International Higher Education 31/4

Big Designs in England: New Labour Offers a New Round of Higher Education Reforms

John Aubrey Douglass
John Douglass is a senior research fellow at the Center for Studies in Higher Education, University of California, Berkeley, and recently was a visiting fellow at the Oxford Centre for Higher Education Policy Studies, New College, University of Oxford.

Last January the Labour government under Prime Minister Tony Blair issued a significant white paper outlining potentially sweeping changes in how British universities might be funded and regulated. If embraced by lawmakers, this treatise will mark a continuation of waves of reform that have induced major paradigm shifts and experiments in system building since World War II.

Reforms in the 1960s created a binary structure of universities and polytechnics, built upon the premise of a reformed secondary school system and the proliferation of further education colleges--essentially vocational institutions with a university preparatory function. For over 20 years this model gave a sense of order and was part and parcel of a drive by government ministers to elevate the role of higher education in British life.

By the late 1980s, with the rise of Thatcherism, however, a series of changes collapsed this binary vision. By 1992, all English higher education institutions were given the title of research universities. Thatcher and her successor, John Major, also launched the beginning of the end of rather liberal allocations of public funds for university building and created an array of bureaucratic accountability models focused on research and teaching quality. Perhaps, most importantly, this era marked the end of a consensual and collaborative relationship between the national government and the higher education community.

The Promise of New Labour
With the election of "New Labour" in 1997, many within England's higher education sector pined for a major shift away from the Thatcher model. They had tired of growing enrollments, shrinking budgets on a per student basis, and the growing structure of burdensome accountability reviews.

Yet the arrival of New Labour under Blair did not result in a challenge to the Thatcher model. Indeed, the 1997 Dearing Report, a commissioned study under John Major's government, cited the need for financial stability and increasing access. While enrollments in England had exploded between 1989 and 1997, public funding per student declined by some 36 percent. To ease the financial crisis, the Dearing Report argued for the introduction of a tuition fee of £1,000 per year at all higher education institutions in England (approximately $1,580 in today’s dollars). To the surprise of many, the Labour government embraced this quick-fix source of additional funding for higher education in 1998.

Enter the new white paper offered by the Department for Education and Skills and largely shaped by its new secretary, Charles Clarke. The Labour government previously set a goal of increasing access to higher education to 50 percent of the 18-to-30-year-old population by 2010 (a curious age cohort and one not used previously by the OECD, for example). New Labour clearly sees the higher education sector as not sufficiently concerned with expanding access, parochial in its interests, and for the most part staunchly against any and all necessary reforms.

Yet Blair and others are also deeply enamored of the glow of the knowledge economy, by higher education's essential role for economic competitiveness, and its centrality for expanding social economic mobility and further eroding England's class structure.

The Shape of the New White Paper
The white paper, entitled "The Future of Higher Education," offers a number of new initiatives, most falling into two general categories. The first is a desire both to increase funding and to diversify the sources. This plan includes a substantial promised boost in funds--6 percent increases per year over the next three years for both teaching and research--representing a total three-year commitment of £2.3 billion (or approximately $3.6 billion). But like other recommendations in the white paper, the devil is in the details on how these funds will be distributed.

To some degree, the promise of increased funding is a sweetener to induce acceptance of a more controversial proposal. The white paper offers a daring plan: by 2006, fees may be set by each institution, but capped at a maximum of £3,000. Furthermore, borrowing from the Australian experiment in fees, students would not pay this fee upfront. Rather, they would pay through the national tax system at an interest rate pegged to inflation, and repayment would begin only after graduates achieved an annual income of £15,000.

In Australia this policy has led to a problematic scenario: the promise of a new infusion of funding but the reality of a continued decline in public funding. Labour, however, has promised to expand funding from government coffers, and to provide all fee-derived funds up-front--to pay the fee for the student and then to take on the burden of collecting at a later date. The white paper also promises a scheme to boost university endowments, including offering matching funding for any new funds raised by an institution.

A second major component of the white paper is a continued reliance on an accountability bureaucracy and incentive funding to expand access to underserved populations. Indeed, the government now desires a new regulatory agency under a sort of "czar for access." The new "independent access regulator" will require all universities to submit "access agreements." At least as indicated by policy administrators in the ministry, funding incentives will be tied to attracting students from "nontraditional backgrounds"--which is also code for saying there will be penalties for low institutional performance.

Within this mix are not only universities but also the vast network of further education colleges that are explicitly asked to bear the largest burden in increasing enrollments by offering a growing number of higher education courses and a relatively new, largely terminal, and mostly vocational two-year higher education degree: the new "foundation degree."

Another Agenda?
What is missing in this expansive proposal? Perhaps most apparent is any overt discussion of the need for more formal mission differentiation among higher education institutions. Rather, the white paper recommends increased research funding to "top" departments and institutions and makes a vague reference to restricting the title of "university," in what is clearly an opening move regarding mission differentiation.

Can the United Kingdom afford some 110 research universities, all competing for the same pound? The bulk of the higher education sector thinks it can--and has inherent interests to keep it that way. But Clarke clearly thinks this current paradigm spreads too little money among too many institutions, resulting in unacceptable levels of mediocrity.

Governments generally favor differentiation because it promises cost containment and a coherent strategy for building high-quality institutions. But clearly the English higher education sector remains largely antagonistic to this agenda. The prospect of the fee structure alone creates great uncertainty for a majority of England’s higher education institutions over what to charge. Many oppose the proposal, including a substantial and vocal portion of Blair’s cabinet, some of whom have offered blustery threats of resignation if the scheme is adopted.

And in this tension lies the rub. A major and vocal opponent of the fee scheme is the chancellor of the exchequer, Gordon Brown. In the realm of parliamentary politics, Brown is an appointment of Blair's and is also a political rival with substantial powers regarding budgeting. Add to this the instability of Blair’s government with the onset of war with Iraq (at least at the time of this writing) and it becomes clear that the fate of the white paper is uncertain.