The question this paper sets out to answer is: how have market mechanisms introduced by recent UK Governments impacted English higher education? Three main policies designed to increase marketisation of the system are discussed with reference to their potential impact on average tuition fees:
i) The 2011 White Paper Students at the Heart of the System (BIS 2011) introduced incentives for institutions to enrol greater numbers of highly qualified applicants (at the expense of less qualified applicants within a fixed numbers cap known as the Student Numbers Control mechanism) and incentives for institutions to enrol greater numbers of students at a lower fee rate (the 'core and margin' mechanism). The White Paper also obliged institutions to present clearer consumer information for applicants (Key Information Sets).
ii) The UK Treasury (HM Treasury 2013) announced a removal of the students numbers cap from 2015-16, thus enabling the supply of places in undergraduate HE to rise until they meet or exceed demand.
iii) The 2016 White Paper Success as a knowledge economy: Teaching Excellence, Social Mobility and Student Choice which introduced measures to encourage market entry from 'Alternative Providers' (Evans 2016) who will henceforth find it easier to attain Degree Awarding Powers and adopt the word University in their titles (BIS 2016). These are encouraged to create the additional supply of places to either absorb excess demand or to create additional places; in either case at lower fees than those charged by existing HE providers (in conditions of fixed fee cap), and thus having the effect of lowering the average tuition fee in English HE.
The paper seeks to discuss the implications of these moves with regard to the development of the stated aim of developing a price differential between higher education institutions that we conceptualise as a 'dual pricing' mechanism. English HE is characterised by fixed maximum tuition fees but there is a sophisticated alternative pricing mechanism consisting of University and College Admissions System (UCAS) tariff points (an equivalence measure of all entry qualifications). The more prestigious research-intensive universities are able to demand higher UCAS tariff points than less prestigious HE institutions. As, in traditional consumer markets, consumption at the highest prices is restricted to those with the highest income, so access to the highest demanded courses is restricted to those that have the highest entry grades.
Our work models changes in supply and demand following the opening up of the market in higher education places, which has taken two main forms: as in Australia, the cap on the total number of places has been removed; there has been encouragement of new providers into the market, principally by making it easier for providers to attain degree-awarding powers and use the title 'university' to help attract applicants. Secondly, legislation will also make it easier for existing HEIs to fail, i.e. they will no longer be supported by the state if they lose student numbers to new alternative providers (BIS 2015; 2016). The declared aim of this policy is to create a price differential within the existing fee-cap (£9250 per annum) by providing price competition at the least prestigious end of the market: government aims to achieve an average tuition fee of £7,500 which was in line with Government's modelling for affordability of the variable fee regime introduced in 2012-13 (currently the average stands at £8,650). A dual pricing mechanism, then, would equate the highest entry tariff courses and institutions with the maximum fee; and the lowest entry tariff courses/institutions with the lowest fees (£6,000).
BIS (2011) Students at the heart of the system, HMSO, March 2011 BIS (2015) Fulfilling our potential: Teaching excellence, social mobility and student choice, HMSO, November 2015 Brown, R. & Carasso, H (2014) Everything for Sale; the marketisation of UK Higher Education Abingdon: Routledge Evans, GR (2016) Alternative providers of higher education: what are the risks? Higher Education Review, Vol 49, No 1, 2016. ISSN 0018-1609. HEFCE. (2011). AAB+ Modelling. HEFCE 2011/20 Annexe D. Bristol: HEFCE. HESA (2016) Statistical First Release, December 2016. Institute for Fiscal Studies (2016) What and where you study matter for graduate earnings – but so does parents’ income, Press Release, 13th April 2016 Marginson, S. (2013) The impossibility of capitalist markets in higher education, Journal of Education Policy, 28:3, 353-370 McGettigan, A (2013) The Great University Gamble: Money, Markets and the Future of Higher Education, London: Pluto Press. Meek, V.L. (2000) ‘Diversity and marketisation of higher education: incompatible concepts?’ Higher Education Policy 13: 23-39 Molesworth, M., Scullion, R. and Nixon, E. (2011) The Marketisation of higher education and the student as consumer London : Routledge
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