Universities challenged: we must not overturn a successful system

Jo Johnson, the Minister for Universities, Science, Research and Innovation, argues that our universities “act like bouncers,” stopping people entering their club. He also likens them to an aggressive hamburger chain: specifically, McDonald’s trying to stop Byron Burgers from setting up nearby. His Higher Education and Research Bill (HERB) purports to tackle this supposed misbehaviour. It has cleared the Commons at speed.

In fact, some 70 new universities have been established in England since 1986, with nine in the last three years alone. This is way above average for western Europe: the Netherlands, for example, hasn’t created any new universities in 40 years. But presumably the minister thinks ours are the wrong sort of new university.

The 120-page bill, now before the Lords, lays out Johnson’s solution: a vast new government regulator, with unprecedented powers. The “Office for Students” will have powers to bestow and remove the title of university, and the right to award degrees. It will be able to override parliamentary statutes as well as universities’ current Royal Charters. It will serve as the judge both of the standards of degrees and the quality of university teaching, and be able to suspend “providers” (universities and others). And it will be able to impose, without obvious limits, monetary penalties on any institution deemed to be in breach of conditions that it has laid down.

Moreover, many of its activities will be carried out under “delegated” powers, which can be exercised without any need to refer back to a minister, let alone submit to parliamentary scrutiny. I don’t suppose for a moment that this government has immediate plans to close down a university, whether it is Oxford or Gloucestershire, Lincoln or York. But whenever powers are created, they affect behaviour. Their very existence will make universities more biddable and timid.

Higher education in England is now largely funded from student fees, many paid upfront by the government-funded Student Loan Company, before students repay some, though often not all, of the debt. The government commitment here is open-ended. For any and each EU undergraduate that a university enrols, the state will provide three up-front payments at £9,000 a year.

The new regulatory behemoth is charged with making it easier for new institutions to award degrees from the moment they open. But if you combine easy opening with the open-ended finance, then what would you expect to happen? Ministers believe that a raft of exciting, innovative universities will spring forth, and offer good degrees at lower prices than today. They are wrong.

The government uses one new institution to argue its case. The Dyson Institute of Technology, fully funded by inventor James Dyson, will open next autumn at his company’s Wiltshire base. It will start with 25 students who will initially gain University of Warwick degrees, pay no fees and do salaried work alongside Dyson engineers. It is wonderful. It was also established under current rules. It required a very rich man to commit his own funds. It is tiny—and totally atypical.

The US shows us what happens when it becomes easy for new universities to open. You don’t get the “STEM” subjects—science, technology, engineering, maths—that the government hankers after. You get degrees in low-cost subjects, mostly with a “business” connections, such as marketing or “events management.” The reason is simple. Business degrees are easy to run. You don’t need expensive equipment. You can design a programme for pretty much any level of entrant.

America encouraged rapid university start-ups and, like us, expanded its government-backed student loans. New for-profit companies duly set off in search of fast growth and short-term gain. The most aggressive targeted less advantaged students, spent almost a quarter of their budget on marketing, and generated a 20 per cent profit margin. Now, over-expansion has led to huge bankruptcies, involving hundreds of thousands of students, left with degrees from institutions that no longer exist and debts they must still repay.

Here in England, a new generation of universities is waiting in the wings. Hundreds of “alternative providers” of higher education have been authorised in recent years. They can offer courses though not, yet, their own degrees; students on their approved courses can borrow £6,000 a year from the state, as compared to £9,000 in universities. Their students are overwhelmingly enrolled on courses in business. There is hardly a science or engineering student in sight.

Under the proposed regime, I am sure, many will simply apply to become universities, and charge £9,000 a year for a regular degree. In business studies. The reforms will do nothing at all about our chronic and worsening shortage of mathematicians or technicians. The Home Office has found some serious cases of fraud, typically involving claims for non-existent students, in the “alternative provider” sector. But more generally, we know that small, private institutions are especially prone to high drop-out rates. They are also far more likely than either universities or further education colleges to fail inspections for quality under the existing regime.

The government clearly is expecting trouble. How else do we explain the brand new powers to enter, search and seize items from university premises that figure in the Higher Education Bill? They have never existed before, and no previous government seemed thwarted by their absence. Instead of taking new powers to deal with a flawed system, why not avoid creating one in the first place?

UK universities are a global success. They contribute billions to the economy by appealing to international students. They are the most productive research universities in the world, in terms of output for expenditure. They are also, for the moment, among the world’s most autonomous universities. These features are, surely, linked. So why compromise their independence and overturn a successful system?