left to my own devices – occasional thoughts on higher education

One of the most frequent criticisms of the way we are governed in the UK is the lack of joined up government.

Sometimes the accusation of a lack of join-up is well-founded. Often this happens due to an oversight, a failure to join the dots.

On other occasions it’s a deliberate choice, as Nick Hillman has recently pointed (£) out about the split of teaching and research in higher education across different government departments.

sometimes you just have to look in the right place

Other times, though, policies that initially appear disjointed are in fact joined up.  It’s just that we’re not looking in the right place for the link.  And I wonder if that may be the case in respect of the recent government announcement to almost entirely withdraw apprenticeship levy funding from Level 7 apprenticeships.

The higher education sector has been quick to criticise this decision.

The decision undermines the government’s skills and productivity agenda (£).  It hits public sector reform plans,removing funding for the leadership and management training in key public services that is needed to deliver improved services and increased public sector productivity.  These policies are not being joined up, runs the critique.

All of that’s true, but I can’t help but perhaps we need to look elsewhere for the policy join: to the recent announcement in the government’s immigration white paper of its intention to ‘explore introducing a levy on higher education provider income from international students, to be reinvested in the higher education and skills system’ [p.36].

a possible scenario

The near-total withdrawal of apprenticeship levy funding for Level 7 apprenticeships is likely to save c.£240M p.a. from apprenticeship spending.  (Or to put it another way, take this income away from the higher education sector).

At the same time, while it’s details are still vague it is thought that the international student fee levy could generate £600M if levied in England alone (the indicative modelling published by the government suggests a 6% levy).

Enough to allow the government to cover the lost levy funding for Level 7 apprenticeships; for the Treasury to retain and spirit away a chunk (e.g. c.14% of apprenticeship levy funds will disappear into the Chancellor’s back pocket in 2025-26); and for the government still to have almost half of the international study levy to spend on other parts of skills system.

And who could object? Funding higher level skills education and training such as Level 7 apprenticeships is obviously ‘a good thing’.  Using the profit from international student fees to subsidise worthy activity is therefore ‘a good thing’.

no such thing as a free lunch

Except of course that international student fee income is already being used to subsidise swathes of our higher education system.  The education of home undergraduates, due to the unit of resource plunging to near historic lows.  University research, where little if any covers its full economic cost.

So even if the funds from the international student levy were to make it back to the sector, either as a replacement for the lost Level 7 apprenticeship funding or in some other way, resource would still be disappearing from the sector.  If not quite into thin air, in a way that will feel close to it to universities.

many things are possible

Obviously this is just speculation about what might happen.

The international student fee levy may just be added to the (very large) pile of white paper bright ideas that go no further.

Or it may not, but the funds it brings into government may not be diverted to replace the lost apprenticeship levy finding for Level 7 apprenticeships.

sometimes bad things happen to good sectors

But I wouldn’t rule it out.

After all, this is the government that last year pulled a bait and switch on the higher education sector – raising the home undergraduate fee, and then pulling back from the sector the additional fee income this delivered and more via the rise in employer NI rates.  And gained this boost to the national finances on the backs of students, as ultimately it’s students rather than the government that pays the increased fee level.

It’s also the same government that is paying the significantly rising costs of the Teachers’ Pension Scheme for schools and colleges; but not providing any funding for those universities in TPS while doing nothing to address the calls from these universities to be permitted to take action to address this very significant additional cost.

There is a pattern emerging over the last year of resource in higher education disappearing into thin air. Except that as with energy in the first law of thermodynamics, this resource doesn’t really disappear, it just goes elsewhere – into the coffers of the Treasury.  The merits of the ends to which this is then put may be good or bad, clear or opaque.  Whatever the ends are, this is not helping a sector in financial crisis – and one of the few sectors in the UK that has a credible claim to be world leading.