STRATEGIC ISSUES FOR SCOTTISH HIGHER EDUCATION
FUNDING FOR THE FUTURE: A Consultation on the Funding of Teaching
The Royal Society of Edinburgh is pleased to respond to the Scottish Higher Education Funding Council (SHEFC) consultations on the funding of teaching ‘Funding for the Future’, and ‘Strategic Issues for Scottish Higher Education’. The RSE is Scotland’s premier learned society, comprising Fellows elected on the basis of their distinction, from the full range of academic disciplines, and fromindustry, commerce and the professions. This response has been compiled with the assistance of a number of Fellows with substantial experience of higher education from across Scotland and the UK.
The two consultation papers are addressed below. The responses to the questions in section two of the Strategic Issues for Scottish Higher Education consultation, are addressed in the consultation on the Funding for the Future.
Strategic Issues for Scottish Higher Education (Consultation Paper 06/98)
Overall, whatever the consequences of devolution, Scottish higher education must aim to stay internationally competitive, continuing to attract considerable research funds from outside its borders and maintaining the influx of students from the rest of the UK and abroad. This priority is not just to benefit the Scottish economy, but because if one does not aim to be internationally competitive, one provides a very mediocre higher education for ones own citizens. Priority needs, therefore, to be given to the maintenance and development of the highest quality research and teaching at both undergraduate and postgraduate level, as well as to increasing interaction between higher education institutions and industry at both Scottish and international level.
In addition, one should distinguish between what is expected of institutions, and what is expected of the Funding Council. As far as individual institutions are concerned, they will have to address all of the issues raised in the paper to a greater or lesser extent. Indeed, most of the issues can only be addressed by the institutions themselves.
The key areas that should be the highest priorities for the Funding Council, as listed in the consultation paper ‘Strategic Issues for Scottish Higher Education’, are ranked below:
Key Issues for Scottish Higher Education
(1) J: Developing and enhancing excellent research capacity
Are there other statistics that could usefully be included in this overview?
Key considerations in the collection of additional statistics are: what additional useful information willthey give, and can reliable information be obtained at reasonable costs. In addition, statistics for Scotland should be benchmarked with those in the UK and abroad.
Possible additional statistics for students, graduates and diplomates are:
Patterns of Participation
* Drop-out rates – e.g. why students drop out, and drop-out versus qualification on entry.
Graduates and diplomates
In terms of research and economic impacts, it is misleading to associate ‘economic impacts’ only with research, as teaching and learning almost certainly have as great an economic impact as research. Specific research information, however, could also be collected on:
FUNDING FOR THE FUTURE: A Consultation on the Funding of Teaching (Consultation Paper 05/98)
One principle that must be borne in mind throughout consideration of the funding for teaching is to recognise that SHEFC is one amongst a number of major contributors. Long-term issues that arise as a result must include: what does SHEFC teaching funding pay for; what is the relation of SHEFC funding to other funding sources; and how is the efficiency of institutions in generating non-SHEFC resources to support basic teaching infrastructure valued and supported by SHEFC. Understanding of these issues will develop and change over time.
In addition, now that the Scottish Further Education Funding Council is closely associated with the SHEFC, the differences and co-ordination between further and higher education should be clarified lest they be lost in evolving future funding scenarios. Although many useful skills necessary for employment should be acquired in both further education (FE) and higher education (HE) courses, it is important that the in-depth education of subject specialists is protected. High quality students, undertaking in-depth degrees, often, in the course of their careers, have a disproportionately beneficial effect on the development of their subjects and discovery of major advances in their discipline and the generation of "new thinking" from which the country and the economy as a whole benefit. This will require the provision in higher education institutions of state of the art laboratories, equipment, first class libraries and academic staff who are at the leading edge of their subjects.
The specific questions identified in the consultation document are addressed below:
Section Three: Objectives and criteria for a funding method
QUESTION A: Are the objectives and criteria set out in paragraphs 11.1 and 11.2 and 12.1 to 12.11 above a reasonable set of criteria against which to test any new proposed funding method for teaching? If not, how should they be modified?
The criteria are in general reasonable, however 11.1 should read: ‘required to meet Scotland 's economic, technological, social and cultural needs’. The key objectives should also include an extra objective ‘to encourage the highest academic standards and aim to be recognised amongst the best in the world’. There should also be a system for encouraging innovation. University teachers do not provide best value if they are too constrained, and a new funding process should encourage innovation and experimentation in teaching, e.g. through the proposed subject centres.
Section Four: Future needs for graduates & diplomates
QUESTION B: What factors should be taken into account in seeking to determine the overall future size and shape of the Scottish higher education sector?
The present size and shape of the system has grown and changed over the years. The Funding Council should set out a rationale for the shape of the system as it now is, as only by understanding the current system and the functions which it fulfills can one arrive at a suggestion for its future size. The diversity of the system needs to be recognised and it should be determined whether that diversity is well adapted to need. Thought should also be given as to whether the necessary diversity is best sustained through a single formula for funding or through recognising patterns of structural diversity which require different methods of funding. The objective should be to develop a diverse system in which there is equality of esteem between its different parts, rather than one in which the losers in a financial competition deliver part of the function, and the winners deliver another part.
A key factor for the Scottish higher education sector will also be the future development of the Scottish and UK economies. Scotland’s potential lies in a knowledge economy and at the high skills end of the market, and the strength of the Scottish research base, and its production of high quality graduates to meet these needs, should be maintained so that the UK can compete in European and global markets. In addressing these needs, however, it is important for the sector to have the necessary flexibility to be able to respond to changes in market demand.
QUESTION C: The Council has proposed that 50 per cent of 25-59 year olds should have gained a higher education qualification by 2010. Is this an appropriate target for participation in higher education in Scotland? If so, what are the major obstacles to its achievement, if any?
A target of 50% of the 25-59 age group represents a huge increase compared with the present participation rate, and is probably over ambitious. It is clear that unless this is associated with a significantly increased injection of resource, the quality of the educational opportunities which will be available to students will necessarily diminish. As indicated above, size and structure are intimately associated.
Barriers to the achievement of such a target are likely to be student poverty, and the perception that the material benefits of higher education are significantly less than they were twenty years ago. Unless we provide courses and structures which are well matched to potential students and can offer opportunities for employment which are greater than they might otherwise have been, then attainment of the target will be difficult and even if achieved, could be associated with a large student fallout and consequently greater discontent than is currently apparent. Currently about 40% of graduates enter jobs for which a degree is not required, and any substantial and rapid growth in entrants is likely to drive down the rate of return and lead to graduate unemployment. Similarly, the costs of education have also been increased by the imposition of fees and the removal of maintenance grants, which has reduced the number of mature applicants for whom the payback period is shorter than those coming directly from school.
Given that nobody knows what the ideal participation rate should be, a fixed numerical target should be avoided (note: the Robbins Report of 1963 was based on assumptions that the ‘ideal’ participation rate was about 15% for the university sector). There is also a blurring of HE and FE at present and this is likely to increase. Accordingly, it would be best to have a target for HE + FE and then to have flexible targets (e.g. + 10%) for each sector within an overall target. It is realistic to assume that many students will have experience of, and qualifications from, both HE and FE through the 25-59 age period of their lives. This could occur with FE preceding HE or vice versa.
QUESTION D: Is there a current or potential shortage or over-supply of graduates and diplomates at particular levels or in particular subjects?
Predicting future needs in employment is always difficult and it would be foolish to over commit resources on the basis of medium term predictions. The emphasis should be on (i) producing graduates for non-technical areas equipped with skills fit to meet the changing demands of the market (e.g. with independence of thought, flexibility, capacity to analyse, and inquiring mind, articulacy, and fluency in written English) and (ii) highly qualified and well educated subject specialists for key areas.
Underlying this, however, is the need for knowledge-based entrepreneurs. It could be argued that different types of scientific and technological skill are needed, which will need to be furnished through a diversity of pathways. This comes back to the issue of structure in Question B. If we are to ensure that we produce an adequate number of highly skilled people with the spark required to use their skills in an entrepreneurial context, then we need to ensure that science teaching at school is given support, and that public understanding of science is stimulated. The development of joined up thinking in the development of policy embracing schools, colleges and universities is very important in this respect.
In considering the market which Scottish Higher Education should serve, it is also important not to think in terms of Scotland alone. First, as the papers recognise, manpower planning for anything other than the short term has had only limited success. Secondly, in a niche market, Scottish higher education institutions have an export reputation to be exploited rather than curbed: medicine is a good example. Thirdly, a highly educated labour supply attracts mobile industry.
QUESTION E: How could future priorities for particular levels and/or types of provision best be identified?
It is important that the appraisal of future demand for graduates and diplomates is taken forward in the perspective of Scotland as a knowledge-based economy. In this, SHEFC and the education sector should engage with the other economic and social partners, and in particular with Scottish Enterprise, in developing a forward-looking view. In this respect the suggested project with Scottish Enterprise to explore techniques for producing better labour market intelligence should be encouraged.
The Society also agrees with SHEFC that there should be durable long-term priorities underpinning policies rather than short-term labour market fluctuations, and that the HE and FE sectors should aim at a suitable balance of subjects offered at a clearly defined number of levels.
QUESTION F: What measures are needed to improve the employability of graduates and diplomates?
Transferable skills are critically important, as are breadth of knowledge, basic science and technology, training, analytical and problem-solving skills and experience of using modern technology, particularly information technology. More interdisciplinary training would also encourage adaptability and innovative skills. However, the diminishing intimacy of the teaching and learning experience, driven by the falling unit of resource, has made it more difficult to develop these skills.
It should also be recognised that technology will continue to develop rapidly over the span of a working lifetime. This requires a strategy where the first degree provides a sound and broad foundation on which the graduate can build in a flexible way. Postgraduate courses will be important to assist this process. In this context, the Scottish three-year general degree provides a good education in which a student should develop a critical capacity and the ability to analyse problems. Itis not, however, sufficient to provide the sound and broad foundation in most scientific disciplines which is needed for subsequent innovative work and for which the honours degree is well suited.
A further measure to improve employability would be for HEIs to interact more strongly with industry (e.g. through sandwich placements) so that both become more familiar with each other’s needs and capabilities, and ideally, for all students to obtain some relevant work experience.
Section Five: Key prior assumptions
QUESTION G: Are the key prior assumptions set out in paragraph 24 acceptable, or do they need to be modified?
The key prior assumptions are generally acceptable, although the top-slicing element to deliver Council and Government priorities should be limited and not allowed to drift upwards at the expense of core funding.
Section Six: Promotion of wider access
QUESTION H: Two main options for addressing wider access are outlined in paragraph 28. Should the Council address wider access through option 1, option 2,some mix of both, or some other mechanism?
There are two sides to the question. Wider access students need to be encouraged to undertake courses, and HE and FE Institutions need to be encouraged to enrol these students. As such, a mixture of options 1 and 2 (with the emphasis on 1) would be appropriate. In addressing wider access, it should be recognised that the non-participating students often come from a background that cannot offer financial support from the family. Costs will therefore deter participation by a large proportion of such students, unless initiatives to reduce costs to these students are promoted.
In terms of social exclusion, detailed studies of the causes of social exclusion (e.g. Metcalf, H. (1997) "Class and Higher Education: the participation of young people from the lower social classes" London: Council for Industry and Higher Education) shows that it begins very early on in life. Of course universities must do what they can, but much of the damage has already been done by the middle and later stages of secondary education.
Section Seven: Promotion of lifelong learning
QUESTION I: Should the Council change its basis of measurement of student activity from full-time equivalents (FTE) to some other basis such as credit-enrolled?
The current system is transparent, useful and well understood and, before any change is considered, the full consequences of an alternative method should be tested and shown to be robust. There might also be problems of policing such a system as there are examples where a course may be given a different credit rating in two different faculties. There may be a case for change, however, as lifelong learning develops and the diversity of provision is likely to increase.
QUESTION J: Is there a role for the Council in helping the sector develop market intelligence to respond to the lifelong learning age as it emerges?
The Council should, through its new relationship with the Further Education Funding Council, be proactive in assisting institutions to develop appropriate market intelligence.
QUESTION K: Are there other issues emerging from the Scottish Office paper on lifelong learning which have a bearing on the Council's funding of teaching?
There are no obvious other issues.
QUESTION L: Should the number of subject groups to be used in the funding formula be fewer or greater than at present, and how should they be determined?
The number of subject groups in the funding formula should not be greater than at present. There might be some benefits in having fewer, but great care should be taken in putting currently independent groups together.
It has become clear, however, that funding band levels need to be reviewed. The 11 main subject groups contain disciplines with disparate costs. Current arrangements militate against wet-laboratory and field work subjects and favour dry-lab (computing) subjects. Economics is grouped with social sciences, which attracts a unit of resource of £3,142. Yet in many institutions economics is contained within business schools which attract a unit of resource of £3,812. It is not enough to state that individual institutions can adjust the internal distribution system of subject funding as they please, as departmental pressures to follow the SHEFC funding pattern mitigate against this. The Units of Resource need to be adjusted with perhaps the introduction of new intermediate bands between the extremes of arts-based and wet-lab-based subjects.
QUESTION M: Does the Council have a role in protecting important minority subjects, and if so, how should this role be exercised and how should such subjects be identified?
The Council should have a role in protecting important minority subjects. This should be through consultation in Scotland and with the other Funding Councils, on a UK basis. Such subjects should be important to the natural culture, economic and industrial scene.
It will be important that these subjects should become competitive academically both for attracting students and in attracting research money. SHEFC should, therefore, assign fundable numbers to these minority subjects in only one or two HEIs. Other HEIs may continue to provide for these minority groups but would have to do so on a fees-only basis. The Council could assist institutions in"swapping" these subjects so that critical department sizes can be reached.
QUESTION N: Should the Council change the levels of study in the funding method, and if so what should the new configuration be?
With regard to the differentiation of undergraduate studies, provided that all the years of study are undertaken at a single institution, there is no particular virtue in differentiating between year of undergraduate study and the funding method. If, however, there are systematic patterns of interchange between institutions which involve certain institutions taking a larger proportion of students in their early years, and others a larger proportion in their later years, then some differentiation of funding would be required to adapt to the greater cost of more advanced teaching. In doing so, it should be recognised that there is not always a direct correlation between year and level of study in module-based learning systems.
There is, however, an argument for subdividing undergraduate provision by level of study in that there are distinct requirements for different qualifications and also that the costs, especially in scientific and technological subjects, are very different for different levels of courses. A division into broad categories of sub-degree, 3-year degree and honours degree, with some limited latitude for HEIs, would be favoured.
At a postgraduate level, there has been a significant increase in demand for taught postgraduate studies such as MSc. A systematic pattern has been that those universities with a buoyant external income based on fully funded undergraduate places and research income tend to discriminate against Masters studies on the basis that they involve large teaching costs with a relatively small return. Arguably, such universities are the places where Masters studies should be undertaken. On this basis a higher level of FTE-based funding might be appropriate for Masters students.
QUESTION O: Should the Council consider creating additional dimensions to the funding cell structure of the funding formula, and if so, what should these be?
Such a move would require further study of its likely impact before implementation. Forms of study such as distance learning do differ from traditional methods of teaching either full- or part-time students. The pattern of costs of distance learning using computer-based material, produced either as a video disc or as web-based material, are significantly front-loaded. The resource provided for distance learning FTEs could be adjusted so that the costs of preparation of material at the outset should be recognised in the funding model. Such refinement, however, impacts upon whether the Council wishes to specify how institutions carry out their internal allocations of funding, or whether the principle of a block grant and institutional freedom is to be maintained.
QUESTION P: Should fees-only student places continue to be the main method of allocating or re-allocating additional funded places, and if not, what other mechanisms should be used?
Yes. The current arrangement allows for the adjustment in student demand and can be used for the movement of resources to strategically important areas.
QUESTION Q: Should the Council introduce more dynamism into the funding method so that performance in meeting national needs may be rewarded, and if so, how should this be done?
Before considering this issue, the Funding Council must first be confident in determining what the national needs are, and of how to measure performance in meeting them. While more dynamism should be sought, it should not be at the expense of the unit of resource. Decay of the unit of resource is already likely to occur as a consequence of growth in the system on the presumption that Government is unlikely to put in additional funding. This will, almost inevitably, reduce the quality of education available to students and probably have an adverse effect on the recruitment of high quality students. Rather than contemplate a process which will lead to a reduction in the unit of resource the Funding Council should argue that the decrease in the unit of resource should be halted and that any additional growth in the participation rate should be funded primarily from new money.
QUESTION R: Whilst recognising that the format of the outcomes of the new processes which the QAAHE will develop are not yet known, what type of links should the Council create between funding and quality?
There should be a link between funding and quality. It is still premature to speculate how this might best be done given the continuing uncertainties about the processes to be introduced by QAAHE. The current position of giving extra fundable places is not appropriate in all cases, for example to a subject area which already has difficulty in finding additional students. However, where courses are of high quality and well-qualified students are available, an increased unit of resource would also help to ensure that quality remains high as student numbers increased.
Further information is available from the Research Officer, Dr Marc Rands