BU Research Blog

Brexit

So we aren’t leaving the EU on 12^th April – not that anyone really thought we would.  Although the decision made by the EU in the middle of Thursday night means that we could leave at some stage up to the 1^st June, it seems far more likely that EU elections will be held and then we will be up against another cliff-edge deadline on 31^st October.  At the moment it is hard to imagine that there can be any movement on anything that will change the position.  Of course, the government might agree something with Labour, that gets the Withdrawal Agreement through, but it seems unlikely, especially as the deadline for that is not 1^st June but a good few weeks before that because of the legislation required after the meaningful vote.

In her statement to the House of Commons on Thursday afternoon the PM said [thanks to Dods for the summary]:

• she still believes it is better to leave the EU with a deal, and in an orderly fashion.
• many member states preferred a longer extension and the extension until 31 October 2019 was a compromise.
• if we were to pass a deal by 22 May we would not have to take part in European elections.
• she agreed with Tusk that the future now lies in the UK’s hands. She also confirmed there was no conditionality attached if the UK were to elect MEPs and would continue to hold full member rights.
• the choices we face are “stark” and we must push forward “at pace.”
• she welcomed the discussions with Labour and the talks that will take place today. She stated reaching an agreement “will not be easy” and will require compromises on both sides. However, it is “incumbent” on both parties during a deadlock to seek a compromise/agreement.
• she maintained that she hoped to reach a single unifying agreement, but if this were not possible she hoped they would be able to agree a number of options that would be put forward in indicative votes. She confirmed the Government would act on the outcome of these indicative votes.
• the Withdrawal Agreement is a necessary bit of legislation for any agreement to pass.
• the European Council is prepared to consider changes to the political declaration but reiterated the Withdrawal Agreement cannot be reopened.
• she stressed she had never wanted to seek this extension and asked MPs to use the recess to reflect on the way forward.

The Leader of the Opposition laid blame for the extension with Theresa May, arguing she had “stuck rigidly” to a flawed plan. He said he welcomed her now reaching out to the opposition, but said the lateness of this was a “reflection of the Government’s fundamental error” to not seek a consensus. However, he said talks had been “constructive” and welcomed the indication the Government may be willing to move on their red lines (customs union.) He said he wanted a close economic relationship with the EU and frictionless trade and if that were not possible then “all options should remain on the table – including the option for a public vote.”

All this will play out in late April/ May while the country is preparing for EU elections. It is not clear how all this will be affected by the purdah rules that restrict certain activities and prevent the use of public resources ahead of elections.  There is more information from the House of Commons here,  although this is silent on the EU elections – for that you have to look at the main document.  This was the 2014 version and similar rules are likely to apply now unless the special circumstances mean that something different is issued in due course:

• The guidance set out the general principles that should be observed by all civil servants, including special advisers, during this period:
  • a) Particular care should be taken over official support, and the use of public resources, including publicity, for Ministerial or official announcements which could have a bearing on matters relevant to the elections. In some cases it may be better to defer an announcement until after the elections, but this would need to be balanced carefully against any implication that deferral could itself influence the political outcome – each case should be considered on its merits;
  • b) care should also be taken in relation to proposed visits;
  • c) special care should be taken in respect of paid publicity campaigns and to ensure that publicity is not open to the criticism that it is being undertaken for party political purposes;
  • d) there should be even-handedness in meeting information requests from the different political parties and campaigning groups.
  • e) officials should not be asked to provide new arguments for use in election campaign debates.

The terms of the EU deal [thanks to Dods again for the summary] are:

• European Union leaders have collectively agreed on an extension of Article 50 until 31 October 2019, but the UK will be able to leave before this date if a Withdrawal Agreement is passed and ratified.

• If the UK remains a member of the European Union by 22 May then the UK must enter European Parliamentary elections. UK MEPs would retain all rights of member states (voting) if elected on 23 May 2019.
• If the UK passes and ratifies a Withdrawal Agreement by 22 May then the UK will exit the EU on 1 June 2019 and will not have to enter into European Parliamentary elections.
• If the UK is still a member state after the European Parliamentary elections then the EU will have a “review” of the situation on 30 June 2019. President of the European Council, Donald Tusk said the point of this review would be to update EU leaders on the status of progress in the UK.
• Donald Tusk has not ruled out giving another extension after October 31 but has urged the UK, “please, do not waste this time.”
• The EU have once again reiterated that the Withdrawal Agreement is not open for re-negotiations.

Meanwhile, the background campaigning for a possible future Tory leadership contest will continue.  And MPs will get an Easter recess after all – to campaign for the local elections and hopefully reflect on the muddle we are in.  The country might appreciate a break from the ramping up of rhetoric, which has perhaps been fuelled by late nights and too much proximity.

Guarantee extended for Erasmus funding

The government have extended their guarantee of EU funding in the case of a no deal Brexit: the guidance has been updated:

• The HMG guarantee will cover the payment of awards to UK applicants for all successful Erasmus+ and ESC bids submitted before the end of 2020. Successful bids are those that are approved directly by the Commission or by the UK National Agency and ratified by the Commission.
• This includes projects and applicants that are only informed of their success, or who sign a grant agreement, after the UK has left the EU, and commits to underwrite funding for the entire lifetime of the projects.
• If discussions with the Commission to secure UK organisations’ continued ability to participate in the programme are unsuccessful, the government will engage with Member States and key institutions to seek to ensure UK participants can continue with their planned activity so far as possible.
• UK organisations should consider bilateral or multilateral arrangements with partner organisations that would enable their projects to continue in these circumstances and further guidance is available below.
• The guarantee covers funding committed to UK organisations. It does not cover funding committed to partners and organisations in other Member States and other participating countries. This means that where a UK organisation is the lead member of a partnership, any funding it distributes to non-UK associated beneficiaries is not covered by the guarantee.
• In the event that the HMG guarantee is called upon, it will be for the Commission and other countries to consider how to fund non-UK organisations

Fees and funding – more lobbying

With rumours that the Augar review will now not be published until after the local elections (now likely to be after the EU elections?), there is ongoing conversation about what it might say and what the impact might be.  David Willetts has written for the Times Higher:

• Which universities’ and subjects’ graduates go on to earn the most – and the least? Those are not unreasonable questions for prospective students to wonder about. They are also very relevant to policymakers – particularly in England, where the government-commissioned Augar review of post-18 funding is due to report imminently.
• Until recently, neither students nor policymakers had any firmer basis to answer their questions than anecdote and received wisdom. That is why, as UK minister for universities and science, I commissioned the longitudinal education outcomes project (LEO). This is one of the biggest, most policy-relevant datasets to arrive in Whitehall for years. By linking educational data on students to tax data on their earnings, LEO promises fresh insights into social mobility by tracking specific routes from school to university and out to good jobs. It is a good example of using administrative data for social science. No wonder it is hot.
• But it is also dangerous. The idea that we have reached “peak student” is currently fashionable, hovering somewhere between a forecast and a policy preference. And LEO is taken to present an objective means by which student numbers could be reined in, by cracking down on courses that yield low graduate returns. But that, in my view, would be a misuse of the data and a major policy error.

Discussing the LEO research project (by Neil Shephard (then at Oxford, now at Harvard University) and Anna Vignoles (then at the UCL Institute of Education, now at Cambridge), he says:

• The research showed that there are wide disparities in graduate earnings university by university, and this would have made it possible to implement a full-blown version of the Browne model. But the research also revealed the actual reasons for the differences in graduate earnings and so raised big doubts about whether this was good grounds for divergence in fees. The key reasons were students’ prior attainment, parental social class and subject studied. For most universities, there was not a strong institutional effect independent of these factors. So a higher fee would be a reward not for educational quality but for selecting students with good A levels from affluent families who want to be bankers or lawyers. It would be the pupil premium in reverse. These arguments are still relevant to today’s debate.

He continues:

• This is information that certainly ought to be available to students. But now that the Augar review has opened up a wider debate on higher education funding, there are ways that policymakers could be tempted to act upon it, too. Most obviously, they might decide to refuse to provide loans for some courses at the universities with apparently low returns. However, such a move would be problematic. The initial LEO research project was very well suited to assessing specific policy options around graduate repayments. It used graduate earnings to assess prospects for repaying loans. Since repayment obligations are largely determined on the basis of taxable earnings, the data and the policy question were tied together. Earnings data, however, are not necessarily a guide to wider policy, such as the performance of universities.
• For instance, LEO measures annual earnings, with no distinction between part-time and full-time work, so it does not say how much hourly earnings are. Young women with poorer qualifications tend to work part-time; this artificially depresses their earnings, which, in turn, boosts the relative returns to the female graduates. Furthermore, LEO offers no information on occupation or industry or other employer characteristics, so a university that provides nurse and teacher training will inevitably appear to perform less well than one focused on financial services and City law firms.
• …. And while the data show in which part of the country someone was educated, they do not show where they work. As some graduates stay near where they studied, this penalises universities in areas with lower earnings. So when the data tell us that some non-graduates earn as much as graduates, they could be telling us that a public school dropout working at an upmarket estate agent in Kensington earns as much as a recent graduate working part-time in Bolton.
• … The dataset stops at age 29 because of limitations on how far back the education data are available. So it fails to capture the evidence that graduate earnings have a better long-term trajectory than non-graduate earnings. This is particularly true of some arts courses. The data favour those occupations where you get to peak earnings early on. They mirror the failures of the British economy, rewarding quick, high returns over longer, slower ones. …
• … Another rather awkward angle is that there seems little correlation between earnings figures and the student satisfaction data that are part of the teaching excellence framework – the other obvious driver of policy direction. This just underlines the point that the LEO data have strongest implications for policy that is most related to earnings and tax. The further you go from the original purpose of the data, the more tenuous the link to the policy conclusion.
• Excluding the courses and universities that appear to do badly under LEO from public support would introduce a two-tier system in which affluent parents, whose children do not need public loans, could presumably buy places. The performing arts would become even more middle class. It would also mean that a Whitehall planner has to pronounce on the value of sports science at University X and drama studies at University Y. It would take an interesting new dataset and turn it into a tool of a very significant policy directly constraining the options for prospective students: a role that is quite simply beyond it and a threat to LEO’s long-term credibility and development.

And he has some conclusions for the Post-18 Review

• The current system’s high repayment threshold of £25,000 means that too high a proportion of the loans is written off. Predictably, this has opened up the whole question of the treatment of the write-offs in the public accounts, leading to their proposed reclassification as public spending. It is not even politically popular because, combined with the high interest rate on some outstanding debt, many graduates now see their debt rising every year, which understandably upsets them.
• So I propose a package of abolishing the interest rate and lowering the repayment threshold back down to its original £21,000 – which virtually nobody ever complained about. One might add a few extra years to the repayment period as well. That would make the system both financially sustainable and more politically acceptable without having to constrain the autonomy of universities.
• As for LEO, the data should be part of the increasing mix of information available to prospective students and their parents, but we need to understand them more fully before wider lessons can be drawn. The best way to extract more value from the dataset would be for more researchers to be able to access it – with the necessary privacy protections, of course. We at the Resolution Foundation are keen to analyse the raw data, and so are others.

How to implement a change in fees?

Nick Hillman has a blog on the HEPI website about how to implement any changes that the government decides to make at the conclusion of the post-18 review.

• There are practical problems in reducing fees overnight. For example, universities and the Student Loans Company need time to prepare for any new system.
• Perhaps most importantly, if there were a significant reduction in fees, then many people who had planned to go to university in the very near future might opt to take a gap year. Remember, many of those who had planned to take a gap year in 2011 cancelled it to avoid being stung by the last big increase in fees…
• … if the reduction in fees does happen, it is worth exploring whether it should be implemented for final-year students in the first instance. In other words, for the first year of the new policy, it would be aimed at students who are already more than halfway through their time as an undergraduate – and not, as is generally expected, freshers.
• This would have two clear advantages, one practical and one political.
• It would make delaying entry to higher education more neutral in terms of the debt arising from being a student, as entrants would feel like they were facing less of a cliff edge. (See below for a more detailed explanation of this.)
• As the people closest to graduation tend to be the people who are most aware of the large debts they have accrued and are typically about to join the labour market and therefore enter the repayment phase, they are also the people who are most likely to feel any gain – though it is important to note that lower fees have no effect on the pound in your pocket until much later (if at all), by bringing the date at which you extinguish your loan forward. Given that you are more likely to vote the older you are, any electoral benefits (if they exist) could be clearer too.

Placements

HEPI have a blog by Mike Grey – an advocate for placements but who argues that they are not an employability panacea.

• “…the latest LEO data release also reports an overall salary premium for students from sandwich courses of approximately £6000, which remained steady at 3, 5 and 10 years. This will further encourage the adoption of this model and is potentially a powerful motivator for students to follow this route. However, this kind of direct sector-wide comparison is intrinsically flawed because:
• Many of the courses with higher placement take up rates, such as engineering disciplines, have stronger labour markets and lead to higher salaries on average across all graduates
• Due to the competitiveness of the placement process, it is likely to be the higher performing students, on average, that secure placements
• We also know that widening participation students take up placements at a lower rate; there are likely therefore to be a number of socioeconomic factors influencing this salary premium
• When looking at direct comparisons at course level, I would predict that in most cases the salary premium is likely to be closer to half of the overall headline figure. Placement experience clearly has a positive impact on salary outcomes but should not be viewed in isolation without considering the wider influencing factors. The host of other benefits of completing a sandwich placement, such as students being able to make a better-informed decision about their future career, are potentially even more valuable but, as with much of the true value of higher education, these benefits are harder to measure.”
• “Placement schemes are only typically viable at scale if:
• There is sufficient employer demand within the specific discipline and if employers are prepared to pay students. Placements completed as part of a course fall outside of National Minimum Wage legislation, but unpaid placements create huge issues for social mobility and encourage employers to undervalue students and graduates.
• The prescribed delivery model offers the potential for employers to get a return on investment for the time and money invested in the student, and if it fits with industry norms. In many technical disciplines shorter placements are simply not attractive to employers due to the training required to get students up to speed with software and processes. Conversely, in other disciplines, such as law, the culture is for employers to offer shorter internships and insights, so sourcing sandwich placements can be extremely challenging.
• They are properly resourced. Placements schemes are intrinsically resource intensive, involving managing the administrative process, delivering quality employer engagement, preparing students to enter the world of work, supporting and visiting students whilst they complete the placements and assessing the academic module associated with the experience.”
• “Beyond sandwich placements, there are a whole host of curriculum-based, embedded, mass-engagement methods which can be vehicles for career development but reach far greater numbers of students. These include:
• Embedding real-world projects to deliver equitable career development for your students. These real-world projects are often a particularly important gateway drug for widening participation students who disproportionally self-select out of traditional career development activities and do not have the same access to professional networks or levels of social capital that their more privileged peers benefit from.
• Develop industry authentic assessments and engage employers to contextualise their relevance to graduate-level professional life.
• Ensure there are synoptic assessments that encourage students to reflect on their employability development throughout their wider course.
• Design some assessment processes which reflect graduate recruitment processes, for example students could write up their experiences as six responses to competency questions, each with a strict word limit, or complete a video interview assessment, rather than consistently defaulting to a standard reflective essay.
• Involve practitioners, employers or community groups in the setting of assessments and as the audience for your students’ reporting.
• Invite alumni to speak who are applying their skills in a diverse set of sectors to illustrate the non-linear nature of the graduate market.
• Develop an employer advisory board with a specific brief to inform curriculum design and employability delivery.
• Build partnerships with graduate developers, the professionals who design and deliver employers graduate training programmes, not just graduate recruiters. Seek to transfer industry best practice into skill development activities within the curriculum.”

Institutes of Technology

The first twelve Institutes of Technology were announced:

• Barking & Dagenham College
• Dudley College of Technology
• HCUC
• Milton Keynes College
• New College Durham
• Queen Mary University of London
• Solihull College & University Centre
• Swindon College
• University of Exeter
• University of Lincoln
• Weston College of Further and Higher Education
• York College

Prime Minister Theresa May said: I firmly believe that education is key to opening up opportunity for everyone – but to give our young people the skills they need to succeed, we need an education and training system which is more flexible and diverse than it is currently.

Education Secretary Damian Hinds said: I’m determined to properly establish higher technical training in this country – so that it’s recognised and sought after by employers and young people alike. These Institutes are a key part of delivering this.

Angela Rayner MP, Labour’s Shadow Secretary of State for Education said: While investment in further education is desperately needed, this announcement will do nothing for the overwhelming majority of providers and students in technical education. The £170 million re-announced today is nowhere near to the £3 billion in real terms cuts to further and adult education since 2010.When they first announced this policy years ago the Government said they would make higher-level technical education available in all areas, yet this list does not include a single university or college in the north west.

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JANE FORSTER                                            |                       SARAH CARTER

Policy Advisor                                                                     Policy & Public Affairs Officer

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