This blog by our CEO Gordon McKenzie first appeared on Research Professional News on 12 January.

What might higher education expect in 2020?

There are some known knowns. The Office for Students says it will publish the results of the Teaching Excellence Framework’s subject-level pilots in January—and alongside that we’ll almost certainly see the long-awaited publication of the independent review of the TEF. 

We know the government wants a subject-level TEF, but the experience of many who took part in the pilots was that the bureaucracy outweighed the benefits. Can Shirley Pearce square that circle?

February brings a government reshuffle. We are into known unknowns now, and aside from potential personality changes (two university ministers, one of them twice, was so 2019) the biggest point of interest is whether university teaching and research and innovation remain in separate departments as we go into March. 

The March budget will kick off a spending review that will conclude in the autumn. This was never going to be an easy review for higher education teaching. It will be competing internally in the Department for Education with schools and further education, just as the department will be competing with promises on hospitals and doctors and police officers and houses and R&D and Northern Powerhouses and Midlands Engines and transport and the theft of cats (OK, not the most expensive manifesto commitment but hard to resist).

They agree with Augar 

The spending review will also, finally, provide a response to the Augar panel’s review of post-18 education and funding.

In this context, it’s worth going back to Augar’s headline message to universities: this is not about you. It is about redressing underinvestment in further education and trying to put in place the funding, student support, qualifications, standards and overall incentives to grow subdegree technical education markedly over the next 5 to 10 years.

The government basically agrees with Augar: the economy needs people qualified at these levels; some young people choose to enter higher education because there’s no obvious alternative and because the state will fund them, and some of those young people make the wrong choice in doing so.

It thinks that more people who stop their education and training at level 2 or 3 would go further if there were a good-quality, understandable alternative to university. Build it and they’ll come.

So in terms of the ‘Is there anything in this for us?’ question, the answer is yes, in so much as universities can help fix that subdegree problem. And clearly they can. Universities have always provided high-quality technical and professional education—many do so exclusively. No long-term reform is going to succeed without universities as part of the solution.

Cost and value

We can also expect a focus on how the higher education we’ve got could cost a bit less or provide better value. Every spending review grapples with the basic fact that the cost of higher education is a function of three things: the number of students, the unit of resource for teaching and the amount of—and terms and conditions attached to—student finance. Changing any one or more of these makes the system more or less expensive to government.

Faced with rising numbers of 18-year-olds from this year along with a trend of rising application rates to university, there is a strong financial reason for the government—on top of its policy rationale—to want to see more of that growing demand met by shorter, cheaper level 4 and 5 qualifications and by higher and degree apprenticeships funded through the levy. 

But what if young people keep choosing three-year, full-time higher education when the government thinks they shouldn’t? Then government will shape the market. 

Return of student number controls 

Like Nick Hillman, director of the Higher Education Policy Institute, I think student number controls are on their way back, but maybe not across all of higher education in this spending review period. The rise in the number of 18-year-olds won’t be that great in the early years of the 2020s, reforms to technical education have a history of overpromising and underdelivering, and enough trusted alternatives won’t necessarily be in place. 

In the short term, though, expect to see number controls as part of the Office for Students’ ongoing conditions of registration, especially as part of fulfilling the promise to tackle “low-quality” courses. 

Fees and loans

I doubt we’ll see a fee cut. There’s nothing wrong with it as policy; lower fee and more grant was pre-austerity normal and the Institute for Fiscal Studies has pointed out the advantages for the government in terms of shaping the outcomes of higher education by having a higher proportion of grant in the mix.  

But the political problem it was supposed to fix no longer exists; and despite the Office for National Statistics’ changes to the accounting rules, it is still better for the Treasury to issue loans than grants. Freezing the fee cap, however, is a given. 

Student loan interest rates got a manifesto namecheck and something like Augar’s proposal to remove real rates of interest during study looks likely. I’d also expect the repayment threshold to be reduced or frozen at current levels, citing the panel’s recommendation to set it at the level of median non-graduate earnings. 

Extending the repayment period to 40 years, without any major compensating changes to other terms and conditions, looks politically difficult, even if highly attractive to the Treasury. It would hit the late careers of the middle-earning nurses and teachers and other public sector workers whom the government wants to say it’s investing in—and even if it wouldn’t hit them until Boris Johnson’s premiership is a distant memory, it’s still a tough sell now. 

More with less 

For the most part, higher education teaching is at the margins of the problems the government is trying to fix with the sort of answers provided by a spending review. So 2020 feels like more of the same—strictures on grade inflation, unconditional offers, free speech—with less money. And in that environment, the best place for universities to be is fixing the genuine problems themselves and challenging the lazy or unfounded criticisms. 

Research and innovation are front and centre. And that raises big questions about how much and how quickly the government can afford to increase public investment in R&D; how it will sharply accelerate private investment; whether the funding formulas, structures and processes of UK Research and Innovation that tend to reinforce the Matthew principle can change sufficiently to shift the balance of funding both away from the Golden Triangle and in favour of closer-to-market research (hard, but maybe a bit easier at the margins when budgets are rising overall and through some aspects of Research England and Innovate UK funding); and just how quickly the promised “high-risk, high-payoff” research agency can be productively disruptive.  

And on top of all that, will the trade talks with the European Union progress sufficiently that we are “in at the start” of Horizon Europe (or in at all, as some vice-chancellors are beginning to question)?

There is a lot of talk that puts university R&D at the heart of the post-Brexit economy—but exactly how is still uncertain. 

Whether higher education and research remain in two departments or not after February, it feels like 2020 and beyond offer rather different outlooks for the different sides of university business—Hard Times and Great Expectations.

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