What has been the most important higher education policy change of the last 10 years? Most would instinctively say £9,000 tuition fees. It’s the issue that has garnered the most media attention, started the most spats on social media and sparked the most political controversy.
But the real effect of £9,000 fees on universities is often overstated. It is intertwined with a far more profound policy change: the lifting of the cap on student numbers. This week, as 18-year-olds await their exam results, we’ll see the impact of this change once more as universities desperately fight to meet their student number targets. Some will be rapidly expanding, others fighting to hang on. In terms of pure market power, there’s never been a better time to be a university applicant.
This has exposed the contradiction in the Conservatives’ thinking about education. First, that market competition is an effective mechanism to improve student learning by incentivising universities to improve their teaching and student experience. And second, that standards in education – expressed through high university entry requirements – need to be maintained.
This hasn’t panned out. The government introduced the teaching excellence framework to show which universities are best at teaching and to inform student choice. But students largely ignore it. Instead, the universities that are luring in more than their fair share of students rely on attention-grabbing marketing, lower entry grades and prestige that is usually the result of research excellence. Very few are competing on price.
The effects on universities unable to leverage these selling points have been devastating. According to Ucas, acceptances to universities in the lowest third of entry tariffs fell by 5.4% from 2015 to 2017. This equates to a loss of over £300m in fee income over three years. Meanwhile, all universities in the highest third of average entry grades, which have on average dropped their entry criteria in recent years, have seen increases in their annual intake.
Further education colleges that provide higher education, often for local communities, have been particularly badly hit. So have modern universities in London, such as London Metropolitan, the University of East London and Kingston University, all of which have seen their intakes declineby more than 20% since 2014.
But where there are losers, there are also winners, with some universities – including the University of East Anglia, the University of Lincoln, and the University of Sussex – taking in more than 30% more full-time undergraduates in 2017 than in 2014. The top 30 expanding institutions have between them secured more than £900m in additional fee incomesince 2015.
The pressure to succeed has increased in recent years. The number of UK 18-year-olds is in decline, higher education participation growth has slowed, tuition income has not kept pace with inflation, and everyone is concerned about the loss of the European market following Brexit.
For those expanding, targets are ambitious. Many have made extensive capital investments in anticipation of their growing student body which need to be financed. Failure to meet recruitment targets can mean in-year budget cuts, including reductions in staffing, cuts to student activities and mothballing of estates. The fact that final student numbers are confirmed just weeks before the start of the academic year adds to the challenge of planning and budgeting. But if there is one lesson from all this, it is that it’s better to over- than to under-recruit.
Zealous marketing by universities is therefore often coming from two places: confident expansionism or defensive desperation. It is small wonder that the number of unconditional offers has exploded in recent years, along with offers of free iPads and discounted accommodation during clearing. This is the unintended consequence of market competition in higher education, where the “price” cut to make a provider more competitive is not tuition fees – it’s entry requirements, as universities drop grades to fuel their expansion.
The official representatives of the sector have tended to remain upbeat about the uncapping of student numbers, pointing to the slight but broad boost to widening participation. But as market pressures bring the future of some universities into doubt, and questions over unconditional offers and specious marketing remain, there may be calls for the return of some “control” on student recruitment. Though political attention for the next year will almost certainly remain on tuition fees, the continuation of an uncapped market will have far more profound consequences for universities in the years to come.
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