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.

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.

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.

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.

Killing the myths in higher education

Misunderstandings and myths

An interesting new pamphlet has just been published by HEPI. Misunderstanding Modern Higher Education: Eight “category mistakes” is a brief and snappy read and is available from the HEPI website:

In this HEPI occasional report, Professor Sir David Watson discusses eight myths – category mistakes – concerning higher education that are widely believed, and argues that these need to be exploded if higher education is to maintain its current comparatively healthy state. This report is based on his presentation to a joint HEPI/HEA seminar at the House of Commons on 26 January 2012.

It’s quite a challenging set of propositions. Here a category mistake is defined as a “sentence that says one thing in one category that can only intelligibly be said of something of another” eg “what does blue smell like?” Watson suggests there are at least eight category mistakes in higher education discourse at present. Some of these I’d agree with but other I think are less convincing.

1. “University” performance

Watson argues that it is the sector or the subject rather than the institution which is the more meaningful unit of analysis. This is certainly true in certain areas, eg NSS, as suggested here. BUT the institution is the key organisational unit, indeed the primary one. While it can reasonably be argued that the university is no more than the sum of its (academic) parts and the staff in those units identify with them more strongly than with the university itself, it is surely wrong to imagine that the subject/department can regarded as an entirely independent unit. There is a mutual dependency here.

3. HE “Sector”

We should be talking about tertiary, ie post-secondary, education rather than exclusively about higher ed. I’m not sure I agree nor does it seem to me that this is a category error. “Higher” education is a sub-category of tertiary education. It is funded differently and has a different set of traditions and regulatory frameworks to other tertiary provision. We might want to take a more rounded view of tertiary education and, indeed, it would be short-sighted not to. But do we gain much by preventing sub-divisions within the very wide range of activity that is tertiary education?

4. Research “selectivity”

Research concentration, which the system encourages, is running counter to the national need and the general trend towards inter-institutional collaboration. In the long run, concentration of research will be counter-productive and isolated work will wither. Two tiers won’t work therefore. But surely this is just an argument for a different kind of selectivity, one based on different criteria to those generated through RAE/REF? For example, signficant collaboration could be the primary criterion. With limited resources to go round though there is always going to be some selectivity.

Probably mythical


5. World-classness

Watson highlights the madness of the international league tables and notes that what everyone says they want is not reflected in what league tables measure. The international tables, which are the determinant of ‘world-classness’, are fundamentally related to research. Again therefore this is about the criteria selected.

7. Informed choice

The paper rightly notes that student choices over time have moulded our system. The idea that students need more information which will then persuade the market to do what government wants is, Watson argues, fundamentally misguided. Additional information is simply not going to get students to do government’s bidding.

8. Reputation and quality: the confusion between the two

Clearly there is some form of relationship between reputation and quality but Watson argues that the gap in reality is much smaller than it often appears. Good quality can clearly exist independently of reputation. Also Watson rightly notes the perception of student instumentalism and its dominance in the discourse.

(I’ve ignored number 2, Access, and number 6, The public/private divide, here.)

And finally…

Finally, Watson asks “What is to be done”?

Rather than Leninist solutions though he offers three particular suggestions. First, the system will need to be messier, more flexible and co-operative. Secondly, we should not chase the Harvard model but rather aim to develop a system more like the California Masterplan – this is really about the national direction of tertiary education. Thirdly, he argues that a proper credit accumulation and transfer framework is needed: “we fail to use these systems for reasons of conservatism, snobbery and lack of imagination”. (Actually, I’d suggest it is much more about a desire to protect institutional autonomy.)

Watson concludes by arguing that we should start by tackling these category mistakes and then learn to live with “flux and contingency”. I’m not sure we would want to spend a huge amount of time on the former or that we have any choice about the latter. It’s the nature of the world we operate in. Do read the piece though.

The Shape of Things to Come – Going Global 2012

The shape of things to come: global trends and emerging opportunities to 2022

I was privileged to chair this session at the British Council’s Going Global event on 15 March:

Over the next five to ten years, which will be the countries with fastest growing higher education systems? Which countries will have environments rich in opportunities for student mobility; for cross-border education provision; and for collaborative research? The new research from the British Council begins to provide answers to these questions. It reveals the new big emerging markets for international students, along with those countries that will be most open for international collaboration in teaching and research. Earlier British Council studies found that the number of students seeking to study overseas depends heavily on family income and the number of students enrolled in domestic higher education. It now depends more on trade links, cost of living and tuition, and exchange rates between the respective countries. The Global Education Opportunities Index maps the economic growth projections and demographic indicators across countries, along with global trade links, to highlight the areas where most opportunities will emerge for international collaboration and student mobility. Dr Janet Ilieva provides an overview of the approach taken and the research methodology, and presents the main findings. The expert panel from UNESCO Institute for Statistics and the OECD then debate the relevance of the opportunities and the implications of this research.

Janet Ilieva delivered an excellent presentation setting out the details of the combination of demographic and economic drivers which will re-shape the global higher education landscape – the data, evidence and forecasts which will be needed by institutions to enable them to address opportunities for student mobility, TNE and collaborative research.

The presentation covered

  • Globally mobile students
  • The internationalisation of research
  • Business collaboration
  • Opportunities for global engagement

Chiao-Ling Chien of the UNESCO Institute for Statistics and Richard Yelland from the OECD responded with some important additional comments too with the latter noting that we also need to pay proper attention to the other 98% of non-mobile students.

Whilst the content delivered represented significant progress and valuable information, the concerns from the audience largely related to the quality, consistency and timeliness of data.

The video of Janet’s presentation and her slides can be found here. Do have a look. Overall, it was fascinating stuff and a real honour to participate.

The report from which the data was drawn will be published soon. In the meantime University World News carried some of the information contained in it and in Janet’s presentation with the headlines being the slowdown in the growth of higher education enrolments and the impact of economic changes on the HE landscape. First the demographics:

The largest higher education systems are likely to be China with some 37 million students, India with 28 million, the US with 20 million and Brazil with nine million.

However higher education, currently one of the fastest growing sectors globally, is predicted to experience a significant slowdown in the rate of growth in enrolments in the coming decades.

This is according to the report The Shape of Things to Come: Higher education global trends and emerging opportunities to 2020, drawn up for the British Council by Oxford Economics. It is to be published officially next month, but a preview was released ahead of the British Council’s “Going Global” conference being held in London from 13-15 March.

The study forecasts enrolments to grow by 21 million students by 2020 – a huge rise in overall numbers and an average growth rate of 1.4% per year across 50 selected countries that account for almost 90% of higher education enrolments globally.

But this represents a considerable slowdown compared to the 5% a year global enrolment growth typical of the previous two decades, and record enrolment growth of almost 6% between 2002 and 2009.

Tertiary enrolments have grown by 160% globally since 1990, or by some 170 million new students.

This slowing in growth “should be expected with the sector maturing or slowing in some markets, and demographic trends no longer as favourable as a result of declining birth rates over the last 20 to 30 years,” says the report.

rowth in enrolments in China are predicted to fall from a 17 million increase to five million, according to the report’s projections. India’s tertiary enrolment growth overall is forecast to outpace China’s during the period.

“This does not take into account the political ambitions and aspirations of these countries,” said Janet Illieva, the British Council’s head of research, who will be presenting some of the research findings at the “Going Global” conference this week.

“If India manages to double participation rates in the next five years, this will be a phenomenal increase,” she said, referring to Indian government plans to increase gross enrolments from 17% of the cohort now to around 30% in the next decade.

Economic growth fuels enrolments

Over the last 20 years, growth in global higher education enrolments and internationally mobile students has closely followed world trade growth and has far outpaced world economic growth.

“What is changing is GDP (economic wealth), and economic growth which has a very significant impact on tertiary enrolment,” Illieva told University World News.

A country’s average wealth is seen as a clear driver of future tertiary education demand. “Not only is the relationship positive and statistically significant, but perhaps more importantly, at low GDP per capita levels, gross tertiary enrolment ratios tend to increase quickly for relatively small increases in GDP per capita,” the report says.

Around half the 50 countries studied currently have GDP per capita levels below US$10,000 a year. “Provided these economies grow strongly over the next decade, as many are forecast to, there is significant scope for their tertiary enrolment ratios to increase.”

But despite strong economic growth, many of the shortlisted economies are forecast to still have GDP per capita (adjusted for purchasing power parity) below US$10,000 in 2020 – including Nepal, Bangladesh, Pakistan, Nigeria, India, Morocco, Indonesia and Sri Lanka.

This is likely to constrain how quickly these countries close the gap in enrolment rates compared to advanced economies. But it also means continued rises in enrolment ratios and strong growth in tertiary education demand beyond 2020.

“Where income is below US$10,000 a year, a proportional increase in income results in a much higher rise in the rate of enrolments than you would expect,” said Illieva.

Things really are changing. Look forward to seeing the full report when it is published.

Tilburg University Economics Ranking

Another University Ranking You Didn’t Know You Needed

Bit of a one for the anoraks this, and certainly one of which I was, until very recently, unaware. It is, as the title suggests, a ranking of Economics departments, namely the Tilburg University Economics Ranking. It’s a pretty straightforward methodology too – they have identified a list of 36 leading journals in the fields of Econometrics, Economics and Finance and have ranked economics schools based on publications in these journals for the last five-year time period. And the results are as follows (with changes to rankings in brackets):

1. HARVARD UNIVERSITY

2. UNIVERSITY OF CHICAGO

3. NEW YORK UNIVERSITY

4. UNIVERSITY OF CALIFORNIA, BERKELEY

5. COLUMBIA UNIVERSITY

6. [+1]STANFORD UNIVERSITY

7. [-1] MASSACHUSETTS INSTITUTE OF TECHNOLOGY

8. [+2] YALE UNIVERSITY

9. [-1] NORTHWESTERN UNIVERSITY

10. [-1] UNIVERSITY OF PENNSYLVANIA

11. [-1] LSE

12. [+2] UNIVERSITY OF MICHIGAN

13. UNIVERSITY OF CALIFORNIA, LOS ANGELES

14. PRINCETON UNIVERSITY

15. DUKE UNIVERSITY

16. [+3] UNIVERSITY OF TORONTO

17. [+1] UNIVERSITY OF OXFORD

18. [-2] UNIVERSITY OF MARYLAND

19. [-2] CORNELL UNIVERSITY

20. [+6] UNIVERSITY OF BRITISH COLUMBIA

And just for domestic interest the other UK placings in the Top 50 are:

22. [+3] UNIVERSITY COLLEGE LONDON

32. [+3] UNIVERSITY OF NOTTINGHAM

36. [+9] UNIVERSITY OF WARWICK

41. LONDON BUSINESS SCHOOL

48. [-2] UNIVERSITY OF CAMBRIDGE

Fascinating, huh?

“For-Profits Eye the British Market”

New opportunities for private providers

The Chronicle of Higher Education has a good piece on the interest for-profit providers are taking in the UK market. Robert Lytle of the Parthenon Group, management consultants with an interest in education, seems a bit sceptical:

“It’s a very expensive market to operate in, and the profitability is not there,” says Mr. Lytle, noting that, along with the rest of Europe, Britain is “relatively stagnant” and “just not as attractive” as countries like Malaysia and Singapore, which are experiencing rapid growth. Britain and continental Europe also lag in the development of an online higher-education market, which has been a major growth area for American for-profit companies.

I don’t think this was quite the response the authors of the White Paper were expecting to the bold reforms proposed. Stagnant? Us?

There is also an interesting comment on the value or otherwise of degree awarding powers:

Mr. Lytle, of Parthenon, says there are differing views about how important degree-awarding powers will prove to be for companies seeking to expand their presence in Britain. “One school of thought says they are very overvalued,” he says, while others contend that having such autonomy is “terrifically important because it means you can’t be held hostage by the degree-awarding university.”

Ms. Noone, of Kaplan, says that once tuition at public universities is allowed to rise next year to as much as £9,000, or $14,700, from its current cap of about £3,000, pricing pressure from universities may prove to be the greatest barrier to entry into the marketplace for private providers. Most universities “won’t want a partner who is offering the same degree at a lower price,” she says. Now that students at for-profit institutions will have access to government-backed loans, universities will be facing the prospect of direct competition with partners offering the university’s own degrees at potentially significant discounts.

I’m not at all certain that degree awarding powers are over-valued. They are rightly prized and should be extremely difficult to secure. The White Paper is likely to change that though. Unfortunately.

Certainly whether or not American for-profits seek new markets in Britain will be influenced by their struggles at home. The Apollo Group, parent company of the for-profit giant University of Phoenix, saw its U.S. enrollments decline more than 16 percent in the past year, while Kaplan saw U.S. enrollments plummet 30 percent.

Whatever the eventual new contours of the higher-education landscape, opportunities are likely to be created, not just for the for-profit sector but for mainstream American universities seeking new avenues of expansion, says Mr. Lytle. “You could imagine someone like a Johns Hopkins saying, ‘We have a terrific brand of health care, there are lots of smart students in the U.K. Let’s go get them.’”

This final point is a particularly interesting one. The idea of leading US universities setting up in the UK, whilst intriguing, is perhaps though unlikely to take off in a major way given that all of the opportunities are likely to be at the discount end of the market.

Following the money: paying out for AAB

“Universities cut fees for top students”

According to The Sunday Times that is. However, the headline doesn quite match the story which is a bit more complicated than that. The BBC presents it a little differently as “Universities to offer A grade students cash”.

All of this seems to be sparked by comments from Steve Smith as he hands over the Presidency of UUK but presumably the details are buried in institutions’ access agreements. The Sunday Times notes:

Kent and Essex universities are among the first to offer special deals. They will give £2,000 scholarships to any recruit for 2012 who gains three As in their A-levels, regardless of their family income.

Kent’s scholarship will be available for every year of the degree course, although the Essex version is a one-off for the first year.

Goldsmiths College will waive its £9,000 annual fees for the brightest 10 students it admits from its south London borough.

Essex and Goldsmiths are both members of the 1994 Group of research-based universities, conventionally seen as an elite grouping. At Essex, however, only 8% of 2009 entrants gained at least two As and a B, while at Goldsmiths the figure was 16%. At Durham, by contrast, another 1994 Group member, the figure was 85%.

Other institutions that have already decided on new deals for 2012 include De Montfort University in Leicester, which will give £1,000 a year to any student with AAB or above.

West London is offering 45 scholarships to students who score at least AA B at A-level, paying 50% of first-year tuition fees, which will average £7,498. South Bank in London will waive its £8,450-a-year fees for up to 85 highly qualified students.

It is possible to envisage this turning into a crazed bidding war with AAB students being offered ever more lucrative details to sign up with one university or another (and is this what was really envisaged in the White Paper?). More likely though is that most students will continue to focus on the courses and institutions which most closely meet their needs. Some may chase the money but most surely will base their decisions on other criteria. Or perhaps we are entering the mercenary period for university admissions?