BU Research Blog

As it is Parliamentary recess, we thought we would do a general policy round up this week

Fees, funding and finance

We’ve updated our  separate paper on fees, funding and finance for BU readers while we wait for the final response to the Augar review.

Research and knowledge exchange

Post-Brexit there is still a great deal of uncertainty about whether we will be able to join Horizon Europe and what happens if we don’t.  Science Minister George Freeman has started talking about Plan B domestic funding (£6 billion) to replace it, although that doesn’t deal with issue about collaboration on EU projects.

Linked to productivity and regional economic success, there is a big focus on the “right sort” of research. We will continue to see a focus on industry led rather than university led projects and a downturn in funding for humanities and social sciences research, with priority given to projects that lead directly to improvements in productivity and economic gain, as well as medical or health benefits – rather than “pure” or theoretical research.  The other focus is on “place” – linking research and funding to local and regional needs.

• The government are pressing ahead with the Advanced Research and Invention Agency (ARIA). The Bill is awaiting Royal Assent in February 2022.  The first CEO has been appointed and he has come from DARPA, the US agency on which ARIA was partially modelled.
• The KEF outcomes and REF outcomes (due in April 2022) will inform this agenda. This explains how to use the KEF dashboards. You can view the dashboards for individual institutions here and compare two providers here. UKRI have consulted on changes to the KEF for the future.  In May 2021 UKRI launched a review of the REF to plan for the future.
• The House of Commons Library have a useful review of Research and Development funding policy from November 2021.
• The R&D roadmap announced in July 2020 repeats the commitment to R&D investment of 2.4% by 2027 and public investment will be £22bn by 20204/25.
• There was a consultation and the outcomes were published on 21^st January 2020: “In the coming months, we have committed to publishing a new places strategy for R&Dand we are working across government and with the devolved administrations to develop this”.
• However, since then there has been a lot of concern about what would be included in this target – whether some of it would be paid to the EU for associate membership of Horizon Europe, and there have been cuts in the development budget with an impact on research (UKRI stated most of its aid-funded research projects are unlikely to be funded beyond 31 July as a result of the Government slashing its overseas aid development budget (from 0.7% to 0.5% of gross national income (BNI) The full UKRI ODA letter is here).
• Research Professional report that quality related (QR) funding will be cut by £60 million. This is in addition to the cuts to the research relating to the aid budget and the uncertainties surrounding how Horizon association will be funded. See this RP article for far more detail on the various cuts, changes and uncertainties to research related funding streams
• The Government launched an independent review into UK research bureaucracy led by Professor Adam Tickell, Vice Chancellor, University of Sussex. The last time bureaucracy came up was when they attacked EU research bidding processes as part of the Brexit discussions, announced they were dropping impact statements in UK bidding and then quietly admitted they were just moving them to another bit of the form. It is unclear what new bee they have in their bonnet but anyone applying for the government restructuring funding announced in the summer of 2020 may need to demonstrate the leanness of their professional services functions and internal processes, or at least show that they are willing to tackle them once restructured.  The interim report was published in January 2022 and identified some themes for future work – more is due this Spring.

Education:

We don’t yet have a letter to the OfS from the Secretary of State, Nadhim Zahawi setting out his priorities – in contrast to his predecessor, who wrote many such letters.  We do have a letter about access and participation from November 2021, announcing the new Director of Fair Access and Participation and directing a change in approach.  He has also engaged in the ongoing discussions about antisemitism on campus.

The Universities Minister has taken a much higher profile role now that she is a member of cabinet, writing directly to universities, and even phoning them, apparently.  According to a speech at a UCAS event in February 2022, her priorities include quality, fair access and transparency.  She is actively campaigning on a range of issues including mental health support, the use of non-disclosure agreements in cases of bullying and harassment, advertising in HE and the use of personal statements in admissions. And unconditional offers. Just a side note on admissions – speaking to UCAS and not mentioning the DfE consultation on post qualifications admissions really does suggest that it has been kicked into the very long grass.  This was Gavin Williamson’s thing…and once again the complexity of the change required seems to have stopped it progressing.

Access and Participation

In his November 2021 letter, Nadhim Zahawi said:

• The current system for Access and Participation in HE has had some successes. The proportion of children receiving FSM progressing to higher education by age 19 has increased from 19.8% in 2010/11 to 26.6% in 2019/20; similarly, the proportion of state school entrants to Oxbridge has increased from 59% to 66% between 2015/16 to 2019/20. We want this progress to continue. But the gap between the most and least advantaged students remains stubbornly open. White British young males who received free school meals are amongst the least likely to enter higher education, with just 12.6% progressing to higher education by age 19 by 2019/20. We also see persistent gaps in the attainment of students from different ethnic groups within higher education, with the number of Black students achieving 1st or a 2:1 being 18.3 percentage points lower than for White students. It also cannot be right that some notional gains in access have resulted from recruiting students from underrepresented groups onto courses where more than 50% of students do not get positive outcomes from their degree.
• We would like to see the whole higher education sector stepping up and taking a greater role in continuing to raise aspirations and standards in education – and we would like to refocus the A&P regime to better support this.

And

• we welcome a fresh focus from the OfS on the outcomes achieved by disadvantaged and underrepresented groups in higher education. Providers should not be incentivised, nor rewarded, for recruiting disadvantaged students onto courses where too many students drop out or that do not offer good graduate outcomes.
• Within this A&P refresh, where courses exist on which significant numbers of students who start drop out or do not progress to graduate jobs or further study, the OfS should expect such providers to set clear, measurable targets to improve the outcomes of such courses, hold them to account for meeting those targets, in a similar manner to how the OfS expects to see access targets in high tariff providers.

The OfS has shared more than a hint of what is to come under the new Director for Fair Access and Participation (read more here).

Quality and standards

The big thing in 2022.  We did a detailed review of all of the current proposals in our policy update on 21^st January 2022.  It’s all there – absolute numbers for baseline standards on student outcomes metrics (continuation, completion and progression to highly skilled employment or further study), to be published split by subject and a wide range of other criteria including student characteristics, to support the access and participation agenda noted above.  But also a whole load of other licence conditions about keeping courses up to date and coherent, to ensure that they develop relevant skills, that students are supported to achieve high quality outcomes, that students are engaged with course development and that courses are properly resourced.

Building on these “baselines”, we also have a new TEF!  With a new category of “requires improvement”, still using the NSS, and with a new “aspect” of educational gain.  While not a subject level TEF, again, all the data will be published using similar splits to the regulatory data referred to above (including subject and student characteristics) and the way that the ratings are awarded means that problems in subject areas or for particular groups of students could pull down institutional ratings.  The 20 page submission will be expected in mid-November 2022.

And the OfS are still reviewing the NSS.

Skills agenda

This is still a thing, although the white paper that is supposed to define how it will be implemented is still not available so no-one really knows what it all means.  We hear a lot about the lifelong loan entitlement and modular learning.  The Skills Bill itself is at report stage in the House of Commons in February 2022, having been though all stages in the Lords.

We were hoping for more information in the Levelling-Up white paper.  We covered this extensively on 7^th February 2022.  As we said, more than a third of the 300 pages is data analysis, and even in the policy sections there’s a lot of waffle and reviewing of previous initiatives to justify the new approach – 12 big “missions for 2030”.  A lot of the policy stuff is in the “things we are already doing or have announced before” box.  There is very little in here for Dorset either.  And there are thin pickings in terms of HE policy.

One thing that is in the bill – a clause aimed at outlawing essay mills.

Financial sustainability

After a big focus on this through the pandemic, worries seem to have subsided.  The last report is from the OfS in June 2021:

• The sector is forecasting a decline in financial performance and strength in 2020-21, relative to 2019-20, followed by an expected slow recovery from 2021-22.
• Higher education providers have generally responded to the challenging circumstances brought about by the pandemic through sensible and prudent financial management, including good control of costs and the effective management of cashflow to protect sustainability. There is evidence of prudent management of liquidity, building contingency to accommodate the financial pressure expected from coronavirus. This has been achieved through the generally effective management of cash outflow, including restraint on capital expenditure, where this has been possible.
• The sector in aggregate experienced stronger student recruitment in 2020-21 than many predicted at the height of the pandemic. 2020-21 saw overall strong demand from UK students, and overseas students held up well, albeit at lower levels than were forecast before the pandemic.
• Despite this, an overall decrease in income in 2020-21 will reduce the financial operating performance. Net operating cashflow, necessary to support longer term sustainability, fell from 8.4 per cent of total income in 2019-20 to 4.2 per cent in 2020-21. This appears to be manageable in the short term, but at this level will not support sustainability in the longer term.
• Some higher education providers have applied borrowing instruments, including through some of the government-backed loan schemes, as contingency to safeguard operational cashflows in the event of financial risks. Many of these borrowing instruments remain in place, but are not drawn down and are not forecast to be drawn down.
• Despite the overall satisfactory findings of our analysis at this time, significant uncertainty remains, and the impact of the pandemic globally could change quickly. Issues that could affect income include restrictions on the movement of students domestically and internationally, higher numbers of students dropping out, and reduced income from accommodation and commercial activities that rely on open buildings and facilities.
• While the aggregate position is reasonably positive, relative to the risks that have been managed recently, there continues to be significant variability between the financial performance of individual providers, and we expect this will continue as providers adapt to the post-pandemic operating environment. However, we consider that, at this time, the likelihood of multiple providers exiting the sector in a disorderly way because of financial failure is low.
• Overall, the sector is forecasting continued income growth in the next four years, supported primarily by expectations of strong domestic and international student recruitment. Domestic and international student numbers are projected to increase by 12.3 and 29.5 per cent respectively between 2020-21 and 2024-25, with associated rises of 14.4 and 46.6 per cent for the related income. UCAS data on applications for the 2021 cycle at the January equal consideration deadline indicates increased demand from UK and non-EU students to study at English providers. The forecast growth in fee income from domestic students is based on a broad assumption that there is no material change to level of government funding of teaching, be that through tuition fee loans or OfS grant funding.
• Net liquidity (net cash holdings) is forecast to be lowest in 2020-21 and 2021-22 as providers manage the financial implications from coronavirus. However, in aggregate, net liquidity remains at reasonable levels and we also know that the banking sector has often provided short-term finance facilities to providers as contingency, in the rare circumstances when this is needed. All tariff groups forecast steady growth in net liquidity from 2022-23, underpinned by expectations of strong student recruitment.
• While the sector is hopeful of a post-coronavirus recovery in financial performance from 2021-22, there are a number of potentially significant financial challenges to overcome in the forecast period. Examples could include: extended operational restrictions from new variants of coronavirus, which could affect student recruitment; the implications of global economic recovery for spending, business interaction and the employment market; and the need to secure the financial sustainability of pension schemes.

Free speech

The Higher Education (Freedom of Speech) Bill has made fairly slow progress, at the report stage in the House of Commons as at February 2022, with the whole Lords process still to go.  The culture wars rage around this.  Was xx no platformed or simply not invited?  Did a protest mean someone was “cancelled” or was it a legitimate protest?  Does it depend on the subject matter and whether those opining agree or disagree with the position of those protesting?  Where is the line between legal, but controversial, speech, and speech that breaks the (existing) law.  Which speakers will be protected for their controversial, but legal speech, and which won’t because, although legal, their speech was in some other way deemed to be unacceptable.  Hmm.  There’s a neat summary from February 2022 here.

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JANE FORSTER                                            |                       SARAH CARTER

VC’s Policy Advisor                                                              Policy & Public Affairs Officer

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