growing and sustaining an overseas campus is a long game. Even if every UK university had one it would take a very long time to get to a point where they were capable of providing the scale of export benefit the UK currently enjoys.
  4. If the primary aim of building an overseas campus is to make money then it is unlikely to provide a good basis for a productive relationship with a host country.

So, even with the backing of Goldman Sachs it is not clear that the overseas campus option is going to come close to compensating for the anticipated impact of immigration policies on international student numbers in the UK. The other angle discussed by the Minister, distance learning, may offer possibilities but again is unlikely to deliver on the scale required. Better perhaps to review those immigration policies instead.

Making money from MOOCs

There aren’t any MOOC business models which stack up. Yet

An earlier Imperfect University post on MOOCs questioned their ultimate impact on traditional university provision. Inside Higher Ed carries an interesting piece on possible business models for MOOC providers which notes that with over 1.5 million people having registered for MOOCs through Coursera, Udacity and edX, the level of demand is significant:

But while demand appears to be high, none of these three organizations — two of which are for-profit companies that will be expected to generate money for investors and the other of which is a nonprofit that will be expected to stand on its own feet eventually — currently has a business plan.

They can afford it, for now. The Massachusetts Institute of Technology and Harvard University together have committed $60 million to edX, Coursera has raised $16 million in venture funding, and Udacity is sitting on an undisclosed infusion from Charles River Ventures. They have cash to burn, and each has focused on establishing partnerships with reputable institutions and professors and harnessing available technologies in its platform.

The MOOC providers are nonetheless in strange territory. They have staked their future on a vision that makes higher education more free than ever before. And yet their task, eventually, will be to figure out how to make money. By declining to charge for content, instruction and assessment, these providers will have to find new ways to cover their overheads and pay back investors.

A huge issue for MOOCs is the absence of accredited certification. One solution might therefore be to forget credentialling altogether and make the link directly between student and employers, charging the the former for promoting them and the latter for access. Alternatively, or additionally, they could offer additional premium paid for content and services which bring them closer to current fee charging online higher education such as tutoring, online assessment support, library resources etc. And if the worst comes to the worst the MOOC providers could always sell advertising space.

It’s still early days though and it will be fascinating to see which way MOOC business plans develop.

International students: not an immigration issue

Students really aren’t immigrants

Excellent piece in a recent edition of Times Higher Education by Edward Acton. The essence of his argument is that international students make a massive contribution to the UK economy and most of them leave the UK after graduating. In other words, they really should not be considered as part of the immigration debate. Unfortunately, for entirely political reasons, they are:

Students, in so far as they are regarded as immigrants at all, cause least concern. The vast majority leave after completing their studies. A Home Office study of the cohort entering in 2004 found that after five years, only 3 per cent had settled. Concern only rises if there is doubt that students are visa-compliant and duly exit when their visas expire. But it is acknowledged by all sides and underlined by the Home Office’s own detailed analysis that those with visas sponsored by universities have excellent standards of compliance.

No queuing here

…one clear solution is to lift university-sponsored students out of the net migration calculation. The case for doing so is overwhelming. These “migrants” are distinct. They are, as public policy in other countries recognises, temporary. They are known to have excellent standards of visa compliance. And, in spite of the Home Office, the government as a whole commits considerable resources to encouraging them to come to the UK.

The data needed to separate them is readily available. The Higher Education Statistics Agency collects from its members meticulous detail on each non-EU student joining and completing a higher education course. Every university records student visa start- and end-dates, as well as passport numbers. From this it is possible to derive and publish annual estimates of both the inflow and the outflow of non-EU students who come to the UK for university study.

While influential figures in both governing parties are supportive of the proposal, the Home Office is nervous. A spokeswoman has talked of the need to avoid “fiddling the statistics”. No doubt this reflects ministerial fear that any change to the net migration calculation might arouse public distrust. The fear is misplaced. It underrates the scope for raising the level of public debate. The pressure group MigrationWatch UK, often taken to be the fiercest immigration guard dog, repeatedly emphasises that legitimate international students are not an immigration problem.

As Acton concludes, students have to taken out of the migration stats. We should be focusing on other migrant categories and not students and then, it is to be hoped, it will be possible to undo the damage done internationally to the UK’s reputation.

The PIE news reports on a wave of media attention for UK student visa cap following an IPPR report which suggests that the government has included international students in the net migration count as a way of “gaming” the figures:

IPPR points out that the UK’s main competitors in the overseas student market – the USA, Canada and Australia – do not include temporary or “non-immigrant” admissions in immigration figures, and says only the 15% of overseas students who stay on to work permanently in Britain should be counted within the net migration figures.

More worryingly, it says the government’s plans – which include issuing 250,000 fewer student visas by 2015 – threaten to wipe £4bn to £6bn a year off the UK economy.

The major media response to the report will be welcomed by the education sector, and put pressure on the government as it prepares to announce the latest immigration statistics on May 24.

Higher education is one of the UK’s biggest and most successful export earners and one sector in which we enjoy a real competitive advantage. Now more than ever we need to support it.