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Don’t Look to the Ivy LeagueHoward Hotson
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Vol. 33 No. 10 · 19 May 2011

Don’t Look to the Ivy League

Howard Hotson

3475 words

At the heart of the Browne Report and the government’s higher education policy is a simple notion allegedly grounded in economics: that the introduction of market forces into the higher education sector will simultaneously drive up standards and drive down prices. The confidence displayed by ministers in predicting these effects would be more reassuring if it were not at odds with the evidence that precisely the opposite is happening. The list of universities committed to charging something near the £9000 upper limit of fees is steadily lengthening, contrary to what Vince Cable has repeatedly told them is in their rational economic interest. And with regard to standards, the American company that owns BPP University College – which David Willetts granted university status only last year – recently lost its appeal in the US Supreme Court after being found guilty of defrauding its shareholders and is under investigation by the US Higher Learning Commission for deceiving students about the career value of its degrees. Since one of the justifications for funding university teaching primarily through tuition fees was to open up the English university sector to the beneficial influence of private providers, this news throws further doubt on the wisdom of government policy.

Whenever university standards are talked about, the basis for comparison is taken to be the annual THE-QS World University Rankings.* Every year since 2004, these tables have appeared under some variation of the headline ‘US Universities Dominate World Rankings.’ And every year the picture has been more or less the same: on average, US universities have occupied 13 of the top 20 positions, while British universities have occupied four. US universities outnumber their UK rivals further down the league table too, and no other country remotely challenges America’s effortless supremacy.

It isn’t difficult to see how these tables have helped push government policy towards its current infatuation with markets. All but one of the 13 American universities which have routinely topped the tables are private institutions, and those inclined to neoliberal ways of thinking are unlikely to see this as a coincidence. If the global supremacy of US private universities is the product of their exposure to competitive markets, then the sooner such markets are introduced into UK, the sooner we can begin to watch their magic ‘driving up standards’. The government’s zeal to marketise UK higher education, to emulate American universities and to invite US corporations to set up private universities in Britain are all of a piece. Because the dominance by US universities of the upper end of these tables is thought to be so absolute, their role in informing the political consensus underlying government policy is rarely discussed.

Yet all those journalists and politicians who have leaped so nimbly from league tables to university policy have apparently overlooked the fact that the US is larger than the UK: its population of 311 million is five times the UK population of 62 million. Already, the American three-to-one lead in the World University Rankings looks far less impressive. In fact, over the past seven years, the UK has had more top 20 universities per head of population (one per 15.5 million) than the US (one per 23.9 million). And since the UK institutions in the top 20 are on average slightly larger (20,500 students) than the US ones (17,300 students), almost twice the proportion of the UK population has been studying at top 20 universities (1 in 756, compared with 1 in 1383). In economic terms, the two countries differ by an even larger margin: US GDP (at $14.658 trillion) is 6.5 times larger than UK GDP (at $2.247 trillion). For the past seven years, the UK has been maintaining fully twice as many top 20 universities as the US for each unit of financial resource.

No less important, Americans spend a far higher proportion of their national wealth on higher education than the British. According to the OECD, the UK spends 1.3 per cent of GDP on tertiary education, precisely the EU average. The US, on the other hand, spends 3.1 per cent, far more than any other country in the world. So America not only has 6.5 times the UK’s financial resources, it also spends 2.4 times as much of those resources on tertiary education. That adds up to more than 15 times as much investment in higher education in the US than in the UK. And yet, according to these world rankings, that 15-fold investment nets barely a three-fold return in educational excellence. The UK has somehow managed to maintain top-ranked universities for only about a fifth of the US price.

The top ten or 20 places typically grab all the attention. What happens when we consider all 200? No summary of the mean rankings of the top 200 universities over the past seven years is available, but we can examine the data in the THE rankings for 2010-11. In the top 50 places, US outnumber UK universities by five to one. In the second tier (places 51-100), American universities begin to lose their edge, and the proportion drops to three to one. In the bottom half of the table (places 101-200), the number of places held by both countries is much reduced, as universities from other countries crowd onto the table, but the significant point is that here the US and UK universities are virtually at level pegging. UK universities are distributed fairly uniformly throughout the table, which suggests that there is a smooth and gradual transition from the top tier of universities to the next level down, and so on. The US university system, by contrast, appears to concentrate a hugely disproportionate share of resources in a small group of very wealthy and exclusive private institutions.

If anyone thinks the lower reaches of the table are inconsequential because only the top 100 universities in the world really matter, they should think again. According to Unesco, there are 5758 recognised higher education institutions in the US, about 1600 of which grant four-year degrees. So the 72 US universities in the top 200 represent fewer than 5 per cent of those offering four-year degrees. The US university system overall appears to offer poor value for money: none of the funding, public or private, pouring into 95 per cent of the higher education institutions in America makes any impact at all on the world university rankings. By comparison, the 29 UK universities in the top 200 represent nearly a fifth of the 165 listed by the Higher Education Statistics Agency. So British universities appear, on average, to be almost four times better at breaking into the global top 200 than their American counterparts.

An even less flattering picture emerges if a few necessary corrections are factored into the data. If we first adjust the figures by head of population, the UK is a match for the best of the US from the start: according to the most recent data, the two countries have virtually the same number of top 50 universities per capita. But as we move from the top 50 to the bottom 50, the UK opens up a commanding lead: there are four times as many universities per capita in the bottom half of the table (101-200) in the UK as in the US. If we further adjust for the ratio of GDP between the two countries (6.5 to 1), the data show that the UK makes better use of its smaller per capita resources in every tier of the rankings. And if we factor in that the US invests more than twice as much of its GDP in higher education as the UK, even in the top tier, where the strength of the American system is concentrated, UK investment in higher education seems to be yielding almost three times the return. In the bottom half of the table, British universities appear to be offering a staggering 12 times better value for money.

The data which appear, at first glance, to demonstrate the great strength of the US university system are revealed, on even the most rudimentary analysis, to demonstrate nothing of the kind. Measure for measure, US universities are manifestly not the ‘best of the best’. If value for money is the most important consideration, especially in an age of austerity, the American model might well be the last one that Britain should be emulating.

This analysis has serious implications for government policy. There is no evidence here that private sector competition drives up academic standards, but there is clear evidence that market competition drives up prices, since academic excellence apparently costs much more in the US than the UK. Why is this? It isn’t in fact difficult to see why the introduction of market pricing into a small cohort of elite universities will drive prices up, not down. Wherever a small and strictly limited supply of a highly desirable commodity – such as places at Harvard – is introduced into a genuinely open market, the wealthiest cohort in society will drive its price up to levels only they can afford. This is essentially what has been happening at the upper levels of the US university league since the income gap began to open up in the 1980s. For several decades, tuition fees have been rising at double, triple and even quadruple the rate of cost-of-living inflation, first at the most exclusive universities, and then throughout the private sector, so that there are now more than a hundred private colleges and universities in the US charging students at least $50,000 annually for fees, room and board.

One might think this a peculiarly American phenomenon – an offshoot, perhaps, of some particularly ‘advanced’ form of consumer culture – but in fact the logic at work becomes even clearer in the context of the smaller education market in England. The introduction of competition drives down prices only in markets for commodities that can be readily produced. If a firm is producing things inefficiently, or skimming off too much profit, it can be undercut by more efficient methods of production or leaner business models. But there are some things which cannot be readily produced, and ancient universities are an excellent example. Oxford and Cambridge have a 600-year head start on their English rivals. Many of the advantages they enjoy are the product of their long histories: their architectural settings, their libraries and archives; their unique systems of tutorial teaching, collegiate organisation and self-government; and the academic prestige accumulated by two dozen generations of scholars, philosophers, scientists, poets and prime ministers. Their competitors cannot produce these things at any price, much less one that undercuts theirs. And because the ‘student experience’ they offer is one that many find uniquely attractive, they could, if freed from the constraints of government legislation, charge as high a price for this experience as the market would bear, without the risk of being undercut by anyone but each other.

So, imagine what would happen in England if the fee cap were removed, a real market introduced, and universities allowed to pursue their own economic interests without regard for anything else – i.e. act even more ‘rationally’ than Vince Cable thinks they should. Oxford and Cambridge would jack up their tuition fees dramatically, first of all to recoup the roughly £8000 of their own resources they currently invest in educating each student every year on top of what they receive through fees, government grants and research income. Rich parents would relish the opportunity to drive fees even higher, beyond the reach of less wealthy parents of more able children. The hyperinflation in Oxbridge fees would provide headroom for every other university in England to start increasing its fees; some, with lucrative professional degrees to offer, would raise them to levels above those of an Oxbridge arts degree. Further down the English academic league table, the rate of fee inflation would gradually fall until, somewhere near the bottom, universities would be competing on price within the £6000-£9000 band, as ministers intended all along.

Market forces are the reason American private universities have become so expensive, but why does all the extra money pouring into US universities generate such a poor return in the rankings? Evidently, a large fraction of this funding is being invested in something other than academic excellence. This haemorrhage of funds has not gone unnoticed by American university leaders, who have traced the source of the leak to another aspect of market-driven academic culture which the government plans to start importing from America: the ‘student experience’.

Jonathan Cole, former provost and dean of faculties at Columbia, wrote in the Huffington Post last year that in addition to fee inflation, a major contributor to the increased cost of higher education in America stems from the

perverse assumption that students are ‘customers’, that the customer is always right, and what he or she demands must be purchased. Money is well-spent on psychological counselling, but the number of offices that focus on student activities, athletics and athletic facilities, summer job placement and outsourced dining services, to say nothing of the dormitory rooms and suites that only the Four Seasons can match, leads to an expansion of administrators and increased cost of administration.

If Cole is correct, then the marketisation of the higher education sector stimulates not one but two separate developments which run directly counter to government expectations. On the one hand, genuine market competition between elite universities drives up average tuition fees across the sector. On the other, the marketing of the ‘student experience’ places an ever increasing portion of university budgets in the hands of student ‘customers’. The first of these mechanisms drives up price, while the second drives down academic value for money, since the inflated fees are squandered on luxuries. To judge from the American experience, comfortable accommodation, a rich programme of social events and state of the art athletic facilities are what most 18-year-olds want when they choose their ‘student experience’; and when student choice becomes the engine for driving up standards, these are the standards that are going to be driven up.

What’s worse is that British government ministers, on visiting a beautifully manicured US campus for the first time, respond in the same way as American teenagers. Familiar as they are with the shoddy physical condition of even the best English universities, they cannot help but be impressed by the quality of the facilities offered by rich American institutions. What they forget is that the dilapidated state of so many English university buildings is the product, not of a lack of academic competitiveness, but of deliberate government policy these last 20 years. By holding university income firmly down, raising student numbers and prioritising research through the RAE, they have attempted to push up academic performance at the expense of teaching and the maintenance of existing buildings, not to mention the construction of new ones.

Might markets have the beneficial side effect of driving up academic standards? Much depends on the measure you use; but the academic standard that markets are most likely to drive up is the one that matters most to high-fee-paying students: marks. Way back when, the average mark in the US was supposed to be a C. Nowadays, the more expensive the university, the higher the average mark, with the average in private universities now an A-minus. Why is grade inflation so closely correlated with fee inflation? The reason can easily be guessed. If you’ve attended one of America’s hundred costliest colleges or universities and paid upwards of $200,000 for a four-year degree, then it had better be a good one. Ignore this demand and an institution’s levels of ‘student satisfaction’ will plummet, as will the number of wealthy people willing to invest in its degrees. Fortunately, these private universities are not required to employ external examiners to even up standards across the system, so there is nothing to prevent them meeting the student-led demand for higher and higher grades. Thus the net effect of introducing market forces driven by student demand is, yet again, precisely the opposite of what ministers intend: the value of academic credentials is debased across the system.

But might free-market competition drive up levels of actual academic achievement as well as grades? Not according to the World University Rankings. The only place in the world where private universities compete with one another and with a far larger group of public universities is the United States, and the US data clearly indicate that this competition drives the quality of public universities down, not up. Consider the top 20 institutions in the aggregated THE-QS rankings for the past seven years. Moving down the table, past all those famous Ivy League names, one finally comes to a solitary American public university, the University of Michigan, in 20th place, just below the best public universities in Canada (joint 17th) and Switzerland (19th), and below the Australian National University in Canberra (14th). Canada’s population and economy are about a tenth the size of its neighbour’s, so the data suggest that the Canadian public university sector narrowly outperforms the American on a tenth of the assets. Switzerland manages to pip the US despite having a GDP 1/30th and a population 1/40th the size. And the Australians somehow managed to beat the American public university sector in this seven-year period with only 1/14th the people and 1/12th the money. As for the UK, with only a single small private university until recently, it contributes all four of the best public universities: their mean rank positions are second, joint third, seventh and 12th. If we factor back in the five-fold difference in population, UK citizens have 20 times more opportunity to study at first-class public universities than their American cousins.

Another interesting pattern emerges if we examine the geographical distribution across the United States of the top 100 universities in the THE rankings for 2010-11. The wealthiest private universities at the top of the league table – including the whole of the Ivy League – are concentrated on the northeastern seaboard of the United States, from Massachusetts in the north to North Carolina in the south. If proximity to the energising influence of private universities drives up standards, as Willetts seemed to imply, we would expect to find the great public universities clustered in this same area. But the opposite is the case: the more distance between them and the rich private universities, it seems, the higher their level of achievement. Overwhelmingly, the best-represented state university system is California’s, with two universities in the top ten and a total of nine in the top 100. This seems impressive, but we should bear in mind that California’s GDP is almost as large as that of the UK, which boasts 14 public universities in the top 100. A striking contrast is provided by New York, California’s economic and intellectual counterweight. One might imagine it would benefit from market competition with Columbia, Cornell, NYU and the Ivy League institutions to its north and south, yet although New York State’s economy is fully half the size of the UK’s, its top-ranked public university – the State University of New York at Stony Brook – slots in at a humble 78 in the global rankings. Of the 14 other US public universities in the top 100, ten are located in southern, midwestern and western states that don’t have large private universities: Michigan (joint 15th), Washington (23rd), Georgia Tech (27th), Wisconsin-Madison (joint 43rd), Minnesota (52nd), Ohio State (66th), Colorado-Boulder (67th), Virginia (72nd), Utah (joint 83rd) and Arizona (joint 95th).

Thus, once again, the empirical data directly contradict current government assumptions. The great private universities in the US do not provide the competition needed to energise lethargic public institutions. Instead, they hoover up a hugely disproportionate share of the resources in the system, thereby impoverishing their neighbours. They have the money to build the best labs, stock the best libraries and buy up the most high-profile professors. Their facilities attract the best and the wealthiest students, cornering the market in social as well as intellectual prestige. They drain the area around them of all the resources needed to sustain good public universities. Most of the public universities that break into the top 100 operate as far away from the Ivy League as America’s vast landmass allows. Outside the top 100, American performance falls sharply to a low level.

The natural interpretation of the World University Rankings flies in the face of the key assumption underpinning current British government policy. Market competition in the United States has driven up tuition fees in the private universities and thereby sucked out the resources needed to sustain good public universities, while diverting a hugely wasteful share of these resources from academic priorities to improving the ‘student experience’ and debasing academic credentials through market-driven grade inflation. The partially privatised university system in the United States is not ‘the best of the best’. In terms of value for money, the British system is far better, and probably the best in the world. Willetts should follow the example of the health secretary, take advantage of a ‘natural break in the legislative process’, and go back to the drawing board.

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Letters

Vol. 33 No. 11 · 2 June 2011

Howard Hotson has a polemic to make against the UK government’s higher education policy (a polemic I am sympathetic to), but in the process he issues some dubious statements about American universities (LRB, 19 May). ‘Market competition in the United States has driven up tuition fees in the private universities,’ he writes, ‘and thereby sucked out the resources needed to sustain good public universities, while diverting a hugely wasteful share of these resources from academic priorities to improving the “student experience" and debasing academic credentials through market-driven grade inflation.’

This sentence distorts the situation of American universities, their sources of support and their policies. I suppose in some cosmic economic analysis you could claim that American private universities consume too many resources, but there is no indication that economies on their part would go to support the public universities. These traditionally were funded largely by state budgets, that is by tax revenues, and ought still to be, though many states have deplorably underfunded them in recent years. The ‘elite’ private universities justify their high tuition charges through a policy of ‘need blind’ financial aid: that is, the claim that students will be admitted without attention to their ability to pay and given the resources they need. At the university where I currently teach, 60 per cent of students receive such financial aid, all of it in direct grants, not loans.

As for the debasement of academic credentials through ‘market-driven grade inflation’, I’d be interested to see Hotson’s evidence for his assertion. ‘Way back when,’ he writes, ‘the average mark in the US was supposed to be a C.’ Perhaps so, if you were partying with Scott Fitzgerald’s gilded youth in This Side of Paradise. I am convinced that the best universities now have a more serious, more academically committed, and harder-working student body, and that the rise in grade averages has something to do with this. American universities face multiple problems that are not altogether different from those in the UK. But I don’t see what is to be gained by demonising them in an otherwise justified critique of what’s going on in the UK.

Peter Brooks
Princeton University, New Jersey

Howard Hotson commits a textbook example of the fallacy of composition. He contends that the Canadian public university sector does better than the American on one-tenth the funding on the grounds that the University of Toronto outranks its highest-ranked American competitor, the University of Michigan. This ignores the fact that Canada pours a disproportionate amount of resources into Toronto and that the university has three undergraduate campuses, making it much larger than any American competitor. Indeed, there are at least a half-dozen American public institutions of comparable international stature.

Dhananjay Jagannathan
St John’s College, Cambridge

Vol. 33 No. 14 · 14 July 2011

Howard Hotson is quite right when he says that his analysis of American universities ‘has serious implications for government policy’ (LRB, 19 May). But his view of our policy is such a crude caricature – market fundamentalism plus infatuation with the US – that he misses out on the real implications of his critique. His starting point is the annual THE-QS world university rankings. He draws heavily on this and shows, very persuasively, that while the US does well, we do even better. I completely endorse his conclusion that ‘the data showed that the UK makes better use of its smaller per capita resources in every tier of the rankings.’ These rankings, like most international league tables of universities, are heavily driven by research performance. His article shows, yet again, the current Anglo-American dominance among high-quality research-based universities, with – if anything – the UK doing even better than the US relative to our size. One reason we secured a ring-fenced, cash-protected budget for research (covering all types of research, including arts, humanities and social sciences) was that the last thing we wanted to do was jeopardise this excellent performance.

The interesting question, which Hotson doesn’t address, is why we do so well in these rankings. Apart from the obvious advantages of our extraordinary tradition of open research and inquiry across a whole range of disciplines, it must also have something to do with the policy framework that has been created. There are two separate ways of allocating research money: through research councils and through the Research Assessment Exercise, now reformed as the Research Excellence Framework. Many rationalists might see it as rather messy that we have two different modes of financing, but it brings diversity into the system and it is the reason why, for the first time, we have included quality-related funding as well as research council funding within the cash-protected research budget. Another reason for the strength of our research could well be that the allocation of these funds to particular projects and researchers is independent of political interference.

A further explanation is that the mechanisms for allocating funding are intensely competitive. The research councils run a bidding process which I sometimes hear complaints about, yet most people accept that it is better than the alternatives. While research council funding rewards existing excellence, universities can and do use quality-related funding from the Research Assessment Exercise to build up new departments and encourage new research areas. Sometimes the competitive pressures prompt universities to recruit staff with a good back catalogue of peer-reviewed articles to help improve their research performance. What I draw from this is that, by and large, if left to shape their own systems, academics come up with a model that is intensely competitive and individualistic. If anything I would like to see rather more collaboration and co-operation in research – between different departments and different universities. Nevertheless, as Hotson demonstrates, this model has driven a very strong performance by British universities in the research-driven rankings.

The system that governs teaching and academic experience hasn’t really been designed by academics and the way funding is allocated is beyond their direct control. Instead, it has been designed by politicians and it is very different. Because we have to regulate overall student numbers in order to control the cost to the public purse, we fix the number of students allowed to go to each individual university. Universities do, of course, have complete autonomy over whom they select, but they have lost the freedom to determine how many students they take. Keeping the current system would be the equivalent of not having research councils or the Research Assessment Exercise, and just allowing each individual university a certain number of funded research places. Both Vince Cable and I believe that this model has led to insufficient focus on teaching. A key purpose of our reforms to university financing is to do something about this fundamental problem. We believe that rather more openness and competition is part of the answer. But we are emphatically not driven by some naive desire, in Hotson’s words, to ‘emulate’ America.

Let me list some of the obvious features which make our arrangements very different from and rather better than America’s. For a start, we have a nationwide system of quality assurance. I know that academics have complaints about the clunkiness of the QAA – which is why we propose in the White Paper that rather than just follow a regular cycle its inspections should be based more on response to concerns. The independent quality assurance process is nevertheless crucial. Indeed, we want to set out clearly in new legislation that any alternative providers whose students are to receive public support through our loans system must participate in the QAA.

Hotson refers to American organisations making wildly exaggerated claims about employment outcomes from their classes. This is clearly a problem in the US. But in Britain, we have the independent Higher Education Statistics Agency, together with other datasets. I am working with academic social scientists to link up all these data more effectively and make them available in transparent form, so that every prospective student has access to information about these types of outcome.

In America, many students have to go into the private market to borrow money to finance their studies. We have a universal student loan scheme that is also highly progressive: payments will only start if and when graduates earn over £21,000 a year, up from £15,000 at the moment.

Hotson rightly says that another weakness of the American system is that it doesn’t use external examiners. There is a case for strengthening the role of external examiners here even further, and I am strongly in favour of external degrees. Most of the universities created in Britain between 1850 and 1950 began by awarding external degrees. Universities with degree-awarding powers are proud of them and we are not going to take them away. But the Open University’s Validation Service, the University of London external degree programmes and internationally recognised qualifications like BTECs can be a powerful way of signalling high standards, perhaps in institutions whose own degrees might not command recognition in their own right. They offer a route for new teaching institutions to enter the system – the main model for growth through most of the history of higher education in our country. So we are a long way from America, and the proposals in our White Paper will strengthen the institutional arrangements which remain distinctive features of our education system.

Hotson’s article fails to address the real challenge of improving the student experience in our universities. That is ironic as the answer is staring him in the face: it is to try to introduce into teaching some of the competition and incentives in the research system he praises. Instead his confused article tries to use our success in research to oppose reforms to teaching which are influenced by that very success. He does, however, have a sentence which gets close. It contains a vivid list of complaints I have heard from many academics: ‘By holding universities’ income firmly down, raising student numbers, and prioritising research through the RAE, they [I think he means me and my predecessors!] have attempted to push up academic performance at the expense of teaching and the maintenance of existing buildings, not to mention the construction of new ones.’ That is a very good list of grievances, and our White Paper is a genuine attempt to tackle them.

The first item on Hotson’s list is university income. This is what the shift from teaching grant to fees and loans is all about. The lazy way to have saved money would have been simply to cut the teaching grant. That’s what happened under the Conservative government in the early 1990s and it is the process that Labour embarked on during their final year in office. It would have weakened our universities, though I doubt whether there would have been riots in Parliament Square.

We are replacing the teaching grant with an alternative source of income from government in the form of student loans, with graduates only starting to repay once they are in well-paid jobs. We write off about 30 per cent of those loans because we recognise that there will be some people who cannot afford to pay them back. This offers the best features of a progressive income tax charged at a rate of 9 per cent on earnings above £21,000 per annum until graduates have paid off the cost of their university education. But as we are going to get back around 70 per cent of the money through these graduate repayments, the cost to the Exchequer is much less than it would be from an unconditional teaching grant. Some of the savings we make on the teaching grant will go into a more generous maintenance package for students so that students from poor backgrounds are not put off. It will also enable more income to reach universities than under the old system. Our estimate is that, in cash terms, the overall public support for universities in 2014-15 could be 10 per cent higher than in 2010-11.

As funding shifts from direct public grant towards loans for tuition that are paid back by graduates once they are earning, universities will have to compete for students and places and the quotas will be eroded. I do indeed believe in this sort of competition but it doesn’t mean that I’m committed to the American model of higher education. This competition will be partly on price, especially through fee waivers and suchlike for students from lower income backgrounds. But, equally, it will be competition by quality.

Hotson is rather dismissive of this, implying that we’ll have a race towards greater luxury. But the cap on tuition charges means that competition in conspicuous over-provision remains a long way from the reality at any university. Instead, students can expect competition on the quality of the teaching experience. But it does mean that we will have a system of allocating teaching funding which has some of the same features as the system of research funding that Hotson implicitly praises. It is how we are tackling over-prioritisation on research.

The second item on Hotson’s list concerns raising student numbers. I don’t have a fixed target for how many students should go to university. I believe that with money tight and the demographic decline in young people, we may well be on a plateau for a while. But over time I hope, and I hope Hotson does too, that more people will have the chance of going to university, one of the things that makes ours an advanced, progressive society.

So my response to Hotson is yes, I plead guilty to believing in choice and competition. But they must always be rooted in a national culture, strong institutions and a set of moral understandings. They should never jeopardise professional integrity and professional judgment. I’m not advocating some kind of Wild West free-for-all. There must always be regulation and a clear legal framework, especially where there is a significant public subsidy. The success of British universities in research has been the result of a system that places intense competition in a wider legal framework. I believe that we can now achieve the same for teaching and the student experience – a change that many academics have wanted to see for quite some time.

David Willetts
Minister for Universities and Science, London SW1

Vol. 33 No. 15 · 28 July 2011

David Willetts’s argument is essentially as follows (Letters, 14 July). Relative to its size, the UK currently enjoys one of the world’s finest university systems. But UK universities score highly in international rankings because those rankings prioritise research; and UK universities are good at research because for the past 25 years government has stimulated competition for research funding through the Research Assessment Exercise (RAE). In order for UK universities to become good at teaching as well, competition for students must also be introduced; and this requires the replacement of teaching grants by greatly increased tuition fees, the opening up of higher education to new private providers, and more data to inform student choice.

His argument has several puzzling features. First, the THE World University Rankings, on which the argument turns, don’t just measure research performance: 30 per cent of their weighting is based on teaching quality. In other similarly weighted tables (such as QS and the US News & World Report), UK universities rank just as highly. But in rankings based on research performance alone (such as the Shanghai Ranking or ARWU), the UK does markedly less well. So, by international standards, British teaching does at least as well as British research.

Second, Willetts claims that the high quality of UK research is due to the competitive pressures generated by government policy. Are we to believe that the 22 Nobel Prizes awarded to scientists working in the UK during the last 25 years are the consequence of the competition stimulated since 1986 by the RAE? How then to account for the 32 Nobel Prizes awarded to British-based scientists in the 25 years before 1986?

Third, even if we concede that competition promotes excellent teaching, can anyone deny that UK students currently compete for places at the best universities, or that universities compete for the best students? Universities are already artificially incentivised to attract the best students, since their standing in national league tables rises along with students’ standards on admission, graduation results and job prospects. If economic competition between universities is thought desirable, ministers could easily arrange for ‘funding to follow the student’ even if some or all of that funding was paid directly by the state, and to allow popular universities to expand at the expense of less popular ones. Willetts gives no justification in his letter for the most reckless aspect of his White Paper: the overthrow of the way our universities are defined, established, regulated and funded in order to usher into this country the new breed of predatory, profit-driven ‘universities’ which have wasted so much public and private money in the US.

There is much in Willetts’s letter that is baffling, at least until his closing profession of faith in market fundamentalism reveals the premise on which his argument rests: ‘I plead guilty to believing in … competition.’ For anyone who believes, without need of evidence, that market competition only and always drives up standards, the high standard of British research can only be explained by reference to the RAE, because only market competition drives up standards. British teaching cannot possibly be any good, because it isn’t presently subject to market competition. And an extremely successful university system can be radically re-engineered overnight on a confused and speculative basis, because market competition, even from the most debased and mercenary pseudo-universities Wall Street can devise, must inevitably drive up standards.

There’s one big problem with this faith-based policy: it doesn’t work in the real world. In fact, we all discovered, less than three years ago, that market fundamentalism doesn’t work even in the world of high finance. Meanwhile, Americans – from the Supreme Court and the US Department of Education on down – have concluded that deregulating higher education for the benefit of for-profit universities doesn’t work either, except for CEOs and shareholders. But in the UK, neoliberal radicals of all political parties have seized on the crisis of public finances created by their own misguided policies as a pretext for privatising our universities, and are now gambling one of the world’s best university systems on an ideological conviction which recent experience has shown to be dangerous and destructive.

Howard Hotson
St Anne’s College, Oxford

David Willetts could not be more wrong when he attributes the success of UK universities to ‘the policy framework’ created for the allocation of research funds. Increasing competition for smaller numbers of awards means increasing the amount of time researchers waste on fruitless applications. The system of ‘full economic costing’ produces awards that include hefty overheads for the researcher’s institution, which is wonderful if you get one, but means that far fewer are available. Researchers are under huge pressure to apply for these awards, effectively to support their institutions, which results in massively intensified competition and plummeting success rates – less than 20 per cent in the case of the main awards offered in the social sciences and humanities. Countless hours of research time, not to mention the public money that funds researchers’ salaries, are wasted.

At the same time, the small grants of just a few thousand pounds that funded so much valuable work have been axed. The medieval historian who could write a book with the benefit of a few trips to the archives and some research assistance, or the anthropologist who needs a few thousand pounds to undertake fieldwork in the Himalayas, is now faced with the prospect of applying for a massively inflated, extremely competitive research council grant, or competing with colleagues for a minuscule amount of university funding – or not writing the book at all. Our universities are maintaining excellent standards despite, not because of, the current policy of inefficient, competition-based funding. Extending this policy to the funding of teaching is a mistake.

Fernanda Pirie
Centre for Socio-Legal Studies, Oxford

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