Thursday 5th December saw the release of the autumn statement from the Chancellor of the Exchequer. With a bit of a surprise in there about student number controls.
After quoting from the 1960 Robbins report, the statement describes how there has been an increased demand of higher skilled workers, and how there is still a salary premium for graduates. Higher education is therefore considered as a good investment for those who wish to pursue it (it might be useful to look at the recent BIS document where the benefits of HE to both the individual and society, are described as being more than just economic).
A key change then is:
“However, this strong demand for higher education significantly exceeds the supply of
places. This is in part because the numbers of students providers can accept have been tightly
controlled since 2009. This cap acts as a bar to aspiration, as people with the grades to enter
higher education are excluded from doing so. And it also prevents the UK from developing the
highly-skilled workforce demanded in modern economies.
1.202 Autumn Statement 2013 announces that the government will remove the
cap on student numbers at publicly-funded higher education institutions in England
by 2015-16. This will enable institutions to expand their provision to meet demand from an
estimated 60,000 young people a year who have the grades to enter higher education but
cannot currently secure a place. For 2014-15, the government will significantly increase
the cap for HEFCE-funded institutions by 30,000, allowing those institutions that want
to begin expanding straight away to do so, and encouraging competition. To ensure that
institutions provide places in the subjects most needed in the economy, the government will
provide extra funding for STEM students of £50 million per academic year from 2015-16.”
An early response by University Alliance said:
“The announcement of additional student places is excellent news for the students, universities and the UK. This shows that the Government are future focussed and fully recognise the role that graduates and universities play in driving the UK economy towards a more prosperous future.
“These extra places will ensure the UK can meet the need for additional highly skilled graduates helping us meet the demands of the future economy.
“Despite the difficult climate for all young people entering the job market it is still the case that a degree is by far the best route for most individuals. Universities will work hard to help with the transition into employment for all students.”
I think we can expect other similar responses from the other mission groups.
The expansion of student numbers will be funded by the sale of part of the student loan book. The statement goes on to say:
” Freeing higher education institutions from number controls will help improve quality
in the sector by increasing competition and allowing institutions who face strong demand
to expand. To maintain quality in the sector and ensure value for money, the government
will retain number controls at alternative providers in 2014-15 on the basis of their
2012-13 levels. From 2015-16, it will allow student numbers at alternative providers
to be freed in a similar manner as for HEFCE-funded provision. The higher education
sector has an internationally excellent reputation for quality. The government will continue to
closely monitor quality of provision across the sector and reserves the right to reimpose number
controls on institutions that expand their student numbers at the expense of quality”
I do think that the first sentence needs further examination. Firstly, increasing competition will not necessarily raise quality (especially when this is term is not defined). Secondly, many institutions may chose not to increase numbers of undergraduate students, despite rising demand, as they may not be able, or indeed want to meet that demand.
The converse of course, is not reported in the statement. In encouraging competition, the situation may become more difficult for some universities, who may have relied on recruiting students who were unable to get into more selective institutions. As the SNC is removed, so is some of the protection that the current regulated market provides. It can be well argued that this is a form of protectionism that a free market should of course not support.
The ability of alternative providers to be freed from number controls also from 2015-16 must present a risk, in terms of the number of loans that the government might need to provide for students at these providers, recognising the impact on BIS finances caused by the rapid expansion in HNC/HND numbers at these institutions.
What will be interesting now, is how universities will choose to plan or change their student recruitment strategies, and to what extent this statement might impact on strategic plans that were not anticipating a removal of number controls.