Value for money in higher education: a very English debate*

The term ‘value for money’ is now deeply entrenched in public discourse about higher education in England. It is written into the Higher Education and Research Act. It is the subject of an ongoing enquiry by te House of Commons Education Committee, and it has launched a few dozen identikit newspaper columns. It is at the centre of what the Office for Students describes as a ‘major piece of research’ that it has recently commissioned, intending to probe students’ perceptions of value for money to ‘inform’ how the OfS ‘takes forward its legal responsibilities to promote’ it. And no doubt it will in turn inform the thinking of Sam Gyimah, the new minister for Higher Education and Science, as he implements the review of student finance and university funding announced last week.

But one missing element in this debate is an agreed definition of value for money. When we talk about “value” in the context of university education, are we really thinking only about the material return of an undergraduate degree to an individual – as opposed to the wider impact of a vibrant university system? Whose “money” are we even talking about? And are we happy with individual perceptions, or are we looking for objective evidence?

Given this lack of clarity, it’s worth pausing to consider where we are and how we got here. It’s also timely to reflect on the risks carried by these three little words. Nobody, least of all academics, wants universities that are not providing value. But if “value for money” continues to mean radically different things to different people, this peculiarly English debate is unlikely to lead to a better place.

 

How we got here

In a sector that is profoundly globalized, the value for money debate is surprisingly local. While other countries debate the funding of higher education in various ways, it is difficult to find anything comparable to our value for money terminology. And it is misleading even to call it a British issue; in truth it is confined almost exclusively to England. It can be traced back to the 2012 fee-increases, which have affected students in the four UK nations quite differently.

The Telegraph made an early attempt to assess value for money in the wake of the £9000 fees, producing a table that rolled differences in living expenses into the overall costs of higher education. Given the relentless increases in the costs of university accommodation, this appeared to make sense; but it didn’t last. The Complete University Guide trialled a ‘value for money’ index, created by isolating the facilities and academic services spending of universities. This produced in 2015 a somewhat eccentric top five of: Buckinghamshire New University, Royal Agricultural University, University of Northampton, Durham University and the University of Hertfordshire. It duly sunk without trace.

The Higher Education Policy Institute’s Student Academic Experience Survey, in operation since 2006, has achieved far greater impact. Just 14,000 undergraduate students, from all years of study, completed this survey in 2017 (less than 5% of the number who completed the National Student Survey). It has never enjoyed a fraction of the profile of the NSS within universities, in part because it has no impact on league tables, yet it has managed to achieve remarkable levels of attention within the media and with politicians.

In its early years the survey attracted attention mainly for its valuable data on students’ work-patterns. Indeed very recent analysis has demonstrated its ongoing value in this respect, arguing on its basis for the importance of independent study, and pointing to the risks of two-year degrees. But it has blasted into the mainstream through its ‘value’ question. Specifically, in the 2017 version of the survey, Question 16 asked: ‘Thinking of all the things you’ve been asked about in this questionnaire so far, which statement best describes your view of the value for money of your present course?’ Hence the survey’s definition of ‘value for money’ is not so much explicit as implicit in those preceding questions. These cover matters such as contact time, assignments and feedback, the quality and qualifications of teaching staff and overall satisfaction.

Interestingly, in 2017 Question 15, immediately preceding the ‘value for money’ question, asked: ‘Universities are now allowed to raise their fees in line with inflation to £9,250 if they meet certain teaching standards.  Do you think this new fee should apply to [your university]?’ Given this trajectory of questioning – the sort of thing that may raise eyebrows in a court of law – it is perhaps not wholly surprising that the responses should have suggested a declining sense of value for money. The headline finding, repeatedly rehearsed in the months since the results were announced, was that only 35% rated their degree as ‘good’ or ‘very good’ value for money. When students face the question this coming spring, the constant media attention to the issue over the past twelve months can surely only be weighting the scales still further.

The other key factor that has shaped the debate on value for money has been the increased availability of graduate employment data. The Destination of Leavers from Higher Education survey has steadily risen in status over the past ten years or so, and feeds into most league tables. The release of graduate salary figures has also seized public attention. The concept of ‘low value’ degrees, now prevalent in popular commentary, tends to gesture loosely in the direction of such data. In actual fact, the data have tended to show that, while there are a handful of outliers – disciplines and institutions – at each end of the spectrum, the vast majority of graduates find that there are job opportunities and graduate premiums there to be seized. But rules of evidence are not strictly observed in this discourse.

At a time of economic and wage constraint, cutting hard into the expectations of millenials, it is perhaps understandable that value should be rendered so consistently in financial terms. The cost of higher education weighs very hard on young shoulders. And in the context of the political and cultural instability of 2017, with one major party committing itself to slashing fees, it is equally predictable that students and their families should pause in their thinking on concerns value for money. Ye it remains striking – and disturbingly so – quite how weakly grounded in reality many of the popular complaints actually are.

 

Where we are now

The Office for Students, established on 1 January this year, is charged (among other things) with ‘promoting value for money in the provision of higher education’. So the concept of value for money has slid effortlessly from the realm of a small-scale survey into the English higher education regulatory structure. One might expect we would therefore have a degree of agreement over what ‘value for money’ means – but evidently not.

A remarkable amount of commentary, especially from the level of government, in fact begins with data from the Student Academic Experience Survey, as though its implicit definition of value for money was self-evident all along. Discussion has also been swayed over the past year by evidence that many students now leave university with over £50,000 of debt. While the figure was not far short of this amount previously, and while a student’s overall debt makes no difference at all to his or her monthly repayments, £50,000 was a sum that seized imaginations.

This miasma of anxiety led to reports such as The Higher Education Market, produced by the National Audit Office, which fretted over the lack of variation in fees and made some headline-grabbing comparisons with the regulation of financial services. While such concerns seemed like old news to many people within the sector, the attempt to apply the logic and methods of the market to higher education was significant in itself. Like the Office for Students itself, with its focus on the interests of students as consumers, this report positioned higher education as almost entirely transactional in character.

The ongoing enquiry into value for money established by the Education Committee stretches matters further. Taking its cue, as one might by this point expect, from the Student Academic Experience Survey, it is considering: graduate outcomes and the use of destination data; social justice in higher education and support for disadvantaged students; senior management pay in universities; quality and effectiveness of teaching; and (through a curiously circular rationale) the role of the Office for Students. Quite how some of these matters relate to value for money may escape sceptical observers. Perhaps the key lesson is how this discourse, once given credibility and licence, can become an umbrella under which all manner of concerns might be sheltered.

The Office for Students consultation exercise, launched last autumn, suggested an intriguing new direction in the debate. Value for money is not just a matter for students, the Office suggested, but also ‘for taxpayers’. This line had been rehearsed by Jo Johnson, former Minister for Universities and Science, in a speech in the summer, and essentially follows the money-trail, since roughly 35% of the cost of the average undergraduate’s education is likely to fall into the lap of the state. Yet it perhaps leaves the door ajar to a more comprehensive appreciation of the value of universities within a nation. As Johnson himself stated, universities today are not merely suppliers of degrees; they are expected ‘to help drive national prosperity and advance individuals’ life chances’.

This is the argument of the universities themselves. Universities UK routinely produces statistics demonstrating the net national benefits produced by expenditure on higher education. It’s an investment, they argue, not a cost. The university sector, in the most recent calculations, contributed £21.5 billion to GDP, representing 1.2% of the UK’s Gross Domestic Product. International students are worth £7.3 billion to the economy, and so forth. Other countries take this sort of thing for granted in any consideration of the value of higher education. Australians, for instance, routinely speak with pride about higher education as a leading export industry, and consider the UK’s indifference to international students with open-mouthed incredulity.

Further, one of England’s more articulate and passionate vice-chancellors, Sheffield’s Sir Keith Burnett, consistently maintains that figures, whether wielded by the NAO or UUK, are not enough. In particular, he stresses the importance of the international reputations of universities, and the need also to consider research activity in relation to the cost of teaching. These are arguments welcomed by academics across the sector. ‘If a parent wants “better value for money” in the sense that they long for their child to be taught by truly great thinkers,’ he writes, ‘then they need to think of education in its fullest sense. Perhaps they should be concerned at the erosion of resource for the kind of work which won their child’s university and department international respect.’

It is possible that Burnett’s arguments will gain traction, and that popular discourse around higher education will return to historically more familiar territory. But this remains a challenge. In the midst of a media-storm about student-debt, it is demonstrably easier to place alarmist stories about the salaries of vice-chancellors than to present evidence about the value, to students and their nation alike, of a well managed and highly regarded university. And it is very tempting, for commentators and legislators alike, when considering value for money, to separate the education functions of a university from all else.

 

What could possibly go wrong?

It can be argued that higher education has enjoyed a relatively easy ride through the era of austerity. While other sectors – health, schools, local government – have suffered severe cuts, the fee arrangement of 2012 was higher education’s ‘get out of jail free’ card. Arguments have also been won, with successive ministers and chancellors of the exchequer, over the value of research funding. These victories have brought a measure of stability, though also bred resentment, fairly or unfairly, within wider society. In precarious times, the discourse of value for money poses some undeniable risks.

One element of risk is now written into the structures under which higher education is managed. In 2016 higher education was effectively split between two government departments: the education functions shifted into the Department of Education, and research left behind in the Department of Business, Energy and Industrial Strategy. Moreover, the Office for Students is more narrowly focused than its predecessor, the Higher Education Funding Council for England. It has some oversight – rather vaguely defined – of the nation’s ‘research base’, but otherwise research falls to the new UK Research and Innovation, and its subsidiary Research England.

Hence when the Office for Students focuses on value for money, it is not easy for it to encompass the overall functions of universities, including research. These matter hugely in terms of institutional reputations, which in turn matter hugely in terms of attracting international students. By contrast, the isolation of the education-function invites reductive appreciations of universities. It leads people to ask why universities can’t deliver their products more cheaply, and even more swiftly. Far from representing a smart national investment, then, MPs can now be heard asserting that universities are ‘ripping off’ their consumers. Once the value of higher education is equated with the cheap delivery of skills, such arguments are no more than logical.

In these forms, the value for money debate could have wildly unpredictable effects on the unfolding structural change within higher education. Commentators tend to overlook the intensity of competition within the system. In recent years some universities have expanded rapidly, while others have struggled, year by year, to meet their target numbers. Research funding is also being concentrated relentlessly into the hands of a minority of institutions. In this context it becomes easy enough to see how a discourse of value for money could be used to drive through sweeping reforms, such as differential fees, the formal downgrading of research at some universities, and even institutional closures.

 

A funny kind of marketplace

The Oxford English Dictionary defines “value for money” in terms of “reasonableness of cost of something in view of its perceived quality”. It isolates the relationship between a buyer and seller, focused on the quality of a commodity. But degrees are a peculiar kind of commodity. Students studying for one are years away from reaping the likely economic and social rewards, and their success is dependent as much on their own commitment as that of their lecturers. It is therefore an open question how they can possibly be expected to make an informed judgement on the value for money of those degrees.

Yet such judgments now hold the potential to redraw the landscape of English higher education. The major review of funding, apparently resisted by Johnson and his sacked former boss, Justine Greening, looms large in 2018. It is being cheered on by influential Tories asserting, against conventional logic, that it will at once make fees “lower” and universities “better”. A secure government might assert greater, more mature influence in such an environment. Yet, at a time when universities are being sucked relentlessly into more profound debates about the kind of country England’s citizens want, this seems unlikely.

 

• This piece was first published (in slightly different form, with nicer picture but without the hyperlinks) in Times Higher Education.