New think tank report on the future of universities

       The government should split the Higher Education sector into ‘local’ and ‘national’ universities

With ministers expected to outline major reforms to the Higher Education (HE) system in England in the coming weeks, a new report from education think tank EDSK calls on the government to break up the homogenous HE sector to ensure that it delivers better value for students, taxpayers and local communities. The report called ‘Value-able lessons’ recommends that the government splits the sector into ‘local’ and ‘national’ universities to give HE institutions a clearer purpose and mandate.

   The report identifies several ways in which the behaviour of some universities has contributed to the narrative of ‘low value’ degrees. Subjects and disciplines such as Leisure studies, Media studies and Design & Creative arts received funding increases of over 30 per cent after tuition fees were raised to £9,000 in 2012 and many of these courses have seen enrolments increase since then. In addition, the quadrupling in the number of students recruited onto ‘foundation year’ courses from 2012 to 2019, with a questionable focus on ‘Business and administrative studies’, has also raised doubts about the motivation of the institutions involved.

However, the report finds that the government’s current approach to assessing the ‘value’ of HE will lead to inaccurate and unreliable judgements about courses and institutions. The analysis in the report shows that the value of a degree or university cannot be measured by the salaries and employment rates among past graduates or the drop-out rates of current students. Relying on these indicators to judge the value of courses and institutions will also undermine the government’s ‘levelling up’ agenda by penalising universities based in areas of the country with the poorest employment prospects for graduates.

At the same time, the government cannot ignore the strain that the HE system is placing on the public finances. The mountain of unpaid student debt reached £161 billion last year and is forecast to pass £500 billion by the mid-2040’s. Even so, politicians cannot complain that some students choose supposedly ‘low value’ degrees and universities that leave taxpayers with this huge financial burden because the earnings threshold for repaying student loans has been raised from £10,000 to £27,295 over the past twenty years. Such a high threshold makes choosing a degree or university essentially risk-free for students, even if it offers them little ‘value’ either now or in future.

The report concludes that government, universities and students all have a role to play in ensuring that the HE sector produces ‘high value’ degrees and institutions across the country. The EDSK report recommends that:

• By the 2023/24 academic year, all universities should be required to formally designate themselves as either a ‘local university’ or ‘national university’ to reflect their primary purpose as an institution.
• ‘Local universities’ will become the engines of local economic growth, social mobility and lifelong learning by delivering courses at degree and sub-degree level that promote civic engagement with the local community and support employers in collaboration with FE colleges.
• ‘National universities’ will focus on providing degree-level courses and research programmes that are targeted at students with higher prior attainment from across the country as well as attracting international students.
• To incentivise universities to deliver ‘high value’ degree courses, the Government should introduce a new system of ‘accreditation’ for degrees. To be ‘accredited’, a degree must either be approved by local employers, a professional body, an independent awarding organisation or delivered in partnership with local colleges. Any non-accredited degrees will have their funding cut by £1,500 per student.
• Only ‘local universities’ will be permitted to offer foundation year programmes in future. Foundation years will also have their tuition fee cap reduced to £6,000 to create better value for students and taxpayers.
• To encourage students to seek out the courses and institutions that will offer them the greatest value, the repayment of student loans should be based on a new ‘tiered’ set of repayment thresholds starting at 3% for earnings above the income tax threshold (£12,570) rising to 9% for earnings above £22,570. The repayment period for student loans should be also extended from 30 years to 40 years.

Tom Richmond, Director of EDSK and a former advisor to ministers at the Department for Education, said:

   “Universities can undoubtedly make a major contribution to local, regional and national prosperity, yet the behaviour of some institutions has led to a perception among policymakers and politicians that they are more interested in attracting tuition fee income than they are serving their students, local communities and society as a whole.

“Splitting the sector into ‘local’ and ‘national’ universities as well as giving each type of university a clear purpose and set of responsibilities would make the value of HE more apparent to students, employers and local communities. This new approach would also help reassure ministers and taxpayers that all universities are focused on delivering ‘high value’ degrees that are worthy of the billions invested by government in the HE sector every year.”