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Dr Cable's Nightmare

On 15 November Business Secretary Vince Cable, whose departmental responsibilities include those related to higher education, delivered a speech to the Girls’ School Association at its annual meeting in Manchester. Much of his address was devoted to the plight of taxpayer-funded universities – specifically English taxpayer-funded universities, which currently include Oxford, Cambridge, Imperial College, University College London, and the London School of Economics. By any university league-table you care to choose, these institutions are amongst the very best in the world. By common agreement they – along with all English taxpayer-funded universities – are grossly underfunded. The coalition government of which Dr Cable is a member had, earlier in the month, signalled its intention to legislate so as to permit all these universities to raise the maximum undergraduate tuition fee they can currently charge from £3,290 to £6,000 or – if they agree to certain conditions – to £9,000 per annum. This announcement had given rise to widespread student protests. So Dr Cable decided to devote much of his Manchester speech to explaining why the decision had been taken.

He did not mince his words. “We already [he said] have a lot of universities that are effectively broke. If they were in the private sector they would have been filing for bankruptcy. Various arrangements have been cobbled together to keep them going, and we can't continue to do that." The government, he explained, had no more money to pump into higher education, so other sources of funding must be found. And whilst the government had rejected the centrepiece recommendation of Lord Browne review, that the ‘cap’ on undergraduate tuition fees should be removed altogether, it had agreed to the cap being lifted in two stages: a ‘soft’ cap of £6000 that any university could charge, and a ‘hard’ cap of between £6,000 and £9000 that could be charged provided certain conditions were adhered to. And then Dr Cable made an astonishing admission: "One of the reasons were are doing this is precisely to head off Oxford, Cambridge, London School of Economics, University College London and a few others from going private, because if we had not opened up the system in the way we have, they would have had a very strong incentive to do so."

In other words, Dr Cable chose to lay at least some of the blame for the unpalatable decision the coalition government had had to take upon a handful of elite institutions that had – he declared – threatened to “privatise” [his word] if the ‘cap’ were not removed altogether. Faced with this ultimatum, the government had had to do something, and what it had chosen to do – to raise but not abolish the cap – had made the best of a bad job. Rather than protest – he implied – students and their funding fathers and mothers should be grateful that the government had grasped this nettle, though – he admitted - there could be no guarantee that one or more of these elite academies would not “privatise” at some future date. "Whether we shall head them off [he added ominously], I don't know."

This was a very odd speech for Dr Cable to have made at the annual meeting of the GSA, which is, after all, (as its website proclaims) “the professional association representing the Heads of leading independent girls’ schools in the UK.” For “independent” here read “private,” of course. If the government has no more money to give to the university sector, a decision by a university to go private would – surely – be a blessing for the government, not the curse, the unmitigated evil that Dr Cable insisted it would be.

As a matter of fact all English universities are private. All, without exception. Every university in England – indeed in the UK – is a private corporation, deriving its status and authority either from a Royal Charter (such as Oxford and Cambridge), from a specific, private Act of Parliament (such as the University of London) or from an order made under a more general parliamentary statute (such as the polytechnics raised to university status under the provisions of the Further & Higher Education Act of 1992). All English universities are private. But some are more private than others. The University of Buckingham (established by Royal Charter in 1983) is completely private, because it does not accept one penny of taxpayers’ money. In 2008-9 the University of Cambridge derived just 18 per cent of its annual income from direct government grants; at Oxford the proportion was a little higher, at 23 per cent. At the other end of the scale there are universities that rely on government grants – direct grants from the English Funding Council and (if relevant) from the Training & Development Agency for Schools - for very large proportions of their total incoming funds. At the University of Gloucestershire, for instance, the figure is around 46 per cent, and at Leeds Metropolitan around 45 per cent.

‘Going private’ means that universities, whilst continuing to receive tuition fees (the levels of which they themselves would be completely free to set, as at Buckingham), and while continuing to enjoy such research income and endowments as they could attract, would no longer receive funding-body grants. That is the basic truth behind university ‘privatisation.’ But it is not the whole truth.

The conditions under which a block grant is made to a university by the Funding Council are set out in a Financial Memorandum – in effect a contract between the two parties. At its website the Higher Education Funding Council for England reproduces its current “model” Financial Memorandum. In return for its annual block grant, the HEFCE can (amongst other things) insist that the quality of teaching and learning is “assessed” in a prescribed manner, that the institution in receipt of grant agrees to submit to a periodic HEFCE-driven assessment of its research, that the institution agrees to subscribe to the Quality Assurance Agency and to submit to QAA academic audit and – more ominously – that “value for money” is being achieved. HEFCE-funded institutions must also ensure that their strategic policy objectives mesh with and support those of the Funding Council. They must demonstrate that they are managing their “estate” in a sustainable way, and that they have, and operate, an approved “carbon management plan.” HEFCE demands “unrestricted access to information – including all records, assets, personnel and premises – and can require anyone to give any explanation which it considers necessary to fulfil its responsibilities.” And it reserves the right to impose special conditions on receipt of grant if it thinks fit.

It is important to remember that all these conditions apply irrespective of how great or how small the quantum of the block grant in any particular year. If so much as £1 of taxpayer’s money is made available to an institution by way of grant, all these conditions apply. And they are, of course, in addition to a university’s statutory responsibilities – for example under Equality and Health & Safety legislation.

In brief, a university in receipt of HEFCE grant has very little institutional autonomy. It does not have a soul to call its own. It must do what HEFCE says, when HEFCE says it. And if Dr Cable and his ministerial colleagues have their way, the supposed freedom that they will give to universities to charge higher tuition fees (now approved by Parliament) will also come with thick strings attached. In response to the publication of the Browne review, the government will, with effect from September 2012, permit publicly-funded universities to charge up to – but not more than - £9,000 per annum, but that if they want to charge more than £6,000 they will apparently have to agree to a raft of measures including offering bursaries, summer schools and “outreach” programmes, so as to promote applications from students from poorer backgrounds. To this end universities will be obliged to enter into “access agreements” with the Office for Fair Access; if this Office determines that an agreement has been broken, it will have the power to impose a fine, the proceeds of which will be redirected – it is said - to support disadvantaged students.

I am not for one moment saying that students from disadvantaged backgrounds should not be supported. They should. But we need to be clear that it is the present government’s clear intention to impose upon the English publicly-funded institutions of higher education a draconian regime of command-and-control should they wish to charge anything above the ‘soft’ cap of £6000. This regime could well include compelling institutions to lower their academic standards (in terms of entry requirements) so as to support some new Downing-Street-mandated strategic objective which, however laudable in itself (increasing participation in higher education by students from poorer homes) is not – in my view - one that universities should be compelled to underwrite.

The key to widening participation in higher education lies in the improvement of the quality of education in the state-funded primary and secondary education sectors. No university in its right mind should ever have to turn away an academically gifted student, irrespective of that student’s financial circumstances. Equally, no university in its right mind should ever have to lower its entry requirements merely to fulfil a politically-driven condition of the receipt of taxpayers’ money.

Clearly, that is not Dr Cable’s view. Reading between the lines of his address to the Girls’ School Association it is clear that his view – and presumably that of the coalition government of which he is a leading member – is that a university that goes “private” puts itself beyond the reach of the Funding Council, and hence beyond the scrutiny and reach of Whitehall. This he and his government view as a disaster to be avoided at all costs, certainly at the cost of permitting some universities to charge a relatively high undergraduate tuition fee.

I do not know whether any of the elite institutions mentioned by Dr Cable had in fact sent him an ultimatum: permit us to charge higher fees or we will go private. I do know this. If a number of elite institutions had indeed given the ultimatum that Dr Cable alleged they had delivered, why did he not simply dare them to carry out their threat? And I think I know the answer to this question.

Geoffrey Alderman


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