VC Bulletin – 3 December 2015

The month of November 2015 will be remembered as a pivotal moment in the development of UK higher education. It was a month of major announcements, including the govergreen-paper-smallnment’s Green Paper outlining a new framework for higher education, the publication of the Comprehensive Spending Review (CSR) covering the next 5-years of government funding and the results of the Nurse Review of the research councils. This has been one of the busiest months politically for higher education and in this bulletin I will try to summarise some of the key elements that will be important for us.

The Green Paper.

There is no doubt that the Green Paper, ‘Fulfilling Our Potential: Teaching Excellence, Social Mobility and Student Choice,’ presented to parliament by the Secretary of State for Universities and Science, will have far reaching implications for the future of the university sector. There were, however, few surprises beyond what had been signalled since the elections in May, described by Jo Johnson in various speeches and reported by me in previous bulletins. It is however a very ‘green’ paper, in that while there are some radical changes proposed, the details of implementation are relatively unformed and still need to be clarified. In discussions with the minister himself, I sense that he really is open for debate on a number of aspects of this paper. It is likely to take some time to fully implement, especially considering approval by both Houses of Parliament will be needed before many of the proposals can be enacted.

The proposals continue the path towards the government’s desire for a fully market-based HE system in the UK. The introduction of a Teaching Excellence Framework (TEF) aims to create competition between universities on the basis of the quality of student teaching and addresses the need to justify the level of fees students now pay, albeit via a student loan scheme.

Of course, a market is only considered possible where there is free and fair competition and new providers can emerge while others collapse. To enable this, the paper outlines new approaches to support the creation of new providers of HE alongside proposals to protect students should an HE provider close.

The need to protect consumers in this new market has also led to the creation of a regulator for HE in the same way as other ‘utilities’ have regulators, such as Ofcom, Ofqual and Ofgem – for us it will be OfS – The Office for Students.  This new body will be formed by merging the Higher Education Funding Council for England (HEFCE) and the Office For Fair Access (OFFA).

Within the 103 pages of the Green Paper there are many questions on implementation that are not addressed in any detail. However, while we now enter a period of consultation around some of the finer details, the following aspects are clearly here to stay:

  • The use of some form of Teaching Excellence Framework (TEF) linked to universities being able to increase fees in line with inflation from 2017. This is proposed as a metric-based system in the first instance drawing on outcomes from the Quality Assurance Agency (QAA)  Higher Education Review which we have just successfully completed. It will also include results from the National Student Survey (NSS) and the Destination of Leavers from Higher Education survey (DLHE) as well as student completion rates. What is interesting is the notion of a review panel that will look at these results and recommend a grading at different levels – from satisfactory up to TEF level 3 or 4 depending on how many scales they use. In the longer term there is a desire to include measures of ‘learning gain’, which is excellent for us as we are one of the universities leading on a pilot project on how this can be determined. The TEF will, in a sense, be another ranking but one endorsed by government. Depending on how it is linked to the ability to charge different fee levels, this could have a very big impact on the brand, reputation and ultimately the sustainability of different universities. What is positive for us is that the suggested input measures are already a fundamental part of our new University Strategy and associated Key Performance Indicators (KPIs).
  • Opening up the market for new providers with positive measures in place to encourage competition. While in a sense this is nothing new, work will need to be done to make the rules for different providers the same and reduce the barriers to new providers being set up. This will require new legislation and will mean new competitive challenges including from overseas providers operating in the UK. If we are to maintain our strong brand and positioning, we cannot underestimate the importance of operating efficiently and effectively in providing the very best educational experience for our students. Competition for students is already significant and will only become greater, which means our approach to marketing will take on increased importance. I am so pleased that Dorothy Albrecht, our new Director of Marketing and Communications, is now in place and she will need all of our support in positioning us to embrace this new competition.
  • A new sector infrastructure, including the creation of the Office for Students (OfS).
    There has for some considerable time been a need to rethink the role of HEFCE, but making any change has been avoided until now because it requires parliamentary approval. While there is logic in reducing and simplifying the number of independent bodies engaged with the sector, there is nervousness because HEFCE has always been a crucial intermediary between the government and HE. Using their very deep knowledge and understanding of the sector, HEFCE did an excellent job of presenting to government the reality of implementing new ideas and moderating its thinking. It is proposed that the new body comprising HEFCE and OFFA will not handle any funding but will be very much a regulator focussed on upholding the interests of the students as consumers and the interests of the government. There will be challenges, as HEFCE currently distributes some important funding streams, such as the Higher Education Innovation Fund (HEIF), student opportunity funds, supplementary funding support for high-cost subjects and the QR money for quality related research. The key question is, if HEFCE isn’t distributing the money, who is? That is, of course, assuming that these funding streams will continue!
  • Simplifying the research funding system. In many ways there is good news here with support for excellence wherever it occurs restated and continued commitment to QR research funding, as part of the dual support system for research. Of course it will be the details of implementation that matter and the Nurse Review, discussed below, will also influence government thinking on the future management of research funding.

There is no doubt that while there is much in the Green Paper that will affect us, we should be encouraged that its ideas and proposed changes, support the developments and ideas outlined in our new strategy. It makes delivering the plans we have set for ourselves even more important for our future success. We might have mixed views about a more market based sector, but this is the direction of travel and we must ensure that our response secures our future position, but does so in sympathy with our own mission and values.  The key of course is that the Green Paper is only one part of the puzzle, with the Comprehensive Spending Review in some ways even more important.

Ensuring a successful UK research endeavour: A review of the Research Councils by Paul Nurse

There was great concern about what this review would bring. In many ways we need not have been concerned because, within its 36 pages, the principle of funding research excellence wherever it occurs and the dual support system including the availability of QR funding, is affirmed. It also supports diversity in research and recognises that doctoral programmes, if too inflexible, can prevent graduate students who are not part of such programmes being properly supported. This is of particular interest to us in that we have found it difficult to join such programmes in the past.

The main new proposal is around the structure of the research councils. It is proposed that Research Councils UK (RCUK) is renamed ‘RUK’ and given greater powers including budgetary control and accountability through a chief executive. This chief executive would liaise directly with government in setting priorities and managing the operations of the research councils. It is also proposed that individual research councils remain as separate entities and that Innovate UK is included as part of this new entity.

It will be interesting to see how government responds to this suggestion as I suspect they wanted the proposals to go further towards a merger of at least some of the research councils. What may be of concern, is the idea that RUK would also be given responsibility for distributing the QR money. This might be an issue as it could result in future trade-off between the volume of QR funding and the level of research funds distributed through the research councils. The fact that HEFCE had a hand both in teaching and research funding through the distribution of QR, was always seen as important in ensuring the link between teaching and research. Without this, it sets the research and teaching funds as very much two independent and separate considerations. This could be a future risk for us.

HE funding for the next 5 years – the Comprehensive Spending Review (CSR) outcomes.

While this was the last announcement, it was probably the most important as it defines what will actually happen in the future. It was always going to be a tough outcome, with austerity remaining central to this government’s economic strategy.

While we do not yet know the fine details, we do know that the Department of Business, Innovation and Skills (BIS) faced a cut of 17 per cent over the next five years, which is a good result as cuts of between 25 and 40 per cent had been rumoured and will happen in other departments. What was also interesting is that a part of this cut was achieved through saving in BIS administration, through the previously announced conversion of student maintenance grants to loans and by maintaining the Innovate UK budget but converting it from grants to loans. Here are some of the things we do and don’t yet know:

  • The science budget has been protected in real terms, which means increases by inflation over the period of the CSR. This is much better than was expected.
  • A new Global Challenges Fund has been announced of £1.5 billion over the next 5 years, to be distributed competitively.
  • Research capital expenditure of £6.9 billion has been announced for the period of the CSR. The detail of how this is to be spent and who will decide is not clear, although a new Dementia Institute has been announced.
  • There is a commitment to strong growth in students from outside the EU, supporting the £30billion education exports ambition, and to retain the existing English language requirements under Tier 4. This is good news as there was talk about the tightening of English Language requirements.
  • Further Education tuition loans will be extended for 19-23 year olds studying on levels 3 or 4, and for 19+ year olds studying on levels 5 or 6.
  • Students retraining by undertaking a second degree in STEM subjects which is at an Equivalent Level of Qualification as their first degree, will from 2017/18 have access to student loans.
  • Maintenance support for part time HE students will be introduced by 2018/19, with the details to be consulted on. This could represent important support for our ambitious plans for part time student growth.
  • The age limit on proposed postgraduate loans has been increased from 30 to 60 years or under. This is a good result which we and our Students’ Union had been lobbying for.
  • The student loan repayment threshold will be frozen for 5 years from April 2016. This is a change of policy that many students and graduates will be unhappy about as this threshold originally had been expected to rise with inflation.
  • The Student Opportunity Fund will be cut by 50% which could potentially mean a reduction of income to us of around £2.5million. This is a big loss of income but better than it could have been.
  • The teaching budget will be further cut by £120m overall which could mean a funding cut for us of around £1-1.5million, depending on how it is done. Interestingly, there is a commitment to protect the additional funding associated with high cost subjects.
  • From 2017/18 programmes for Nursing and the Allied Health Professions will be funded through students taking out loans rather than through contracts from Health Education England. This will open up new places for nurses and is welcome considering additional nurses are needed in the UK. This will create opportunities for us to start a nursing provision and expand some of our other health programmes.
  • An apprenticeship levy will be introduced in April 2017, set at 0.5 per cent of an employer’s pay bill. This will increase the University’s costs by around £0.5-0.75 million, although there is a possibility that we may be able to re-invest some of that in apprenticeships at the University.
  • Higher Education Innovation Funding (HEIF) is not mentioned in the CSR and BIS will have to decide whether to continue to fund it once they have got to grips with their new funding envelope. I suspect that HEIF is at risk which could mean a further loss of £1.2million of income.

In summary

There is a great deal of change signalled here and these are only some highlights. We will only really know the details once the individual grant announcements are made early next year. It will take many months to absorb the full implications for us, but overall in funding terms this result, while tough, is better than we had expected.

In addition to all of this external activity and announcements, we have been busy considering the development of our own plans to support our new Strategy. This month we are reporting on our Education Strategy.

Developing our new Education Strategy – open meetings to be held on the 18th December 2015

We are justifiably proud of the education we provide for all of our students irrespective of their background, and the impact this has on transforming their lives. In our new University Strategy we have described how we want to:

  • build on this solid base to ensure that all of our students engage in career enhancing activities
  • to further diversify our student community through, for example, more flexible routes for learning, more distance and technology supported learning
  • to deliver more programmes in partnership, both in the UK and internationally

We also recognise that we need to look again at how we can work within our city and region to raise aspiration and help facilitate progression to university from neighbourhoods where participation in HE is currently low.

To help guide the delivery of these high-level ambitions we are currently writing a new Education Strategy, drafts of which are being discussed by groups of both staff and students. The strategy will need to be clear about what it is that will equip our graduates for future success, and to this end we are seeking to define a set of attributes that we are calling the ‘Hallmark of a Portsmouth Graduate’. The need for our students to acquire these attributes will require a fundamental rethink about many of the ways in which we teach and our students learn. We will need to be prepared to consider our curriculum and assessment structures and the way in which both students and the University record and reflect upon the learning gains associated with a wide range of activities, both within and beyond the curriculum.

Achieving this will require an in-depth review of much of what we already do and is likely to require changes to course structures, from induction through to graduation. We have an exciting opportunity to be bold in shaping the future education provision within our University and while change of this nature will be a challenge, it is through changes like this that we will secure our future, especially considering the new emphasis on teaching excellence.

Paul Hayes will lead discussion on current thinking about the Education Strategy and how we will deliver it at two open meetings on 18 December.  Feedback from those meetings and other events is currently being organised and will be used to produce a final draft for consideration by UEB and the Board of Governors early in the New Year. I would like to encourage all staff to actively engage wherever possible in these important discussions.

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