1. Competition vs collaboration
Higher education
Competition vs collaboration
Pam Tatlow
Chief Executive
Million+

2. 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

3. 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

4. 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

5. 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

6. 1997 – 2010 Labour Government
Investment in early years, primary and secondary education
Target: 50% of years olds to access HE
Expansion of funded numbers

7. 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)

8. 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 ( ) & HE fees an
issue in Scottish independence referendum (Sept 2014)

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

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

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

12. UK Outcomes *Part-time UG & PG decline post-2008 *
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

13. International

14. 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

15. 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

16. 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’

17. 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

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

19. 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

20. Change Since 2009-10 QR Research Councils TOTAL Russell GroupQR
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

21. Share by HEI Type QR Research Councils TOTAL Russell GroupQR
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

23. Public vs private
expenditure on HE (2009)

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

26. 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

27. 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

28. 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

29. 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)

30. 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 

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

32. Medium-Term Challenges
Deregulation of student numbers
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 ( )?
£9k
£9k
£?k
Sir Alan Langlands, Higher Education Funding Council for England, 18 April 2013

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