Sunday, 25 December 2011

Funding the Scottish universities

Just a few days ago (on December 21st), the Scottish Funding Council (SFC) announced its provisional funding allocations to universities for the academic year (AY) 2012-13, with final allocations expected to be confirmed in March 2012. Normally these notifications are quite dull, though everyone in the sector tends to pore over the figures to see whether they have done better than the previous year, or better than their 'natural' institutional competitors. This year such comparisons are less easy than normal - without doing some hunting around the SFC archives - because the tables accompanying this latest circular made no institution-by-institution comparison between the current allocations and those envisaged for 2012-13, except to indicate a very modest overall cash increase (which is even less modest when inflation is allowed for).

However, the circular does include some interesting pointers to how funding arrangements are likely to work in the future. Four of these are worth highlighting right away.

Teaching grant and English students
Since from AY 2012-13, English students attending English universities will be paying fees at the new higher rates, the SFC has decided that it will no longer include in its grants to the Scottish universities an element to cover the teaching costs of English students studying in Scotland. Instead, Scottish universities will set fees for English students to reflect the full cost of teaching them. Most institutions have already announced the fees they will charge, though I imagine there could be some changes as the market situation evolves.

It now seems likely that research funding linked to the periodic research assessments, as well as the accompanying support for postgraduate students, will become rather more concentrated in Scotland. For the SFC announced that units of assessment (mostly departments) with a two-star rating will no longer receive research funding from the SFC, so all funding will go to those with rating of 3* and above. This brings the Scottish situation more into line with England, but a few departments will lose out. This decision doesn't, of course, mean that departments with lower ratings cannot do research, only that they will not get public support to do so.

Outcome agreements
The Scottish Government is pressing SFC to base its funding allocations to institutions increasingly on so called outcome agreements, essentially a set of targets that can be monitored and reviewed, covering such issues as widening access and the success of graduates in finding employment. Universities are already active in these areas, so in a sense having to agree targets might not seem like a big change, except that now there could be financial penalties for failing to meet targets.

However, it does represent a step further down the road of institutions having to comply with more and more central direction (usually called, euphemistically, 'guidance'), and can be seen as a loss of academic freedom for the universities. Whether this is a good thing or not depends on what you think universities should be doing, what their roles in society ought to be, and how they should go about fulfilling their various functions. It also depends whether you think the government, or other central agencies like the SFC, can do a better job than the universities themselves in determining how the higher education sector should operate. Personally, I am quite sceptical of the ability of the 'centre' to manage universities very well, so these latest proposals make me feel quite uncomfortable.

Last, though not explicit in the circular, the SFC has made clear that it does not regard mergers or other forms of closer cooperation between higher education institutions as being 'off the table'. True, the recently advocated merger between Dundee and Abertay Universities appears to have fallen by the wayside, but there may be other combinations being considered elsewhere. We shall have to wait and see.

All in all, 2012 should be an interesting year for Scottish higher education.

Saturday, 17 December 2011

The 21st Century University

According to DeMillo, whose recent book I was discussing in the previous post, there are ten rules for a successful 21st century university to follow - and these apply especially to the large 'Middle' set of institutions, not so much to the elite few at the top, or to the profit-seeking institutions that form the growing third tier. These rules are as follows (DeMillo, 2011, pp272-279):

1. Forget who is above you;

2. Focus on  what differentiates you;

3. Establish your own brand;

4. Don't romanticize your weaknesses;

5. Be open;

6. Balance faculty-centrism and student-centrism;

7. Use technology;

8. Cut costs in half;

9. Define your own measures of success;

10. Adopt the New Wisconsin Idea.

Most of these points are moderately self explanatory, though I shall return to some of them in later posts. The last point will not be familiar at all to UK followers of this blog. What it refers to is the idea that universities should relate to and serve their local communities, a notion put forward in a lecture given by the then president of the University of Wisconsin, John Bascom, back in 1877. Bascom summed up the idea like this:

All inquiry, all truth must be passed over to the community by school and college, by pulpit and press, as a community possession; and as a supplement to this, every citizen must have the means of instruction so open to him that he shall be brought in  living contact with this knowledge. (my italics)

Now there's an interesting thought!

Monday, 12 December 2011

What future is there for the 'Middle'?

Travelling to Vienna last week I had lots of time to read while sitting on planes or waiting for the next one, and took the opportunity to read a fascinating book on the US university system. The book is: Abelard to Apple: The Fate of American Colleges and Universities, by Richard A. DeMillo (MIT Press, 2011). Its basic aim is to explain the structure of American higher education, look at the trends and forces currently influencing the system, and sketch out possible ways forward. I'm writing about it here for two reasons: first, I found it an immensely interesting book and I think it needs to be better known; and second, it seemed to me that some of the messages in the book are highly pertinent to our own higher education system here in the UK.

DeMillo characterises the US higher education system in terms of three levels. At the top is a small number of elite institutions, typically carrying on their core teaching and research activities very much as in the past, suitably updated with modern technology where that proves useful. The third level is a rapidly growing sector of private, profit-seeking providers, essentially treating higher education as a business (and focusing heavily on what students want, and on the job market). In between can be found the great bulk of higher education institutions, what DeMillo terms the 'Middle'. Many of these institutions, the author contends, are engaged in a constant struggle to be more like the elite, but they are doing so with inadequate funding. They have neither the endowments nor the research money to compete successfully, and for most, there is little chance that that situation might change. The Middle certainly cannot compete - and survive - by constantly ratcheting up its tuition fees to cover rising costs.

At the same time, the almost unnoticed - and often derided - rise of the for-profit universities and colleges, as well as the growing diversity and quality of online and distance learning offerings, and the knowledge networking available through social media such as Facebook and the like, are rapidly creating a wholly new competitive environment, to which most institutions in the Middle have not even begun to find an answer (mostly because they haven't noticed the problem yet). In this new and increasingly challenging environment, DeMillo argues that most institutions in the Middle will have to change what they do and how they do it if they are to survive and prosper for long.

Yet there are huge pressures within the system towards conformity, preserving the traditional academic hierarchies and faculty-based institutional structures, while resisting experimentation and change. We think we know what a university ought to look like and what it should do - but our ideas are often those of a generation or two ago when few people attended university, so it really was an elite experience. We like the idea of knowledge for its own sake, and academic freedom (including institutions like tenure), and find it hard to get used to the idea that for most people nowadays, going to university is largely about learning things that will secure decent jobs in the future. Of course it's still important to transmit knowledge, but we probably need to pay a lot more attention to how our students learn, what they need to learn, and what environments are most conducive to learning and discovery. We probably know less about all this than we should.

Most likely there will always be space in a decent university system for a good deal of the traditional thinking and reflection, but this probably needs to be accompanied by a lot of imaginative re-thinking about what - for most people - university life is all about. It's not going to be the same as we have long been used to.

More on this theme in subsequent posts.

Sunday, 11 December 2011

The Eurozone - where now?

Having just arrived home from a short trip to Vienna, where little concern about the Eurozone was detectable, it is curious to observe the diverse mix of views here in the UK. Apparently the UK is isolated in Europe as never before, allegedly we were so determined to protect the UK's interests in the City - financial markets, banks, etc - that we lost sight of the main issue for Friday's EU meetings, namely to save the Euro. On the other hand, commentators are already saying that the Brussels deal agreeing a more disciplined approach to fiscal matters across the Eurozone (and more widely, it seems) is either unworkable or economically foolish or both. And it's hard to find any views anywhere suggesting that somehow the Eurozone is now 'safe', and will comfortably weather what remains of the current crisis.

So what on earth are we to believe? Was Friday's meeting a lucky escape for Britain, or a disaster of the first order? And is the Eurozone now on track to a better, more secure future? It's too soon to know all the answers yet, but a few pointers can usefully be suggested.

First of all, it does seem that the UK played its diplomatic cards quite poorly, for the meeting was basically about new measures needed to support the Euro, something that is quite clearly hugely important for the UK, yet we managed to irritate everyone else by demanding guarantees about the UK financial sector before we could agree to anything. That was unfortunate, and I think a bad mistake, though perfectly understandable given the domestic political pressures that Mr Cameron faced. However, on this occasion he would have done better to face down the pressures in order to be part of what had to be done for the wider Europe. Instead, we are left isolated and, for the moment, apparently friendless. No doubt we shall recover, but great damage has been done.

While Friday was therefore not a great day for Britain, it wasn't wonderful for the Eurozone either. For the agreement on a more disciplined approach to fiscal policy appears to envisage government deficits being maintained below 0.5% of GDP, a very tight limit, far stricter than the Maastricht conditions, and almost certainly unachievable. Assuming that governments nevertheless make serious efforts to keep their deficits within or close to this limit, one can see that across the region there will be tax rises and spending cuts even more stringent than what was already unfolding. This cannot but depress aggregate demand, leading to lower output and employment across the Eurozone, and at best economic stagnation for the EU. On the one hand, this is really bad news for Europe; on the other, it might give rise to political pressures in individual Eurozone states  that could render the agreements unsustainable: in other words, electorates might simply decide that they've had enough of austerity and recession, and that they would like to see some economic growth again.

The new agreement is a bit like a toughened up version of the old Stability and Growth Pact that was supposed to ensure that Eurozone members kept their public finances in decent order; and that failed rather quickly when Germany and France decided that their domestic political interests were best served by ignoring it, not a good message for everyone else. Lacking credible enforcement mechanisms, the new agreement can be expected to suffer the same fate, I fear. Whether the financial markets in the coming weeks will regard it as credible remains to be seen.

In any event, the new agreement is based on an incorrect diagnosis of the current crisis facing the Eurozone, and therefore addresses the 'wrong' problem. It sees the crisis as a consequence of lax fiscal management by the member states, hence needing a new fiscal framework in place from sometime next year. But for most of the countries currently considered to be 'in trouble' (other than Greece), their fiscal management before 2008 was impeccable. The real problem (e.g. in Ireland) was the bubble of private credit, bank failures, and public rescues that converted private to public debt. There is a thus a need to be discussing how we should deal with all this (formerly) private debt, and how far states should or can guarantee it. It is also urgent to deal with both the liquidity problems faced by still solvent sovereigns (such as Italy) and to manage default by those clearly insolvent (such as Greece), preferably within the Eurozone. All this is both difficult and important, but it doesn't seem to me that it was greatly advanced by Friday's discussions.

The other urgent matters that got nowhere on Friday were the questions of how to get growth going again in Europe and how to improve the competitiveness of the weaker members. I think the UK might have had positive things to offer in such discussions - even though our own domestic policy is currently heavily slanted towards austerity - but it's likely that we shall be excluded from many of the discussions that must soon take place. That's a great pity, and I hope our isolation from Europe will not prove to be a lasting element of UK policy.

More on these important topics in later posts.