Competition vs collaboration Higher education 2014-2016 Competition vs collaboration Pam Tatlow Chief Executive Million+

million+ Our role: a university think-tank Our mission: To shape public policy and funding regimes on a non-party basis so that they enable: people from every walk of life to benefit from access to universities that excel in teaching, research and knowledge transfer business, the NHS, not-for-profit sectors and Government to benefit from the full potential of all universities

What we do Advocacy Ministers Opposition Parties MPs Government and funding council officials Evidence to Parliamentary Select Committees Media and press Partnerships With university affiliates, students and other stakeholders

What we do Behind the headlines: What’s the value of Evidence – Policy and Research Reports: Who should train the teachers? Behind the headlines: What’s the value of a UK degree? Student Opportunity Funding: why it counts

6/7 in top 50/60 world university rankings UK HEIs and world-rankings 162 HEIs 6/7 in top 50/60 world university rankings 18 HEIs 4 HEIs 130 HEIs 10 HEIs

1997 – 2010 Labour Government Investment in early years, primary and secondary education Target: 50% of 18-30 years olds to access HE Expansion of funded numbers

2004 HE Act (England) Universities entitled to levy GB £3000pa tuition fee per full-time student (2006) £3000 = additional income Backed by State student loan system (full-time) Reintroduction of maintenance grants £100m p.a. to promote participation (AimHigher) Focus on widening participation by social class Leitch Report ‘ Prosperity for all in the Global Economy: World Class Skills’ – goals for 2020 (adult access)

HE funding devolved Scotland Wales 2007 Scottish Government abolishes fees for full-time students who reside and study in Scotland Wales No top-up fees for full-time students who reside and study in Wales; Welsh Assembly pays additional fees for students in England BUT review of funding in Wales (2015-16) & HE fees an issue in Scottish independence referendum (Sept 2014)

EU EU students study for free in Scotland / access fee loans in England UK universities successful in winning EU research funding

Research Science & Innovation Investment Framework 2004-2014 Higher Education Innovation Fund (£150m p.a)

International Trans-National Education (TNE) partnerships Prime Minister’s Initiative 1 & 2

UK Outcomes *Part-time UG & PG decline post-2008 1994-95 2011-12* FT UG 1,231,988 1,928,140 PG 335,325 568,505 *Part-time UG & PG decline post-2008 By 2010 one in three UGs are over 21 the first time they enter university Source: HESA 2013

International

Universities Flexibility of provision and often work / professionally focused e.g first business courses Significant contribution to: Social mobility in the UK Newer industries e.g creative, digital Multi-disciplinary but also world-leading research International higher education partnerships throughout the world

Some Universities High levels of recruitment from state schools and colleges Older graduates – one in three undergraduates enter higher education when over 21 Majority of black and ethnic minority students who enter HE Opportunities for ‘first-in-family’ students to study at university

2010 Coalition Government (Westminster) Teaching grant cut by 80% Fee cap increased to £9k for English universities Deregulation of full-time student numbers linked with high grades Emphasis on market + alternative providers Research funding : ‘cash protected’

Part-time Course grants scrapped Fee but not maintenance loans Repayment after 4 years of study if £21k+ salary Positive real rate of interest on loans RAB charge:  – 7.5%  (HMT saving) Part-time loan budget of £120m reduced to £30m

Breakdown of teaching related income from 2009-10 to 2014-15 Sir Alan Langlands, Higher Education Funding Council for England, 18 April 2013

Research 2011-12 ‘Quality-related’ = £1.93bn 25% to 5 HEIs Research Councils = £1.51bn 25% to 4 HEIs 50% to 11 HEIs 75% to 24 HEIs

Change Since 2009-10 QR Research Councils TOTAL Russell Group   QR Research Councils TOTAL Russell Group 7,871,000 1.9% -43,879,000 0.8% -36,008,000 1.4% 1994 Group -6,663,000 -0.2% -10,774,000 -0.3% -17,437,000 Modern -14,857,000 -0.6% -5,509,000 -20,366,000 -0.4% Other -30,825,000 -1.2% -16,118,000 -46,943,000 -0.8% UNITED KINGDOM -44,474,000 0.0% -76,280,000 -120,754,000 Source: million+ analysis of HESA Finances of HEIs 2011-12

Share by HEI Type QR Research Councils TOTAL Russell Group   QR Research Councils TOTAL Russell Group 1,294,813,000 67.1% 1,132,401,000 75.0% 2,427,214,000 70.6% 1994 Group 146,135,000 7.6% 116,041,000 7.7% 262,176,000 Modern 139,070,000 7.2% 37,756,000 2.5% 176,826,000 5.1% Other 350,056,000 18.1% 222,879,000 14.8% 572,935,000 16.7% UNITED KINGDOM 1,930,074,000 100.0% 1,509,077,000 3,439,151,000 Source: million+ analysis of HESA Finances of HEIs 2011-12

Public vs private expenditure on HE (2009)

UK: 1.77% Canada: 1.74% Sweden: 3.37% Gross domestic expenditure on R&D as % of GDP (2011) UK: 1.77% Canada: 1.74% Sweden: 3.37% Source: OECD 2013

Conclusions: 2012/13 Enhanced earnings, employment outcomes, tax receipts Positive spill-over effects for companies / employers UK degree: remains exceptionally good individual & Treasury (HMT) investment BUT 30,000 fewer first-time FT students (2012): aggregate long-term cost at least £6.6bn

Graduate gender and distributional effects Men RAB increases from 19.5% to 22.5% Average repayment period increases by 11 years Women RAB increases from 31.6% to 53.8% Majority of women will never repay Total of £2.798bn loans (fee + maintenance) written-off  

Indirect effects Increase in fees = + 0.24% on headline inflation e.g. CPI of 2.5% increases to 2.74% & continues for 3 cohorts Impact on consumers Rail fares, water bills, repayment of student loans Impact on Treasury Non-working age welfare benefits Interest repayments on index-linked gilts (£655m additional HMT payments)   Combined effects of increasing tuition fees 6.5 x more than Treasury savings

2012/13 cf. 2010/11 £9,000 fee cf. £3,290 fee £3.93bn extra in loans provided by HMT Of these additional loans, RAB charge of 62% (only a third recouped)

Resource Accounting Budgeting (RAB) 2010/11 RAB of 26.1% on £6.42bn of maintenance and fee loans Govt. would recoup 73.9% (£4.74bn) over 25 years 2012/13 Positive real rate of interest, repayment period 30 years BUT increase in fee cap and loans RAB of 39.6% on £10.35bn loan book for smaller cohort For every £1,000 only £604 recouped over 30 years 

Alternative options: Annual tuition fee capped at £6000 Graduate tax

Medium-Term Challenges Deregulation of student numbers 2015-16 Sale of student loan book A Ponzi system of finance and funding ? Research funding ? Impact of a general election and a post-election spending review (2015-16)? £9k £9k £?k Sir Alan Langlands, Higher Education Funding Council for England, 18 April 2013

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