Students are right to ask where their fees go

Source: Michael Parkin

We have all heard the anecdotes: “We only have six hours of classroom teaching each week,” says an undergraduate from a well-known university in London. “I’m in my second year and I’m told university is all about private study. I just don’t think we’re getting value for money.”

The student goes on to explain that most of her teaching is conducted by doctoral students. She is paying £9,000 a year for six hours of teaching per week over 32 weeks, what passes for the academic year. Does that represent good value for money?

Discussions about the long-term sustainability of UK higher education tend to build upon an unassailable assumption that there must be more undergraduate funding. To even dare to question why undergraduate fees are so high invites derision, and arguments about whether the state should subsidise more, the student should pay more or universities should offer their own loans all exclude any discussion of value for money.

Of course, higher education is life-changing, the salary premium enjoyed by graduates is significant and the social value of education is unquestionably enormous. But why is £9,000 per year the magic number for fees? And why, as some would have it, should fees be uncapped?

Speaking in the House of Commons last summer, David Willetts, at the time minister for universities and science, argued that the coalition’s higher education reforms “are, we believe, contributing to maintaining the quality of education and bringing more money into universities”. Many are left wondering where the money has gone.

In the Higher Education Policy Institute- Higher Education Academy Student Academic Experience Survey 2014, the most recent edition published, 70 per cent of undergraduates at Scottish institutions, who typically pay no fees, believed that they were receiving good or very good value for money, compared with only 41 per cent in England.

Asked to list their top three priorities for institutional expenditure, 48 per cent of undergraduates chose “reducing fee levels” (rising to 55 per cent among first- and second-year students, who are subject to the higher fees regime).

Yet it is quite possible to have excellent teaching without being research-intensive, and to charge lower tuition fees even in a market where price is used as a proxy for quality. In my own area, a survey of undergraduate law students conducted by Legal Week magazine found that BPP University was regarded as offering the best value for money in the sector (fees range from £12,000 to £18,000 for an entire undergraduate law degree, compared with an average of £,000 at public universities). The same survey also placed BPP fifth for teaching quality out of 151 recognised university bodies, behind only the University of Oxford, the University of Cambridge, University College London and the University of Strathclyde.

The Hepi-HEA survey found that the average scheduled number of contact hours per week during term time is 14.2 hours. Respondents’ preferred classroom size is smaller groups, up to a maximum of 15 students. Moreover, 35 per cent of students wanted more teaching hours, 35 per cent wanted smaller classes, 34 per cent wanted better training for lecturers and 34 per cent wanted better learning facilities. This starts to tell us something about the economic model needed to support what students want and to delineate the cost of undergraduate education.

The typical academic contract for lecturers in the traditional public sector is based on a maximum of 18 hours per week for formalised teaching and 550 hours maximum in any given year. In a Times Higher Education survey, the average salary for all academic staff (taken from Higher Education Statistics Agency data) in 2010-11 was identified as £47,8. Even if we round this up and take £50,000 as the average salary with a maximum teaching week of 14.2 hours (79 per cent of the maximum), this would suggest a direct teaching cost for a group of 15 students of about £50,000 (plus taxes and so on). Compare this with the £135,000 that 15 students would pay for a year’s study.

While there are other costs, on the basis of the teaching hours set out above, each classroom should yield more than £400,000 of income a year, excluding use during evenings, weekends and outside term time. This does not take into account the savings that can be obtained from using online technology to deliver improved and individualised services to all students.

Funding also pays for property, support staff, libraries, the ever-increasing burden of regulation, quality assurance, and internal and external processes. Some of these hidden costs can be big-ticket items. However, data from the Society of College, National and University Libraries indicate that “average library expenditure per FTE student (£358) was almost 3 per cent lower than last year”. Most universities are investing in improving their capital infrastructure, yet in the Hepi-HEA survey, only 11 per cent of students saw this as a priority.

So where has the extra money gone? I fear the answer may be that much of it has been ploughed into pension funds, research and vice-chancellors’ pay – in other words, on anything but the direct costs of undergraduate provision.