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New competitive landscape for higher education confirmed in white paper

The government has published detail of sweeping changes to the architecture of higher education and research in the UK in a new white paper. The document, Succeeding as a Knowledge Economy, takes forward most of the ideas already found in a green paper published in November 2015. Legislation is likely to follow to enact a number of the proposed changes, not least to the regulatory oversight of the sector.

Plans for a Teaching Excellence Framework (TEF), which will reward universities for good teaching with the ability to raise tuition fees above £9,000 a year, have now been slightly rejigged. More time will be allowed to fine tune how it will work and there will be a trial year in 2017-18.

There will be a simpler link permitting tuition fee rises in line with the retail price index for those universities doing well in the first parts of the scheme. This will extend gradually over a number of higher levels – rated “meets expectations, excellent and outstanding” – but the main incentive for universities to get a better rating will be to gain a reputational advantage, rather than a financial one.

Out with the old?

If there is anything resembling a new policy in the white paper (at least in comparison with the green paper) it is the invitation to both old and new institutions to choose their operating model and forms of government support. They may decide to become a private company, some form of corporation, or maybe simply renounce charitable status. This raises possibilities about mergers across the so-called dividing line between the two categories of “existing” and “alternative providers”.

The government clearly believes in and welcomes the possibility that some of the new upstarts will seek to take over or at least merge with those established providers that begin to wilt in the new competitive environment.

The white paper regards “exits” by incumbents from the sector as a healthy outcome in markets reflecting informed consumer choice. But it’s possible that some elite research universities might also look at this proposition and wonder if the best route to raise their undergraduate fee levels above the price of inflation is to go properly private – rather than rely on the small incremental moves permitted as part of the TEF.

Future of the dual-funding system

Although the green paper was relatively light on research policy, it did raise important questions, particularly on how research would be funded in the future. A key question was the future of the dual-funding system of research, through which grants are made to scholars by the research councils on the one hand, with additional government funding allocated to universities by the Higher Education Council for England (HEFCE) following an assessment of the quality of their research – the Research Excellence Framework process.

The white paper confirmed that HEFCE will be abolished – and a new unified entity, UK Research and Innovation, is to be established. This followed recommendations made in a review of research by Paul Nurse that the seven research councils be amalgamated. It is this body that will take over HEFCE’s research funding responsibilities.

This is a little strange. Although the government professes to be strengthening the dual support system for research, rolling it all into one body nonetheless continues the questions about dual funding’s longer-term future.

UK Research and Innovation will also have to consider other important matters once it gets going, not just the future of the dual support system. For example, whether charities and private bodies will become eligible for public research funds as part of the government’s intention in the white paper to create incentives for multidisciplinary work and commercial collaboration. It’s possible this may have a knock-on effect on the “impact” of research, making definitions less academic and more related to “real world” applications.

Easier entry for newcomers

As expected, new or alternative providers should find life a little easier. They will be allowed probationary degree-awarding powers from the get go, as opposed to the current wait of up to six years for full powers. Or, at least, “high quality” organisations will – however that is later defined. Smaller specialist institutions will have more incentive to consider aiming for university designation now that institutions no longer have to reach a fixed number of students to be considered.

Battle for better teaching. UCL IOE, CC BY-NC

Whether the possibility of gaining “degree powers light” will help unfreeze the current icy path to validation experienced by new entrants remains to be seen. At the moment, existing universities understandably regard new providers as fresh competition, and so partnerships between old and new are designated as risky forms of collaboration by the Quality Assurance Agency for Higher Education.

Injecting more market competition into the sector could actually make the chill much worse as new entrants are now fully incentivised to become “challenger” institutions.

Although evidence is needed, new providers, because of resources and status constraints, can be quite conservative in their teaching approaches and to the subjects offered – despite the white paper’s claim that they provide much needed “innovation”. Yet, speaking from my experience as the chair of governors of a new provider, they do appear to reach aspirant sections of the population that do not make it to the existing “old” institutions. So access and social mobility should be enhanced by these moves.

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