To a radical degree

This report from UK think tank the IEA looks at how to reshape the UK’s Higher Education for the post-pandemic world.

  • Covid-19 is bursting the bubble in universities and higher education (HE), exposing the fundamentally unsound nature of the policy of successive governments and of the entire array of HE institutions.
  • Many institutions were in a weak financial position prior to the pandemic. They are now facing a massive cash-flow crisis.
  • The present difficulties could lead to a permanent fall in demand for places in HE. The pandemic has crystallised pre-existing concerns that there is something awry with the product and service universities offer, and the way the system is run and financed.
  • UK HE policy has been heading in the wrong direction since the mid 1980s. The government is using the current interruption as an opportunity for a fundamental rethink.
  • There is no evidence that the UK’s economic performance has been elevated by the expansion in the number of graduates.
  • The good being supplied by HE institutions is the signal a degree will send to prospective employers. As a result, the sort of competition that we see in other markets – of price competition, product variation and price differentiation – has been significantly impaired. It has led to overextension, increasing financial fragility and a system which fails to meet labour market needs.
  • These problems cannot be resolved by a continuation or expansion of previous policies; instead wholesale reform may be required. Different kinds of institutions could be recognised and encouraged, and they could be organised in different ways, with different kinds of funding and different missions.
  • If calls for a bailout are resisted, universities will not be able to continue as before. Moving their funding out of current government spending could give them greater independence and responsibility.
  • Ultimately, there is a case for stopping the use of HE as a validation device for employers. Alternative, lower-cost methods could be adopted to certify the qualities and abilities that a degree currently signals. HE could be thought of as a good that can be valuable and enjoyed at any stage in life, and not for an (often spurious) supposed financial benefit.
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