Does England’s Newest Higher Education White Paper Actually Change Anything?

Alex Usher: Hi there. I'm Alex Usher and this is The World of Higher Education Podcast.
Last year, the Labour Party in the United Kingdom faced a dilemma. They needed to get elected, and to do that, they needed people to vote for them. Nothing wrong with that, except in higher education the UK faces a dilemma. Everyone knows the system's in shambles. Everyone knows it will require painful choices to fix. But nobody wants to pay for it. It's hard to cut that kind of Gordian knot without annoying people, and that interfered with the goal of getting elected.
So, the Labour Party did what any savvy politician would do. It punted — announced, no policy, made sympathetic noises to the sector, and let's face it, that was a low bar after the Torries, and then kept their head down to well after the election.
The election is almost 18 months ago now, and we now have some sense of what labour policy towards the sector is going to be. Last month, it finally published a white paper on post 16 education, which received at best a muted reaction from the sector.
With me today to discuss the white paper and its Likely Effects is Debbie McVitty. She's the editor at Wonkhe, a higher education website, which is in many ways a spiritual sister to us at Higher Education Strategy Associates, and she's written reams on the current UK situation and how the white paper will or won't affect it.
I won't give you any spoilers on this one today. Let's just listen to Debbie.
Alex Usher: So, Debbie, thanks for joining us. Before we get into the white paper itself, can you sketch out a little bit where English Higher Education is right now? Like what's working, what's not? What are the big issues that have been shaping the sector over the last few years?
Debbie McVitty: I think, uh, well, thank you for having me first of all. Uh, and I think for me, the thing I really love about working in higher education in the UK and, and I guess England for this purposes of this conversation, is it really is like a, it's, it's like a tale of two sectors. You can kind of look at it through both ends of the telescope and come up with completely different answers to that question.
So, on the one hand, what we've got is what is very, this incredibly, great reputation, you know, world-leading sector. Students are, you know, that every year more students register for, higher education degrees. We're making really good progress on inclusion and bringing in more students from low income backgrounds. Those students are generally pretty satisfied based on the available data we have. They're, you know, they're having a good time, they're getting jobs afterwards, you know, great, great jobs. Um, and, you know, and this sector is working really hard with, its communities and all, all of that really good stuff, and that's all going on and all of that is true.
However, um, I think it's also really safe to say that this is a sector that feels like it's tipping into crisis. And there's a few reasons for that. One is, is about the funding so that the, the amount that, uh, universities are allowed to charge for undergraduate degrees, um, has, has remained fixed for, for many years now. So it's kind of that, that sort of erosion of the purchasing power of, of that number has been a real thing. Obviously the sector's come through COVID as as everyone has, and that's, that's been a big challenge. Um, but also, and, and of course students are, you know, suffering from cost of living challenges. So that's really, I think, impacting on that student experience. And beneath those kind of high level positive numbers, you can see some real bifurcation. Some students are still having a good time because they can draw on sources of family income. Other students, I think, are really struggling having to work more. You know, really struggling in their engagement with learning and, and you can kind of see that happening. But I think, you know, wrap all of that up into a political environment in which universities I think have felt very much like bit of a political football, a little bit at sea I think in some of the current politics that we're seeing, and this is, you know, to some extent the kind of, you know, a west, a western society phenomenon, not just a a UK England phenomenon.
But, um, really kind of, I think feeling like they have to justify their existence in a way that perhaps they just had, just didn't have to have a decade ago. And that's felt that that's really, I think to some extent, knocked their confidence.
Alex Usher: So these issues though, they've all been around a long time. Like this is not what I think what you're telling me, there's not much that's new here. Um, it's been a long drift to the point we are. Why a white paper now? Like, you know, is, is this about solving an actual problem or a, a, a perceived crisis, or is it just Whitehall needs to show that it's doing something about higher education?
Debbie McVitty: Well this is, uh, this white paper was brought by, uh, the labour government, the labour government that was elected last year. And, you know, this is a government that came in off the back of, of a great deal of political turmoil in the country. So, I mean, I don't know if any of your listeners follow the, you know, the, the ins and outs of Westminster politics. We had a series of very odd, uh, prime ministers, um, and sort of national crises.
So labour comes in last year. They've, they've inherited a bit of a kind, you know, seriously kind of challenging economic environment. Um, but also I think quite, uh, with, with quite a strong sense of, you know, the, the politics has to be handed back to the grownups.
And one of the things that Labour did in, in preparing for power was, was look, particularly, so obviously the kind of big agenda is around getting the economy moving again, getting economic growth, um, and labour knew when it came into power, that not just university education, but all sort of, all, all post compulsory education is really fundamental to that. Do we have the right skills in the right places and all the rest of it. And that's that, that's the real challenge that this white paper is trying to address. It's a, the real tent pool policy for, for this labour administration. Um, it's not just about higher education, it's about any kind of education that you have post the age of 16.
Um, so in, you know, here that that's A-levels, but there's also vocational equivalence. There is, there's obviously university education, but there's also adult education, apprenticeships, there's lots of different things you might do. Um, and it's trying to kind of bring all of that together into something that feels a bit more coherent, that's a bit more able to deliver on national agendas.
So there is, I think there was a, there's a strong rationale for having a white paper and of course some of those longstanding HE problems that, that was picking up on sort of got swept up in that because that's the sort of opportunity that there is in, in, in the political, uh, calendar to, to tackle some of that.
Alex Usher: So, is it coherent? I mean, so the paper came out, I, I guess it was what, 10 days ago? What, uh, what does the white paper actually propose? Which of the sector's challenges does it tackle? And which does it, politely sidestep.
Debbie McVitty: Well, I mean, what, I think there, I mean obviously there was an awful lot of debate leading up to this white paper about what was going to be in it and, and how it was, how it was going to land with the sector. And I think, you know, just for the purposes of time, I won't even try and talk about all the bits of it that are not higher education, right? 'Cause I think, I think, A, it's not gonna be that interesting to your listeners, and B, it's not, it's not something I kind of know enough about can say, say, talk about with any degree of, of credibility really.
But I think, you know, the, it was very obvious from the outset that the real challenge for government in putting together what it was referring to as a kind of package of higher education reform, was that it wanted some things from higher education. Um, and traditionally the way you get things from universities which are autonomous, is you either give them some money to do it or you change the regulatory, you know, or you sort of in insist that they do it, otherwise they get punished — you change the accountability.
Um, the, there's no money and there's no, there's no public money in the government's coffers basically, or certainly not sort of sufficient to kinda make, make big changes. Um, and the regulation, there's only so much you can do with regulation to actually make a difference. And, and, and there's been some kind of issues with the regulator that we have, the Office for Students is still, it's still quite new. It was only created in, in 2017 in, in, in law. And then it's only really kind of come into being, um, sort of subsequently to that. And it's been quite challenging for the sector to kind of work its way, work its way around the regulation. So you don't wanna do too much in that regulatory space.
And so what I think we've ended up with in the white paper is, you could sort of tell that there's a, a core fundamental thing that the labour government is trying to achieve, some of which is drawing on ideas that were very much already around and had been proposed by, by a major review of higher education that was held sort of three, three prime ministers ago, but it hasn't quite been realized. Some of those, those points were bringing those, bringing those policy instruments together. Um, so it's changed that sort of changes to funding and, and thinking about sort of saying, how can we kind of segment education into, into sort of more, more sort of stackable chunks so that you can kind of come and do something and then go away and come back and do a bit more.
Um, all of that's already around, but then it's also saying, we know universities are struggling financially and we think one of the answers to that is about, um, you know, more collabouration, more sharing of services, more, more kind of thinking, thinking kind of across institutions as well as within them.
Um, but we don't really have any mechanism to make that happen. So we're just going to say that that's what we want to see. And then there's also a sort of expectation, which I think is what's quite distinctively labour, which is about saying what we wanna see is much more coordination at the regional level.
So we think if you're a university, you should be contributing to regional economic growth. We also think that the best way you can do that is by working with the other providers in your region to think about what does that skills landscape look like? Where are the gaps? What's that innovation landscape look like? Where are the gaps? How can you work together to fill them?
Again, we don't really have a lot of mechanisms to make that happen. So, but I think, you know, I think that constitutes a coherent vision. It's just very hard to, it's very hard to argue that it's one that is, you know, I think there's a bit of a, a delivery gap in, in, in terms of how it, how it thinks that's actually going to come about.
And then as well as that, that there's just this incredibly long tail of bits and bobs and, and, and stuff and things. And some of that is just about fixing some stuff. So at the minute, for example, we've got a bit of an issue around, uh, provision that's provided under franchising arrangements where if you've got one provider that's delivering higher education, another provider validates the quality of that and the standard of that.
There's an awful lot of, you get the impression that at some point somebody wrote round and said, what are we doing? Let's lob it in. And that's you get that doing something effect, you know? And actually, and I would argue a lot of that, strip away a lot of that, and you've still got a coherent agenda. And actually it would, the, the white paper would've been better for it had you just left out some of those bits.
Alex Usher: We're gonna take a short break. We'll be right back.
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Alex Usher: And we're back. Um, okay, I, we've talked generalities here, I wanna talk about some specifics. Uh, and the specific I really wanna talk about, uh, to start with is tuition fees. Now, England has a set of tuition fees, which are almost incomprehensible to the rest of the world. And, and so you get sentences, I've seen sentences in, in papers that say things like, we need more public money in higher education, therefore we should increase tuition fees. And I understand how that makes sense. Like that, that sentence makes no sense anywhere else in the world, but it does in England. Um, so explain how and, and what and what do the current proposals about tuition fees mean?
Debbie McVitty: Right. Okay. So the way it works in England, you apply to university or indeed, you know, into any higher education, uh, qualification, and you become, uh, if you're accepted to that course, then your tuition fees are paid for you upfront. There's nothing to pay upfront to a maximum number, which currently sits at something like 9,757, something like that, because it was originally 9,000, and it's being sort of going up at different points by inflation. Um, and then, you only start paying that back after you graduate, once you make a certain amount of money, once you hit a threshold in your salary and only for a fixed period of time. So you, you pay a proportion of your salary above that threshold each month. Um, it is not a million miles from simply just being taxed a bit more once you hit a certain salary threshold. And for that reason, higher education is extremely accessible in terms of, you know, cover covering the, you know, covering the fees. Um, and the, the consequence of that is, is that if you, and, and of course it's all kind of underpinned by public finances. So if you want to increase funding to universities, we call it the unit of resources, the, you know, the, the, the fee amount that comes in per student. If you want to increase funding to universities, the easiest way to do that is to increase the fee level. And, you know, universities free for student, they get, they take a little bit more money in and everyone is happy.
The thing is, except nobody is happy because as far as the students are concerned, they're paying through the nose to go to university, as far universities are concerned, they're not getting enough money to cover the actual cost of, of delivering the, the high quality teaching that the students expect. Um, and as far as the kind of the, the public purse is concerned, this kind of enormous amount of money being, being pumped into higher education, 'cause a lot of that money is not recouped in, in, in what graduates pay back in the long term. So you've got this kind of, uh, brilliantly kind of devised system that that actually does work in practice, but also doesn't work for anybody.
Um. So that, yeah. So that, that does create issues. But I, you know, I think it's, I think our higher education funding system is like democracy in that it obviously doesn't make everyone happy, but it's very hard to think of a better option.
Alex Usher: And, and the, the current proposal to increase tuition fees by inflation, is that gonna make things worse or better?
Debbie McVitty: Um, I think it will make, it will definitely make things better for universities, but not, not by as much as the government would like to say it will. So we had, um, an, you know, universities have been really kind of subject to the problem, but the fees, fees have, have also been quite a politically contested issue, um, in this country. So every time the government puts up fees, there's been big student demonstrations. I was on one myself back in the day. Um, and the sense that, you know how higher education is sort of becoming more expensive and out of reach and all the rest of it. Um, so it is a, it is, it is a tricky political choice for government to put up fees.
But if the fees are not put up, then essentially the value of the fee erodes and erodes and erodes, particularly when an inflation is running high. So that that just creates all kinds of issues for universities.
Alex Usher: And where's the levy going? So, so they're, they're levying it on international students. And so that means the institutions in London and the South that are popular with international students, they're gonna pay more. Who gets the money?
Debbie McVitty: Well that's gonna go into a pot, some of which an un undefined amount is going to go to provide some, uh, grant funding for students who don't have a lot of family money who will be studying subjects that the government thinks are are high priority. So there's a sort of small number of students who are going to be getting a bit more money in their pocket.
That is a good thing because one of the real challenges, actually fees are not the thing that is stopping access to higher education in this country is it is the cost of study. It's the cost of living while studying. Um, and the fact that it's very hard, you, you can draw down a, a loan for your maintenance, but you, you, if you want to be able to, you know, live and function, you, you need more money. And lots of students work, you know, undertake paid work or they get money from their parents to do that. So, you know, grants, grants are all good, but, uh, the international levy is very unpopular because as far as universities are concerned, recruiting international students is one of the ways that they contribute to the economy and, and taxing them on it is, uh, is not good policy in their view.
Alex Usher: Right now one area which I think a lot of people were surprised about was the fact there was nothing in here about university finances or the possibility of a bailout. So, UK universities have been going through a tough couple of years. Um, you know, they perhaps overbuilt, overspent, um, and now you've got a lot of institutions running deficits.
You've got one university essentially you two universities essentially merging, uh, in Southeast England. Um, why the silence on the bailouts?
Debbie McVitty: Well,
Alex Usher: or the possibility of a bailout?
Debbie McVitty: Yeah. Well, and yeah, and, and this, this is a really interesting area because I think it, the thing that gets reported is uh, some of the, uh, the regulator's assessment of the financial health of the sector and in, in order to kind of make sense of that, you do have to sort of understand a bit, a bit about how big a deal it it is if universities are running a deficit.
So I think the, the thing that, um, the thing that is often very unseen in all in thinking about university finances, but is really, really important, okay, because universities in the UK are autonomous institutions. They're independent, so they're not, so they, they, they draw on a lot of public money to do what they do, but they're not, um, the government has, in one sense, no responsibility to make sure that they, that they can survive.
And actually, the last government was very clear that sometimes a university should shut down because it's not, if it's not, if it's not recruiting students, then that must mean it's not delivering, therefore, it, it doesn't deserve, doesn't deserve to, to stick around, I think. But it's, we, we've also known for a long time that if a university did literally fail and, and become insolvent, not only would you have all the kind of knock on impacts on, on local communities that those universities situated in, but what do you do with the students? What do you do with the staff? Like thinking through all the implications of that actually is a much bigger political headache than just simply figuring out how to kind of keep that university going for a bit.
So, what we know about university finances is that most universities in England are actually in really good fettle with their private lenders. 'Cause actually, that's the thing that matters. If you, if you've got an ongoing good relationship with your bank, then even if you, you can run a deficit for a few years, as long as you've got a kind of credible business plan to get yourself back into financial sustainability. Um, what's happened in the last year is, is that the government has, has asked the regulator to work more closely with universities that might be in kind of difficult positions, to think about how to get to that point where they can remain in good fettle with their lenders, you know, develop that credible business plan, do the things that they need to do to, to get to that point.
And I think the government has decided that it wants to continue down that path of trying to sort things out behind the scenes. Perhaps in some cases encouraging universities to look at merging with each other, although that is not necessarily entirely the situation that that happened with the, those two universities in the Southeast. And really just keep its fingers crossed that it is never called on to publicly have to bail out an institution because the moral hazard of doing that would be really, really challenging I think for the government.
Alex Usher: Yeah, so you make the point though that that institutions are legally autonomous and the government doesn't have responsibility for them. But at the same time, this document uh, gives a lot of new powers to the office for students over quality and recruitment or finance. There seems to be a tension there to me, right? Like, so is this really about ensuring accountability or is it about gaining tighter political control over universities?
Debbie McVitty: I think, I think that that tension always exists between accountability and autonomy, and it is often a productive tension. Um, it is also one I think that is used by both universities and governments to escape, having to, uh, you know, the, the accountabilities that, you know, they might have in practice, if not in, if not in principle.
Um, so the best, the, the best sort of version of that sees universities, uh, stepping up to accountabilities before they're enforced. Um, and government taking responsibility before it is put under political pressure to do so. And I'm not sure, I think not least because we just, we are in this kind of financial circumstances that we are, what, what, we're not really seeing that at quite so much at the minute.
Alex Usher: So, I mean, is this, how much is this about exerting control, right? I mean, the labour, labour wants to have uh, guess, uh, as, as you said, it wants them to work more closely together, doesn't necessarily have the tools for it. Is, is what's going on in the white paper about trying to acquire those? Is this about lessening autonomy?.
Debbie McVitty: Do you know, I don't, I don't think it is actually. I think that the challenge is, is that one of the things that's happened over the past decade is, is that the higher education sector has just become increasingly diverse, um, which has got lots more providers of higher education coming under the auspices of the regulator. Um, you know, which is on balance good, 'cause that means that they're, they're then kind of, you know, more likely to be held accountable. But one of the things that is emerged then is, is that some of the behaviors and expectations of the, of the parts of the sector that have hither two kind of sat very firmly within the public realm, if not necessarily the public sector just do not apply to those providers that are independent. They're often funded by investors. You know that their accountabilities are often to their stakeholders as, you know, their shareholders, as you know, as, as much as they are to, to the regulator. And I think that just changes the calculus about how much regulation you need. Cause it just does, you, you know, you've got incentives in the system, um, that are, that are different and therefore, you know, lots of, lots of public realm universities are registered as charities, for example. Um, lots of private institutions are registered as being for profit and that, so yeah, you, you essentially just need tighter regulation. Some of the public realm universities then, then get swept up in that. I don't, I think, you know, all governments want control to some degree, but I don't think that this white paper is about delivering tighter government control.
Alex Usher: Okay, so let's say, what's the best case scenario here? So if all these reforms take hold, is English higher education better by 2030 or by 2035? Like is, is this meeting the is this set of proposals meeting the moment? Is it gonna make the system measurably better?
Debbie McVitty: Do you know, to some extent, my livelihood depends on the answer not being what I'm about to give. But you know, if, you know, if you put me, if you, if you could of lock me in a room and say, I am not allowed out until, uh, until I've given my verdict on the white paper about the extent which it's gonna change the sector, honestly, I don't think, I don't think it is.
And, and the reason for that is because most of the things that I, you know, I think we're going to end up in pretty much exactly the same place that we are now. Because if I think about these, these agendas around collabouration and coordination, I think we're maybe gonna see a couple of mergers, a couple more mergers, we might see some interesting kind of federations and that sort of thing.
I think, you know, that, that, that's really, that stuff is really interesting. But then what you've then got is some institutions delivering the same stuff that they did before. Perhaps just in a sort of slightly more secure way. I think we'll probably see some, um, interesting, the emergence of kind of some, some groups, uh, at regional level. We've had one of those emerge in the last year if, uh, for the northeast, all really positive. But fundamentally, what you've just got is a very diverse set of institutions continuing to de deliver, you know, a, a diverse bunch of things and probably still facing some of the same challenges in terms of are, you know, are you delivering the job ready graduates, and are you sufficiently attuned to your communities? And I think, because I think to some extent those questions are just always gonna be the right questions to ask because that's about, I guess, accountability in the public mind, not, not sort of through that regulatory lens. And so, you know, universities should always be, be, being asked those questions.
Um, and I don't see anything in the white paper as it currently stands unless the government really doubles down on thinking through how it puts the incentives in place to move the dial on some of those bigger things that univers universities are not gonna spontaneously start doing this stuff at at scale because I don't think they've really got the wherewithal to do that.
Alex Usher: Debbie, thanks so much for joining us today.
Debbie McVitty: Thank you so much.
Alex Usher: It just remains me to thank our excellent producers, Tiffany MacLennan, Samantha Pufek, and of course you our readers and listeners for joining us. Uh, if you have any questions or comments about this week's episode, please don't hesitate to get in touch with us at podcast@higheredstrategy.com.
Join us next week when our guest will be Dan Levy. He is the distinguished professor of education at the State University of New York at Albany. We'll be talking about his book, A World of Private Higher Education. Bye for now.