Transcript Document

CVU annual conference, 19 September 2014
Public spending on higher education
and the implications for partnership activity
Julian Gravatt, Assistant Chief Executive, AoC
[email protected]
English College HE
Characteristics
100,000 students in 280 colleges (range 100 to 3,500)
Local, employer-led, technical, some niche
c50% apply for one course/one institution (UCAS)
70% live within 25 miles of campus
Student cohort more disadvantaged than HE average
Partnerships with Universities long-standing & important
English College HE trends
2008-9
2011-2
2012-3
Direct
31
37
44
Indirect
28
30
24
Full Time
Sub-total
59
66
68
Part Time
Direct
24
21
20
Indirect
33
27
18
Sub-total
56
48
38
117
116
106
47%
50%
60%
Full Time
Part Time
% Direct
The English HE system – not a normal market
Supply
Inertia (heritage, three-year degrees etc)
Longish lead-times to respond to demand but shortening
Full-time UG fees close to the £9,000 cap
Universities compete to be higher up league tables
Demand
Applicants need to be qualified to make a choice
Degrees are positional goods
Higher fees are paid after completion (no fees upfront)
Living costs loom larger than fees to many students
“Breaking the mould”
Analysis
English post-secondary higher-level skills
system weak and small
Policy & history biased towards full-time
residential three-year degree model
Proposals
Re-balance the system
Different approaches to validation
Colleges/universities to work on progression
The bigger spending picture
800
Government plans
Deficit reduction
700
Spending cuts 2009-18
600
Spending review in 2015
500
Unprotected departments
Taxes
400
9.1% of GDP (2013-14)
RAME
300
7.8% of GDP (2015-16)
5.4% of GDP (2018-19)
Loans may be a safe haven
PSCE
RDEL
Deficit
200
100
0
-100
The HE budget
2011-12
Teaching
Student
Support
Research
RAB charge
Teaching
Student
Support
Research
RAB charge
Grants
Loans
2013-14
Grants
Loans
Revenue spending in HE after 2015
BIS revenue budget £13.2 billion in 2015-16 (£8 billion HE)
Spending plans imply 31% cuts to unprotected depts (2015-18)
IFS scenarios for UUK (back in October 2013)
1. Breach the science/research ringfence (£4.6 bil budget)
2. Allow fees for Medicine & STEM to exceed £9,000
3. Switch from HE maintenance grants to HE loans
4. Reduce number of FT HE students
5. Cut 19+ FE/Skills budget further (on top of 35% cuts 2009-15)
HE student loans after 2015
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Outlays
Repayments
Issues
Options
10.3
12.7
14.4
15.6
16.7
17.4
1.8
2.1
2.3
2.5
2.5
2.6
Now – the 2014-15 HE round
The spending decisions
HE teaching grant £2 bil; HE fee loans £7 bil
Decisions on HEFCE grants and SNCs notified in March
Fee regulation
No significant change despite new fair access director at OFFA
Allocation of HE loan budget
30,000 additional FT entries in 2014 (8% extra)
No core/margin bidding process
Redistribution of SNCs within a new flexibility range (6%)
Off quota Colleges and private HEIs will get SNCs
Some justifiable concern about practices in some private HEIs
The future – 2016 and beyond
Could general election change things?
“Young people feel they have no control because they are going to get
into mountains of debt if they go to university…We do want a radical
offer on tuition fees because the future of our young people… is a
massive issue that our country faces,”
Ed Miliband, ITV interview, March 2014
..but Ministers would need to act quickly
“There are some decisions, however, that can’t wait. We do need to set
out in the next few weeks the way forward for graduate contributions
and student support if we are going to have any chance of
implementing changes for the Autumn of 2012 …..It is rather like A. J.
P. Taylor’s thesis that train timetables determined the outbreak of the
First World War”
David Willetts, October 2010
HE full-time entries
Entry numbers
Average SLC fee loan
2012-13
312,000
£7,700
2013-14
345,000
£7,800
2014-15
375,000
£7,900
2015-16
390,000
£8,100
Source: Derived from PQ answered by David Willetts, 24 Feb 2014
Suggestions
Rethink adult learning
Changes to public spending permanent
These are long-term trends which take time to implement
Loans are a way to make fees more palatable
Fees were a bigger part of the mix in the 1980s
There’s still considerable demand for education and training
People are working longer/need to retrain
Employers still think about workforce development
Opportunities exist