Degrees of Delusion: How to Fix the UK’s Broken Universities

Published on April 9th this year, the HEPI (Higher Education Policy Institute) Debate Paper 45 makes sobering reading regarding the functioning of the UK Higher Education (HE) sector. Written by HE analyst Tom Richmond and titled ‘A degree of regulation: Building a more financially sustainable and resilient higher education sector’, the paper outlines the pressing financial issues facing UK universities and their impact on staff and students.

Richmond also proposes an eight-point plan to tackle the issues. In the case of many of these points – all of which needed saying – it is remarkable that some of these points are not already policy. Who, for example, would have thought that universities did not have to guarantee sufficient accommodation for living and teaching when they recruit students?

Expansion and the 50% delusion

The UK HE sector was revolutionised in the late Thatcher and early Major years. Margaret Thatcher, who rightly held much of HE in disdain, began the process of creating more universities from former polytechnics – much to the alarm of the then 40 or so universities (ancient, red-brick and 1960s universities) – and this was cemented by the Major government in the 1992 Further and Higher Education Act. By 2000 the number of universities grew to around 100. Presently, we have over 160 universities, many of which, such as the University of Law, Arden University and BPP University, most people will never have heard of.

Then the Blair government, for reasons of ‘social mobility’, decided that 50% of school leavers should attend university. Thus, the number of universities having increased, the number of students was set to increase, leading to the present situation whereby many popular university programmes are packed to the gunwales. It is notable that neither the expansion in the number of universities nor the increase in student numbers was accompanied by additional funding.

Funding the fantasy

To accommodate the inevitable financial costs, especially from the increase in student numbers, the means-tested university student grants system was replaced by the student loans system. This neither covers the full cost of teaching students nor relieves students of financial burden: many are crippled by debt on graduation and find themselves repaying their student loans for decades.

Therefore, the UK HE sector is not entirely to blame for the predicament in which it is currently enmeshed. However, it has compounded the problems by poor decision-making and sacrificing the quality of the experience of students for quantity in student numbers. Years of expansion chasing fee income have left institutions financially fragile. Universities have behaved like overleveraged banks: high debt, thin cash reserves and blind faith that student numbers will always rise.

Universities report that domestic tuition fees have failed to keep pace with inflation and request the Government to loosen the purse strings – something that is unlikely to happen. The signs of financial doom have been there for over a decade. The problem with UK universities is that they have a regulator, the Office for Students (OfS), that can observe and report on the problems but which lacks the mechanism to stop them.

According to Tom Richmond’s debate paper, universities have adopted a cavalier attitude to risk. Since student number controls were lifted, some institutions have grown at incredible rates – thousands of percentage increases in student numbers. Franchise partnerships have proliferated under the assumption that more students equal more money, and more money solves everything.

The overseas student dependency trap

The increasing student numbers have, increasingly, relied on volatile overseas student markets. Regions such as India, China and Africa have been favoured recruiting grounds. There was a decline last year in applications from India and what is described as a recent dramatic decline in students from Africa. There has also been a decline in Chinese applicants. But the issue of Chinese students has further implications in that UK universities, especially those with Chinese Government funded Confucius Institutes, are held to ransom by the Chinese Government over free speech issues related to criticism of China and recognition of Taiwan.

Turning to the recommendations in the HEPI debate paper, which are aimed at restricting unsustainable growth, these include: less reliance on international students; restricting franchised teaching (essentially outsourcing); ensuring financial safeguards; capping the number of undergraduate students that can be recruited to match the teaching capacity of the university; advertising expected class sizes; and stopping the grade inflation that has been so obvious in recent years. If necessary, this may involve classifying universities as part of the public sector.

Richmond’s remedies

Franchising has been a particular problem regarding quality of teaching and student experience. Over 60% of franchised teaching is not registered with the OfS leading to a “regulatory blindspot”. In three universities most undergraduate provision is franchised with money from fees profiting the franchise but not the students being taught.

Some control over finance is essential as universities rely more heavily on borrowing money to finance operations. An astonishing 10 universities borrow at 100% of their income with five borrowing at 200%.

Capping student recruitment would ensure staff well-being in addition to student experience. Other benefits would include students being able to live within easy reach of their university (University of Bristol houses students 30 miles away in Wales) and an end to the use of overflow lecture theatres, laptop learning and the advice to University of Manchester students to listen to their lecture “in a coffee shop”.

To counter grade inflation whereby the class of degrees obtained by students tends to correlate negatively with the purported quality of the university (so the ‘worse’ universities are more generous with their grades), Richmond suggests a simple formula, based on the normal distribution, of 15% first class, 35% 2:1, 35% 2:2 and 15% third class degrees. I suppose it might be too much to expect that to be retrospective.

The problem for UK universities is that expansion without funding, recruitment without capacity and ambition without restraint have all brought the sector to this point. Richmond’s proposals are sensible, if belated, but they address symptoms more than causes. Until universities rediscover that their primary function is education rather than expansion, and that sustainability matters more than scale, the sector will remain locked in a cycle of managed decline.

Professor Roger Watson is Distinguished Professor of Nursing at Southwest Medical University, China. He has a PhD in biochemistry. He writes in a personal capacity.