Don’t mourn the universities that go bust

The new commercial battleground that is the student “experience” will undoubtedly lead to a radical restructuring of higher education - and maybe that's no bad thing
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We can now begin to assess the impact on English universities of high tuition-fees, financed by student loans. How students themselves deal with this situation is, as yet, less clear. Universities have been turned into businesses. Students have been transformed into young people with heavy debts – even before they settle down and try to buy their own home.

The headline earlier this week was startling enough: “Some universities may close”. Well, maybe, but that wasn’t the most interesting finding to emerge from a survey of senior university leaders conducted by PA Consulting. The key result is that universities, in the way they think of themselves and the way they behave, are switching from the ethos of the public sector to habits of mind more common in business.

There is no precedent for this. Ancient universities such as Oxford and Cambridge were founded in the mediaeval period in much the same way as the religious institutions of the time, as pious foundations financed by grants of land. Since then universities have generally been created by Royal Charter or Act of Parliament. Legally they still remain the public sector, even while their thinking has become market-oriented.

This change in attitude has been brought about by the demise of grant funding for teaching and by falling student numbers. This last factor has become serious. There were 51,000 fewer acceptances into English institutions in the 2012-13 academic year than in the previous year, a decrease of 13 per cent. At the same time, digital technology is allowing the development of alternative routes to higher learning.

As a result, the report finds that university leaders don’t any longer think that Government or “official” sector bodies will be central to their future success. Whereas they were once obsessed by what the Government might be planning, now they think that focusing on Whitehall brings little reward. They are on their own. Competition has arrived. They must concentrate on what has become a battle for fee-paying students. Suddenly power has moved from the universities, as providers of higher education, to students as the customers, who can “pick and choose the offers that best suit their needs, circumstances and ambitions”.

For instance, last year’s National Student Survey showed low scores for universities’ ability to provide prompt feedback on students’ work, for providing comments that were sufficiently detailed and for giving explanations that helped to clarify things that were not understood. Perhaps once these shortcomings could be shrugged off, but not any longer. These aspects of the university experience have become critical. It is not just that students demand value for money (their money, even if financed by loans) but that success in finding a job requires the best that universities can offer.

The consequences for universities are working themselves out in a market-oriented way. Individual institutions are narrowing the range of courses they offer. Rationalisation is the order of the day. The report cites anecdotal evidence of widespread closures and mergers of academic departments across the sector. There were more than 20,000 (or 27 per cent) fewer undergraduate courses offered through the clearing system in 2012 compared with 2006.

For the most part, this type of reorganisation is surely good news. The rapid growth in higher education in earlier decades, unchallenged by budgetary rigour, is bound to have left the sector with numerous examples of foolish expansion – without having had the disciplines to engage in judicious pruning. Yet there are concerns. It must be all too easy to cut back traditional subjects such as literature, history and philosophy that don’t play well in the market place, yet remain fundamental to living a full life. And if all research projects were judged on payback criteria, then important pieces of work would never get done.

Living the market-economy experience also means facing failure and closure. Think of the recent gaps in the high street. Among famous names, HMV, Jessops and Comet have all been put into administration or boarded up recently. Is this the fate that awaits the weakest institutions in the higher-education sector? The survey shows that a majority of university leaders expect substantial restructuring and rationalisation among current institutions.

What of the poor, debt-burdened students? Higher tuition-fees have undoubtedly acted as a deterrent. Offers of courses seem to be more concentrated on what are perceived as the brightest applicants than hitherto. But judging only by the 2012 figures, students from disadvantaged backgrounds don’t seem to have fared better or worse than their fellows.

In what shape, then, will the English university sector end up? There is a very high expectation that a “super league” of dominant institutions will emerge – if it hasn’t already. For the rest, what is expected is the development of an increasingly differentiated and plural system, viewed as a collection of niche student markets, each with different needs and conditions for competitive success. And when all is said and done, that doesn’t appear a bad outcome.