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Education briefing - Value for money in HE? House of Commons Education Committee publishes its conclusions and recommendations

  • United Kingdom
  • Education - Briefings

12-11-2018

Introduction

The issue of value for money in the higher education sector has never been more topical. One of the four primary regulatory objectives of the Office for Students (OfS) is that students receive value for money and one of the terms of reference for the current review of post-18 education and funding (which is expected to report in January 2019) is that of value for money for graduates and taxpayers.

On 5 November 2018, the House of Commons Education Committee published its report on its inquiry into value for money in higher education, which it launched on 15 September 2017. The conclusions and recommendations of the Committee will be relevant for English universities but also FE colleges given that they teach A Level and BTEC courses to prepare students for university, offer alternatives such as apprenticeships and many are themselves higher education providers.

The Committee received 81 written submissions and took oral evidence on five occasions, including from current and former students; several Vice-Chancellors; Sam Gyimah (Minister for Universities, Science, Research and Innovation); Sir Michael Barber and Nicola Dandridge (Chair and Chief Executive of the OfS) and Philippa Lloyd (Director General for Higher and Further Education at the Department for Education). In addition, the Committee had a private roundtable with 11 stakeholders and visited a number of universities.

In the introduction to the report the Committee states its inquiry has been conducted at a time of increasing public scrutiny of the higher education sector, and significant questioning of the extent to which universities offer their students and graduates value for money. Although the inquiry has primarily considered value for money in terms of the student, and the graduate, it has also looked at it in terms of wider society, the taxpayer and the economy.

The report is also published at a time when there has been speculation about financial difficulties facing a number of universities - with some experiencing a fall in student numbers, uncertainty about what Brexit will mean for the ability of UK institutions to attract EU students and whether the Government is likely to cut tuition fees (possibly to as low as £6,500 to £7,500 a year).

The introduction to the report concludes with the Committee encouraging the post-18 education and funding review to be “brave in its approach, to design a holistic funding model which supports a wider range of pathways and prioritises support for disadvantaged students”.

The report then sets out a number of conclusions and recommendations in the following five areas:

• Value for money for students and taxpayers

• The quality of higher education

• Skills

• Social justice

• Graduate employability

We will explore each of these in more detail below, but among the more notable recommendations are that every higher education institution should, by the end of 2018, publish a breakdown of how tuition fees are spent; the OfS should publish ”strict criteria” for universities on acceptable levels of pay for senior staff; all HE institutions should offer degree apprenticeships and that the Government reinstates the means-tested system of loans and maintenance grants.

Value for money for students and taxpayers

The Committee believes there should be greater transparency on tuition fee spending and recommends that every higher education institution should, by the end of 2018, publish on its website a breakdown of how tuition fees are spent and that the OfS intervenes if this deadline is not met.

In relation to pay, the report states that “unjustifiably high pay for senior management in higher education has become the norm rather than the exception” and that “the current system of self-regulation for senior management pay is totally unacceptable”. In this regard it calls for the OfS to publish ”strict criteria” for universities on acceptable levels of pay that could be linked to average staff pay, performance and other measures that the OfS sees fit and that the OfS should take swift action if this is not the case. In addition, the report recommends that institutions routinely publish the total remuneration packages of their Vice-Chancellors in a visible place on their website, that Vice-Chancellors must never sit on their remuneration boards and that this should be enforced by the OfS.

The quality of higher education

In this section the Committee considers TEF, flexibility in HE provision and accelerated degrees.

The Committee states that it heard mixed views on TEF’s ability to signal the quality of teaching in a broad range of institutions. The Committee concludes that TEF is still in its infancy and requires further improvement and embedding to become the broad measure of quality that the Committee wants it to be and that for TEF to improve value for money for students it must play a more significant role in the decision-making process of applicants. It recommends that the forthcoming independent review of TEF focuses on how the exercise is used by students to inform and improve choice and must include an assessment of how TEF is used in post-16 careers advice.

In relation to flexibility, the report concludes that institutions should move away from a linear approach to degrees, and enable more part-time, mature and disadvantaged students to study in HE. In order to achieve this it recommends that the current post-18 education and funding review develops a funding model which allows a range of flexible options including credit transfer and ‘hopping on and off’ learning.

On accelerated degrees, the Committee states that, as with TEF, it heard mixed views on their benefits. It therefore recommends that, while more flexible approaches to higher education should be supplemented by the option for undergraduates of studying for two-year accelerated degrees alongside the traditional three-year model, the post-18 education and funding review should investigate potential funding models to clarify the benefits and costs of accelerated degrees, taking into account fees, living costs and post-study earnings. Furthermore, it believes that the introduction of two-year degrees should not create a two-tier system where students from disadvantaged backgrounds are encouraged to take them on the basis of cost and therefore the review should include an impact assessment of how accelerated degrees will affect disadvantaged students.

Skills

The Committee is concerned that the country is facing a serious skills deficit, referring to the fact that 61% of the businesses surveyed in the 2017 CBI/Pearson Education and Skills Survey were not confident there will be enough people available in the future with the necessary skills to fill their high-skilled jobs. This section of the report looks at a number of ways in which this skills deficit can be addressed.

The Committee believes that degree apprenticeships are crucial to filling skills gaps and boosting the country’s productivity but that the numbers of degree apprentices are not growing fast enough. The Committee is “extremely disappointed” by the response from the Institute for Apprenticeships to concerns from the higher education sector on the future of degree apprenticeships and urges the Institute to make the growth of degree apprenticeships a strategic priority. It also states that the Institute must remove the bureaucratic hurdles which universities are facing and it and the Education and Skills Funding Agency must engage much more actively with the HE sector and take better account of its expertise.

The report goes on to state that all HE institutions should offer degree apprenticeships and recommends that the OfS demonstrates its support by allocating a significant portion of its widening access funding to the expansion of degree apprenticeships specifically for disadvantaged students.

In relation to the introduction of T-Levels, the report states that during the session with Vice-Chancellors the Committee received a mixed response to the question of whether their universities would accept T-levels. The Committee believes that the implementation of T-Level qualifications from 2020 could offer improved access to universities for students from disadvantaged backgrounds and that the Government should engage with universities and UCAS to determine an appropriate tariff weighting prior to the introduction of T-levels.

The Committee also recommends that universities look to include significant periods of work experience within undergraduate degree courses (a year in industry, or shorter placements with local employers) and that that practical experience of the workplace must become the norm in degrees and an integral part of making students ‘work ready’.

Social justice

Value for money for students from lower socio-economic backgrounds was one of the main focuses of the inquiry and the Committee is concerned that the proportion of state-educated students entering full-time undergraduate courses has stalled. To try and rectify this the report recommends:

• Greater transparency on what HEIs are investing on access and participation, a greater focus on outcomes for students and a rigorous evaluation process. The Committee expects to see institutions focusing their efforts on value for money for the most disadvantaged students and facing penalties if sufficient progress is not made.

• A move away from the simple use of entry tariffs as a league table measure towards contextual admissions, foundation courses and other routes to entry.

• That institutions state their contextualisation policies in their application information so that disadvantaged students and schools in areas with lower rates of participation in higher education will have a better understanding of the entry requirements to different institutions.

• That the recent decline in part-time and mature learners should be a major focus of the Government’s post-18 education and funding review and that the review should redesign the funding system for such learners.

• That the Government reinstates the means-tested system of loans and maintenance grants.

In addition, the Committee wants the OfS to “clamp down” on the rise in unconditional offers, the increase of which it believes is detrimental to the interests of students and undermines the higher education system as a whole.

Graduate employability

Data shows that graduate employment continues to rise and that the average working age graduate earned £10,000 more than the average non-graduate in 2017. However, the “graduate premium” varies greatly depending on where and what a student studies.

Whilst the Committee says it is encouraged by the increase in graduate outcomes information, it believes there is still a long way to go before students have access to robust data on graduate employment which will inform their choices. The report concludes that HE institutions must be more transparent about the labour market returns of their courses and recommends that the OfS instructs all providers to be transparent about levels of graduate employment and secures this through funding agreements.

On student choice, the Committee concludes that students lack sufficient high-quality information to make informed choices about higher education and the career paths which might subsequently be open to them – indeed it comments that the inquiry found a “woeful lack of pre-application and career information, advice and guidance, particularly awareness of degree apprenticeships”. The report recommends that the Government’s current post-18 education and funding review looks at routes into higher education, and the quality of careers advice which students receive.

OfS response to report

The OfS, in welcoming the report’s focus on the importance of value for money for students, has responded that it is preparing a new approach to significantly reduce gaps in access, success and progression for disadvantaged students. In addition it says that through TEF it promotes excellent teaching and improves information for students, including student employment outcomes.

It goes on to state that it strongly supports the growth of degree apprenticeships through the £8 million Degree Apprenticeship Development Fund and will draw on its evaluation to determine what further steps to take in 2019. It is also conducting an analysis based on data from UCAS to understand the increase in unconditional offers and the impact this may have on students.

In relation to senior pay, the OfS points out that it already requires universities to publish details of Vice-Chancellors’ pay and justify their pay package, as well as requiring institutions to publish the number of staff being paid more than £100,000, and ratios showing how the Vice-Chancellor’s pay compares to that of all other employees.

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