The UCAS figures published on Friday made for a nasty surprise.
Undergraduate courses at established higher education institutions subject to Student Number Controls have filled 52 000 fewer places for 2012 entry when compared to last year.
The Russell Group are focusing their complaints about Hefce’s failure to predict the number of applicants holding AAB+ at A-level.
85 000 places were removed from the ‘core’ allocations of individual institutions in relation to their previous AAB+ recruitment. UCAS reports that only 79 000 such students have accepted places. For the Russell Group, it is probably significant that only 51 000 of those had sat A levels (as compared to 61 000 in 2011). There are therefore between 6 and 10 000 fewer eligible applicants in the system and because of the way the artificial recruitment pools work, those losses are felt at the second or third tier of selective universities. (UCL and Bristol managed to expand by a few hundred places each).
The real story is elsewhere though. Despite the vagaries of conditional offers and A level results this year, there was little significant increase in Clearing activity or those adjusting upwards on the back of better than anticipated grades.
The number of non-ABB applicants accepting places for 2012 entry fell to 223,000 from 260,000. What’s happened there is not clear yet, but as a guess: applicants only receiving offers from their third, fourth or fifth choices were less likely to accept places than in previous years owing to higher fees.
A large leap in fees combined with ill-considered artificial restrictions on recruitment have delivered the HE sector a big problem. It was predictable and predicted.
Update: I realised a stage of my reason went unstated in the above. If there are fewer AAB+ than expected, then they ought to show up in the ‘non-AAB’, so the fall there is worse than a simple comparison with 2011.
The government has moved forward with its promise to review the VAT status of commercial HE providers, first announced in this year’s Budget.
A consultation closing in December can now be found here on the HMRC website.
The idea is simply that for-profit operations would be exempt from charging VAT on their tuition fees in the same way that charitable and public education providers are under EU law.
The 2011 White Paper announced its intention to create a ‘diverse and competitive’ HE sector and the government is now minded that for-profits are disadvantaged in relation to VAT and that this distorts competition.
It is not clear that this is the case – both BPP University College and New College of the Humanities have adopted not-for-profit subsidiaries to benefit from the VAT exemption. This reform would seem to be more about allowing the distribution of profits than generating competition.
And if all significant differences are eroded between charities and for-profits so as to ensure a ‘level playing field’, then what does that mean for the charities? For-profits have the large advantage of being able to raise equity capital and other forms of investment.
If this change were to go ahead, it is not clear how the majority of charitable institutions would remain competitive in the new terrain.
I have contributed to the new edition of Pearson Blue Skies – out today.
My article and an accompanying video are available here.
The full publication can be downloaded here.
I argue that Pearson and other non-teaching bodies should not be granted the power to award degrees (as suggested by last year’s White Paper). The article also contains a summary overview of the HE reforms and the effort to create a level playing field for private providers.
The sixth and final meeting of the Different Class philosophy of education reading group will be held on Wednesday 12 September at the Wheatsheaf (starts 7.30pm).
We will be discussing Diane Ravitch’s The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education.
Further details here. All welcome.
In October, Jonathan White will return to take over the reading group.
I will be talking about student loans at next week’s annual conference of the Centre for Research on Socio-Cultural Change. The conference runs from Wednesday 5th to Friday 7th.
I’ll be speaking on the Education/Intellectual Capital panel on Thursday afternoon.
More details (including keynote speakers) here.
Venue: Manchester University
Something bugs me about Anthony Grayling and the way he presents New College of the Humanities. Nothing is ever quite as it seems.
When the original company, Grayling Hall, was founded as a company limited by share back in July 2010 (note the date, before the Browne review was published) Grayling was one of two shareholders: the other was Peter Hall a strong opponent of public services who had previously sponsored David Willetts when he was in opposition.
Grayling Hall changed its name to New College of the Humanities Limited before the college was launched last summer. By far the largest shareholders, over 30 per cent of the company, are the Swiss family Ebstein who run the venture capital firm Meru AG based in Lucerne. They go unmentioned on the NCH website.
Private equity and venture capital is well served on the board http://www.nchum.org/who-we-are/non-academic-staff Many of the illustrious associated professors also took shares in this company, which is a profit-distributing entity
The separate charity, New College of the Humanities Trust (Registered Charity Number: 1141608), was set up to oversee bursaries and scholarships to support study at the company.
Alongside the high fees (£18000 headline fee per year), the profit distributing nature of the company attracted criticism from those who think educational establishments that aspire to be ‘Oxbridge colleges in London’ should be charities.
But earlier this year, I noticed that Grayling had begun to deny that NCH was ‘for-profit’. I have never had much confidence in Grayling’s grasp of the business and presumed either that he rightly understood that he was unlikely to be making any profits for quite some time or that the company had altered its constitution in some way to become a ‘non-profit distributing body’ in order to benefit from VAT exemption on fees.
Last night the news broke at 10pm: the UK Border Agency (UKBA) confirmed the revocation of London Metropolitan University’s ‘highly trusted sponsor’ status. This means that London Met is no longer able bring in non-EU students into the UK to study under the ‘Tier 4’ visa scheme.
In fact, the move is more draconian in that such students currently studying at London Met will have their visas withdrawn: at least 2000 face deportation within 60 days of official notification, unless they can find another sponsor. Effectively they must find a place on another course at another institution.
This is the first ever revocation for a university, although two have previously been temporarily suspended from the scheme (several private and FE colleges have also had their licences withdrawn). Damien Green, Immigration Minister, told Radio 4 this morning that this monumental decision was justified owing to ‘seriously deficient’ practices at the university.
Ostensibly this is the culmination of a spat within government. The Department of Business, Innovation and Skills (BIS) which has responsibility for higher education has been keen to promote the sector as one of the UK economy’s few export successes (to which fees from overseas students make up a large contribution). BIS has been lobbying with the support of the sector to have student numbers removed from the official migration statistics which are the responsibility of the Home Office ( in charge of the UKBA).
Theresa May, Home Secretary, is bound by David Cameron’s pledge to reduce net immigration to the ‘tens of thousands’. Of course, today was the day when the latest such figures were released. In the period covering the year to June 2012, the figures show that net immigration is down to 216 000 with student visas down by 30 per cent on the previous year.
Following up the post from earlier this week on London Metropolitan, I have now seen the relevant tender document.
I can confirm that it is not about outsourcing in the normally understood sense.
The key clause is this:
The University seeks a strategic partner who will work with us in three stages:
(i) to review the existing administrative business processes of the University, deploying proven expertise to maximise performance improvement and transform administrative processing;
(ii) to develop and deliver a shared services partnership to deliver those transformed processes to the University, delivering continuous process improvement and cost-savings for reinvestment;
(iii) subject to confirmation of the business case and the Finance Bill 2012, to develop and deliver a shared services proposition to offer to other higher education providers.
This shared services partnership will be facilitated by recent changes in VAT legislation with regard to shared service units and will take a lead in providing high quality cost-effective services to the higher education sector.
The initial contract will be for five years. The University reserves the right of the option to extend for a further three years pending reviews.
London Met is looking for a management consultant initially on a £74million contract for 5 years but the idea is at stage (iii) to create a subsidiary company. This is the ‘special purpose vehicle’ mentioned in the previous post. Note that the Finance Bill received Royal Assent in July.
The sixth and final meeting of the Different Class philosophy of education reading group will be held on Wednesday 12 September at the Wheatsheaf (starts 7.30pm).
We will be discussing Diane Ravitch’s The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education.
Further details here. All welcome.
In October, Jonathan White will return to take over the reading group.
I carry with me at all times a 2009 report for Universities UK prepared by the legal firm Eversheds. Why?
On page 7 of ‘Developing future university structures’, you will find a diagram entitled ‘A model for university buyouts’.
I suggest you look at that diagram and then read the stories about London Metropolitan University’s intentions to ‘outsource’ all staff besides teaching staff and vice-chancellor.
According to a spokesperson at London Met, what was being proposed was not outsourcing as the contract out to tender was for the management of services (£74million over 5 years), while posts and staff would potentially be transferred to a subsidiary.
“If London Met decides to set up a subsidiary company, it will be 100%-owned by the university. Staff would be working for this wholly-owned subsidiary of London Met.”
This is not what normally happens in ‘outsourcing’ where in-house posts are replaced by the services provided by the independent contractor.
“The successful tenderer may be required to become a service provider to a special-purpose vehicle created by the university, and any resulting contracts may be between the university’s service company and the chosen service provider.”
Look again at the entity marked ‘NewCo (Profit)’ on the buyout model. That is a subsidiary owned by the university but, as a company limited by shares, some non-voting shares are sold to investors in return for dividends (see the footnote).
London Met’s aim is to create a ‘shared services’ company specialising in backroom operations, which it will then market to other universities and similar organisations. (This is now a viable project given the changes to VAT pushed through by the conservatives).
‘Outsourcing’ (‘we’ve seen that before’) may be a smokescreen as it takes the first step down the route to ‘buyout’ – opening a new route for investors who want a piece of university action. They currently cannot buy a share in a company limited by guarantee. As charities, publicly funded higher education institutions cannot distribute profits. The subsidiary, as ‘special purpose vehicle’ may be designed to circumvent those impediments to private finance.
Critical Education 