22 SES 02 B, Policy, Management and Governance in Higher Education
This paper sets out to report on research carried out by the author into the impact of an attempt by the UK Government to create a market mechanism (student number controls that encouraged unrestricted recruitment of highly qualified applicants within a fixed numbers cap) to drive up quality and reduce public expenditure in English high education. The policy was abandoned in December 2013 after only two academic years in operation, nonetheless the research carries valuable lessons for any system attempting to create a market without a full understanding of the motivations of key actors and a case study in market failure.
This paper will look at two key areas of immediate impact that also illustrate how SNC threw into relief precisely those key factors that made it unworkable in the Government's timeline: institutions' strategic responses to the SNC policy; and changes to institutional profiles in terms of the student body and the ways institutions positioned themselves in the marketplace. It should certainly be of interest to delegates from states introducing or considering marketised HE system reform.
The UK Government has a long track record of encouraging marketisation of the HE system in England (education is a devolved responsibility in Scotland, Wales and Northern Ireland) (McCaig 2011, Gibbs and Knapp 2002; Brown and Scott 2009). A review of HE finance,Securing a Sustainable Future for Higher Education(the Browne Report, 2010) recommended a stronger role for markets through the mechanism of informed student choice which would drive up quality (McCaig 2011; McGettigan 2013). The White Paper Students at the Heart of the System (BIS 2011) made the system more responsive to student demand through the application of market forces in three main ways:
1. Variable tuition fees up to a new maximum of £9,000 to open up a price-differential between those institutions that most and least satisfy the wants of students. Combined with a liberation of student numbers, hitherto distributed on the basis of 'block grant' the fee market would reward excellence, provide incentives for others to improve, and for those institutions unable to justify high fees as applicants chose to study elsewhere, new providers would be licensed to compete with them for student places at lower costs.
2. The provision of market information to enable applicants to make more informed choices. Key Information Sets (KIS), hosted by individual institutions, consist of four types of information: on the course of study (for example, data on student satisfaction, the amount of contact time offered by staff and the assessment methods used etc); costs (including tuition fees, accommodation costs and details of any bursaries and scholarships to offset costs for poorer applicants); employment outcomes (containing information of the destinations and salary-levels of leavers after 6 months and 40 months after graduating).
3. Student number controls and exemptions for high achieving applicants. The system of student number liberation was designed to reduce the student number control (SNC) allocation for each institution in two ways, known together as the 'core-margin' policy. Firstly, a market effect based on quality was created by exempting the highest achieving applicants (the margin) from student number control (the core). Secondly, the policy initially enabled the removal of another margin of 20,000 places reserved for further education colleges (FECs) and new entrant providers willing to offer HE at £6,000 per year of study (thus attempting to match quality and price on the basis of 'value for money').
An Independent Review of Higher Education Funding and Student Finance. (2010) Securing a Sustainable Future for Higher Education (The Browne Report) BIS. (2011) Students at the Heart of the System, TSO, July 2011 Brown, R & Scott, P (2009) The Role of the Market in Higher Education, Higher Education Policy Institute Cheng, J. and Marsh, H. (2010) National Student Survey: are differences between universities and courses reliable and meaningful?, Oxford Review of Education, Vol. 36, No. 6, pp. 693-712 Gibbs, P & Knapp, M (2002) Marketing Further and Higher Education Research: an educators guide to promoting courses, departments and institutions, London, Kogan Page. McCaig, C (2011) Access agreements, widening participation and market positionality: enabling student choice? in Molesworth, M, Nixon, L, and Scullion, R (eds) The Marketisation of Higher Education and the Student as Consumer, Routledge, London and New York, Chapter 10, pp115-128 McGettigan, A (2013) The Great University Gamble: Money, Markets and Future of Higher Education, Pluto Press: London
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