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The Kerslake Collection | Opportunity, access and skills

Evidence-based WP and graduate outcomesto support a place

Most English universities are founded on the alignment of private and public investment and endeavour, positioning them as a common good in the places where they are located. During the last decade, increasing higher-education participation has been accompanied by a reduction in the public influence on the educational activities of England’s universities, which is now almost entirely financed by tuition fees. There is a substantial public subsidy for UK students, but this is largely determined by choices made by individual students, rather than common priorities, and public endeavour is routed through regulation focused on protecting their interests as consumers. Increasing participation is often associated with a loss of consensus about the purpose and value of a university education, but this appears to be a particular challenge currently for English higher education. Universities are expected to serve the common good, but they have few incentives for this, because of the imbalance between private and public influences on their work. 

Although there is unlikely to be any fundamental change to higher-education funding over the coming year, a new government could identify clear and commonly held priorities, and could broker the collective endeavour needed to deliver them, through compact agreements in local areas across the country. This could be achieved by focusing the regulation of individual higher-education providers on the core concerns of access, quality, financial health and governance. In turn, this would enable more time and resources to be devoted to promoting collaboration around common missions – between universities, further education colleges and their industry and public-service partners, and also the different funding and regulatory bodies responsible for further and higher education.

Establishing universities for the common good

In 1898, Joseph Chamberlain set the mission for a new university in Birmingham: it should be ‘redolent of the soil, and inspired by the associations in which it exists’. Chamberlain was by then the nation’s colonial secretary, a role that often shapes perceptions of him today. But he made his money as a screw manufacturer and his name as Birmingham’s mayor. He raised local taxes to supply the city with gas, water and street lighting, and leveraged private investment and philanthropy for a commercial centre and cultural institutions. 

The University of Birmingham was founded in the same spirit. Chamberlain’s standing in local and national government, combined with his relationships with industrialists and philanthropists, enabled a Royal Charter, the gift of land, endowed academic posts and new buildings. The university built on a college for the study of practical science, which had been established 30 years earlier by another industrialist and philanthropist, Josiah Mason, and then merged with the city’s medical college. It was intended to improve educational opportunities for local people, while supplying professional, technical and scientific expertise for industry and public service, and cultivating knowledge for future generations. 

Chamberlain’s connections enabled these shared benefits to be supported by a mix of funding sources, which aligned philanthropy, industry sponsorship and student fees with finance from local and national government. Birmingham’s ‘civic gospel’ expected its wealthiest citizens to serve their local community as a moral responsibility. But their individual contributions were matched by public funding, which enabled disparate interests to be aligned around the common mission to establish a new university.

Birmingham now has five universities, all of which have developed through the alignment of private and public interests, often dating back to their origins in 19th-century technical colleges. Aston University originates from the city’s School of Metallurgy, which led to the Birmingham Municipal Technical School, Birmingham Central Technical College and the nation’s first College of Advanced Technology. Birmingham City University is founded on the integration of the city’s School of Design with its technical, art, music, acting and commercial colleges, then schools of nursing, midwifery and radiography. University College Birmingham and Birmingham Newman University developed from specialist institutions intended to supply professionals for the city’s food and catering industry and its Catholic schools.

Universities give prominence to their roots and associations with the places in which they are located because this makes them distinctive and provides confidence that their qualifications have lasting recognition. The progress of many institutions towards university status also demonstrates the integration of specific professional and technical training with the advancement of universally applicable knowledge. This responds to the immediate needs of students and employers, but also the changing character of work and life. Thus it extends the interest in university education beyond private individuals and organisations. It positions universities as a common good, providing shared benefits now and into the future. 

Expansion and fragmentation

Birmingham’s five universities figure alongside more than 400 other institutions on England’s register of higher-education providers, which now educate more than two million students each year, including around half of young adults. As identified in the United States 50 years ago, increasing participation has been accompanied by a loss of consensus about universities. Higher education has become an obligation for many families – indeed the way in which people and places adapt to social and technological change. This has enabled universities to grow, but has also yielded greater scrutiny and challenge, particularly in relation to the culture of academia and the value of a university education. 

These patterns are perhaps inevitable, given the greater diversity of expectations and perspectives arising from more young people and their families experiencing higher education. They have, though, been compounded in England by the approach to financing and governing expansion, which has given primacy to competition and student choice. Most English universities are founded on the alignment of private and public interests around a common mission, but their educational activities are now determined by decisions made by individual students. 

Over the last two decades, student numbers in England have increased from 1.8 million to 2.3 million. University income has risen from £12 billion to £40 billion, more than half of which is now generated through tuition fees. Three fifths of tuition-fee income is attributable to UK students, who are supported by income-contingent government loans, and the remainder comes from international students. Tuition-fee income from international students has nearly doubled over the last five years, compared with an increase of one fifth for UK students. 

The public subsidy for UK students is mostly provided by writing off loans for the lowest-earning graduates, and allocating a supplement to the tuition fee for students on the highest-cost courses. This follows choices made by individuals about where and what to study, rather than priorities identified collectively, locally or nationally. It therefore reflects a narrow conception of the purpose of university education. Public funding is only justified where activity cannot be delivered by tuition fees, with the assumption that university education primarily benefits individual students. Yet universities are expected to serve a more common purpose because this has been embedded in their development for more than a century. 

When income-contingent student loans were first introduced in England from 2006, they were intended to facilitate the continued growth of higher-education participation by aligning private and public investment. Additional tuition-fee income associated with individual students was matched by grants to institutions, so access to higher education could improve not only through competition but also through collaboration and progression between further-education colleges and universities. This was delivered through place-based outreach and progression agreements, as well as new higher-education centres in towns and parts of cities with low levels of participation, which were financed by national Government leveraging grants, land and lending from regional development agencies, local authorities and banks. 

Public funding for local collaboration reduced from 2012, as a result of the replacement of two thirds of the institutional grant with income-contingent loans. When the 2017 Higher Education and Research Act introduced the Office for Students (OfS) as a new regulator for higher education, it was initially anticipated that its requirements of individual institutions would be balanced alongside sector-wide activity shaped by public priorities. This has, however, proved difficult to achieve, because of the weight of additional regulatory obligations placed on the OfS. Higher-education regulation now forms one element of a fragmented landscape, within which the pursuit of common missions is hampered by different funding and regulatory policies and practices across further education, adult learning, apprenticeships, higher education and research. 

Towards a new settlement

England’s fragmented approach contrasts with the publicly funded state systems of the United States, which enable progression between community colleges and different types of universities, and the policies now being advanced in other countries that have similar educational histories and cultures. Australia, Ireland, Wales and Scotland are all promoting a more integrated and collaborative approach to higher education and technical and vocational education and training (TVET). Governments in these countries want more joined-up funding, regulation and qualifications frameworks to facilitate the alignment of provision with common priorities, locally and nationally. This is expected to enhance the benefits of universities in the places where they are located, but also to increase their collective resilience to financial challenges arising from volatile recruitment and rising costs.

Many of the countries now advancing strategies for tertiary education have populations more comparable to city regions with devolved powers, such as London, Greater Manchester and the West Midlands, than to England as a whole. There are, though, asymmetrical powers and capabilities across England, so regional government is unlikely to be able to replicate a model comparable to the tertiary commissions recently proposed for Australia and now being implemented in Wales. National oversight is crucial for students and investors to retain confidence in England’s universities, but a new government could focus its expectations for regulation on the core concerns of access, quality, financial health and governance. This would enable the OfS to devote more time and resources to brokering the collective endeavour that is needed to address common priorities in local areas across the country, between universities, further-education colleges and their industry and public-service partners, and between the different bodies responsible for funding and regulating further and higher education. 

For example, Birmingham is situated within the West Midlands Combined Authority, which has an employment and skills strategy including models of adult learning and apprenticeships that are tailored to the characteristics of the local economy and public services. The Department for Education separately funds skills bootcamps through a national scheme, and it is introducing a Lifelong Learning Entitlement. This is intended to provide a common source of student finance for different forms of tertiary education, but it will not create the pathways between courses and institutions that are needed to capitalise on it. Two universities have published civic agreements, which describe how they work with local partners. There is also a shared commitment to university outreach through the West Midlands Aim Higher Partnership, but all five universities and two further-education colleges negotiate separate access and participation plans with the OfS, which include competing targets for student recruitment. 

A more common approach could be achieved by integrating different investments and activities of this kind through compact agreements developed by universities and local partners. The agreements would support educational progression throughout a local area, providing a consistent source of academic and financial support, articulation arrangements between different courses and institutions, and engagement with employers to diagnose and respond to their needs. They would aim to create an ecosystem aligning the interests of students, universities, further-education colleges and employers around a common mission, actively facilitated by government. 

Five conditions would be crucial for compact agreements to succeed, all of which are associated with advancement of the common good: a clear mission based on commonly agreed priorities; a participatory approach to its development and implementation; a commitment to collective learning and improvement; sharing of recognition and rewards; and clear accountability. In order to meet these conditions, OfS would need to work in partnership with other local and national agencies responsible for further and higher education. This would initially be required to invest in a shared capability for analysis and engagement in local areas across the country, the design of pathways between further-education colleges, universities and the workplace, and the approach to improvement and evaluation. Then it would need to ensure mutually supportive approaches to financing and regulating the learners and pathways supported within agreements.

By brokering a more integrated and collaborative approach in this way, a new government could align increasing participation and progression through all forms of tertiary education with common priorities, locally and nationally. This is crucial in an era of constrained resources, when minimising duplication, sharing capabilities and aligning investment will be needed to sustain universities in places that rely on them. It has, though, been central to the mission of most English universities since their origins.

Professor Chris Millward

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