Since the announcement that all unprotected government departments are being asked to identify 25% and 40% savings, there has been pretty much constant speculation about what this might mean for BIS, and for higher education within it. First came the HEFCE consultation on changes to quality assurance arrangements, with a proposed larger role for information and for Universities’ Boards, and a consequent series of questions and conjecture about the future of QAA.
But things never stay still in the world of politics, and since then there has been a flurry of speculation, rumour, claim and counter-claim about how the required cuts might be found. Hot on the heels of the original announcement that there was going to be a Teaching Excellence Framework, raising questions about how this would interface with the QA review, came the news that McKinsey had been engaged by BIS to advise on how to make the savings. This only served to underline the suspicion that many commentators had already expressed that Javid was showing his credentials by cutting further and faster than his Treasury paymasters required. News that he was not inclined to view the paper savings identified from converting student grants to loans as part of the 25% or 40% served only to confirm that view further and raised concern across the sector.
All of which brings us to the latest piece of speculation about where the funding cuts might fall, based on a leak of an internal consultation document within BIS which references the McKinsey work. Essentially, this suggests a focus on cutting down (potentially by half) the number of ‘arm-length’ bodies, together with a consolidation of BIS activities to a small number of locations. Whilst this may, perhaps, provoke some sighs of relief for universities (potentially the cuts will not fall so directly on us) it does nonetheless raise some very big questions.
Firstly, with QAA potentially in a clearer space given the proposals for QA review under some challenge, not least to ensure that we can continue to evidence the excellence of the UK system and retain its world-class reputation, and a plethora of bodies with a regulatory role, whither HEFCE? A Funding Council that has very little to fund is in need of a makeover, and potentially at risk in a bonfire of the quangos. Whilst we await the Green Paper, due imminently, which promises to consider the whole question of regulation of a sector that has a significant degree more marketization than even three years ago, and has also seen a move to more control through areas such the Consumer Rights Act and the implementation of the PREVENT requirements, we continue with a confusion of roles and a number of smaller independent bodies that surely must be under question (OFFA, anyone?). With funding limited to a small amount of teaching ‘top-up’, student opportunity funding (under threat despite protestations to keep supporting widening participation and social mobility), HEIF and QR, essentially, why not bring this back directly into the BIS orbit?
Secondly, this brings us on to the vexed question of research funding. The dual support system of QR funding for basic infrastructural support (albeit increasingly selectively allocated following successive RAEs and the last REF) and Research Council grants for specific projects, which has been the cornerstone of the system for a long period, may be under threat. Despite the protestations of Sir Paul Nurse, currently reviewing the Research Councils, that he has no intention to recommend any kind of consolidation, if you go back to the McKinsey assertion that agencies could be halved, we might well see a reduction in the number of Research Councils. And given that they are pretty much all co-located anyway, doesn’t this give a great opportunity for a quick win on the savings front? If your priority is cost cutting rather than an organisational framework designed to promote excellence across particular disciplines (after all, we have one of the lowest R&D spends in the OECD, yet our universities are second only to the USA in terms of world rankings), then this makes perfect sense. You can even continue to have the dual support system as well, thus ensuring that there remains some infrastructural support for the best research.
All of the above seems to stand in isolation from consideration of the overall impact that UK HE plc has on the world stage, the ever-increasing competition from other countries both in Asia and closer to home in Europe, and the continuing need to invest in a sector that is both a key driver of our knowledge-led economy and a major source of economic growth and export earnings.
When you add in the challenges facing the sector from Home Office policies on International students, it starts to feel like a perfect storm, and one which, perhaps, the Minister does not fully foresee in his drive to set the pace in identifying efficiency. We may yet, of course, see the demise of BIS itself in the bonfire, which would provide yet more food for thought.