The Economics of Higher Education EHE 20056 Program

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The Economics of Higher Education (EHE) 2005-6
Program
An Overview of the UK Higher Education System

• Nissan Limor
• Tel Aviv, April 6, 2006

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The United Kingdom
Population (in millions)
Male 29.0
Female 30.8
Total 59.8
Tertiary Education
Universities Colleges 331
Students (in millions) 2.3
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Higher Education in the United Kingdom 1986-2004
1986 1st Research Assessment Exercise (RAE)
Further RAEs were carried out in 1989, 1992,1996,
2001, the next - 2008.

• 1988 Education Reform Act

• Aiming to increase participation rate.
• Strengthened central planning of HE.
• Polytechnics become independent.
• Funding councils UFC and PCFC were created.

1989 White Paper on Education

• Selective funding of research.
• Increase in students numbers.

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Higher Education in the United Kingdom 1988-2004
1992 Further Education Act

• University status for polytechnics.

Also in 1992

• All universities and colleges brought within a
  single funding mechanism operated by Higher
  Education Funding Councils.
• Creation of new funding councils HEFCE, SHEFC
  and HEFCW
• Separating HE funding into teaching and
  research.

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Higher Education in the United Kingdom 1988-2004
1993

• Transfer of around 20 of HEFCE research
  expenditure to other agencies.
• 1st assessment of teaching quality.

1997 Dearing Report

• First fundamental review of HE system since
  Robbins Report (1963).
• Further expansion of HE.
• Changes in institutional and student funding.
• Support for an interdisciplinary arts and
  humanities research.
• A framework for qualification, and creation of
  QAA- Quality Assurance Agency in Higher Education

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Higher Education in the United Kingdom 1988-2004
1998 Teaching and Higher Education Act 1998

• Introducing tuition fees.
• Introducing measures of financial support for
  students (grants, maintenance grants, loans,
  etc.).

2002 SET for Success Science, Engineering,
Technology

• Roberts Report (2002) Aimed the increase of the
  supply of people with science, technology,
  engineering and mathematics skills.
• The recommendations referred to primary and
  secondary schools, further education,
  undergraduate and postgraduate education
  employment in HE and, scientists and engineers
  in RD.

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Higher Education in the United Kingdom 1988-2004
2003 Review of Research Assessment

• Roberts Review (2003) - recommendations to
  revise research assessment exercise.
• Assessment shouldnt be based only upon
  performance indicators it should assess the
  capacity of the unit and the institution.
• Assessment should review whether the overall
  productivity and impact of a unit of assessment
  exceeded a minimum threshold.

• ? A new RAE process was announced in 2004

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Higher Education in the United Kingdom 1988-2004

• 2004 Higher Education Act 2004

• Based on the White Paper The Future of Higher
  Education (2003) CMD 5735.
• Aims to
• (1) Widen access to HE.
• (2) To help UK HEI to be competitive in the
  world
• economy.

Main issues

• Introduction of variable fees, up to 3,000,
  from 2006.

2. Repayment can be deferred until the graduates
income reaches 15,000 a year.
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Higher Education in the United Kingdom 1988-2004
3. Creation of a new office Office for Fair
Access (OFFA) OFFA is charged with the power to
review access plan of any institution increasing
fees above 1.125.

• 4. HEI to provide bursaries for students from
  under-represented groups.
• 5. Re-introduction of maintenance grants, up to
  2,700 a year.
• Creation of a new Arts and Humanities Research
  Council.
• Designation of a new independent body to review
  student complaints (not related to academic
  judgment).

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• Tertiary Education in the UK
• Statistics

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UK Students 2004/2005 Academic year
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Full Time Students
61
51
13
Part Time Students
39
26
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UK Students 2004/2005 Academic year
13
UK Students 2004/2005 Academic year
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UK Students 1999-2005
2,288
19
2,247
2,175
2,086
1,991
1,856
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UK StudentsGrowth Rate - 1999-2005
Female
Male
Average growth rate
18.9
13.9
22.6
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UK Students 1999-2005
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UK Students 1999-2005
44.1
17.1
- 2.5
Non-EU Students
EU Students
UK Students
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• Budgeting
• Higher Education
• In the UK

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Funding Higher Education
Funding Sources (1) HE Funding
Councils (2) Other government agencies (3) Non-go
vernment Private fees, charities, industry etc.
Higher Education Funding Councils
In 1992 funding councils were created HEFCE
England SHEFC Scotland HEFCW Wales.
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Funding Councils Money

• Most of the money is distributed as a block grant
  to HEI and FEC delivering higher education.
• HEI and FEC can decide how to spend the money.
• Some activities are funded under special
  initiatives, have restrictions on how the money
  is spent.

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Funding Higher Education in the UK 2005
B 15.8
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HEFCE Allocations 2005/6
7
20
10
63
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HEFCE Funding Teaching

• Was introduced in 1992, reviewed and changed in
  1995 and in 2002. A new review is currently
  conducted.

• Teaching formula is based on number of FTE
  student, and four price groups.

• There are special premiums for

• Students on long courses.
• Part-time students.
• Foundations degree students.
• London weighting.
• Institution Factor (specialist and small
  institutions).
• Old and historic buildings.

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HEFCE Funding Research

• HEFCE provides funding to support the research
  infrastructure. The Research Councils provide
  funding for specific programs and projects.

• Funds are divided by 68 subject areas (units of
  assessment).

• Each subject is assigned to three cost weights.

• The volume of research is measured by 4
  components (1) Research active academic staff
  (2) Research assistants (3) Research fellows
  (4) Research income from charities.

• Funds are distributed to institutions in
  proportion to the volume of research multiply by
  the quality of research in the subject for each
  institution.

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Research Assessment Exercise (RAE)
Three steps

• 1. Calculating the FTE staff in each unit
  submitted for assessment.
• 2. Evaluating research activities in each unit.
• research activities are judged by five
  categories - from four stars to one star, and
  unclassified.
• 3. Calculating the average for each unit.

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Strategic Plans
2003-2006
2006-2011
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Strategic Plan 2003-2006Targets Resources
Targets

• 1. Higher education must expand to meet rising
  skill needs.
• 2. The social class gap among those entering
  university should be smaller.

Resources

• Increase in funding for higher education
  averaging more than 6 per cent over and above
  inflation for the next three years.
• 2. Funding for student support will rise
  sharply, including new grants for students from
  lower income families.

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Strategic Plan 2003-2006And more

• But this alone will not enable universities to
  boost opportunity and excellence as much as
  needed.

Additional resources will be needed if they are
to meet the long-term challenge
?
Maintain and improve high standards, Expand and
widen access, Strengthen links with business,
and Compete globally.
?
?
?
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Strategic Plan 2003-2006 Research Excellence
Building a Strengths

• Increase spending on research in 200506 by 1.25
  billion compared to 200203 around 30 per cent
  in real terms
• Encourage and reward research in larger units,
  including through collaboration
• Invest more in leading research departments and
  universities
• Develop and reward talented researchers, with
  rigorous new standards for government funded
  research postgraduate places
• Create a new Arts and Humanities Research Council.

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Strategic Plan 2006-11
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Strategic Plan 2006-2011

• Meeting customer and stakeholder needs

1
Enabling excellence
2
Sustaining a high quality HE sector
3
Enhancing the contribution of HE to the economy
and society
4
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Strategic Plan 2006-2011 - Risks Sustaining a
high quality HE sector

• 1. That changes in market conditions reduce
  institutions ability to generate income from
  private sources, and threaten their financial
  viability and ability to achieve their mission.
• 2. That institutions prioritise short-term
  spending needs ahead of investment that promotes
  longerterm viability.
• 3. That the development of people in the sector
  fails to keep pace with changing demands placed
  upon institutions.

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Strategic Plan 2006-2011- Risks Contribution to
the economy and society

• 1. That teaching quality and standards decline
  as universities and colleges are unable to
  recruit and retain suitable academic and support
  staff and/or maintain appropriate physical
  resources.
• 2. That the strategy for employer engagement
  fails to ensure a higher level of skills and
  knowledge that meets the needs of the economy and
  society.
• 3. That the outcome of the teaching funding
  review fails to win the confidence and support of
  the sector and/or the Government.

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Strategic Plan 2006-2011 Teaching and learning
delivering excellence

• Additional funding for excellence in teaching,
  rewarding good teaching and providing more
  fellowships for the best
• 2. Better information for students including a
  new annual student survey and publication of
  external examiners reports
• 3. New national professional standards for
  teaching, and a new national body to develop and
  promote good teaching the Teaching Quality
  Academy.

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Strategic Plan 2006-2011 Higher Education and
Business

• Strengthening the Higher Education Innovation
  Fund (HEIF) worth 90m a year in 200506
• 2. Funding through HEIF a network of knowledge
  exchanges to reward and support HE institutions
  working with business
• 3. Building stronger partnerships and alliances
  between HEI, business and Regional Development
  Agencies (RDA).

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Strategic Plan 2006-2011 Expanding higher
education

• Continue to increase participation towards 50 of
  those aged 1830, mainly through two-year
  work-focused foundation degrees

In the early 1960s only 6 of under-21s went to
university, whereas in 2003 around 43 of 1830
year olds in England enter higher education, for
2011 50.
2. Work with employers to develop more
foundation degrees, strengthening links between
further and higher education and creating better
pathways for progression
3. Encourage more flexibility in courses, to
meet the needs of a more diverse student body and
improve support for those doing part-time degrees.
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Strategic Plan 2006-2011 Expanding higher
education
Expansion should not mean more of the same.
There is a danger of higher education becoming an
automatic step in the chain of education almost
a third stage of compulsory schooling. We do not
favor expansion on the single template of the
traditional three year honors degree.
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Strategic Plan 2006-2011 Fair Access

• Restoring grants for students from lower income
  families and abolishing up-front fees for all
• Requiring universities to draw up an Access
  Agreement to improve access for disadvantaged
  students
• Appointing an independent Access Regulator to
  oversee these agreements

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Strategic Plan 2006-2011 Fair Access cont.

• Building better links between schools, colleges
  and universities and raise young peoples
  aspirations
• Reimbursing universities and colleges for extra
  costs in attracting and retaining students from
  non-traditional backgrounds
• Double the amount of extra money to help
  vulnerable students, and introducing a new
  package of grant support for part-time students.

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Strategic Plan 2006-2011 Delivering Higher
Education in Further Education

• Further education was in 2003 around 11 of
  delivered higher education in colleges.
• About 90 comprised of two year work-focused
  programs, including foundation degrees.
• Further HE-FE collaboration - remove unnecessary
  bureaucracy and eliminate boundaries between HE
  and FE.

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Strategic Plan 2006-2011 Support System and
Tuition

• Make the system for supporting students fairer.
• Having a university education brings big benefits
  and while the Government will continue to pay
  most of the cost involved in studying for a
  degree, it is also reasonable to ask students to
  contribute to this.
• Make sure that no student is put off from going
  into higher education because they cannot afford
  the cost of studying while they are at
  university.
• And those who come from the poorest backgrounds
  should get extra support.

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• Thanks