What Does ‘Value For Money’ Really Mean?

Back at the AHUA Autumn Conference in September, I led a session on Efficiency and Effectiveness within Higher Education. I argued that, despite excellent progress over many years, both the challenging external environment and the new regulatory framework would further increase pressure on institutions to deliver efficiency, effectiveness and value for money.

In the discussion, I debated with colleagues whether we were ready for the challenges that lay ahead and whether we had sufficient capacity, flexibility, innovation and leadership to deliver and sustain new ways of working, further refine our delivery model and deliver excellent value for money for students.

In the following months, the House of Commons Education Select Committee launched an inquiry into value for money in higher education. Then came the Government Consultation on behalf of the Office for Students (‘Securing student success: risk-based regulation for teaching excellence, social mobility and informed choice in higher education’). AHUA colleagues will be aware of the focus of both the inquiry and the consultation but, in terms of the value for money agenda, the consultation questions clearly signal a shift away from the more ‘traditional’, HEFCE-defined value for money return and towards a much broader definition of value for money.

Furthermore, we are now seeing the student placed right at the heart of the value for money question, with questions such as ‘Is the student getting value for money for their investment?’ and ‘Does the student receives a good quality education?’ Putting the wider definition and the student together, this presents us with a challenge as to how we best use our resources, and how accountable and transparent we are to both students and the taxpayer.

In terms of known next steps, the OfS Consultation makes it clear that part of the registration conditions will be to make governing bodies accountable for promoting value for money. In addition, institutions will be required to publish a statement on the steps they have taken to ensure value for money for students and taxpayers, and to provide transparency about their use of resources and income. Whilst the detail still has to be finalised, we can assume that we will need to provide a wider series of value for money indicators than we do at present and will probably need to be much more transparent.

There is a steer that the sector should be looking to other sectors, such as Local Authorities, to see how they breakdown and publish expenditure. Are we moving towards something similar to the Local Authority Transparency Code, which specifies that what open data local authorities must publish, including all expenditure exceeding £500? In this respect, we also need to consider how the new data provision requirements – with the move towards information flows in as near time as possible – will affect how we manage the provision of information to both students and the wider public.

Alongside all these potential new value for money requirements, we are also seeing continuing pressure on funding, particularly around the cost of higher education for the student. Whilst we are unable to predict what might happen over the coming years, we are at a point where fees are not likely to rise in the short-term. Many institutions will therefore effectively be faced with falling income. This comes at a time when questions are being asked about the value of individual courses and differential fee levels, expectations of increased investment in the student experience are higher than ever, and teaching excellence is being promoted.

Furthermore, even as I put the finishing touches to this piece, we have continuing debate around senior salary levels, the publishing of a National Audit Office Report into the Higher Education Market and more calls for accelerated degrees. Given that funding will probably continue to be squeezed and inflationary pressures may continue to rise, we will have to both strive to make our organisations more efficient to meet these challenges and deliver on the new requirements to show excellent overall value for money to both students and the taxpayer.

I think we can see how the value for money environment is changing and the direction in which it is heading. However, the final ‘landscape’ has not yet been fully painted and this will, I am sure, require much more discussion over the coming months.