Category / Knowledge Exchange

HE policy update 22nd January 2024

EU, Industry collaboration, innovation, international, Knowledge Exchange, parliament, PG research, policy, Research news, UKRI

This seemed like a good moment to explain what the Lifelong Learning Entitlement is really about and what it means for universities (spoiler: a lot of administrative work and not much else, in the short term), and this update also includes some horizon scanning by UKRI, some data on staff numbers and applications and a bit more on financial sustainability, as hard to get away from in stories about the sector this month.  And there is more besides.

Politics and Parliament

Lots of time spent this week on the Rwanda bill, with work for local MP Michael Tomlinson in his new role as Illegal Immigration Minister. The two deputy chairs of the Conservative Party resigned their roles yesterday along with a PPS but the Rwanda bill was passed unamended and has gone to the Lords where there will be more challenges.

Meanwhile it isn’t a manifesto but there is a campaign brochure from the Labour Party.   It says “we will be able to seize the opportunities of advances in AI, digital, life sciences and technology as drivers of economic growth”.  It presents again the 5 missions we discussed in issue 1 of this update. On education: this is the closest to a reference to HE: there simply aren’t enough high-quality pathways onto apprenticeships, and technical education. So we will have to keep waiting for the detail.

And if you missed it, constituency boundaries change for this election.  There were originally going to be major changes locally but those were dropped in the last round of reviews, so not much is changing here.  However, there might be implications elsewhere: there is a BBC article here.  One point to note is that Chris Skidmore stood down on environmental issues and there is a by-election planned in February: but his constituency is one of those disappearing.

Ongoing legislation

Research and knowledge exchange

Business and innovation

UKRI have published a position statement on their “commitment to improve the research and innovation environment for businesses seeking to scale up, through enhancing the support that we offer alongside private capital to help them invest, innovate and grow”.

As well as confirming some of the things they already do they will be:

  • launching a new digital guide to help businesses, along with investors and researchers, to make the most of UKRI products and services to commercialise research
  • launching new £20 million proof-of-concept funding in 2024 to support researchers to spin out scientific discoveries into exciting new products and services
  • ensuring that UKRI’s core offer of training to new doctoral research students improves awareness and experience of commercialisation and entrepreneurship, building on existing opportunities that allow students to work with businesses
  • creating a joined-up funding pathway over 2024, working with the British Business Bank and UK Export Finance, to enhance access to finance for scaling businesses

The Science Minister, Michelle Donelan, gave a speech about “scaleups” on 16th January.  It has unicorns, silver bullets, powder kegs and goldmines.  There is a lot in in it apart from those theme park elements, but this bit caught my eye:

  • Regulate to innovate is not just some slogan that I happen to use – I think it is a commitment I make to businesses across the country. 
  • And that is why I am backing the Regulatory Horizons Council report, published today, and committing to reviewing the recommendations to become unapologetically ambitious in our regulatory approach. 
  • And that is also why this year, I will develop a regulatory support service specifically designed to help science and tech companies to navigate rules and regulations.  Because we know that regulation isn’t just about dry ink on the statute books. I believe the behaviour of our regulators and regulatory simplicity is absolutely key.  

What is the Regulatory Horizons Council?  The Regulatory Horizons Council (RHC) is an independent expert committee that identifies the implications of technological innovation, and provides government with impartial, expert advice on the regulatory reform required to support its rapid and safe introduction. Find the membership etc at the link.

Here is the report and its recommendations:

  • Recommendation 1: DSIT, working with the Department for Business and Trade (DBT) .. should ensure that regulators are empowered with the tools and resources to better support innovative startups and scaleups.
  • Recommendation 2: DSIT should work with relevant partners to embed a greater understanding of regulation, and earlier engagement with regulatory issues, within the early-stage business community.
  • Recommendation 3: Government and regulators should continue to build the knowledge base on pro-innovation regulation, and particularly the impacts on start-ups and scaleups.

Emerging technologies horizon scan

In December, UKRI published an insights report on Innovate UK’s 50 emerging technologies that could be part of our everyday lives in 2040 and beyond.

Although there are 50, the report is only 39 pages: the list is in the contents page (and it does briefly explain what they all are).  The world has been very focussed on the risks of new technology, AI in particular, in recent months, but this is a very hopeful list, focusing on the problems that can be solved rather than disruption and destruction.  The report does note the ethical challenges (in the context of AI in particular) and sets our five questions to consider:

  • As technology is more embedded in our bodies, will humans turn into something new and different? What makes us human will be increasingly questioned.
  • Should AI be allowed to make decisions on our behalf? All aspects of business and society will be transformed through AI and computing.
  • If humans can expect a century of good health, what does this mean for employment, pensions or housing? The quality and length of our lives will be greater than ever before.
  • Will a shift towards cleaner, affordable energy change the way we live and work? A transformed energy system could help new industries to thrive.
  • What will a vast expansion of our understanding of the world mean for the UK economy? The UK’s ability to draw on its research and business strengths will help us solve big problems and seize opportunities.

Quantum missions

In the context of the above, the government announced 5 “quantum missions” in November: there are likely to be more funding rounds for research and projects in these areas.

  • By 2035, there will be accessible, UK-based quantum computers capable of running 1 trillion operations and supporting applications that provide benefits well in excess of classical supercomputers across key sectors of the economy. 
  • By 2035, the UK will have deployed the world’s most advanced quantum network at scale, pioneering the future quantum internet. 
  • By 2030, every NHS Trust will benefit from quantum sensing-enabled solutions, helping those with chronic illness live healthier, longer lives through early diagnosis and treatment. 
  • By 2030, quantum navigation systems, including clocks, will be deployed on aircraft, providing next-generation accuracy for resilience that is independent of satellite signals. 
  • By 2030, mobile, networked quantum sensors will have unlocked new situational awareness capabilities, exploited across critical infrastructure in the transport, telecoms, energy, and defence sectors. 

And the other Horizon (Europe)

You can’t have missed it, but the UK is now an associate member of Horizon Europe from the start of 2024.  You can read more on the UKRI website here.  The Horizon Europe work programmes are listed here.

Small but beautiful

Research England have also announced the results of the second round of the “expanding excellence in England” fund. Research England is investing £156 million to support 18 universities across England to expand their small, but outstanding research units. The list of projects funded in round two (and round one from 2019) is here.

Regulation

These policy updates so far this year have included a lot of regulatory content, focussing on the OfS, but did you know that many other regulators may have an interest in aspects of education at universities, and this makes for a challenging and potentially burdensome situation.

Research Professional reports on an event sponsored by the Higher Education Policy Institute and AdvanceHE, which Keith attended this week, at which the VC of London South Bank University raised this issue:

  • Phoenix pointed out that if a level 4 or 5 course is taught as part of a degree, then it is regulated by the Office for Students, but if it is a standalone qualification such as a higher national certificate and taught in a college, it is overseen by Ofsted.
  • Similarly, if higher technical qualifications are taught in higher education, they are quality-assured by the OfS in universities but by Ofsted or Ofqual in further education, while level 4 apprenticeships are overseen by Ofsted regardless of where they are offered.

Of course it is even more complicated than that, as apprenticeship funding is overseen by the ESFA (the Education and Skills Funding Agency, part of the Department for Education), making them an important regulator for HE too.  If you haven’t heard of the ESFA, then here is what they do: it isn’t obvious from this that it includes degree apprentices delivered at universities; but it does.

As an executive agency of the Department for Education, and on behalf of the Secretary of State for Education, ESFA is responsible for administering funding to deliver education and skills, from early years through to adulthood.  

ESFA funds education and skills providers, including: 

  • maintained schools and early years institutions, through local authorities 
  • academy trusts 
  • special schools 
  • colleges 
  • independent training providers (ITPs) 
  • high needs institutions 

ESFA is responsible for: 

  • £67 billion of funding for the education and training sector, ensuring timely and accurate allocations and payment to education and training providers 
  • providing assurance to Parliament that public funds are spent properly, achieving value for money for the taxpayer and delivers the policies and priorities set out by the Secretary of State 
  • provides, where necessary, financial support for providers

Outstanding OfS consultations

Just a reminder of the ones that are ongoing or we are expecting outcomes on from the OfS:

  • Consultation on a new free speech complaints scheme: open until 10th March: BU is considering a response
  • Consultation on the approach to regulating students’ unions on free speech matters: open until 17th March
  • Consultation on the inclusion of higher technical qualifications in student outcome measures: closed November 2023
  • Consultation on a new approach to regulating harassment and sexual harassment-this one has been closed since May 23 so there should be an outcome soon

And two Department for Education ones:

Apprenticeships

In the last couple of updates I have mentioned the government focus on apprenticeships, which is being supported by funding provided by the OfS to support the development of new L6 apprenticeships.   On 17th January the outcome of the latest funding competition was announced, with £12 million being allocated.  The list is here (BU is on it).

Applications and admissions

UCAS have published the end of cycle 2023 data.

Sector:

  • Overall applicants fell in 2023, the peak was 2022
  • 18 year olds had grown (slowly in some years) since 2014 when this data starts until 2023 when the number fell back
  • More females than males applied in every age group

As well as the more general picture there is also data for nursing, which shows tor UK applicants there is a fall in application numbers for most age groups since 2021 but applications for 18 year olds and over 35s remain higher than they were in 2019, and the over 35s are now the biggest group, as they were in 2020 (and almost were in 2021).  The proportion of male applicants over 35 is also higher than the other groups.

Midwifery applications have also fallen since 2021 but remain higher than 2019 for 18 years olds and the over 35s, 18 year olds being by far the largest group with the over 35s just squeaking in at second.  The gender data is interesting: tiny numbers of male applicants.

Wonhke have an article and analysis: there are a little over a thousand more English domiciled applicants who have accepted a place at a Russell Group provider this year than last. Everyone else (excluding alternative providers) has lost accepted applicants over 2022, but (as UCAS is always keen to remind us) the “last regular year” comparison to 2019 looks a bit rosier. There are loads of charts and even a map.

Student experience, wellbeing and finances

Cost of living: This year’s updates have covered this ongoing issue; the Russell Group published a briefing this week on the impact of inflation on the maintenance loan and what their members are doing to help. The briefing also points out: The shortfall is compounded by the freeze on the parental earnings threshold used to calculate maintenance loans in England. Students with a household income of less than £25,000 are eligible for the maximum loan, but this figure has been frozen in cash terms since 2008. It is estimated that had this threshold increased with earnings, it would now sit at £35,000, making many more students eligible for the maximum support.

Lifelong loan entitlement

This has been a long running story and we have reported for several years on the various legislative changes and consultations but it all still seems a bit remote and confusing: the new funding system will be in place for entrants to HE from September 2025.

This is about two things, really:

  • putting funding arrangements for university degrees and other post 18 higher level courses on an equal footing; and
  • the “lifelong” bit: enabling flexible and modular learning including to support returning or mature learners

The real change is in the mechanics of funding for universities.  In preparation for modules and to support the “LLE personal accounts” the funding basis is switching to a system based on credits, not academic years.

Last week I talked about the OfS funded short course trial that had a microscopic take up.  I wonder if the public accounts committee will be interested in the cost/benefit of that £2m investment?

There’s a blog here that the OfS wrote in October 2024 on the changes for HE that the LLE will bring:

Over time, we think this will lead to some or all of the following changes:

  • Universities and colleges will offer standalone modules from existing courses
  • Students will be able to build a full qualification by completing different modules, across different courses, from different universities or colleges
  • Students could end up studying at several universities or colleges at the same time, or across multiple departments in a single higher education provider
  • Students will be able to study modules that will give them the skills or knowledge they need to progress their career without the intention of building or completing a full qualification.

If there is a growth in LLE funded modular study, we also think there might be a shift to:

  • Universities and colleges changing existing …courses to an LLE fundable modular format
  • …An increase in modular study overall, not only LLE fundable modules
  • A decrease in the number of employers paying for continuing professional development (CPD) related courses as individuals will receive funding for standalone modules; [and] an increase in employers encouraging employees to take up CPD related modules as they will not need to fund them.

But if you are still puzzled about what it is all really about, and what it means in practice for universities, the Department for Education have published a guide in the form of a policy paper this week. sorry this is a bit wordy!

The summary: so far not very revolutionary.

From the 2025 to 2026 academic year, the LLE loan will be available for:

·       full courses at level 4 to 6, such as a degree or technical qualifications

·       modules of high-value technical courses at level 4 to 5

Under the LLE, eligible learners will be able to access:

·       a tuition fees loan, with new learners able to access up to the full entitlement of £37,000, equal to 4 years of study in today’s fees

·       a maintenance loan to cover living costs

Targeted maintenance grants will also be available for some groups such as learners with disabilities, or for support with childcare.

An additional entitlement may be available in certain cases – for example, for some priority subjects or longer courses such as medicine.

Learners will be able to see their loan balance through their own LLE personal account. This will help them make choices about the courses and learning pathways available.
So the devil, as always, must be in the detail.  What is covered, see below, again, fairly straightforward, except the bit about modules. 

But that isn’t coming straight away “The government will take a phased approach to provide modular funding. We expect to expand modular funding to more courses from the 2027 to 2028 academic year.”

Eligibility:

·       The LLE will be available to new and returning learners.

·       For returning learners, the amount they can borrow will be reduced depending on the funding they have previously received to support study.

·       LLE tuition loans will be available for people up to the age of 60. Learners who are over 60 may still qualify for maintenance support, though not a tuition fee loan.

·       Eligibility criteria for the LLE will track existing higher education (HE) student finance nationality and residency rules.

Courses: the LLE will be available for:

·       full years of study at higher technical and degree levels (levels 4 to 6)

·       modules of technical courses of clear value to employers

From the 2025 to 2026 academic year, the LLE will fund:

·       full years of study on courses currently funded by HE student finance including:

o   traditional degrees

o   postgraduate certificates in education (PGCE)

o   integrated master’s degrees (a 4-year programme that awards a master’s degree on top of a bachelor’s degree)

o   the foundation year available before some degree courses start

·       all HTQs, including both full courses and modules of those courses

·       qualifications currently funded by advanced learner loans where there is clear learner demand and employer endorsement

·       modules of some technical qualifications at levels 4 and 5 currently funded through advanced learner loans with a clear line of sight to an occupational map and evidence of employer demand
So what does this mean for students?  The main change is that tuition fee and maintenance loans will be available for a wider range of courses.

The entitlement

New learners (those who have not yet received government support to undertake higher-level learning) will be able to access a full entitlement equal to 4 years of full-time tuition. This is currently equal to £37,000 across 4 years, based on today’s maximum fee limit of £9,250 per year.

This means a student could use their £37,000 to pay for more than 480 credits of learning, depending on the per-credit cost of the course. For example, if a student can borrow £37,000 and they use £7,000 for a 120-credit course, they would have £30,000 of the LLE left for other courses, regardless of the size or duration of the original programme.

Returning learners …who have not used it all will have access to a residual entitlement. For example, a typical graduate who completed a 3-year degree worth £27,750 in today’s fees will have a £9,250 residual entitlement.

An additional entitlement above the core 4-year entitlement will be available for some priority subjects and longer courses such as medicine.

Maintenance loans

Maintenance loans are designed to help learners with living costs while they study. There is a maximum claim amount based on a student’s course, location and personal circumstances.

Under the LLE, the maintenance loan for living costs and targeted support grants, such as the Disabled Students’ Allowance and the Childcare Grant, will be made available for all designated courses and modules that require in-person attendance. Maintenance support will be subject to personal criteria such as income. This will broadly remain the same as the current criteria.

Repayments

The latest repayment arrangements apply as for students who started university this year.
And what does it mean for universities?

There will be a maximum financial amount per credit and a maximum number of credits that can be charged for in each course year, which will be set by the government.

We will treat certain course types under the LLE as ‘non-credit-bearing’. This means that different rules will apply. Non-credit-bearing courses include courses such as medicine and PGCEs, and courses where the provider has not assigned a qualifying credit value.

To support the LLE, the government will introduce a standardised transcript template to ensure a learner’s assessed achievements are always captured under the new modular, credit-based system.

There will be a new process for new providers and new qualifications.  This is properly new stuff and the subject of a lot of the ongoing work listed below, but probably not a lot of interest to readers of this update!
There is a separate paper on how tuition fees will work, from November 2023. This bit is confusing and implementing it will be tricky: lots of new reporting and forms likely to achieve this!

In the LLE system, we’ll set fee limits per credit. Credits are a measurement used by colleges and universities to identify how much learning is in a period of study. One credit generally equals 10 hours of learning by the student. This includes all tuition, assessment and any self-guided study in the student’s own time.

The credit-based system means that providers will only be able to charge for as much learning as they offer. A course containing 60 credits will have half the fee limit of a course containing 120 credits at the same provider.

The LLE system will have different fee limit rates. The limit-per-credit will depend on the type of study. There will be different limits for work placement, study abroad, and foundation years in certain subjects. Each of these limits may be lower if the provider does not have:

·       a Teaching Excellence Framework (TEF) award

·       an approved access and participation plan (APP).

There will no longer be different limits for part-time study. Instead, each course or module will have a fee limit based on the number of credits it contains. This is subject to a course year maximum and a course maximum. This means that if a course contains 360 credits, its overall fee limit will be the same regardless of how many years it takes to complete.

Some courses will be non-credit-bearing. For these courses, we’ll allocate a default number of credits. For example, we’ll allocate a PGCE course 120 default credits. This is because currently providers do not always allocate the same number of credits to these courses, but the amount of content is always very similar.

Under the LLE system, we’ll calculate fee limits according to the number of credits in a course year, multiplied by a limit-per-credit. For example, if a year of a course contained 120 credits, and its limit-per-credit was £50, its fee limit would be £6,000.

The LLE system will no longer have different fee limits for accelerated study. Instead, the overall fee limit for an accelerated degree will be the same as the overall fee limit for the same degree (full-time or part-time).

There will be a cap on the number of credits for which providers can charge in each type of course. This ensures that credits are not added on to courses simply to increase tuition fees. Providers may offer additional credits beyond the maximum, but are not allowed to charge for them.

If a student repeats part of their course, the repeat study is not counted towards the course cap. For example, if a student on a 360-credit degree fails a 30-credit module and repeats it, the provider can charge them for 390 credits overall.

And those modules?

There are no restrictions on the number of chargeable credits in a module. However, a module must have the same number of credits as it does when it is offered as part of the full course.

Modules offered separately from full courses must contain at least 30 credits. This can include multiple smaller modules bundled together.
So what is next?

In spring 2024, we will:

·       launch a technical consultation on the wider expansion of modular funding

·       lay secondary legislation covering the fee limits for the LLE in parliament

·       communicate the details on the benefits of the third registration category

In summer 2024, we will: publish further information about the qualification gateway

In autumn 2024, we will: lay the secondary legislation that will set out the rest of the LLE funding system in parliament

In spring 2025, we will: launch the LLE personal account, where users can track their loan entitlement and apply for designated courses and modules

In autumn 2025, we will: launch the qualification gateway, an approval process that allows qualifications to access LLE funding (as noted above, not directly relevant to us)

Who are the staff at UK universities?

HESA published a bulletin about UK HE staff statistics as at 1st December 2022, on 16th January 2023.

  • Research Professional article here.
  • Wonkhe article here

The data shows an increase in the number of academic staff and non-academic staff employed in the sector since the previous year and a small decrease in the number of a-typical academic staff employed.

  • In 2022/23, 103,005 or 43% of academic staff were employed on contracts described as having a teaching and research function. The total for 2021/22 was 100,170 or 43%.
  • A further 36% of academic staff were on teaching only contracts. This percentage has steadily increased year-on-year since 2015/16, when it was 26%.
  • Among academic staff, 71,420, or 30% were employed on fixed-term contracts in 2022/23. Of full-time academic staff, 22% were employed on fixed-term contracts in 2022/23. In contrast, 43% of part-time academic staff were employed on fixed-term contracts, marking an eight percentage point decrease from 2021/22.
  • Of academic staff with known ethnicity, 22% were from ethnic minority backgrounds in 2022/23. This has increased from 16% in 2017/18.
  • Of the 22,345 professors with known ethnicity, 2,865 or 13% were from ethnic minority backgrounds. The majority of professors from ethnic minority backgrounds were Asian.
  • From 2021/22 to 2022/23 there was an increase of 40 Black professors.
  • The number of staff known to have a disability increased by 1,100 compared to 2021/22

Financial sustainability: Scotland

Last week’s update mentioned student number caps, which may soon be applied in specific cases (by provider, by subject) based on quality reviews by the OfS.  The government recently ruled out reintroducing more widespread caps in England after a consultation.  There have caps in Scotland, though, and they are about to be reduced.  Wonkhe reported this week on remarks in the Scottish Parliament:

  • Scottish finance secretary Shona Robison confirmed that at least 1,200 funded university places for Scottish-domiciled students will be cut following the Scottish government’s 2024–25 budget. Her remarks were made a scrutiny session with the Scottish finance committee – Robison told MSPs that the funding for additional places, instituted due to increased demand during the pandemic, was no longer sustainable.

The Scottish caps on home students have had a direct impact on the finances of Scottish institutions and they have turned increasingly to the international market to make up the income as, like in the rest of the UK, the real value of domestic tuition fees falls.   The financial challenges for Scottish universities are described in this recent report from the Scottish Funding Council (4th Jan 24).

You will recall that there is a reason for these caps: the Scottish government funds tuition fees directly in Scotland for Scottish students, there is no tuition fee loan. The actual amount received was £7,610 for each Scottish student this academic year year (see a report from the Institute for Fiscal Studies from December 2023), significantly less than the £9,250 capped fee in England.

Institutional failure

Last week I talked about the OfS licence conditions in place to protect students in the context of a university closing down, perhaps as a result of financial issues.

Wonkhe have several blogs this week.

There is one from two members of Public First on what would happen if a large university ran out of money:

  • The DfE (rightly) puts in place lots of warning measures for schools in difficulty, and if a school or group of schools start to find themselves in real trouble, a lot of things kick into place. They can mandate that schools have cost cutters come in; they can prescribe significant changes to operating models; and they can both demand that the school or school group takes an advance from the state, whilst placing (pretty onerous) conditions that are attached to repaying that advance. And given that financial trouble often goes hand in hand with performance trouble, the government has pretty carte blanche to change leadership and management when a poor performance judgement is made….
  • Universities are, of course, not big schools. And it is their fiercely guarded autonomy – as safeguarded in HERA – which means we don’t have a clear set of state interventions. When the Westminster government made its various moves to extend a more market based HE system in England in the early 2010s, it was explicitly envisaged that some providers could exit the market – and that government wouldn’t step in. This was not a bug, but instead a positive virtue of the system…
  • There is no power in today’s legislation for the government to give “extraordinary support” to a particular institution. In a major failure scenario, they could theoretically want to support (or even force) a merger or acquisition. They could also want to support specific institutions financially to keep them open at least for an interim period. But both would likely require new legislation, potentially at speed, and all of this tells against a story of autonomy
  • …. This issue all relies on some very big P political questions. Which institutions might be allowed to fail – and which won’t? What does increased government intervention mean for institutional autonomy, an idea already much eroded in political and policy circles? What does it mean for the status of universities, and could they be reclassified as FE colleges as public sector bodies if the state gains more control over funding or governance? And how much is the sector as a whole willing to trade to save a small, but potentially significant number of institutions?

There is one is from two members of the Office of the Independent Adjudicator for Higher Education (OIA) talking about what will really happen if a provider fails.

They point out the regime that applies to FE, for which there is no equivalent for universities:

  • the Technical and Further Education Act 2017 established an insolvency regime that applies to further education and sixth form colleges in England and Wales. This introduced a special education administration regime, which protects learner provision for existing students at insolvent colleges with the overarching duty to the learner

They conclude:

  • We have talked before about insurance schemes or a “pot of money” to help students in these situations. We often hear that many providers would not be willing to pay into a system as they do not think such a situation really impacts them.
  • But the impact on the wider sector, students and the reputation of HE must be worth further serious discussion, and we are increasingly finding that there is an understanding that this situation needs to be addressed. …..
  • Whatever the answer, students should not be the collateral damage. A provider closure can leave students significantly disadvantaged, with their experience of and faith in higher education ruined. The potential impact on some students’ mental health cannot be underestimated. The financial impact, in a system where students are at the end of a long list of unsecured creditors, could create significant hardship and may make it unsustainable for a student to complete their studies.
  • We cannot just wait for a large-scale disorderly exit to happen before we engage in a serious discussion.

Knowledge Exchange in Research

BU research, Events, Knowledge Exchange

The Knowledge exchange in Research session, is aimed primarily at those in academic leadership roles including Deputy Deans and Heads of Department.

It is open for academics and researchers who want to explore ways of making the most from their research outcomes.

  • Consultancy and contract research
  • Enterprise
  • External engagement
  • CPD and Specialist Facilities

Prof Kate Welham will share their experience on knowledge exchange in research.

 

Wednesday 31st January, 13.30-15.00 at Talbot Campus

To book onto this session,  please complete the Booking form  under “Introducing Knowledge Exchange in Research – 31/01/2024”  in the drop-down menu.

For further information about the content of the session please contact Wendelin Morrison, KE Manager, RDS wsmorrison@bournemouth.ac.uk

 

HE policy update: outlook for 2024

EU, Industry collaboration, innovation, international, Knowledge Exchange, NHS, parliament, policy, Research assessment, research governance, Research news, Student Engagement, UKRI

New year, new start for the BU HE policy update.

It’s an election year, so I will be looking at the policies, predictions and plots as the year unfolds alongside the usual news and comment.  I’ll be trying some new approaches this year so let me know what you think.

Alongside all the policy and politics there are the big geopolitical issues that may escalate even more dangerously this year; with luck some of them may creep towards a resolution.  Just to list a few: Ukraine, Israel/Palestine, China/Taiwan, ongoing conflict or issues in Yemen, Afghanistan, North Korea, elections in the US, Mexico, Venezuela, India and Pakistan and a new leader in Peru, a third of African nations have elections this year) alongside climate change and equality issues across the world.  These issues have an impact on domestic politics including through the impact on cost of living and potentially as people seek clarity,  reassurance or perceived strong leadership in a time of fear or uncertainty.  There’s an interesting article here from CIDOB on the issues the world is facing this year.

If you are interested in predictions, IPSOS have a survey of what the public are expecting.

Politics and Parliament

Let’s start with the current government’s pledges and likely priorities: as the year unfolds I will look at some of these in more detail and review the alternatives.

YouGov have a take on the most important issues facing the country: the economy, health, immigration and asylum are at the top

Conservatives seeking re-election

A year ago the PM set out 5 pledges: we can expect to hear a lot more about them.  Reviews here from  the BBC and the New Statesman:

  • Halving inflation by the end of 2023: This has been met, but this will continue to be a focus along with the reason it matters: cost of living (see below).
  • Get the economy growing wages have improved somewhat in real terms but GDP is flat
  • And there is an issue with fiscal drag, as more people pay more tax (see the FT)
  • National debt falling: The pledge was that it would be forecast to fall in 2028/29 (i.e. not yet). The BBC points out:
    • In the Autumn Statement in November, the Chancellor Jeremy Hunt claimed to be on track to meet that pledge because the OBR predicted a fall in 2028-29. But it’s going to be tight and will involve challenging spending restraint for some government departments.
    • When will we know? The next debt forecasts will be published alongside the Spring Budget in 2024.
  • Cutting NHS waiting lists: This is not going very well.  The overall waiting list was expected to fall by March 2024: we will know in May 2024 when the figures come out.  The BMA have some data, and the BBC chart uses the same NHS data but helpfully splits it out by how long people have waited. Ongoing strikes will remain a challenge for the government this year.
  • Stopping the boats.  Controversial and difficult.  Chart from the BBC again. Here’s a link to the 2nd Jan update from the Home Office on this one.  Stopping the boats is just part of the larger policy agenda on cutting net migration to the UK (see below).

Things to watch this year: cost of living

The reason inflation mattered so much was the impact on cost of living.  The increases may have slowed but costs are still high:

… food bank charities like the Trussell Trust are helping record numbers of people, and some people are using debt to pay for essentials … The Joseph Rowntree Foundation (JRF) collects data on destitution in the UK. Someone is ‘destitute’ when they didn’t have two or more of six essentials in the past month because they couldn’t afford them, or their income is too low to purchase the items themselves. JRF found that 1.8 million households experienced destitution in 2022, a 64% increase since 2019. The rising prices of essentials has contributed to this increase. The essential that most destitute people went without most often was

  • food (61%), followed by
  • heating (59%)
  • clothes (57%),
  • toiletries (51%),
  • lighting (35%) and
  • shelter (which means they slept rough) (14%).

Things to watch this year: net migration:

Despite the focus on the small boats, the real policy issue is the net migration number, going back to the original pledge from more than a decade ago to reduce that number.

There is a useful annual report from the Migration Advisory Committee here (Oct 23).

This report also has a section on student migration which is discussed below in relation to international students.

Other things to watch in 2024 (as well as the general election)

Local elections and by-elections – always interesting in the run up to a general election: Local elections are in May (not in BCP), there is a by-election in February in Wellingborough: another test for the government as the former seat of Peter Bone MP is contested; and another possibly in Blackpool later in the year.

Spring budget: 6th March 2024: likely tax cuts, with a potential to reduce the fiscal drag point noted above, plus possible cut to inheritance tax. Other appeals to the Tory base are likely and there are rumours of “traps” to make life hard for Labour in the election campaign or if they win the election.

Political leadership: this is a mainly post-election consideration, but would Sunak step down if the Tories lose the election and who would replace him? What would happen to Starmer if Labour lose?  What about the SNP and what will happen in Northern Ireland?  Wales will have a new First Minister this year (in the Spring as they are holding leadership elections).

The political fallout from the Covid inquiry: which will continue through this year.

Some parliamentary bills of interest to HE were carried over to the new session, and new ones were announced in the King’s Speech such as:

Labour’s 5 missions

As well as these, Labour have also talked about the possibility of replacing the system of education regulators with one combined regulator, as they are doing in Wales,  Unlike the Conservatives, they do want to encourage more 18 year olds into HE.  See the bold highlights below.

These were set out a while ago:

  • Get Britain building again: not just about home building but this one is about growing the economy more generally: “Secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off.” This includes:
    • A new industrial strategy and a council to implement it
    • A Green Prosperity Plan: private sector investment
    • Changes to planning to help industry
    • Devolution
    • National Wealth Fund
    • “Making it easier for universities to develop self-sustaining clusters of innovation, investment, and growth in their local areas”
    • “reforming planning rules and arcane compulsory purchase rules, with new protections for renters”
    • “closing the holes in the government’s Brexit deal, cutting the red tape”
    • “Establishing a supply chain taskforce to review supply chain needs across critical sectors”
  • Switch on Great British Energy: this does include a plan for a new energy generation company but also a wider objective to “make the UK a clean energy superpower”
    • Act fast to lead the world with clean and cheap power by 2030, backing the builders not the blockers so Britain gets the cheap, clean power we need;
    • Establish GB Energy – a new home-grown, publicly-owned champion in clean energy generation – to build jobs and supply chains here at home;
    • Set up the National Wealth Fund, which will create good, well-paying jobs by investing alongside the private sector in gigafactories, clean steel plants, renewable-ready ports, green hydrogen and energy storage; and
    • Upgrade nineteen million homes with our Warm Homes Plan, so that families have cheaper energy bills permanently, with warm, future-proofed homes.
  • Get the NHS back on its feet: lots in here. for HE the most relevant are:
    • Labour will create 7,500 more medical school places and 10,000 more nursing and midwifery clinical placements per year. We will allocate a proportion of the new medical school places in under-doctored areas, to address inequalities in access to healthcare – because one of the strongest indicators of where doctors practice is where they train. We’ll also train 700 more district nurses each year, 5,000 more health visitors and recruit thousands more mental health staff.
    • Give everyone the opportunity to participate in research if they want to, so we can speed up recruitment and give patients access to treatments faster
  • Take back our streets: “Halve serious violent crime and raise confidence in the police and criminal justice system to its highest levels, within a decade”
  • Break down barriers to opportunity: lots in here, including:
    • urgently commission a full, expert-led review of curriculum and assessment that will seek to deliver a curriculum which is rich and broad, inclusive and innovative, and which develops knowledge and skills
    • Recruit over 6500 new teachers to fill vacancies and skills gaps across the profession.
    • Replace headline Ofsted grades with a new system of school report cards, that tell parents clearly how well their children’s school is performing.
    • Labour wants all young people to complete compulsory education with a firm foundation and will ensure that 80% of young people are qualified to Level 3 (A-Level equivalent) by 2035, with an interim target of 75% by 2030. Labour will reverse the decline in the number of young people moving into sustained education, employment or training after completing their 16 – 18 education. We will aim for over 85% of young people to be in a sustained destination by 2030, including more young people who have completed a level 3 qualification moving onto higher level education and training, with over 70% moving onto higher level opportunities by 2030
    • Labour will establish Skills England, bringing together central and local government, businesses, training providers and unions to meet the skills needs of the next decade across all regions.
    • “Improving the flexibility of the apprenticeship levy, turning it into a ‘Growth and Skills Levy”
    • we will work with universities to ensure there are a range of options on founder-track agreements helping to boost spin-outs and economic growth.
    • Labour will reform this [tuition fee] system to make it fairer and ensure we support the aspiration to go to university. Many proposals have been put forward for how the government could make the system fairer and more progressive, including modelling showing that the government could reduce the monthly repayments for every single new graduate without adding a penny to government borrowing or general taxation. Reworking the present system gives scope for a month-on-month tax cut for graduates, putting money back in people’s pockets when they most need it. For young graduates this is a fairer system, which will improve their security at the start of their working lives and as they bring up families. We will build on the legacy of the last Labour government’s target for 50% of young people to go to university to reverse the trend of declining numbers of adults participating in education and training. We’ll press on and ensure that the ambition for any young person to pursue higher education, regardless of background or geography, is realised.

And that election

Lots of MPS are stepping down: update here from the Institute for Government and a nice interactive map from Cambridgeshire Live here:  makes Scotland look very interesting as they lose standing MPs just as they are in trouble politically on lots of fronts.

Research and knowledge exchange

This will be an interesting year as plans for REF 2029 (as we must now call it) are developed further.  We will be watching for R&D announcements in the Spring budget.

If you missed our coverage of the King’s Speech and the Autumn Statement then you can catch it via the link and here are some highlights relating to RKE:

REF 2029

Announcements made in December including:

  • The next REF will be REF 2029, with results published in December 2029
  • Moves to break the link between individual staff members and unit submissions were welcomed by the community and this principle will be maintained
  • Outputs sole-authored by PGR students, including PhD theses, will not be eligible for submission, nor will those produced by individuals employed on contracts with no research-related expectations
  • The overall Unit of Assessment structure will remain unchanged from REF2021
  • The minimum number of Impact Case Studies that an institution can submit per disciplinary submission will be reduced to one, and the removal of the 2* quality threshold is confirmed

BU’s approach to the REF: the REF Steering Group, led by Professor Kate Welham, is working with the Interim Associate PVC for RKE, Professor Sarah Bate, and with colleagues from across BU on our approach to the REF and Kate is attending UET regularly to discuss developments.  The REF Committee is chaired by Professor Einar Thorsen.

BU has responded to the consultations so far on the REF and will continue to do so: we broadly welcome the changes although we have flagged some concerns about inclusivity and the administrative burden.

Strategic themes and research priorities

The government have a database of their areas of research interest.  These tell us “what policymakers are thinking, what their priorities are and where they need help”

UKRI are working through a 5 year strategy and it is helpful to recall their strategic themes:

Education

There is always a lot to talk about on education in the policy updates, but for the first one of the year I wanted to go back to basics and look at the priorities for the OfS and the government and set them in context.  For example, did you know:

  • That the OfS monitors continuation, completion and graduate outcomes against an absolute baseline for ALL students at all levels (including PGRs and apprentices) at an institutional level, by student characteristics and at a subject level? This is licence condition B3 and if you didn’t know, you can look at the OfS dashboard here for sector data and find data relating to our own provision on the Prime SharePoint site.
  • That the OfS have recently published the outcomes of 6 quality assessments for business and management and computing, with more to come in those subjects and other areas, with some important areas highlighted for other providers: see below for more on this.
  • That we have to inform the OfS within 5 days if certain things happen under what they call the “reportable events” regime, and this can include a wide range of academic or other things: please email reportableevents@bournemouth.ac.uk if you become aware of something that might be reportable (even if it might turn out not to be).
  • That the OfS provides funding for educational development and other work in universities including the development of apprenticeships and other programmes: worth checking their website from time to time.

Government education policy

Government policy as it relates to HE does not address the big elephant in the room: in other words they are NOT proposing any changes to fees and funding or maintenance arrangements.   A series of changes to student loan arrangements came into effect in the autumn, including extending the repayment period.

If you missed our coverage of the King’s Speech and the Autumn Statement then you can catch it via the link and here are some highlights relating to education:

  • In October 2023, the Prime Minister announced a strong action plan to ensure every student has the literacy and numeracy skills they need to thrive through the introduction of the Advanced British Standard. This new Baccalaureate-style qualification will bring the best of A-Levels and T-Levels together, creating a unified structure that puts technical and academic education on equal footing. This reform will ensure every student in England studies some form of maths and English to age 18, boosting basic skills and bringing the UK in line with international peers. It will increase the number of taught hours by 15% for most students aged 16 to 19 and will broaden the number of subjects students take. [this means abolishing T levels, which are supposed to be replacing BTECs, as well as A levels]
  • Proposals will be implemented to decrease the number of people studying poor-quality degrees, and to increase take-up of apprenticeships [as far as we can tell, this does not mean new measures but continuing to instruct the OfS to use its existing powers of regulation plus a continued focus on funding and promoting apprenticeships]

Funding priorities:

  • On 14th December the government asked the OfS to run a competitive scheme to allocate funding for 350 new medical student places for 2025: this follows an expansion by 205 for 2024 and supports the NHS long term plan (although they will need to do more).
  • In their latest strategic priorities letter to the OfS (March 23) the focus was on:
    • Choice and flexibility or provision: the changes to enable lifelong learning (i.e. changes to the structure of loan payments etc), technical education, apprenticeships
    • Strategically important subjects: subjects that support the NHS and wider healthcare policy; science, engineering and technology subjects; and specific labour market needs
    • Degree apprenticeships especially at level 6 (i.e. not level 7)
    • L4 and L5 provision: higher technical qualifications
    • Specialist providers
    • Mental health and wellbeing

Read about OfS funding for 2023-24

OfS strategy

The objectives are:

  • Participation: All students, from all backgrounds, with the ability and desire to undertake higher education, are supported to access, succeed in, and progress from higher education.
  • Experience: All students, from all backgrounds, receive a high quality academic experience, and their interests are protected while they study or in the event of provider, campus or course closure.
  • Outcomes: All students, from all backgrounds, can progress into employment, further study, and lead fulfilling lives, in which their qualifications hold their value over time.
  • Value for money: All students, from all backgrounds, receive value for money.

The two areas of focus are quality and standards and equality of opportunity. That results in 11 goals:

  1. Students receive a high quality academic experience that improves their knowledge and skills, with increasing numbers receiving excellent provision [see the section on quality below]
  2. Students are rigorously assessed, and the qualifications they are awarded are credible and comparable to those granted previously. [see the July 23 analysis of degree classifications]
  3. Providers secure free speech within the law for students, staff and visiting speakers [read the latest consultation on the new complaints scheme and their consultation on regulating students’ unions].
  4. Graduates contribute to local and national prosperity, and the government’s ‘levelling up’ agenda [measured by progression to highly skilled employment: see below for the outcomes data]
  5. Students’ access, success and progression are not limited by their background, location or characteristics [see the new guidance on access and participation plans].
  6. Prospective students can choose from a diverse range of courses and providers at any stage of their life, with a wide range of flexible and innovative opportunities [linked to the government agenda on higher technical qualifications, apprenticeships, lifelong modular learning etc]
  7. Providers act to prevent harassment and sexual misconduct and respond effectively if incidents do occur [ we are expecting the outcomes of a consultation on this fairly soon, it closed in May].
  8. Providers encourage and support an environment conducive to the good mental health and wellbeing that students need to succeed in their higher education [read their insight brief]
  9. Providers are financially viable and sustainable and have effective governance arrangements [see the section on sustainability below]
  10. Students receive the academic experience they were promised by their provider and their interests as consumers are protected before, during and after their studies.
  11. The OfS minimises the regulatory burden it places on providers, while ensuring action is effective in meeting its goals and regulatory objectives.

Outcomes

The OfS annual review provides some data to set the scene.

The report highlights that continuation is lower for:

  • students from more deprived areas or who were eligible for free school meals,
  • students from most (although not all) black and minority ethnic groups
  • mature students
  • students with reported disabilities, other than those with reported cognitive or learning difficulties (who make up 5.1% of students); and
  • care experienced students.

The report highlights that completion is lower for:

  • students from more deprived areas or who were eligible for free school meals,
  • students from most (although not all) black and minority ethnic groups
  • mature students
  • students with reported disabilities; and
  • care experienced students.

The report highlights that attainment rates are lower for:

  • students from more deprived areas or who were eligible for free school meals,
  • students from most (although not all) black and minority ethnic groups
  • mature students
  • students with reported disabilities with the exception of students with a reported mental health condition (4.5% of students); and
  • care experienced students.

The report highlights that progression rates are lower for:

  • students from more deprived areas or who were eligible for free school meals,
  • students from most (although not all) black and minority ethnic groups
  • students with reported disabilities other than those with reported cognitive or learning difficulties (who make up 5.1% of students); and
  • care experienced students.

In relation to mature students, those aged 31-40 have the highest progression rates while those aged 50 and over have the lowest.

Quality and standards in HE: OfS quality assessments

If you don’t follow the announcements from the OfS closely, you may have missed the trickle of OfS quality reports, so far in two subject areas, business and management and computing.  There are context papers which provide an interesting read and then the investigation reports themselves (so far 5 published for business and management and one for computing).  Concerns were found in 2 of the 5 business and management reports: no sanctions have been confirmed yet.

More detail is given below, but just to flag the priorities for 2024 quality assessments.  With the government already having announced that fee caps will be reduced for some foundation year courses, note the link to foundation year courses below: there will be quality reviews in this area especially as outcomes are lower, as noted in the linked Wonkhe article from October.

OfS sector context papers:

  • Business and Management
    • Growth in numbers (pp5 and 6) which highlights some potential issues which probably triggered these investigations and explain why they picked it as a subject priority
    • The percentage of full-time undergraduate entrants taught through sub contractual arrangements has more than doubled since 2018-19, from 10 per cent to 27 per cent (pp9 and 10)
    • The proportions of full-time undergraduate students that are from deprivation quintiles 1 or 2 are consistently higher in business and management than for all other subject areas (p18)
    • The proportions of full-time undergraduate students who are on courses that include an integrated foundation year are consistently higher in business and management than for all other subject areas (p20)
    • Low continuation for UG (p23), low completion for UG (p25), low progression at UG and PG (pp27 -28)
    • Low NSS for teaching (p30) and some other areas (not learning resources)
  • Computing
    • Low continuation and completion compared to other subjects (pages 23 to 26) at UG and PG
    • Balanced by good progression – but a provider that didn’t have good progression would stand out (pp 27 and 28)
    • Low NSS scores (pp29-34)
    • High proportions of non-permanent staff (p41)

Quality assessments: Business and management

Themes: concerns were found in relation to two of the five published so far and findings included:

  • Insufficient staff to provide adequate support, impacting personal tutoring, assessment and feedback and academic support
  • Not enough flexibility in course delivery to support the cohort of students recruited, namely not providing sufficient flexibility when students had to work to finance their studies or have caring responsibilities, having recognised that this was a specific feature of their intake: licence condition to deliver course effectively was brought into play
  • Inadequate central monitoring and pro-active management of engagement and attendance and over-reliance on individual academic staff to follow up  – licence condition to take all reasonable steps to ensure students receive sufficient academic resources and support.  Recommendations included:
    • Clear lines of responsibility at faculty and university level regarding who the lead for continuation is, and further channelling of university-level resource, expertise and effort towards the continuation problem in the Business School.
    • Systematic analysis of student failures on modules and historical withdrawals, to provide a more detailed picture and understanding of why students do not continue their studies at the university.
    • Better real-time monitoring of engagement and a university-level set of criteria that can be used to identify a student who may be at risk of dropping out, combined with systematic analysis of student behaviour and non-attendance so that proactive additional support can be offered.
    • A review of examination board processes and module performance criteria to ensure that under-performing modules are being picked up and addressed through the quality assurance and enhancement system. While the assessment team acknowledged the new course and unit enhancement planning process, this did not appear to be embedded and should be monitored closely.
  • Support for avoiding potential academic misconduct was not consistently provided in assessment feedback via the online assessment platform at Level 4
  • The format for providing formative feedback on assessments may not have been sufficient for some students across a number of modules reviewed. This concern also relates to condition of registration B2 because the assessment team considered that ensuring consistent access to formative feedback is a step that could have been taken to ensure students have sufficient academic support to succeed
  • Insufficient academic support for foundation year students once they progressed onto the main programme – support should have continued at higher levels

Quality assessment: Computing: no concerns were found in relation to the one report published so far.

Apprenticeships

As noted above these remain a priority for the government (and would likely be for a Labour government too).  In that context a report from the summer by UCAS with the Sutton Trust is interesting:

  • Today, 40% of students (430,000) interested in undergraduate options are also interested in apprenticeships. Despite this growth in demand, the number of starts for young learners remains low – with the number of Level 4 and above starts for under-19 year olds less than 5,000
  • Disadvantaged students are more likely to be interested in apprenticeship options, with 46% from the most disadvantaged areas interested in this route, compared to 41% from the most advantaged areas. Furthermore, those from lower socioeconomic backgrounds (63%) are more likely to have considered apprenticeships
  • A quarter (24%) of former applicants said that one of the top three reasons why they did not pursue an apprenticeship was because they felt they could not afford to do so.

Student experience, wellbeing and finances

Student finance

The cost of living update from the House of Commons Library Nov 23 has a section on student loan repayments and maintenance support (page 64) which links to this report from September 2023 on the value of student maintenance support.

International

Despite all the negativity about international students in the context of the migration policy (see above) and the OfS’ regulatory concern about the risk of large numbers of international students, there is a positive policy in relation to international students: the government have an International Education Strategy that has two ambitions by 2030:

  • increase education exports to £35 billion per year
  • increase the numbers of international higher education (HE) students studying in the UK to 600,000 per year

According to the annual report from the Migration Advisory Committee here (Oct 23) referred to below, this second target was achieved in 2020/21:

  • according to the Higher Education Statistics Agency (HESA), this target was met in early 2020/21, with 605,000 non-UK students at Higher Education Institutions (HEIs). This has increased further since then, with growth driven by a small cohort of countries, notably India and Nigeria.
  • Non-UK students accounted for almost 30% of first-year enrolments in tertiary education last year, up from 25% before the policy announcement in 2018/19.
  • In a global context the UK is a major market for international students. HEIs in the UK accounted for 9% of all international students in 2020, behind only the US for market share. The UK’s market share had been steadily declining since 2006 having been briefly overtaken by Australia as the second most popular destination for international students in 2019

Student visas

The annual report from the Migration Advisory Committee here (Oct 23) referred to above also has a section on international students.  It includes the policies on stopping dependants which have now been implemented.

There is some interesting data on student numbers: it shows the large number of international student in London and also Scotland (not surprisingly given their student number cap for home students).  Perhaps surprisingly, there are more international than UK students in the East of England and the North East and numbers are more or less equal in Yorkshire and the Humber, although this data includes students on the London campus of universities based outside London.

HE sector sustainability and change

Student numbers and admissions

UCAS projects that there could be up to a million higher education applicants in a single year in 2030, up from almost three quarters of a million today.

But will there be?  Applications and admissions fell last year, but that was after a bumper post-covid year in 2022 and UCAS described it as a return to normality.  Or is it the rhetoric from the government on mickey mouse degrees etc and changes to loan repayments making it more expensive for students in the long run having an impact?  Time will tell: eyes will be on this year’s applications.

Financial sustainability

The OfS annual review provides some context for this. The OfS issued their annual report on financial sustainability in May 2023 and identified the following key risks which are still relevant:

  • The impact of inflation on costs and challenges in growing income to meet increasing costs. In particular, the ‘per student’ income from tuition fees from UK undergraduates is capped and not increasing, while other costs rise.
  • Increasing reliance on fees from overseas students, particularly postgraduates, in some higher education providers’ business plans. (In May 2023, the OfS wrote to 23 higher education providers with high levels of recruitment of students from China. We reminded them of the importance of contingency plans in case there is a sudden drop in income from international students. We asked a subset of those higher education providers most exposed to a short-term risk to provide information about their financial mitigation plans)
  • Challenges in meeting investment needs for facilities and environmental policies

The OfS identifies a number of strategies that they may see to address financial sustainability concerns.

JANE FORSTER, VC’s Policy Advisor

Follow: @PolicyBU on X

BU carbon pricing research cited in select committee report on the financial sector and the UK’s net zero transition

BU research, Featured, Knowledge Exchange, policy

BU research on the impact of carbon pricing has featured in a House of Commons Environmental Audit Committee (EAC) report on the role of the financial sector in helping the UK achieve net zero emissions by 2050.

A cross-faculty team comprising Dr Alan Kirkpatrick and Dr Tahani Mohamed of the Business School and Dr Festus Adedoyin of the Faculty of Science and Technology submitted written evidence which has been published as part of the report, titled The financial sector and the UK’s net zero transition. 

Their evidence included recommendations considering the economic welfare implications of carbon emissions pricing at a national and international level, and the need for carbon border adjustment mechanisms (CBAMs) that has informed the EAC’s deliberations and subsequent recommendations to the Government.

Carbon pricing systems include carbon taxes and emissions trading systems (ETSs) in which carbon credits may be bought and sold thereby creating a ‘carbon market’ which, theoretically, could help achieve a global price for carbon.

In practice, however, carbon emissions pricing systems may encourage ‘carbon leakage’ – where businesses in countries that have more stringent carbon pricing rules try to save costs by moving production activities to countries with less demanding carbon pricing rules and hence lower costs.

CBAMs are designed to reduce carbon leakage by applying charges to take account of variations in carbon prices ruling in different jurisdictions.

The BU research team discussed the risk that CBAMs might be seen as ‘climate clubs’, reducing the competitiveness of carbon-intensive emerging economies but concluded that CBAMs are necessary to minimise carbon leakage when carbon emissions pricing systems such as the UK’s Emissions Trading Scheme are implemented.

In its report the EAC has recommended that the UK Government should develop a UK CBAM. The BU research team is continuing to analyse the impact of carbon emissions pricing on wider public wellbeing in the UK.

Read the full report – The financial sector and the UK’s net zero transition