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.

Research
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.

Mergers
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.

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!

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.

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.

An Absence of Professors

A few years ago, when drafting one of her early children's books (and one that is not yet published, unlike her first two books in the Dragonsdome Chronicles series), my wife, Lucinda Hare, came up with what I thought was the perfect collective noun for professors, namely an absence.

An absence of professors has a nice ring to it, and it actually  fits quite well some of the noticeable characteristics of professors. Many professors, like myself, choose to work at home a good deal, partly because it's a pleasant place to be, partly because it's very productive for writing as there are rarely any interruptions. In addition, we often travel a lot to conferences, workshops; also for examining, other professional meetings and the like; besides travelling to various places to interview people and collect data to support our research. For all these diverse reasons, we are indeed absent a good deal, and some people would say far too much!

Indeed my wife has sometimes argued that I travel too much, and that some business could be conducted using Skype and other modern electronic media, and she is not convinced when I talk about networking and the importance of personal contacts; she probably thinks I just travel around for the novel food and drink - Surely not.......

Given my wife's claim to fame in regard to coining this collective noun - an absence - imagine my surprise when I looked through the latest Times Higher Education. For it contains a lead article by Ann Mroz about the role of professors, in which this very collective noun is proposed. So now it's finally in the public domain.

On the role of professors per se, the article is quite critical, highlighting the common conflicts that arise between the pressures to deliver high quality research and teaching, and the pressures - both from institutional managers and from junior colleagues - to provide good academic leadership, guidance and support. These days, when we all have performance targets to meet (except that, being retired, I avoid all this managerial nonsense), the tendency is to work hard to fulfill the measurable, and hence measured goals, and to be correspondingly less diligent in regard to the more intangible goals. In the latter category, I suspect, would fall such things as 'support for colleagues', a hugely valuable part of departmental life but almost impossible to measure.

Personally, I do think professors have a role, and a responsibility, to provide academic leadership, but there are lots of different ways in which this can be done. Some do it by being Head of Department, others by working with colleagues on research or by reading draft papers to give feedback to colleagues, yet others by supporting teaching initiatives - either new courses or new teaching methods. A few professors probably do none of these things, merely getting on with their research and teaching in the hope that their institutions and colleagues appreciate what they do. It's hard to pin this down with much precision, since the professor's job is so ill defined. We all think we would know it when we saw it, but there is little in the way of formal, written job descriptions - and when my own university tried to write a job description for staff at professorial level, I'm afraid I thought it was rubbish, basically because it included just about everything that anyone had ever seen a professor do!

Last, I'm aware that I've been away a lot over the years, or working at home, but when I am in the office I do always try to make up for this by operating an 'open door' policy, so anyone - staff or student - wanting to discuss something with me can be assured of my immediate attention.

That said, I suspect the phrase, an absence of professors, is one that could well catch on.

Academic strategy - Going international

When you think of the good products that Britain produces and exports, it's natural to start with food and drink, products like Scotch whisky, for instance. From other sectors, vehicles, especially cars, also come to mind. Such products serve both the domestic market, and also perform well in diverse export markets. This country also has a strong tradition of exporting some very high value-added services such as banking, insurance, and other financial services. Often forgotten in such a list, but hugely important nowadays, is higher education.

We don't usually think of higher education as something that is internationally traded, but of course it is. It takes places in three ways: (1) the overseas students come to study at the UK university; (2) students study at a UK university via distance learning (sometimes with some local support for their studies, sometimes not); and (3) the UK university sets up a branch campus at a carefully selected overseas location, and actually delivers the education there, mostly using local staff. The latter model normally awards degrees of the 'home' institution, so an important aspect of making the model work successfully has to do with the monitoring and control of the quality of education provided at the overseas campus.

My own university, Heriot-Watt (based on the edge of Edinburgh) does all three of these things, and takes great pride in its strong international profile. Developing this profile is a deliberate part of the institution's academic strategy, and rightly so given all the pressures and constraints that nowadays face higher education institutions operating in the home market. Building a presence in other markets, provided it is done well, helps to make an institution more robust - financially and academically - in the face of these pressures.

However, expanding overseas also poses some challenges. For instance, to build teaching capacity in an overseas campus we need to employ good teachers, and are likely to expect them to carry quite heavy teaching loads. At the same time, while the teaching function is not to be neglected on the 'home' campus, there will typically be more pressure there for academic staff to be research active (for REF reasons, among others). So there can easily be some conflict between what we expect of academics at home, and what we expect of our academic staff working on an overseas campus. At times this can prove a difficult balance to get right.

For some years now, my university has had a small campus out in Dubai, part of DIAC - Dubai International Academic City, where we have delivered a variety of courses to over 1500 students. This week, though, First Minister Alex Salmond was out in Dubai with our Principal to open our new expanded facility out there, a £35 million development that will enable us to handle up to 4500 students on an expanded range of degree programmes. All the signs are that demand for places is already very buoyant, so if all goes well we should build up to full capacity operation in just two to three years, making us a key player in the United Arab Emirates. For the University, this is a really exciting development, building on years of solid experience in the region. As the Principal, Professor Steve Chapman, said at the launch:

“As Scotland’s international university, the official opening of our new state-of-the-art, eco-friendly Campus, built in partnership with Eikon International and offering world class facilities, demonstrates our ambition and continued vision for providing high quality and relevant Scottish Higher education in the region.”

What more can I say, except to wish this new development every success!

Examining students - How we do it

Most of our students follow one or other of our degree programmes, and these are made up of a range of courses - some of them compulsory, some of them optional. To get their degrees, students have to pass all, or nearly all, of the courses they take (we allow for a limited amount of failure), and this means that the students' performance in each course has to be assessed. How do we do this?

Sometimes a course is assessed entirely on the basis of the individual student's own work, in the form of essays (and sometimes, presentations), but more often we use a mix of coursework and examination, or assess entirely by examination. When students write a dissertation, as they often do at the end of an honours degree, this is naturally assessed entirely on what they write.

In the case of examinations, we usually set papers that give the students two to three hours to answer a choice of questions, typically 3 out of 8 essay questions; or there can be a Part A consisting of multiple choice questions or questions to be answered using short notes, and a Part B with the more familiar essay-type questions, again with a choice. From all this it can be seen that there is scope for a fair amount of diversity in our practice, with different courses in a degree programme being assessed in different ways. This partly reflects the preferences of different members of the teaching staff, but I think it makes sense on educational grounds, too.

At the start of a degree programme, student performance (i.e. marks and grades) matters only to the extent that it determines whether they are eligible to proceed to the next year of study in the normal way, or whether they have to repeat examinations or even the whole year. Later on, marks and grades matter because under the current system (currently under discussion) they contribute to each student's final degree classification. And at the end, each graduating student receives a degree certificate that indicates his/her subject and class of degree, together with a detailed transcript showing all the courses taken and grades/marks achieved by that student. Much of this reflects the modern desire - and need, apparently - for ever more information to be provided about everything we do. In my day, as I've mentioned in earlier posts, I received a degree certificate that indicated that I was now a graduate with a BA degree, but it showed neither my subject nor my class of degree. And transcripts were unheard of back then in the 1960s.

This whole edifice of assessment and examinations is supported by our system of external examiners. For each course we have an external examiner, sometimes more than one, whose job is to ensure that our assessment is both fair, and consistent with the standards that would be expected at other universities. In other words, we should not be giving first class degrees to students who might struggle to get a second class degree elsewhere, and conversely, we shouldn't be too hard on our very best students.

Mostly, I think this system works surprisingly well. Of course, it's vulnerable to 'friendly' personal networks - 'you examine for us, and I'll do it for you later on', but most senior academics are quite anxious to protect their reputations, and would not want to be seen to be supporting assessment that was of a poor standard, badly run, and the like. Since in my view our 'internal incentives' about this are really very strong, it's a bit irritating that institutions increasingly feel that they have to provide ever more documentation and guidance about what they expect from their examiners. More information is also provided about the individual courses being examined, including the expected learning outcomes and outline answers to the examination questions.

With a struggle, I can just about see a justification for this, though in the first 20 years of my external examining experience it was never done, nor seen to be needed. Back then, the external examiner was a respected outsider whose professional judgement was almost invariably accepted with alacrity. Now there is too much box ticking and concern for procedure over content for my taste, so I haven't accepted invitations to examine at undergraduate level for quite a while. These days I only examine PhD dissertations.

An interesting aspect of the external examiner system is that it is, in effect, a free service provided by academics in one institution to those in another. Actually, it's not quite free, as we do get a notional fee for undertaking external examining. But the fee is tiny in relation to the work involved, and there is a presumption in the UK higher education system - implicit but nevertheless widely understood and accepted - that doing some external examining is part of a professor's job description. That was fine in the old days when professorial pay was relatively higher than it usually is today, and when academics were under less immediate pressure from their home institutions to meet a variety of short-term performance targets (which never include external examining). So it's probably time for the whole system to be reviewed.

What did the Romans ever give us?

Despite being officially retired, I found myself doing some undergraduate teaching earlier this month, contributing to a new course we're running this year on 'Topics in World  Economic History'. When the idea of this course was first under discussion, I piped up and said, 'why not look at the economic impact of the fall of Rome?' So naturally, that's the topic I ended up teaching, in the form of a lecture one week, and two seminars the following week, at which the students presented the essays they had written for me.

The students wrote on attempts to assess income distribution at the height of the Roman Empire, while my lecture covered the institutional features that enabled the Empire to perform well economically - such as the rule of law, security, good roads and other public infrastructure, and a monetary economy - and then discussed how things fell apart in Britain when the Roman legions left in AD 406 or so. I argued that the Dark Ages were indeed very dark! The students were hugely enthusiastic, so I think the whole thing went down pretty well.

The first picture shows Hadrian's Wall, the northern frontier of the Empire (in northern England), as it probably looked around AD 200-300. The second picture shows it as it is today, lots of the stone having been lifted for other buildings over the centuries. It's still amazing how much remains 1600 years after the Romans left Britain. They built to last!

Quite aside from the sheer inherent interest of the topic, there are two things that struck me while I was doing this teaching about the Roman Empire.

The first was a reminder of just how interesting it can be to vary what one teaches, and not teach the same thing year after year. I've always found it surprising when colleagues have tried to hold on to the same area of teaching more or less forever. Much of the fun of teaching is trying something different and new from time to time. It involves a bit more work, naturally, but I think it's better for both staff and students when the teaching is fresh and engaging.

The second point was a reminder of some issues that still don't get enough attention in our standard economics courses, namely the critical importance of good institutions for successful development. Although this is still debated among historians, it doesn't seem that Rome succeeded as a result of its amazing science, technology and innovation, though in some fields it was certainly impressive for the ancient world; rather, it established public order, a decent legal framework, money, and good infrastructure, and that boosted incomes and growth remarkably well for a long time.

Who needs a four-year degree?

As expected, moves to a regime of higher fees for undergraduate students - for all students in England, for non-EU and non-Scottish UK students in Scotland - are already calling into question the merits of the traditional Scottish four-year degree. This is not surprising as, although no UK student studying at a Scottish university will pay fees up front, students will be increasingly conscious of their growing indebtedness, debt that will have to be repaid over their future working lives, on an income-contingent basis. Of course, students who graduate and then take low-paying jobs will not have to repay anything, and for those who find well paying jobs the burden of repayment should not feel that bad. Nevertheless, it's understandable that students and/or their families should think hard about where to study, what to study and how long a course to go for, given the new funding arrangements.

Traditionally, Scotland's four-year undergraduate degree has fallen into two parts, namely a three year ordinary or general degree (usually a BA), and the fourth year that resulted in the corresponding honours degree (usually an MA). When I first came up here to teach in Scottish universities back in the early 1970s, around half the students completed the ordinary degree and graduated at that stage, not least because for many professions that was sufficient for the job market. Entry to the honours year usually depended on performance in at least the first two years of study, and it was not enough just to pass the relevant courses, good passes were required. Commonly, students had to be achieving results of at least a lower second class honours standard before we let them advance to the honours year.

Over time, this quite strict and competitive system gradually broke down.

In part this happened as a result of factors external to the university, specifically changes in the job market. It seemed that more and more jobs expected graduates to have an honours degree (possibly because that was always the norm in England), so instead of choosing to leave us with a perfectly good ordinary degree, more and more students pressed for admission to honours. As a side effect of this, the status of the ordinary degree gradually declined, relative to the honours degree. There were also factors internal to the university, such as the modularisation of courses; each module was then assessed separately (by a mix of examination and coursework), instead of students facing a single set of exams at the end of each academic year. Gradually, it came to be thought that we couldn't stop students from proceeding to honours if they were passing all their modules. It was considered unfair to deny students the chance of an honours degree. And before long, practically everyone took their studies that far.

So how might the Scottish system evolve as increasing numbers of students have to pay fees? One way forward is to be more flexible about allowing entry to second year. For the first year of a Scottish degree was often quite broadly based, with a strong subject specialism only coming in year 2. Originally, the first year was designed for students with a range of Scottish Highers, but now more students stay on to do Advanced Highers, and the English students have A-levels. These qualifications often overlap with first year degree work, so second year entry is not so unreasonable. Indeed it has always been an option for exceptionally well qualified students, but I think it will be allowed more widely before long. The financial pressures certainly push in that direction.

Some universities might soon find that their first years become quite small, with more and more students entering at the second year stage. In time, one can easily envisage the existing first year simply being abandoned in many degree programmes; everyone would then start at the current second year (so it would be the new first year). Of course, this has resource implications for institutions, as universities wanting to keep up their total undergraduate numbers would need to recruit more students for each year of three-year degrees than they currently do for four-year degrees.Will there be enough students to go round, and how will such changes affect the competition between institutions? We don't know yet, but one can imagine difficult times ahead for some.

Mergers and restructuring in Scottish higher education

How many universities does Scotland need?

That's not a question we have needed to ask for quite a while, and the country has a very long tradition of valuing higher education and fostering some very high quality institutions. This week's bombshell from the Scottish Government, coming down to the universities concerned via the Scottish Funding Council (SFC), will bring this whole debate about the number and size of institutions right out into the open. The casus belli, if I may put it that way, was the decision (and there's no other way to describe it) that the universities of Dundee and Abertay Dundee should be instructed to enter into immediate discussions with a view to merging, a decision that was communicated in a letter from the SFC to the two institutions.

Both institutions profess to be 'totally surprised' by these developments, as well they might. And senior people at Dundee have already said that while they will examine the proposed merger, they would only want to go ahead if it makes 'academic and financial sense' for them. No doubt this is true, but I would bet that the SFC has ways of making the merger look like 'academic and financial sense'.  We shall see, and probably fairly soon. I can't imagine the institutions being allowed to mull the whole idea over for a couple of years........

And what's in it for the Scottish government? Well, it's hard to see why they would push for the merger unless they anticipated some real cost savings to come through, meaning, I expect, job losses at all levels. This hasn't been said yet, but the announcement surely has no rationale otherwise.

More interestingly, the announcement raises questions about universities elsewhere in Scotland. For Aberdeen has two, Glasgow and Edinburgh both have four universities (including the University of the West of Scotland in Glasgow's). Will these numbers prove to be sustainable, and who might be next on the SFC hit list? In these days of spending cuts, it would be surprising if the merger proposal already announced turned out to be the only one. In the past, several Scottish Universities have sought to grow by merging with various colleges - sometimes for good academic reasons, sometimes simply seeing security in greater size. Now we can expect to see university-university mergers, as the Scottish Government seeks to square the circle of preserving the strengths of Scotland's university traditions, while nevertheless cutting system-wide costs. Difficult times lie ahead, I think.

Meanwhile, what are other institutions to do?

In some ways the situation for our universities is a bit reminiscent of the problems firms faced when the Soviet Union collapsed back in 1991. At the time, some firms I visited were saying, 'we don't know what to do, we are waiting for our next plan instructions', but other, more forward-looking firms were already looking around for new partners and markets, and were determined to survive in the new environment. So what will our universities be doing now? Perhaps some will sit and wait, hoping the SFC never notices them, never sends them 'that letter'. Others might be more strategic and pro-active, picking out good partners and going for them long before any official intervention from on high.

Given all this, we might now expect a mix of more or less forced mergers, plus some cherry picking by stronger institutions. This cannot be an easy or comfortable time to be running a university up here in Scotland.

Who should go to university?

The simple answer to this question is this: those who are well enough qualified to go, and who have the motivation and drive to enable them to succeed in their chosen course.

But that's a bit glib, and leaves aside some important points that crop up frequently in discussions about whether or not to go to university (and why), what to do there, and how to make the best of the university experience. So let me take these points in turn and offer a few comments, based on the experiences of family and friends, as well on my own experience of advising students over many years.

Whether to go (and why)
This is really the key question, I think. These days it seems to be a standard assumption that anyone able to obtain the necessary grades in various school subjects should proceed to university, and the Government has certainly wanted to raise the share of young people going there. For those young people who know what they want to do, have the ability and qualifications, and who are well motivated, I'm sure that moving on to university is a great idea.

For many others who get the grades but are really quite unsure what they ultimately want to do, I'm not so convinced. They might be better off working for a while, perhaps taking professional qualifications while doing so. Sometimes, working can mean virtually any job - and some work experience is always better than none; but it can also mean finding work closely related to one or other of the subjects that a young person has already studied, which helps him or her to assess whether it really is what they might like to do in the longer term.

It's also tempting to suggest a gap year of some sort, but the snag with that (aside from its likely cost), is that it merely delays important decisions without doing anything to clarify options and hence help the decision-making process. No doubt it's often fine, however, for a young person already clear about where they are heading, educationally.

The worst option of all, faced with indecision, is to laze around doing nothing at all, perhaps hoping for some inspiration to pop up from somewhere. Sometimes it might, but mostly, I suspect, it won't. Hence time is wasted, and since we only get to live our lives once, that's a terrible shame.

It seems to me there are two good reasons for going to university: (a) you're good at something and want to pursue it further (and hope that it might lead to a job at the end); or (b) you want to make yourself more employable and there are courses you could take to achieve that (and hopefully they are subjects you like and are reasonably good at). No one should go just because family and friends tell them that they should.

What to do there
Once there, what do you do?

Obviously, the main thing is to pursue the degree programme that you applied to do. Two points here - first, lots of universities provide for some flexibility, making it possible to change what you are doing if you realise that your first choice was a mistake; or you fail parts of the course; or, more positively, you realise you like something else even more.

The second point - take care over your choice of subject/course in the first place. After all, it's something that will take up three years of your life (usually four in Scotland, and in a few English universities), so it really helps if it's something you like and are good at. You may have in mind future career options, and it's always sensible to think about these, but it's not smart to torture yourself doing a degree you don't like, based on the idea that good jobs lie ahead. For what makes you think you'll like doing the subject as part of a job any more than you did as a student? So think carefully about what you do.

How to make the best of it
Here I can only reiterate points made in previous posts, namely that university is not only about studying (which reminds me of a couple of students I knew some years ago who were bright but performing badly - they were really amazed when I pointed out to them that they needed to do more than one or two hours of studying per week, in addition to lectures!). Universities offer diverse social activities, sports clubs, all sorts of other clubs, travel opportunities, and so on. So by the time you graduate, you can not only feel educated, but also hugely enriched as a person, ready to embark on the adventurous world of work.

STEM subjects and the next generation of academics

Once again there are worries about STEM (science, technology, engineering, mathematics) subjects in the UK. Not so long ago, the concern focused on recruiting sufficient good quality undergraduates into these subject areas, especially students with good mathematical skills. That may indeed still be perceived as a problem, but the latest issue seems to have more to do with postgraduate students, specifically getting more UK students into STEM MSc and PhD programmes. Reportedly, UK postgraduate student numbers in these fields have been static or declining, while available places are being increasingly filled by overseas students. This brings in some very welcome fee income to institutions, but raises questions about the viability of many university departments if this was thought of predominantly in terms of provision for UK students.

There are several issues wrapped up in all this, that we need to disentangle and think about carefully.

First, does it matter that an increasing share of our postgraduate students in the STEM subjects come from overseas? From the standpoint of the providing departments, surely not - they are only concerned to fill their available places and ensure that their provision is properly funded. Moreover, for many people, one of the benefits and attractions of postgraduate study is precisely the huge diversity of the student body. However, this benefit might be less clear for someone who finds himself/herself as the sole UK student in a class of 40-50 mostly Chinese students, say. So there will at times be an issue of balance to think about.

Second, both at undergraduate level, and even more so at postgraduate level, there is a great deal of student mobility around the world, with the best students seeking out opportunities in countries that offer the sorts of course and/or research programmes that they seek. Much of this mobility involves students from poorer parts of the world, or parts of the world lacking high quality universities, coming to countries that are both richer and better endowed. Some of these students stay and work in the country where they studied, many eventually return home. Relatively few UK students take part in this international mobility, partly because the UK is well endowed with good universities already, partly because most UK students lack good language skills and this would constrain where they could study (e.g. within Europe, though increasingly European universities do offer  English language programmes).

Third, why do we need (more?) STEM graduates with MSc and PhD level qualifications? Part of the argument is about providing the next generation of academics as the current faculty head off into the sunset and retire. Of course, recruitment of new academic staff is itself increasingly international, but most departments tend to feel they should include some UK academics among their numbers, and this is said to be becoming increasingly difficult. That said, I'm not aware of situations where significant posts simply cannot be filled.

We also apparently 'need' more STEM graduates at all levels to meet the demands of the wider economy. But do we? We are often told that 'industry' needs more engineers and mathematicians, but when I look at the jobs pages in various publications I don't notice all that many especially attractive salaries being offered. This makes me wonder where the alleged demand is to be found. It may well be that UK students are being completely rational in their reluctance to pursue STEM subjects to a high level. To encourage more to do so, I imagine we would need a mix of far better funding to support UK postgraduate students in the STEM subjects, and a sense that there really are lots of excellent - well paying - jobs at the end of the line. There's plenty of food for thought here, but we shouldn't just bemoan the lack of UK students taking STEM subjects.

More on those university rankings.....

This morning there was another round of news about university rankings, this time an update of the QS rankings. Just under 3000 of the world's higher education institutions were surveyed, with 712 of them being ranked; the top 300 institutions in the ranking have just been published. The methodology underlying the QS rankings is quite complicated, involving:

(a) the collection of data from institutions on such indicators as student-staff ratios and publications per member of academic staff;

(b) a survey of over 16,000 employers to find out how they judge the quality of graduates from different institutions; and

(c) a survey of over 33,000 academics to find out how academics rated other institutions (usually in their own discipline) (I was among those surveyed, and provided information on my own discipline, economics).

So, masses of information, some of it quite objective, some unavoidably subjective and personal. At the end it is all put together to form the published rankings, an enormous task.

As in previous years, the UK, with 19 institutions in the top 100 in the world, comes out rather well. Cambridge remains at number one, and in Scotland, Edinburgh is now in the world's top 20 and Glasgow has come up the rankings by 18 places to 59th. Needless to say, those institutions which have done well - by holding onto an already high ranking, or by coming up significantly - will draw attention to this in their publicity. For whatever they really mean, institutions commonly perceive that good rankings are helpful in recruiting both staff and students. Institutions that come out less well might undertake some sort of internal review to figure out ways of doing better next time, but they will say little or nothing publicly.

Some will try to use these new rankings as a stick with which to beat the government. The argument goes like this: First, the UK has done really well in the rankings; second, it is assumed the government would like to see the UK's strong academic performance continuing in the future; third, with public funding cuts, the introduction of much higher fees, and more competition, the environment in which our universities operate is becoming more difficult; hence it would surely make sense for the government to back off a little, slowing down or even reversing reforms to ensure that our universities have the funding to remain competitive. This is quite an appealing argument, but not ultimately a very convincing one.

In the end, though, I'm convinced that our best universities will manage to steer a path through all the changes going on in our higher education system, and will continue to perform well (though deep down, we all know the rankings don't mean very much, don't we.........).

Fees for English Students Studying in Scotland

Today the newspapers reported that Aberdeen University had officially decided to set the fees for new English undergraduates wanting to study at the University at the highest permitted level, namely £9000 per year, from academic year 2012-13. However, the pain is alleviated somewhat by the supermarket-like offer of four years for the price of three. In other words, the total fee for the standard four-year undergraduate degree will be capped at 'just' £27,000. My own and other Scottish institutions will no doubt be announcing similar decisions quite soon. And one can see why. Money is tight, the Scottish government is not really in a financial position to pay up to the extent that institutions need, and where else are we supposed to find the money?

That said, making the new fees stick might not prove straightforward.

For one thing, even before the Aberdeen decision, the idea of charging higher fees to English students was already facing a legal challenge on the grounds that it might contravene various sections of our anti-discrimination and/or human rights legislation. Not being a lawyer, I have no idea what to make of such claims. My instinct is not to be very sympathetic, but we shall have to see what the courts eventually determine. Interesting!

For another, even if the legal issues do not prove too troublesome, there is the issue of market forces. Will English students be willing to pay Aberdeen's proposed fees in sufficient numbers to make the decision worth while? Since, just as in England, students will not have to pay fees up front, the initial burden will not be a problem; however, after graduation, student loan repayments start once the graduate is earning £15,000 per year, whereas in England this threshold has already been raised to £21,000. So in due course, unless the schedules are amended, English students graduating from Scottish universities will face a rather steeper repayment scheme than those who remained in England. However, I doubt whether such arcane details will make a big difference to many potential students.

More important, in the longer term, will be two other factors: (a) the size of the cohort of (mostly young) people ready to go to university in a given year; and (b) potential students thinking harder than they have had to hitherto about the prospective costs and benefits of their higher education.

On the first point, we already know from population projections that the relevant age cohort will be falling in the next few years, so unless universities can attract more older students to enrol (or even pensioners?), the total demand for university places across the UK can be expected to decline quite regardless of any pricing issues. No doubt the fall in demand will not be distributed evenly across all institutions, so one can expect that a few will face really severe recruitment, and hence funding problems. Whether any of these will be in Scotland, we don't of course know yet, but we are hardly in a position to exclude such a possibility. Falling demand will certainly sharpen up the competition between institutions for the best students (in some cases, for any students!), something that might lead to some re-thinking about fee levels.

On the costs and benefits point, I'm not sure how far young people (or their parents) think this through. I know I never did myself, but then in my day few people went to university, all fees and living expenses were paid by the state (so one graduated with no debt), and good - graduate-level - jobs were pretty easy to find. Nowadays, the government wants around half the relevant age group to go to university, but is unwilling or unable to fund that in the way that used to happen; and the job market has changed beyond recognition. There are still lots of graduate-level jobs around, but one reads of many new graduates struggling to find their first job, and apparently around a quarter of graduates are doing jobs that don't call for a degree in any case. All this makes the cost-benefit balance less attractive, and over time, some students (and their families) might take the view that getting a job at age 18 is a better bet than going to university.

For the economy, that might not be so bad, but it would obviously not be great for some of our universities. The universities that thrive under these tougher conditions will, I suspect, be of two main types: first, the academic leaders that deliver the very highest intellectual standards; and second, the institutions that do the best job in terms of offering programmes with strong pathways into the world of work.

REF - Transparency and Feedback

The latest issue of Times Higher Education includes an article by Mark Burnley about the REF. He complains that when the results of REF2014 are eventually published, while individual units of assessment will receive their grading in the form of a distribution (or profile) rather as occurred with RAE2008, individual academics will not get any direct feedback telling them how well or otherwise they are judged to have performed. Mark Burnley is clearly unhappy about this situation, and thinks it should be changed.

One of the reasons he gives is that if a given unit is assessed as having, say, 10% of its research of outstanding, world class quality, how can it know which 10% and who delivered that spectacularly good work? His point, I think, is that if the unit doesn't know that, it can't learn from the outcome of REF2014 and do even better next time. More generally, he claims that academics need individualised feedback from the REF to enable them to understand where their weaknesses are and hence, what they can do about them (for next time). However, I think this way of using the REF results is inappropriate, it's not what the system has been designed for, and there ought to be other ways for academics to get the feedback they need. Let me explain.

(a) The REF has been designed to evaluate units of assessment, not individuals, and its fundamental purpose is to provide performance indicators that will be used by the Funding Councils to allocate the research component of their grants to institutions (hitherto, the QR stream) for some years following REF2014. Thus its function is to guide the allocation of financial resources, not to evaluate individuals.

(b) Next, if a unit of assessment does indeed have 10% of its research adjudged 'outstanding' then it seems to me quite bizarre to imagine that members of that unit, or managers in the relevant institution, might find it difficult to identify which parts of their work are so extremely good. If they can't figure out for themselves which elements of their research are world class, then surely something is badly wrong......... After all, we would surely like to think that the REF panels, etc., will do their work as fairly and objectively as reasonably possible, so the designation 'outstanding' is hardly going to be conferred pretty much randomly. One hopes not, anyway!

(c) Last, quite regardless of the RAE, and now the REF, most academic institutions that are serious about developing and improving their research already have systems in place for assessing individual staff - setting targets periodically, monitoring performance, providing training, and so on. Not always, but very often, promotion is the reward for successful delivery of quality research output over a period, and for most of us, promotion is a rather strong incentive to perform well. Of course, acknowledging all this doesn't stop many of us from griping about the iniquities of our internal evaluation systems, and I'm sure many of us don't much like this sort of thing. But it's bound to be more finely tuned to suit a given institution than the rough and ready REF could ever be, so whatever we do internally is likely to give most academics a fairer hearing.

Overall, therefore, the REF has an important job to do, so let's simply allow it to do that job well, without trying to give it additional tasks for which it was never designed. And in case the reader might wonder, I'm not a huge fan of the REF, but it's there, and is not about to go away. We just have to live with it - it's part of our university world nowadays!

What does it take to get a degree?

There's lots of debate nowadays about what it takes, or should take, to get a degree. Some of the discussion is quite mundane, such as commentary on student contact hours (actual, and whatever is presumed to be desirable), expected student workloads, numbers of essays and other items of submitted work, and so on. It seems to me that this whole discussion has moved on a good deal since the time, over 40 years ago, when I was a student myself. Some of the movement, though, doesn't seem to me to have improved how things work in our universities, nor has it necessarily improved the student experience either. Let me explain what I mean.

When I first went to university (Cambridge) I didn't have much of an idea what was supposed to happen there. No one in my family had been to university before, and my parents had even less idea about such institutions than I did - except that my mother thought I might meet and marry a princess. In that respect, though, I was a complete failure!

Luckily I had a couple of outstanding maths teachers who had both been to good universities, and they encouraged me to apply to their respective institutions - Manchester and Cambridge. For the former, I was accepted on the basis of my A-level results (four at grade A, plus one grade 1 Scholarship level - there wasn't an A* in those days), but for the latter I was turned down (which nowadays might even be regarded as quite scandalous, but at the time such daft ideas didn't occur to anyone) - to get in, I had to sit Cambridge's own entrance exams, which I duly did, and passed comfortably.

During my three years at Cambridge, the student experience was amazing and truly life-changing, but not just for the conventional reasons to do with contact hours and the like. Of course, we did have lectures, six days a week in fact (though in my first year, classes were over by 11am each morning!); and we had regular tutorials with at most one other student, sometimes taken by senior academics, sometimes by young graduate students. Back then I had no idea what a privilege it was to have tutorials in such a small group. And it was quite sobering, sometimes, to find that the tutors couldn't always answer our questions, mostly based on problem sheets handed out in lectures. The presumption was that if we did enough work and thought about the problems for long enough, we would figure out the answers for ourselves; and mostly we did. There was no spoon feeding, but academic staff were there to help, and sometimes took the trouble to answer questions in huge detail.

I was never required to submit any problem sets (or essays) for marking, and all assessment was based on exams at the end of each year. That suited me fine, though I know many students these days find a mix of exams and continuous assessment more manageable.

It seemed to me that any student who survived the three years without being thrown out, and who turned up for the final exams, was likely to get some sort of degree. The idea seemed to be that merely soaking up the atmosphere of Cambridge for three years was enough! For instance I knew one maths student, supposedly a Polish minor count, who rarely did any work as far as anyone could tell; in the final exams, he claimed to have written one very long essay - continuing over all four papers - and he graduated with a third. In those days - before grade inflation, and when there were few graduates - even a third from Cambridge was a worthwhile degree, so he did OK.

But aside from the basic degree work, what made Cambridge special was two things. First, in order to find out about lecture times you had to buy a copy of the Cambridge Reporter that had information on all lectures in the university. As matriculated students, we were allowed to attend anything that took our fancy, so I sometimes went to lectures in architecture, philosophy, history, and a little economics - the subject in which I ended up spending most of my working life. It was great to have such an opportunity.

Second, there was an enormous range of student societies on anything you can imagine - political, cultural, social, etc. For me, starting out as a very shy individual, these also gave lots of opportunities to meet people other than mathematicians, through quite a range of activities. One thing I never did, though I met lots of folk who were very enthusiastic, was to engage in any sport. I'm not against exercise, but I've never much liked competitive sport. In my final year, the rooms I had in college turned out to have been home to the Science Fiction Society, and their books were still there. So the year started with three weeks of reading solid sci-fi. Then one day the books were taken away and I settled down to work.

Overall, a really big lesson from all this is that university is what you make of it. It offers fantastic options to anyone who looks around to see what is on offer, usually much more than the basic degree course one signs up for. No one has to take part in anything other than their degree programme, but it seems a shame to miss out on everything else universities can offer. They're amazing places, and about much more than the conventional views about gaining an education in a specific discipline suggest!

Straws in the Wind: Markets in Higher Education

The government's recently published White Paper on higher education reforms in England, bringing in higher fees from AY 2012-13, relaxing some of the formerly very tight recruitment constraints, and lots of other lesser changes, is starting to make some institutions think more competitively, as if they see themselves as inhabiting a market-type economy - as indeed they do!

This change in attitude has to be welcomed, in my view, because it might encourage HE institutions to deliver better services to their students - increasingly seen as their 'customers', whether one likes that or nor - and perhaps even to their staff, who need proper incentives in order to deliver what institutions want.

High-flying students with AAB or better at A-level (or equivalent other qualifications) will no longer be subject to number controls, so universities will be able to take as many of these students as they can attract. Lots of people tried to get into universities for AY 2011-12, to win places before the new fee regime comes into operation; and demographic changes mean that the age group eligible to enter university will anyway be down by about 10% for 2012. Hence the competition between universities to attract the best students will be pretty tough in a year's time, and a few institutions have already announced scholarship schemes offering discounted fees - not means-tested - to entrants with top grades.

This is not unusual in the US, since institutional reputations are often linked to the quality of student they can attract. But it is new for the UK. As one might have guessed, no special deals have yet been offered by the top ranking institutions, since they already attract plenty of high quality students, though they might be thinking about it. Rather, plans have been announced by middle-ranking institutions seeking both to protect their student numbers and to rise up the rankings. It will be most interesting to see how this competition plays out, once we have seen it operating for two-three years.

And for university staff there are increasing rumblings from various institutions thinking about leaving the national pay arrangements and setting pay locally. Imperial College London has already left the national system, and Exeter and Durham are apparently among those currently considering following suit. This could have several effects.

First, local pay levels could come to reflect the local or regional living costs better than they currently do.

Second, institutions will be able to do more, pay-wise, to attract and retain the very best staff than the current national pay-spine allows. However, one should not overdo this point, as senior administrative staff and professors have had more flexible pay for years, often based on measures of their performance. So leaving the national scale only affects less senior staff, and even there there was always scope for institutions to offer a few more points on the scale to secure a particular person. Hence this may be less of a change than it appears.

Third, institutions charging high fees and succeeding in attracting plenty of good students will be able to afford to pay more to all their staff, and some will probably choose to do so - something that staff would welcome after three years of severe pay restraint. However, the campus unions worry that local deals will put management in a stronger relative position, and that universities might demand measurably higher productivity as a quid pro quo for higher wages. This is possibly true, but at the end of the day good staff can vote with their feet and move elsewhere if they don't like their working conditions. This will surely place some constraint on institutions' ability to over-exploit their staff, one hopes.

At the moment, these points are just 'straws in the wind', but they could herald the start of some major changes in English higher education. Some of what is happening will also pose difficult challenges for those of us based in Scottish universities, and for now we have no clear way forward. We're still waiting for funding decisions from the Scottish Government for 2012-13.

Research Excellence Framework 2014

After the publication last week of the Guidelines for the operation of the Research Excellence Framework (REF), we now know a lot more about how REF 2014 is expected to work, including the detailed schedule. The Guidelines have been published by HEFCE, acting on behalf of all four HE funding bodies operating across the UK, and can be found in full at this link.

As was announced by the Government a while ago, the schedule has slipped back a year from the original plans - it was going to be REF 2013. On the new plans, institutions will be invited to make their submissions to REF 2014 in January 2013, with submissions closing on November 29th 2013. The results will be published in December 2014, so a whole year has been allowed for the review of submissions across the 36 units of assessment (UoA).

For each UoA, the evaluation of research will be based on three elements. These are output, impact and environment. Research output will account for 65% of the overall rating of each UoA, research impact 20%, and the research environment the remaining 15%.

As with the previous Research Assessment Exercise (RAE), each researcher included in a given UoA will be able to submit up to four publications for assessment, their quality being judged in relation to relevant international standards, and for their 'originality, significance and rigour' (p6). Apparently some panels might choose to use citation data to support their judgements, though when this idea was first proposed - for universal use - it was shot down in flames. There are huge differences between disciplines in citation practices, for some disciplines there is hardly any published data, and citations are subject to well known distortions - such as self-citation, citation of one's friends, etc. It's not as objective, consistent and reliable as people initially assumed.

Research impact has been the most controversial measure, and is still widely debated - and criticized. The aim, though, will be for the impact of each UoA on the economy, society, culture to be judged. To me, this sounds an absolute nightmare, with assessments highly vulnerable to subjectivity, prevailing fashions in research, and the like. But hopefully my skepticism will prove to be unfounded.

Judging the research environment is a bit less problematic, I think, except that there seems to me to be a built in bias towards large size, in that a larger UoA with lots of staff and PhD students will have an easier time showing that it possesses the required attributes of 'vitality and sustainability' (p6). Yet these days, with collaboration across department in different institutions, and much easier research networking through the internet, I would have thought that the scale of a Unit should matter far less than it used to. One almost gets the feeling that those who have designed the REF haven't quite caught up with the huge benefits we get from IT and electronic communication to support our research. But you never know, the assessors might find ways to take all this into account.

REF 2014 will be a big and costly exercise, so it's worth asking what the results will be used for - apart from being highlighted on institutional websites when they come out well!

Three aims are featured in recent HEFCE publications about REF 2014. These are:

• To provide the basis for the selective allocation of research money to individual higher education institutions (in the past, this was the QR stream of funding; I don't know if it will continue to be denoted this way);
• To give the sector a means of benchmarking its research standards and providing a measurable basis for research reputation;
• Given that much research is supported by public funding, either from the Funding Councils of the Research Councils, there is a perceived need for public accountability and the results of REF 2014 are expected to show both how public money has been used, and to demonstrate value for money.

It's probably quite handy to collect just one set of data to fulfill these three rather different aims, but it's hard not to wonder whether the data we shall have can really serve such distinct purposes. I need to think about this a bit more, and discuss the area again in later posts.

A New EU Package - Buying Time!

Well, rather to my surprise - and relief - European leaders managed yesterday in Brussels to cobble together a new financial deal that provides further support to the ailing Greek economy. The new package comprises Euros 109 billion of official financing, with private sector involvement expected to add a further Euros 39 billion (this part is dependent on bondholder agreement, not yet assured). The interest rates payable on much of Greece's debt are being reduced and maturities extended, all of which takes a bit of pressure off the Greek 'sovereign'. This is a big step forward and the result will help to bring down total Greek debt and provide the country with a breathing space to put through various reforms.

However, the new deal leaves some important issues and questions for later consideration. These include the following:

• Will the deal restore Greece to solvency? Probably not, so there will be further rounds of discussion further down the line. Rating agencies might already treat the present deal as a 'selective default', but it's probably not the end of the story.
• Some funds are expected to be raised through a wide-ranging privatisation of Greek assets, with figures as high as Euros 50 billion being mentioned. But it would be unwise to put much weight on this as privatisation takes time and should not be rushed for the sake of quick sales (probably at fire-sale prices).
• The current deal does nothing to stimulate Greek economic growth, though in due course that remains the key to improving Greece's situation.
• Greece remains in the Eurozone,which constrains the policy actions it can take to improve its competitiveness. It remains to be seen whether this will be viable for long. On the other hand, exit would clearly be messy and difficult. It is not an easy option.

For the Eurozone more widely, the leaders agreed to make the use of the EFSF (European Financial Stability Facility), a fund of Euros 450 billion, rather more flexible, but there has not (yet) been an agreement to increase the size of the fund - some economists argue that it needs to be of the order of Euros 2 trillion to be really credible, and I agree.

Moreover, a declaration by the Eurozone leaders, released at the time of the summit, has some worrying features, in particular:

'All euro area Member States will adhere strictly to the agreed fiscal targets, improve competitiveness and address macro-economic imbalances. Deficits in all countries except those under a programme will be brought below 3% by 2013 at the latest.'

The history of member states adhering to fiscal targets is not a happy one, and there are no penalties for failure to comply. More importantly, in a European economy still struggling to recover from recession, it's not obvious that these fiscal targets are very sensible ones, especially in a context where the European Central Bank has already started to push up interest rates. Sure, deficits and debts need to be managed, but it's surely not urgent to achieve stringent targets quite so rapidly.

So, some welcome progress in Europe, which buys some time. But still no sign of an agreement on the debt limit in the US, so that remains a worry.

Debt crises: US Dollar and the Eurozone

At the moment in the UK there's almost nothing in the news, especially on TV, except for the latest updates on the phone hacking crisis, linked to News International and the Metropolitan Police. It's all rather dispiriting, I find, particularly as immensely more important things are going on in the world, some of which I suspect the British people would like to be hearing more about.

What I have in mind here, are the rapidly worsening Euro crisis and the US debates about lifting their legal debt limit to avoid a US default in early August. Taken together, these two things are seriously frightening and threaten a major financial/economic crisis quite soon if our politicians in Europe and the US fail to reach constructive agreement on the way forward. Given the importance of all this, I have decided to take a break from my usual writing about higher education to comment here on the current financial mess facing the (so called) advanced countries.

Eurozone

As a result of the 2007-8 world financial crisis, many advanced country governments injected huge amounts of public money into their financial institutions - mainly the major banks - to prevent their collapse; this converted a good deal of private debt into public debt. The subsequent recession led to falls in tax revenues and increases in public spending (social welfare spending, etc.), further increasing both government deficits and the accumulated public debts. The incidence of these phenomena varied a good deal between countries, with Greece and Ireland, later Portugal, being especially hard hit, to the extent of requiring financial rescue operations supported by the EU and the IMF. Last week, for the first time, financial market concerns extended to Italy, and later this week there is due to be a Eurozone summit meeting to agree on a second bailout package for Greece. As I write this, the chances of getting a good agreement do not look too promising. Let me offer a few observations about the difficult situation we now face:

1. When the Eurozone was set up it was understood that, in the absence of a central (EU-level) fiscal authority, member countries needed to exercise a sensible degree of fiscal discipline. In fact certain 'rules of the game', the Stability and Growth Pact (SGP), were established with this in mind. Unfortunately, SGP rules were broken first by Germany and France, without penalty, setting a terrible example for the rest of the zone. Thus the Eurozone has always been a monetary union with no corresponding central fiscal authority (unlike the US, for instance).

2. Within the Eurozone, financial markets treated the debt of each member state pretty much as equivalent to the very safe German debt, with bond rates low and almost identical across the Eurozone. I presume that all these bond issues were assumed to enjoy some sort of collective guarantee, though to my knowledge there is nothing in the Eurozone rules to say that. In effect investors treated all Eurozone governments as equally safe, with virtually no risk of default. As a result, countries like Greece (which later turned out to have been less than wholly honest about their national accounts, in order to meet the initial conditions for Euro entry) enjoyed a massive investment boom for at least a decade, with quite modest debt servicing costs.

3. Shortly after the start of the financial crisis in 2007, the incoming Greek government revealed that the national accounts had not been presented correctly (this is putting it kindly!), revealing a much larger deficit than previously reported, and larger accumulated debt. This was the real start of the present troubles, attention shifting from banks to countries, and the financial markets starting to differentiate more between the debt of different countries in the zone. But Eurozone policymakers have not proved able to come up with a solution that lasts for long.

4. The problem is partly one of diagnosis, in that Eurozone policymakers have treated the crisis for Greece as one of liquidity, hence requiring temporary injections of cash while the country makes needed changes to various domestic policies; rather than one of solvency, requiring some form of default to get the country's debt back down to manageable and sustainable levels.

5. The liquidity approach has not worked, so belatedly, policymakers are realising that there is indeed a solvency issue for Greece. However, a formal default is a bit awkward within the Eurozone, partly because default for Greece might well make the financial markets very nervous about other members of the zone, as has already been happening with Ireland, Portugal, and now Italy and Spain; and also because under current rules, the European Central Bank could no longer officially accept Greek debt as collateral for lending to the Greek banks (though I think this is a technical rule that could be changed). So Eurozone members are trying to find new ways of helping Greece that do not amount to a technical default, but which acknowledge the situation. Our leaders are busy tying themselves in knots as a result, not a pretty sight! Will they find a solution later this week? We shall see.

6. The other problem for Greece is that it has become uncompetitive, and can't easily adjust within the Eurozone. It needs to get costs down so its exports can do better, but like most countries finds it hard to get folk to agree to wage cuts. Devaluation might provide a less painful route if its impact were not immediately offset by domestic wage increases, but in any case this is not an option while Greece remains in the Eurozone.

7. For the moment, therefore, Greece is being offered a period of severe austerity - public spending cuts and tax rises - which is so far not working and which is proving a political nightmare. And the country lacks the means to devalue to restore competitiveness, or the resources to stimulate renewed economic growth. So what is to be done?

8. At the EU level, I expect there will be some sort of package offered this week. But it might well be more of the same, more austerity, tougher conditions, not much prospect of growth. For the Greeks themselves, it must no longer seem so crazy to think of leaving the Eurozone, introduce a new currency (the new Drachma?), default on debts, and go it alone. This is a tough option, too, but it might seem increasingly appealing to many Greeks.

US dollar

The immediate problem here is that the US has a legally set limit on the accumulated public debt, and if no action is taken very soon, that limit is likely to be breached in early August 2011. Politicians of both parties, together with President Obama, are trying to find a resolution to this difficulty, but rather than simply raising the legal limit they are arguing about mixes of spending cuts and tax increases that would also bring the current government budget deficit under control. Sooner or later the deficit does need to be dealt with, of course, but it seems to me that need not be the immediate priority, and need not be linked to the legal debt limit. That aside, I would offer the following points on the US situation:

1. It's not smart to have a legal limit on a country's debt at all, no other countries that I know of have such a limit. Perhaps in the US it's a constitutional requirement, but in that event I would be rushing to get the constitution amended. If there has to be a limit, why not just multiply it by ten so no one has to think about it for a few decades, if ever! In a sense the current crisis is a purely artificial, technical one, since the US clearly has the economic capacity to service a much larger debt. The country does not face a liquidity crisis and is a million miles from being insolvent.

2. The US federal government currently has the lowest tax take of any advanced country, around 15-16 % of GDP. But its spending is about 25% of GDP, hence the current deficit of around 10% of GDP. With such low tax rates, it's got to be easy to balance the books with quite modest tax hikes - but many leading US politicians are dead against such an obvious solution. If taxes were already high, that would be understandable, but they're not.

3. Point 2 means that if the US gets to a formal default, federal spending has to fall - instantly, because the country won't be legally able to borrow - to be in line with tax revenues. Thus federal spending would have to fall by 40% overnight, and if the government decided to use some revenues to service existing debt, federal spending on services to the American people will fall even more, say by 50%. That would not be politically popular even if the problem only lasted a few days. It raises the question, who would be blamed by the voters? My heart sinks when I see the silly and dangerous games about this that US politicians are currently playing.

4. Last, if the US does get to a position of default, the international reputation of the country will sink like a stone and huge damage will be done to the sense of trust and reliability associated with US assets in world financial circles. More concretely, because US creditors will not have the same trust in the US as they have had hitherto, they will assign a non-zero probability of default to US assets in the future. Hence the cost of servicing the existing sovereign debt - and any future increases in it - will rise. It seems to me that some leading US politicians are nowhere near as scared as they ought to be about prospect of a default!

5. On the other hand, while it does nothing for the legal debt limit, a spell of inflation at 4-6% per annum, say for five years, would do wonders for the real debt burden. The debt-to-GDP ratio would fall perceptibly (by at least 25%, even if there is little or no real economic growth) and worries about the debt would subside quite fast. This is a feasible policy for the US since all its debt is denominated in its own currency, though it is not a policy the Fed would officially advocate, I imagine.

6. Likewise, getting economic growth going at a decent rate, say 3-4% per annum, let's say, would equally ameliorate the perceived debt burden after a few years. Hence there is good reason to think about policies that could start to stimulate growth.

7. The worst case, therefore is when we get no growth and no inflation, for then the debt burden remains high and will be seen as a constraint on lots of good things the government might like to do. Meanwhile, however, let us hope that the US politicians manage to step back from the brink and reach an agreement of some sort to avoid any sort of damaging default.

_________________

So, we have two interesting and rather different stories, both pointing to the danger of quite a major financial crisis rather soon. It's time for some serious finger crossing right now, and let us hope that political leaders on both side of the pond will find a sensible and workable way through the problems outlined above.

Yet another university ranking scheme - do we need one?

One might have guessed that the EU would not be able to leave well alone. We already have the Times Higher Education world university rankings, as well as the QS university rankings and the less well known Academic Ranking of World Universities (ARWU). So why do we need yet another system?

Apparently the EU thinks we do, and has established a series of pilot projects to explore how it might work, what indicators could be used, and to evaluate how reliable and meaningful the resulting ranking of institutions would be. In its present, pilot version, the new system would be called U-Multirank, and its website can be found here.

From the interim reports produced by U-Multirank, it's easy to pick holes over matters of detail, such as the over-reliance on bibliometric measures, including citation indexes, to assess research, largely reflecting the sort of debate that has been going on in the UK in connection with our RAE and now REF (Research Excellence Framework) evaluation systems. This is a difficult area, so it's not surprising to encounter familiar problems here.

Far more importantly, from reading material on the new website for U-Multirank, I was left feeling quite unsure whether the EU has any idea what a university does, or what the purpose of such institutions is in our modern society.

To show what I mean, here is the objective of the U-Multirank project:

The objective of the project is to develop a feasible transparency instrument that can contribute to enhancing the transparency of institutional and programmatic diversity of European higher education in a global context and test its feasibility. The general intention is to create a transparency instrument that will have a global outreach, potentially covering higher education institutions of all continents.

I must confess that I'm finding it really hard going to make any sense of this at all. To be blunt, I have no idea what it means!

From the reports available on the website, one can infer something more coherent than this, since lists of indicators have been produced, a sample of universities has been surveyed in various countries, and so on. So in practice the position is much better than the above vague and general objective. That said, given the diversity across Europe, including in higher education, it is to be expected that the proposed indicators would also cover a broad field, as indeed they do. And they include university 'constituencies' such as the students, users of research, users of graduates (employers), etc. This all seems quite reasonable, but for me the overall result lacked focus and left me with a very woolly and loose notion of what the EU thinks our universities are about. It's actually quite hard to disagree with much in the available U-Multirank reports, and that surely suggests that they are not telling us much.

Sadly, therefore, this does not seem to me a promising path either to improve the competitive position of European universities, or to strengthen Europe's position in the world economy.

All change in the higher education world

This week has been a fascinating one in the world of higher education in the UK, with lots of new developments.

• Attracting most attention, probably, we had the publication of the Government's long-awaited - and delayed - White Paper on higher education, Students at the Heart of the System.
• Then up here in Scotland, the Scottish education minister, Mike Russell announced that for English students studying at Scottish universities, institutions would be able to charge fees up to £9000 per annum from 2012-13, helping to fill the so called 'funding gap' opening up between Scottish and English universities.
• Last, and in the short term least important, 42 senior academics resigned from the Arts and Humanities Research Council (AHRC) peer review college, in protest at the Council's inclusion of several references to the government's Big Society idea in its latest delivery plan.

Now, the White Paper and the AHRC developments will be covered in later posts, while today I shall simply remark on the funding decision announced by Mike Russell. The detailed implications of the fee announcement are not completely clear just yet. For instance I don't know whether the Scottish Funding Council (SFC) will play any role in influencing what fees individual Scottish institutions will be able to set for English students, or whether this will be wholly up to the universities themselves to decide. However, I suspect the latter.

Whatever the situation, I think that the sector now needs some major decisions to be taken quite rapidly, partly to shape institutions' own financial positions, partly to give guidance to potential applicants from England for 2012-13.

One obvious point, already highlighted in some press reporting, is that if Scottish universities opt to charge the maximum allowed fee, then a Scottish degree could cost an English student £36,000, since our degrees are normally awarded after a four year period of study. One might imagine that such a high cost would deter many students from coming up here to study, but we don't actually know a great deal about the responsiveness of student demand to 'price'. However, anticipating this factor, institutions could respond in two ways:

(a) They could set a lower fee, so that over four years the total cost was comparable with that for a three-year English degree; or

(b) We could see far wider use of the practice of allowing well qualified students to enter a Scottish university in the second year of their degree programme. As a result, the traditional Scottish four-year degree might be eroded quite rapidly, as Scottish students are bound to seek the same entry conditions as the English ones, surely. In that case, after a few years (5 to 10 years, I imagine), there might not be many students still wanting to do our four-year degrees, which will pose quite a challenge to universities currently set up to run such degrees. Interesting.....

The bizarre situation, of course, is that while English students can be charged high fees, as can non-EU overseas students, those coming from other EU member states would, under current rules, have to be offered the same 'free' higher education that Scottish students will continue to enjoy. I put 'free' in quotation marks to indicate that it's not really free - the Scottish government pays universities a fee to cover the costs of these EU students. The Scottish government is currently trying to persuade Brussels to change the rules that create this situation, but I'm not optimistic that they will succeed.

If the rules don't change, then Scotland should not be in any hurry to seek full independence if higher education funding were part of the argument. For then England would be a distinct EU member state, and English students could no longer be asked to pay fees unless Scottish students also did so.

Moreover, setting high fees for 'the English' might not prove very comfortable politically, since such discrimination - even though legally perfectly proper - might not make it easy for Scotland to present itself as a country with a good higher education system, welcoming students from all over the world. English students already pay a fee to study here, which makes them different from, say, students from Latvia, Hungary or France (i.e. other EU member states), but a much higher fee might not prove so easy to swallow. We shall have to wait and see. But think about it. Why would a well qualified English student spend £36,000 on a degree at Edinburgh, for instance, when for £27,000 they can get one from Oxford or Cambridge? It will be intriguing to see how the new 'market' for English undergraduates studying in Scotland unfolds, both in terms of quantity (numbers of students) and price (fee levels).

And after all this, the new fee decision at best only fills part of the 'funding gap' faced by the Scottish universities. Where will the rest of the money come from? Well, with the Scottish government firmly set on keeping higher education 'free' to Scottish (and, for the time being, other EU) students, we still await the 'uniquely Scottish solution' that will fill the gap.

Wisdom, and learning to think

What is it that universities really do, or ought to be doing, especially in relation to their main business of teaching?

These days we hear lots about transferable skills, the various (practical) skills that students supposedly need when they enter the job market or, as we sometimes say, 'they join the real world'............ It certainly can't be a bad thing for young people to learn about teamwork, presentation skills, communication and the like, or even more technical things such as IT, quantitative skills and the ability to write good prose. If these attributes are developed as a by-product of a general university education, that seems all to the good. But one hardly needs to attend university to acquire them, so there must be something else going on in universities that we consider important. What could that be?

Part of the story presumably has to do with learning whatever subject the student is at university to pursue, whether mathematics, history, medicine or whatever. Each subject has its own typical modes of instruction and learning, diverse mixes of lectures, tutorials, seminars, practical classes, essay writing and so on, and guidance from academic staff usually plays a significant part in these endeavours. However, nowadays, much of this can be done through distance learning and on-line courses, often delivered in a highly professional manner and sometimes taking less time and incurring a lower cost than would be entailed by attending a traditional university.

Thinking along such lines naturally leads one to wonder what the real value added of a good university education might be, if it's not just about picking up transferable skills or learning a particular subject to degree level - not that I have anything against either of these two forms of 'output'.

My view, which I have referred to in previous posts, is that easily the most important attribute that we would like our students to pick up from their time at university is the ability to think - logically, creatively, imaginatively, and deeply. From my observation over many years, I would says that this is not an easy attribute to pick up, in fact it's both complex and difficult - but it's surely the key to leaving university as an educated person. And I don't think it can easily be picked up on-line, without the personal academic contact that students enjoy at university.

The trouble is, it's quite hard to pin down and measure exactly what we mean by this attribute, 'ability to think', so I realise that I'm open to attack for being idealistic and vague, whereas the fashion these days is to quantify everything as far as possible. But perhaps we know it when we see it?

Personally, I see the 'ability to think' as partly a generic characteristic applicable to all areas of life - this relates to an older conception of what being a graduate was all about, and explains why classics graduates in the 19th century frequently found employment across various outposts of the British Empire as colonial administrators.; there was a presumption that a graduate could turn his (in those days it was rarely 'her') hand to anything. And partly , the 'ability to think' is something that can be given a more concrete meaning for particular subjects.

For instance, we sometimes observe that someone is 'thinking like an economist', and that means a lot more than just trotting out the latest theory just because it happens to be (dimly) remembered, it means recognising which - if any - theory is relevant to the problem or question at hand, what data are needed and/or available to help understand it, what the key issues might be, and what numerical indicators would look reasonable. It also means acknowledging and understanding what we don't or can't know. Last, it means possessing some economic 'common sense' - so if someone says their economy is growing at 10% per annum while it is only investing 5% of its GDP, one should immediately be sceptical, without even needing to know anything else about the country. This sort of understanding, I find, is not readily gained from textbooks, but it can be learned from experience of a wide range of problem solving and empirical exercises. Writing a dissertation can help to impart such understanding, as can wide-ranging and diverse discussions with tutors. But it's never easy, but very satisfying when it works.