Assaulting the Ivory Tower: The HE white paper and the ‘Free Market’

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The Higher Education White Paper was published on Monday 28th June 2011, and sets out the coalition vision for the reform of universities.  Higher Education policy in England has not had the happiest of times since the Coalition government came to power and the issue of tuition fees and charging structures has created considerable media interest.  Mike Baker provides a useful summary of the key points here so if you have not had time to read the entire paper, or even the chapter by chapter summaries, Mike’s summary is a good place to start.

The White Paper introduces a market  and competition into higher education with universities competing openly for 85,000 places on the open market.  The Neoliberals of the coalition have an answer to just about every ill which they think afflicts a public sector service. The trouble is, the answer is always the same, the answer is always applied without reason to the consequences, and the answer is always the introduction of a market and more competition. The coalition tried it with the NHS and ran into a brick wall of opposition and had to backpedal,  but stand a much better chance of introducing a free market into Higher Education as fewer people care about universities, people don’t die if we get higher education, and the consequences of these proposed reforms are less well understood.

The reasoning that Willetts and the Neoliberals give for the introduction of the free market in Higher Education is that universities are large complex organisations turning over millions of pounds annually, and given that they are not run along the lines of a private business, they must be inefficient and therefore ripe for reform. David Willetts during his media tour to “big up” the white paper even intoned that he thought that ‘universities should see themselves as part of the private sector’.  Now Willetts’s near religious faith in the power of the free market to cure all ills is not in question here, nor is his willfull lack of understanding of the principles of state funding coupled with minimal political interference which have created our genuinely liberal university sector.  What is in question is what these reforms will do to English universities. At the end of the reforms will we have a better university sector than before, and will social mobility be improved as students from poorer backgrounds get the education they deserve.

The White Paper is trying to repair some fundamental flaws in the introduction of the new fees structure and the failure of ministers to spot the serious errors in their plan to allow universities to set their own fees up to a stipulated maximum of £9000.  In particular what the ministers failed to spot was the value/price imperative which meant it was extremely difficult for any universities to charge less than the maximum £9000 for fear of creating the impression that their degrees were second best or bargain basement offering. So most universities are charging at the maximum rate; comfortable no doubt that they can satisfy the Office of Fair Access that they are making reasonable steps to give places to students from poor families.  At the moment that is not particularly hard as the Office of Fair Access is exactly that, an office, and a small one at that with about 3 employees although the white-paper makes recommendations that this is beefed up.  But the OFA has a long way to go before it becomes a fearless guardian of the rights of poor students to social mobility and access to the best university places and given the way in which Private Sector companies run rings around regulators (utilities and banking are two examples), I don’t believe OFA will be anything other than a fig leaf covering the naked scramble for places which universities will have to commit to in order to stay in business.  Now  David Willetts may be reputed as having 2 brains, but it seems that neither of these was powered up when the charging regime was announced to universities, and he failed to spot the rapid emergence of a cartel (albeit a legal one) with universities closing ranks and fixing prices in order to maximise their income.  This created a big headache. Under the new system of loans, the student attends the university and the treasurer pays the university for their tuition and then retrieves the loan from the student once they hit the criteria for repayment (earning more than £21,000).  Because the treasury is effectively lending money to the universities on behalf of the students, the implication of £9000 being the norm is that the treasury has to find quite a lot more cash than they budgeted for.  So that part of the policy backfired in a way which will seem to many the result of a schoolboy error.  The white paper has to pull some radical reforms out of the bag to try and plug this funding gap between what the universities can consume in terms of public money and how much the coalition think the country can afford to give them.

Here are some of my thoughts on the implications of David Willetts’ exhortation to universities that they should see themselves as part of the private rather than the public sector.  The first is that I expect the pay of the Vice-Chancellors and senior management of universities to start heading North with alarming rapidity. VCs will soon cotton onto the fact that they can evoke the rhetoric of the free market and their peers in corporate boardrooms to justify rapid increases in their wages. The increase, they will argue, is commensurate with the responsibility they hold, namely running a large organisation turning over millions of pounds and employing thousands of people; ensuring that they start really hurting the competition and championing the private sector ethos in their organisation. So salaries of £500,000 and more will soon be the norm I imagine. Nor can those of us without those jobs comfort ourselves that failure of the top people will lead to any kind of real consequences. If a VC does run his university into the ground and it goes bust, the most s/he can expect is a few lines of censure in the Times Higher Education Supplement and big bag of cash as consolation. After all if Fred Goodwin could make a significant contribution to a worldwide global financial crisis and walk away with a £16 million pound pension, the VC of Hunstanton University gazing wistfully over the half built international student centre which sucked all of the operating capital out of his establishment can hardly expect anything ‘really bad’ to happen to him.

As the senior management pay inflates rapidly into proper boardroom territory and the pensions and benefits accrue platinum plating, there will be the inevitable move to sweat the assets of the organisation and ensure that nobody else working there really enjoys this cash bonanza, in fact things will get tough for those in the lower floors of the ivory tower very quickly. The primary assets to be sweated here (once land and buildings have been sold off to bolster flagging bottom lines) are the workers in the university (both teaching and non teaching) who are mostly paid low and modest incomes.  They will see private sector tactics employed in order to bring the wage bill down. Casualisation, revision of contracts, and attempts to erode formal union involvement will be used as universities seek ever greater efficiencies to knock costs off their bottom line.

Kim Catcheside in an excellent piece speculates that policy makers do not really have full understanding of what their reforms might mean, and argues that a delicate eco-system is at risk. and I agree. The new private sector style reforms will be owe more to Terry Leahy than Terry Eagleton. Dissenting voices, critical perspectives and the tolerance of eccentricism which thankfully still lives on in some corners of our university system will be rooted out by the zealous application of managerialism and the imperative to have all functions of the university readied for the fight against competitors.  Marketing budgets will rocket as universities vie for the most lucrative 18 year olds.  Who knows, the universities may even start to use the techniques of our privatised utility companies who compete aggressively to sign people up to their services and encourage them to switch their electricity and gas supply over. Maybe soon students will get visits from ‘representatives’ from a nearby university and get asked to transfer to that course during their studies. Maybe some will even be switched without signing anything, turning up to a lecture only to be told that the University of Chorley is no longer their HE provider and they should wait 4 weeks until the paperwork comes through and they can then start attending lectures at the University of the Lune Valley.

There are also implications for research.   Will research in the future be even more geared towards projects which can be commercialised rapidly, will blue skies research fall by the wayside as universities are forced to collaborate more closely with industry? Will it be less of Alan Turing and more of Alan Sugar? Will the demands of the entrepreneur needing to shift some beige boxes to make a quick buck take precedence over the kind of  genuine disinterested intellectual enquiry which gifted humanity the conceptual workings of modern computing and made this blog posting possible.  The simple fact is that some of the work which goes on in universities needs to be protected at all costs. It is important work and blasting the cold wind of the profit and loss account through these highly specialised forms of intellectual activity will not improve things, it will kill them as cold winds kill seedlings.  Genuine innovation and creativie talent will move overseas in search of  a safe haven and world class research will be more and more difficult on these shores.

Peter Wilby writing in The Guardian takes an incisive position on the claims of Ministers that these reforms will deliver a higher quality university system for England and drive up standards to those found, for instance, in the US:

Ministers are open about their ambition to move English universities more towards the American model, and to create an equivalent of the US Ivy League. They believe, as most Britons do, that US higher education is more egalitarian and successful. They are wrong. The most selective US universities admit only 3% of their students from the lowest socioeconomic quartile (mostly African-American), 74% from the highest. As Howard Hotson, an Oxford academic, pointed out in the London Review of Books, the UK does better in international university rankings than the US, once population is taken into account, with four in the top 20 (one per 15.5 million) against America’s 13 (one per 23.9 million) (Peter Wilby, Guardian Article, 29th June, Available here).

Somebody I follow on twitter, tweeted: “Willetts you are a &^*^ing barbarian” as he defended the white paper in an early morning interview Radio 4. In truth Willetts may not be a barbarian, at the recent THES awards I sat two tables across from him and he appeared at ease using a knife, fork and a spoon. But Willetts’ unquestioning belief in the power of the free market has blinded him to what is important about our university system and the results of his reforms, if unchallenged, may deal a hammer blow to English higher education.

Image courtesy of http://www.flickr.com/photos/buck82/244006199/sizes/o/in/photostream/  licensed under Creative Commons..

One thought on “Assaulting the Ivory Tower: The HE white paper and the ‘Free Market’

  1. Pingback: Launch – Content Mangement: The Final Frontier – Social Media Book Contest « B2B-TechCopy Technology Marketing Blog

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