Issues for Higher Education - Government Handling of Universities and Funding Issues

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Issues for Higher Education

Overview

The Government will publish a strategy document early in the New Year setting out its vision for higher education. Secretary of State for Education and Skills, Charles Clarke, has made it clear that he is keen to stimulate debate about the range of issues affecting the future of higher education. As a contribution to the debate, he has published a series of issues papers on some of the most important challenges facing higher education in the UK. These include research, access, teaching, and the freedom and accountability of the higher education sector.

INTRODUCTION

Our universities have long enjoyed an enviable international reputation as being among the best in the world. With over two million students across the UK including 220,000 from overseas, their teaching and research at its best is of world-class standard.

But there are also real challenges. Universities have taken on many more students in recent decades. Student numbers in Britain grew from 340,000 in 1962 to over two million last year. Half of that expansion took place during the nineties, when universities were expected to fund the extra students partly through efficiency savings.

By 2003-04, publicly planned spending on Higher Education will have risen by 15.6% after inflation compared to 1997, following years of continual decline. Student numbers have grown too. There were ten per cent more UK students in 2001/2 than in 1996/7 and a further increase is predicted in this academic year.

Following the National Committee of Inquiry into Higher Education report in 1997 (the Dearing review), the Government asked students to contribute to their tuition fees - a contribution now worth £1100 a year. This is paid on a means-tested basis, with poorer students exempted and those on middle incomes making a partial contribution. Yet the taxpayer still pays around 90 per cent of all university tuition costs. From the early 1990s, the student maintenance grant was gradually replaced by student loans. The maximum loan is now £3,905 outside London, with higher loans available to those from poorer families.

While this Government has halted the decline in university funding and begun to lift controls on numbers so that Universities continue to expand, many argue that more radical change is needed to address three key challenges facing higher education today:

* The first challenge is to enable our universities to have the funding they need to provide high quality teaching and research, and to allow our best universities to continue to hold their own against the best in the world. That requires significant extra investment.

* The second challenge is to enable more able students from poorer backgrounds to go to university. Tuition fees and loans have not reduced working class numbers compared to middle class students. But the child of a professional is still four times as likely to get the chance to study for a degree as the child of unskilled or semi-skilled parents.

* And the third is an economic challenge. In today's globally competitive world, the country needs more people educated to a higher standard than ever before. The Government has set a target of fifty per cent of those aged 18 to 30 experiencing higher education, compared with over 40 per cent now.

These key challenges raise fundamental questions about higher education - not just about the funding of the sector, but also about the pattern of provision, about freedom and accountability, and about fairness and standards. These papers look at these important and difficult questions, to stimulate a wider debate around the full range of issues which our HE strategy will address.

. Research

Key Facts

* Britain has produced 44 Nobel Prize winners in the last 50 years.

* There are over 300,000 postgraduate students at English universities, a quarter from overseas.

* The UK does well on international research league tables. With 1 per cent of the world's population, British research has over 9 per cent of citations in the world's scientific publications - showing the influence that it has on other researchers.

Do good research and good teaching go together?

Research funding is distributed through the Higher Education Funding Council for England (HEFCE) and the Office for Science and Technology (OST), and its research councils. HEFCE distributes almost £1bn for research, with the rest of its funding - over £3bn - going to Universities for teaching and learning.

HEFCE Research funding is selectively allocated on the basis of the Research Assessment Exercise that has taken place in 1992, 1996 and 2001. The 2001 RAE found 55 per cent of research-active staff now work in highly-rated departments (the top two categories) compared with 31 per cent in 1996.

Russell Group universities get 63 per cent of the funding - with much of that going to the four top-rated research Universities (Cambridge, Imperial College, Oxford, and University College London). Whereas many students choose their university on the basis of the quality of its research as much as teaching reputation, newer universities increasingly sell themselves on the basis of their teaching quality and reputation.

Of 80,435 full time posts in Universities1, 84 per cent do both teaching and research. Some argue that this lack of specialisation means that our best researchers can't focus enough of their energies on research, or our best University teachers on teaching.

This distinction between research and teaching has always been recognised much more in the US, where only a fifth of degree-awarding HE institutions2 award a research doctorate, compared to over 90% in this country. In some US institutions, there are many more academics who do not teach than is usual in the UK.

Should we enable more of the best researchers to focus on research, and develop a more professional teaching force for Universities, specialising in teaching? Will pressure for such distinctions grow if universities spend more on hiring top researchers?

What about institutions with different focuses? Should some specialise in teaching, and others in research - perhaps developing more graduate schools? Should institutions group together to play to their strengths?

Do we need better measures for helping students understand the quality of teaching in different institutions?

Government Funding of Research

One study estimated that every £1 spent on research and development is worth £1.80 to the economy, compared to only £1.42 in the US and £1.50 in Germany.3

The Higher Education Funding Council for England (HEFCE) allocated £940 million for research in 2002-3. While this was a 5.9 per cent increase over 2001-2, it came after a large increase in the number of top-rated research departments. So the money was spread more thinly, with funding levels reduced for the lower ratings.

The latest spending review announced the largest sustained growth in science expenditure for a decade - £1.25bn extra a year by 2005-06. It also made changes to make sure that the costs of research were fully-funded - making better provision for overheads and infrastructure costs.

Because research funding is distributed according to quality, there are big differences between different universities. Oxford and Cambridge can expect to receive over £100 million each per year from HEFCE and the OST research councils. But many of the newer universities receive significantly less than £1 million.

Research charities and industry provide a further £800 million for higher education research each year. Industry supports £11 billion worth of research and development within its own structures, but its annual contribution has fallen in recent years as a proportion of GDP. A higher proportion of basic research is done in Universities in the UK than in many other countries, where more is done in private laboratories.

US universities like Harvard and Yale also enjoy substantial endowments, not replicated in Britain. London's Imperial College has an endowment of £49 million but Harvard enjoys a £12 billion endowment. Endowments and investments make up less than three per cent of British university income (though there are big variations between different Universities).

Is our current level of investment sufficient to enable Britain to remain globally competitive?

As well as funding the best research, are we doing enough to support emerging departments and areas of study, so that innovation and new talent can flourish?

Should every university be funded to do research - or should we emulate America where only a minority of universities offer postgraduate research studies?
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Is the balance right between research with an obvious benefit to society and the economy, and research aimed at discovering new ideas?

Do business and students contribute enough to research costs - and if they contributed more, how would this affect the nature of research?

What more should we do to encourage the build-up of endowments in our universities?

2. Capital infrastructure

Key Facts

* Higher Education Institutions have a capital stock valued at £26 billion for buildings, and a further £8 billion for equipment

* Universities received just over £300 ...

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