TEF & fee increases
For many, the Higher Education Green Paper‘s central component will be the proposals to link the Teaching Excellence Framework to the ability to set undergraduate tution fees from Home/EU students above £9000 per annum.
What detail there is appears on pages 29 to 30 of the document. Here are the relevant paragraphs:
We propose that fee cap and fee loan cap uplifts will apply at an institutional level for reasons of simplicity, lower bureaucracy and to provide an incentive for an institution to maintain and improve all its courses. After the first year (see “Starting the TEF: Years one and two in Chapter 1), and over time, we would expect fees to increasingly differentiate according to the TEF level awarded.
We anticipate that Government would set a maximum fee cap to correspond to each TEF award level, i.e. a maximum fee an institution can charge if it is assessed as level 1, level 2 etc. The Government would not pre-set a formula for this fee uplift, but would set the uplift each year, maintaining the current model of basic and higher amounts, and not exceeding real terms increases. Institutions would be able to charge fees up to the maximum of their current TEF level fee cap. This would be regardless of their TEF performance in previous cycles, so institutions will not be able to ‘bank’ increases gained if they performed better on the TEF in previous years. We do not envisage the fees charged to individual students changing during their course.
I find the second paragraph extremely difficult to unpack. It is not clear that it bears careful reading as it has the hallmarks of being compressed from a longer original explication. But this is the basis for Question 9 on the consultation:
Do you agree with the proposed approach to incentives for the different types of provider?
In “Year 1”, 2017/18, the maximum tuition fee cap would increase in line with inflation for those HEI’s that have a satisfactory Quality Assurance report. After that, the government is proposing to bring in the additional ‘TEF award levels’. The question is: what incentives does the government believe will be put in place by these extra levels?
A BIS spokesperson told me:
The Teaching Excellence Framework would allow those universities who offer high quality teaching to increase their tuition fees in line with an annual fee cap up to but not beyond inflation. Among the proposals, one possibility is to link the levels of TEF attained by institutions to different fee levels within the inflationary cap. These proposals form part of a consultation on reforms to the higher education landscape, which runs until 15 January 2016. (my emphasis)
That is, after 2017/18 it appears that only the highest TEF award level available would attract a “full” inflationary increase, while other levels would attract fractions of that as increases.
I cannot see that this is sufficient incentive for established universities to change their approach (if any such change is needed). Such tiny increases in tuition fees mean that universities have a much stronger incentive to recruit additional students than to concentrate on scoring well on ‘contact hours’ and ‘small group work’ (two potential TEF measures).
And if you work in HE, then pay bargaining is going to be a dismal business for the foreseeable. As I noted for wonkhe, the OBR has repeatedly stressed that university teaching income needs indexing to average earnings, not (fractions of) Consumer Price Index, the likely measure of inflation.
At present, CPI is negative – minus 0.1%. Ironically, next month sees 2012’s tuition fee increases drop out of the CPI measure. That means 0.22 percentage points of ‘upwards pressure’ will be removed making it less likely that CPI will be back above zero for a while.
Critical Education 
I found this difficult to parse too, and wondered whether BIS eventually expected to be able to set above inflation increases (in 2019-20?). I’d agree that such a small maximum increase makes it unlikely that anyone would bother with the fractional increase permitted by TEF level 2 (or 3 if a 4 level system applies). The mid-level(s) generally make me think of the “Commended for excellence” status linked putatively to CETLs in the 2003 white paper. No one wanted that either, and it was quietly dropped – but back then price differentiation wasn’t as obvious a goal…
My cynical reading: get the legislation through while only talking about inflation, but make sure the powers enable a future government to do more. A bit like the 2011 Education Act’s clauses on interest rate – which enable ‘commercial rates’, not just real rates of interest.
‘I cannot see that this is sufficient incentive for established universities to change their approach.’ It seems to me that one of the key phrases in the document is ‘reputational advantage’. The financial advantage of changing practices (if, as you say, this is needed) will probably be non-existent, but there’s a bit of brinkmanship as I read it: daring vice-chancellors to take decisions that will make them look like they don’t care about teaching excellence. It’s clever, but risky; I don’t see that the government could afford too many of the big players to opt out. More at:
https://headofdepartmentblog.wordpress.com/2015/11/09/the-genius-of-the-green-paper/
Reputationally, this will largely benefit alternative providers and insitutions lower down in the selectivity stakes. But, again, it’s insufficient to disrupt the embedded advantage and prestige of the Russell Group, for example.
This may play out very differently in the specialist art and design sector and subjects with a strong ‘practice’ dimension.