For profit HE: another way to put taxpayers’ money in private pockets

Paul Temple

Interesting, isn’t it, how often bold, thrusting entrepreneurs end up asking for money from the taxpayer? Banks, obviously, but others too. The private (though non-profit) University of Buckingham was created in the 1970s to try to counterbalance what its founders saw as political interference in higher education, which in their view was an outcome of the public funding of universities. “Liberty”, you can read on the University’s website, “is constantly under threat from governments…who seek to over-tax and over-regulate”. 

A pamphlet by Nick Hillman (2014), now Director of HEPI, the Higher Education Policy Institute, but until recently special adviser to the present Minister for Universities and Science, David Willetts, makes some pertinent observations about Buckingham, and UK private higher education more generally. For one thing, Buckingham’s UK and EU students can now borrow up to £6,000 a year as taxpayer-subsidised loans to meet their tuition fees – so, to that extent, Buckingham is now benefitting from the tax-and-spend profligacy of the current government in relation to student support. Even more remarkably, Hillman quotes Buckingham’s Vice-Chancellor telling a House of Commons Committee in 2011 that “our lives would be so much easier at Buckingham if…[we had] access to QR money [the funds that, in England, HEFCE allocates to universities to support research infrastructure] without having to subject [ourselves] to all the regulatory framework of HEFCE.” Vice-Chancellor, we feel your pain!

The present Government’s 2011 higher education White Paper (PDF) takes a lot of space discussing how to encourage the development of private higher education. What it doesn’t do, I have argued, is to describe with any clarity the problem to which private higher education is the answer. Hillman’s pamphlet helps here: he reveals that what he calls “alternative providers” successfully carried out “lobbying…focused on ensuring their students have access to student support” – that is, so students at what are mainly for-profit private colleges could take out subsidised loans to pay their fees. The lobbying was, in other words, to achieve the transfer of public money into private pockets. (I’m not saying that this is sharp practice: it is simply what “for-profit” implies.) This has been hugely beneficial to the for-profit sector: as Hillman notes, the number of their students claiming public support has rocketed five-fold in two years; and it is fair to assume that profits have risen on a similar trajectory.

As I’ve remarked before, the comparison with the waste of public money associated with the US for-profit sector (never mind the human costs) is depressingly plain. This isn’t, mainly, whatever Hillman thinks, about healthy competition between the public and private sectors (they serve largely distinct markets); or about introducing more diversity (for-profit colleges, pretty well everywhere, teach a limited range of popular subjects in traditional ways*): it’s about an ideologically-driven programme that will waste public money – lots of it.

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*see Kwiek, M. (2009), ‘Entrepreneurialism and private higher education in Europe’. In M. Shattock (ed.), Entrepreneurialism in universities and the knowledge economy: diversification and organizational change in European higher education. Maidenhead: McGraw-Hill/Open University Press.

Robbins: a 50th anniversary worth celebrating

Paul Temple

This month marks the fiftieth anniversary of the Robbins report, or the 1963 Report of the Committee on Higher Education as it’s never called, and we’ll be marking it with a one-day conference at the Institute on 24 October. It’s an anniversary worth celebrating.

From today’s vantage point, we can see Robbins as an early indicator that higher education was moving from the periphery towards the centre of British national life –changing from  picturesque adjunct to essential component. UK university student numbers had grown from 20,000 at the start of the last century to 118,000 when Robbins reported – roughly the combined student populations of Manchester and Leeds today.

The 1963 report marked a wider modernisation, one of a number of developments signalling a break with the immediate post-war years. Philip Larkin, Hull University’s Librarian at the time, later summed it up: “So life was never better than / In nineteen sixty-three / (Though just too late for me) / Between the end of the Chatterley ban / And the Beatles’ first LP” – though perhaps he wasn’t thinking primarily of the Robbins report.

Although the decisions about founding the 1960s new universities had been made well before Robbins was published (the first, Sussex, opened for business in 1961), it is significant that they are so often associated with the report. Like the report itself, they marked new ways of thinking about higher education, both in curricular terms (Asa Briggs’s “new map of learning” at Sussex), in physical terms (leading architects designing bold new campuses), and in terms of the modestly enlarged entries to higher education that followed their establishment, shortly to be followed by the creation of the polytechnics. Suddenly, higher education looked and felt different.

Parallel modernising changes were taking place in the schools system, overseen by two outstanding ministers: Edward Boyle, the Conservative Minister of Education from 1962-64, and Anthony Crosland, the Labour Secretary of State from 1965-67. As Maurice Kogan notes in his book about the two men, The Politics of Education (1971), they directed the transition from “the assumptions of pre-war education psychology [to those of] the post-war radical sociologists about the extent to which ability could be reliably predicted”. Crosland’s Circular 10/65, which “requested” (not a word now much favoured by Secretaries of State) local education authorities to prepare plans to abolish selection in secondary education was a result. The Robbins-validated expansion of higher education was another response to this dawning realisation (to quote Kogan again) “that access to the more favoured forms of education was differentiated according to social class” – not to ability.

Robbins cleared the way intellectually for the expansion of higher education by driving a stake through the heart of the “more means worse” argument – though, like one of the undead in a cheap horror movie, it nevertheless emerges regularly from its grave. What Robbins’s research showed about what he called “the so-called pool of ability” was that entry to university largely depended not on innate ability, but on your father’s occupation: 45% of children whose father was in a “higher professional” occupation went into full-time higher education, compared with about 2% from families where the father was a manual worker. It was your dad’s job, not how bright you were, that determined whether or not you’d go to university.

The higher education system that we see in Britain today would amaze Robbins in terms of its scale and scope. But its foundations were laid by the work of his committee, and others pressing for social and educational change in the early 1960s. We should use this anniversary to honour their work.

This post is based on a previously published article in the Times Higher Education

How boom times for pure research bred the Bomb

Paul Temple

A recent biography of J Robert Oppenheimer (there have been six since 2004 alone), Inside the Centre: The Life of J Robert Oppenheimer (2012), by Ray Monk, Professor of Philosophy at Southampton University, makes you think about both twentieth-century scientific history and current national policies.

Oppenheimer’s story has much to interest students of higher education. Apart from his time in charge of building the first atomic bomb at the Los Alamos laboratory from 1943-45 – when he showed himself to be an outstanding leader of a disparate group of brilliant egoists – Oppenheimer spent his working life as a university teacher, researcher and administrator, latterly as the Director of Princeton’s Institute for Advanced Study, where his staff at one point included Einstein, Bohr and Dirac.

A point of particular interest is that Oppenheimer’s academic career spanned the period during which Europe, as a result of self-inflicted wounds, ceded world scientific leadership to the United States. When Oppenheimer graduated from Harvard in 1925 (in chemistry, not physics – a reminder that the disciplinary boundaries we now take for granted have only recently become so rigid), bright young American scientists wanting to work with the world’s best researchers crossed the Atlantic as a matter of course. In theoretical physics, Oppenheimer’s chosen research topic, the choice was between Germany, particularly Göttingen and Leipzig, and England, particularly Cambridge.

Oppenheimer began with Cambridge, where he was unhappy (though it was not, he wrote, “quite so bad as Oxford”), and then in 1926 went to work with Max Born, one of the leading figures in quantum mechanics, at Göttingen, receiving his doctorate there in 1927 – and no doubt improving the University’s doctoral completion statistics in the process. The international language of science was then significantly German, in which Oppenheimer, from a German-Jewish family, was fluent: presumably other ambitious American scientists learned German as a matter of course, in the way that German academics now learn English. (Oppenheimer was in any case a gifted linguist: he learned Sanskrit in the 1930s in order to read Hindu literature.)

Several factors came together to allow America to build an atomic bomb in a stunningly short period. It took about three-and-a-half years from approval of what became the Manhattan Project to the first use of an atomic bomb, at Hiroshima on 6 August 1945. But the crucial period, from when the first scientists arrived at Los Alamos to the “Trinity” test in the New Mexico desert on 16 July 1945, lasted 28 months: perhaps what you’d allow for the implementation of a modest IT project in a university today. But the Manhattan Project was able to build on the world’s best physics and engineering research, created in American universities in the 1930s – Berkeley and Chicago in particular – largely with public funding for the purest of pure research. Through the 1930s, for example, Berkeley seemed to have no particular difficulty in obtaining funding to build ever more powerful cyclotrons, with no practical aim in view: nobody seems to have asked them for an impact statement.

American universities, and later the Manhattan Project, also took full advantage of talent sucked in from Europe, particularly Jewish refugees from fascism in Germany, Hungary and Italy. Even Britain took in foreigners: Rudolf Peierls and Otto Frisch, both German-Jewish refugees, worked at Birmingham University in the 1940s and made a vital contribution to building the bomb by showing that the amount of uranium-235 needed to sustain a chain reaction was a matter of kilograms, not tons as had been thought. This insight made the bomb a practical proposition – though even America struggled at first to produce even a few grams of the stuff. Around the same time, in one of history’s happiest mathematical errors, Werner Heisenberg (of “uncertainty principle” fame), running the Nazi atomic bomb project, made the same calculations but got an answer in tons, and so abandoned the uranium-235 method. Lucky that nobody thought to check his sums.

A number of things allowed the Manhattan Project to succeed, but large-scale, long-term public funding for blue-skies research, together with a policy of grabbing talent from wherever it could be found, and a strong manufacturing economy, were all crucial. Might there, just possibly, be any lessons from this for policymakers today?

Oppenheimer’s loss of his security clearance in 1954, at the height of the McCarthy witch-hunts, was devastating for a man with a strong sense of national duty. There are several ironies here. One is that, while Oppenheimer’s politics were certainly left-wing, he was notably clear-eyed about the Soviet Union, concluding as early as 1947 that negotiations with Stalin over the control of nuclear weapons would be a waste of time. And, just as past outstanding service to the Soviet state was no guarantee of one’s future safety, so the fact that Oppenheimer had given America the bomb (“What more do you want? Mermaids?” a friend asked at his Security Board hearing) did not help him in countering the FBI’s obsession about his political unreliability. There is a depressing contrast between this cold war paranoia and the open, international scientific culture which Oppenheimer had known before the war. Princeton’s refusal to bow to pressure from Washington to sack him must have been a consolation of sorts. The traditions of institutional autonomy and academic freedom, which had served America so well in the Manhattan Project, came to Oppenheimer’s rescue at the lowest point in his career.

The picture on the dust-jacket of Monk’s book shows Oppenheimer writing equations on a blackboard, cigarette in hand. He died of throat cancer in 1967. He was 62.

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Open access publishing: go for green, not gold

Paul Temple

The digital revolution is changing the world in often unexpected ways, although sometimes widely-predicted changes can take longer to appear than first suggested. “The end of the book” has been predicted for decades now: while UK physical book sales were still running at £1.5bn in 2012, they seem now to be in a slow, long-term decline in the face of e-book sales. The value of UK recorded music sales is also showing steady decline for the same reason – digital competition.

The world of academic journal publishing looks as if it is now about to undergo the same sort of digital shock-treatment. Academics have long grumbled about the handful of profit-making publishers – often, very handsome profits – (Elsevier; Palgrave-Macmillan; SAGE; Springer; Taylor and Francis; Wiley-Blackwell) which dominate the journal market. The Economist recently said that these firms possess “that rare thing in the media industry: a licence to print money”. That’s because they can get their authors and editors to work for nothing, and then sell the finished products back to the universities that mostly employed the authors and editors in the first place.

When journals were entirely printed artefacts, found mainly on the shelves of university libraries, commercial publishers arguably provided expertise in their production, quality control and distribution – although journal publishing had begun as a university-run activity, which over the years had typically been handed over to commercial firms, with their economies of scale. But now the internet seems to be putting the boot on the other foot. The unlovely term “disintermediation” is key here: the internet can cut out the middle-person, making it practicable for (in this case) academic research to be made directly available to anyone who fancies reading it. The editorial and peer-review costs need to remain, but these hidden subsidies to the publishing industry can now be brought in-house by the universities. Copy-editing, typesetting, indexing and so on also still have to be paid for: but again, digital technologies have simplified most of these processes.

Naturally, the big journal publishers have not taken this existential threat to their businesses lying down. They are pushing the model of the “gold” open access, online journal, which will be free for all to read – but funded by the authors paying “article processing charges”, or APCs. It is thought that these will average out at around £1,500 per paper. So the publishers’ income will still come from (mainly) the universities, but in the form of APCs rather than journal subscriptions. Better still, APCs will probably be easier and cheaper for the publishers to collect – no more sales people trudging from university to university to sell subscriptions – and university staff will still be doing the unpaid peer review and editorial work. If you’re a publisher, what’s not to like?

Luckily for universities, fee-paying students and the taxpayer (because most of the journal publishers’ profits ultimately come from these sources) there is an alternative. The “green” open access model publishes papers in online journals after the usual peer review and editorial processes, without APCs. The green journals can be owned and managed in a variety of ways, but are essentially non-commercial. Naturally there are costs involved, but the total costs of the green publishing model will always be much lower than the gold alternative (the title is well-chosen) because the profits of multinational corporations don’t enter into the equation. Instead, green publishing will get research into the public domain quickly and cost-effectively. By embracing green publishing, universities will reclaim one of their historic missions: producing and disseminating knowledge as a public good.

Privates on Parade: for-profit HE in the firing line

Paul Temple

For-profit higher education has been in the news on both sides of the Atlantic in the past year or so.

In the US, the for-profit sector was eviscerated by the Harkin report (PDF). Senator Harkin, Chairman of the Senate Health, Education, Labor and Pensions Committee, told The New York Times in July that his report had produced “overwhelming documentation of exorbitant tuition [fees], aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation”.

Meanwhile, over here, the Government’s 2011 White Paper, Higher Education – Students at the Heart of the System (PDF), appeared set on encouraging the arrangements shown to produce both appalling value for the American taxpayer, and damage to the students caught up in profit-driven higher education. The White Paper aimed to “make it easier for [new providers of higher education] to attract private investment”. The unstated implication here must be that these new providers will be for-profit organisations, as non-profit institutions are unlikely to be attractive to private investors (as opposed to philanthropists). And for-profit organisations have indeed moved in – BPP, owned by the US-based Apollo group is the best known; what is now the University of Law (formerly the College of Law) has been bought by a private equity firm; and Pearson, “the world’s leading learning company”, is looking for opportunities.

There are two difficulties with for-profit higher education, one about economics and one about effective public administration.

First, the economics. The notion of profit is usually seen as having theoretical benefits by signalling the existence of opportunities for new investment, and for indicating where innovation may generate high returns, both potentially leading to increased wealth for the economy in question. So why should profitability not have a role in providing higher education? (The argument that education is “too important” to be left to the vagaries of the profit motive is not compelling: there seems to be little controversy in most countries about the supply of food being largely determined by judgements of profitability by food producers, distributors and retailers.)

But there are several reasons why profitability is a difficulty in education, and in particular in higher education. One is to do with externalities (or spillover effects): the benefits of education are felt well beyond the parties directly involved in the educational activity. This argument applies most strongly to basic education, as the returns to society of universal literacy and numeracy are huge, but it also applies to higher education, as the benefits of high skills are also widely felt. But if the supply of education depended on the profitability of individual enterprises, it is likely that provision would be less than optimal for society as a whole, as these externalities would not figure in calculations of profitability.

Supply could be increased through public subsidies to students and/or institutions, but, as Senator Harkin showed, this creates a set of perverse incentives that are hard to manage in an educational setting. Running a profit-making enterprise is problematic when your customers are both your raw material and your finished product: as with most other enterprises, you want to maximise the quantities of both.

There are, actually, a large number of private institutions providing higher education in the UK – certainly over 1,000 of them, nobody knows for sure. Most are very small, typically teaching international students, often for non-UK awards. The business model of many of these institutions is puzzling, as they seem to have no distinctive academic or professional expertise.

This brings us to the second difficulty. The new English student fee regime means that UK/EU students at private colleges are able to apply for student loans on courses designated by BIS. The number of students at private colleges receiving taxpayer support more than doubled in 2011/12 over the previous year, involving £100m in loans. So big money is already involved – and the kind of abuses which the Harkin report identified look set to develop here.

In a recent case, Guildhall College, in London (not to be confused with the long-established Guildhall School of Music and Drama), was found to be registering students on courses designated for student support, when in fact the students concerned wished to study on courses that were not so designated. The College benefitted by some £750,000 before designation was withdrawn. It is difficult to see how practices of this kind can be prevented in a systematic way, if there are hundreds of such colleges, each with relatively small numbers of students, in a system which is constantly in flux. The scene is set for bad public administration and worse higher education.

Small countries, big problems: higher education reform in the Western Balkans

Paul Temple

The Institute recently carried out an evaluation for the Open Society Foundation (OSF) of its scholarship programme, which has brought young people from the Western Balkan countries to study social science subjects in UK universities. Our study involved assessing aspects of university work in these countries – Albania, Bosnia-Herzegovina, Macedonia, Montenegro and Serbia – and making recommendations for future OSF programmes.

These are all small, or very small, countries, which accordingly have small higher education systems. Montenegro, for example, effectively has only one public university; Macedonia has two. By European standards, these countries are very poor, but their universities’ chronic lack of resources will probably be easier to deal with than their fragmented structures, organisational rigidity, intellectual isolation and endemic corruption. The small sizes of these higher education systems also create problems: the difficulty is not numbers of institutions or students as such (some of the universities, in Serbia for example, are actually rather too large), but rather the insularity to which small systems, without pre-existing international traditions, are prone.

As if these countries were not already small enough, ethnic tensions effectively create internal sub-divisions, in Macedonia and especially Bosnia-Herzegovina: here, a country with four and a half million people has, technically, 14 ministries of education. The internal division between the Bosniac/Croat-dominated Federation and the Serb-dominated Republika Srpska prevents any sensible national restructuring plans (and of course much else besides). And even within the Federation, ethnic tensions have led to the creation of two universities, one Croat and one (clearly unviable) Bosniac, in the small city of Mostar. Universities here are being used as symbols to identify a set of political aims and to help implement divisive programmes of identity politics.

Fragmentation is also a characteristic of internal university organisation in the region, stemming from the Yugoslav tradition of strong faculties, and chair systems within them. Despite current attempts in places to integrate faculties in order to create more effective unitary universities, this internal fragmentation persists, making institutional change hard to manage because of multiple and competing sources of authority. Formal institutional mission differentiation is hardly attempted. It is hard to avoid seeing this institutional fragmentation as mirroring the fragmentation found at national and regional levels.

Academic corruption remains a serious issue throughout the region, and obviously undermines any attempts to persuade Western universities to take seriously claims about academic standards there. The still-widespread use of frequent one-to-one oral examinations is one factor which facilitates academic corruption, but simply changing processes (as with the move to written examinations in Serbia, or new quality assurance procedures) is unlikely to eradicate a deep-rooted problem. Changed processes have to go hand-in-hand with a frank recognition of the problem (still mainly absent), followed by efforts at cultural change.

Other Institute colleagues involved in this study were Jane Allemano, Natasha Kersh and Holly Smith.

Why 2012 will forever be seen as a milestone year in higher education policy

Paul Temple

The Institute of Education’s MBA in higher education management  marked its tenth anniversary with a conference on the theme “Managing higher education in the post-2012 era”, with papers given by graduates of the programme.

The title reflected the view that the new student tuition fee regime that begins this year marks the biggest single shift in the financial basis of higher education that the UK – and indeed, we think, any other country – has ever known. In future 2012 will be seen as a milestone year in higher education policy, perhaps on a par with 1963, the year of the Robbins Report, which set the seal on the expansion plans of the 1960s and beyond.

What’s the connection between the MBA and the new tuition fees plan? It is that the idea underlying the MBA, as conceived by its founding directors, Michael Shattock and Gareth Williams, is that the policy environment in which universities operate would become increasingly uncertain, and that both policy analysis skills and the ability to manage change effectively would become key management priorities in higher education.

The years since 2002 have amply justified this view, challenging university managements to an even greater extent than envisaged by the programme’s designers. The government helpfully provided the first MBA intake with its 2003 White Paper - proposing for the first time the introduction of variable tuition fees – as a case study in managing change And the pace has hardly slackened since, right up to the latest 2011 White Paper.

As well as tuition fees, and a continuous debate around their principles and practicalities, research funding has also become more unpredictable as a result of the Research Assessment Exercises of 2001 and 2008 – unpredictable not so much in the RAE findings of where academic excellence was to be found, but in the way that these findings were translated by the Funding Council into funding streams for universities: was the aim to support good work wherever it was found, or to build up a limited number of centres of excellence? Policy veered between the two, with destabilising results.

Regional policy has also affected universities, with first the growth of the Regional Development Authorities and their often substantial support for higher education in their regions, to their subsequent abolition. The growing divergence of higher education policies in Scotland and Wales offers another change in what until recently was a common UK higher education landscape.

We hope that the MBA will continue to offer its participants both a historical perspective on why we are where we are, but more importantly, how we should try to manage our universities to try to get to somewhere else – and perhaps, better.