From Sussex question time to the NUS demo in London on the 21st, ‘Privatisation’ is still the word on everybody’s lips. But what makes Sussex’s privatisation so different from other UK Universities? Adriano Mérola explores the roots of local changes in the context of a wider government-led restructuring of Higher Education.

Photo: MINA RASSOULI

On November 21st, thousands of students will converge in London to demonstrate against the Conservative government’s restructuring of Higher Education. Organised by the National Union of Students (NUS), the demonstration takes aim at the most pertinent issues for present and future students, encompassed in government policy on Higher Education. This restructuring has manifested itself most obviously through the rise in tuition fees to £9,000, leading to growing to concerns about unsustainable debt-levels for graduates. The trebled tuition-fees are intertwined with the abolition of the Education Maintenance Allowance (EMA), a direct weekly payment which was aimed at keeping underprivileged students in secondary education. Yet under these directly visible changes lies a deeper, structural change of universities which is being promulgated by the government but implemented by universities.
Part of the government’s vision for Higher Education, as recommended by think-tanks such as Policy Exchange and Institute for Economic Affairs, has been to create a level playing field between all actors in the Higher Education sector. The idea behind it is that the non-profit universities currently regulated by the Higher Education Funding Council for England (HEFCE) should not be given priority over for-profit institutions that award degrees. Currently, according to Student Finance England, there are over 150 institutions with ‘designated’ status, meaning that students there are eligible for Student Loans. These institutions also have degree-awarding powers, yet they are not as of yet official ‘universities’. As universities are regulated by caps on maximum student numbers, these for-profit institutes are not. The idea of a ‘level playing field’ is linked to having a competitive system between for-profit institutions and non-profit universities. David Willets (UK Universities Minister) declared this in February 2011;

 “Currently, one of the main barriers to alternative providers is the teaching grant we pay to publicly funded HEIs [Higher Education Institutions]. This enables HEIs to charge fees at a level that private providers could not match, and so gives publicly funded HEIs a significant advantage. Our funding reforms will remove this barrier, because all HEIs will – in future – receive most of their income from students via fees. This reform, of itself, opens up the system.”

 

The arts, humanities, social sciences, law, business and mathematics all lost most of their funding from the government, as did several other ‘Band C’ and ‘Band D’ subjects. This was the initiative from which universities were pushed to raise fees to as high as £9,000 a year, in the autumn of 2010. It was done in order to remove much state-funding to universities, so that the majority (sometime all) of their revenue comes from ‘consumers’, i.e. students. These reforms were aimed at increasing the influence of and reliance on the ‘market’ in Higher Education. Andrew McGettingan, independent researcher on education, wrote of these changes in July; Although it [the Government] is implementing market reforms, the decisions outlined above will be made by individual institutions – by their managers, overseen by their governors. In this sense, the government is distanced from changes even though its reforms push universities in certain directions.”

Whilst consumer groups and public media were subsumed with the heightened tax on pasties and other hot foods in the March budget, one tax-cut was underrepresented in most debates on the budget. Any universities which decided to ‘outsource’ or go in to ‘shared services’ with private companies would be rewarded with an exemption on VAT. This exemption included all ‘support services’ such as administrative, IT, catering, maintenance, libraries and more. Two months after in May, the University of Sussex announced (to the dismay of staff and students alike) its plans to sell off most of its support services to private companies. This sell-off has excluded IT and the library, but maintenance, catering, security and much more are set to be privatised. In theory, these forms of privatisation will allow universities to access much larger economies of scale and benefit from specialisation, as larger corporations specialised in providing services may provide cheaper services at a higher quality. Whilst not much academic research has been done on the issue of ‘outsourcing’ of support services, Steve Jeffrys from the Working Lives Research Institute (London Metropolitan University) stands out for his research on the topic. In May 2012, he published a thorough analysis of the empirical evidence of outsourcing in universities, finding the claims that private companies enhance efficiency in these sectors to be empirically unfounded. Private companies running services for universities were found to be an increased burden on long-term expenses, and many of the arguments in its favour were based on theory and ideology rather than empirical evidence.

 

There are many universities in the UK which have sold some support services to private companies, mainly in the administrative sectors. Yet this author has not found a single university that has recently implemented a privatisation on the level seen at Sussex. The only other example of a university with similar plans has been London Metropolitan University (LMU), which announced its plans to outsource all of its non-essential services to a private company in late December 2011. This move trumped Sussex in scope, as it included selling library services and IT, and was also met with fierce resistance from trade-unions and students alike. As of October 2012, LMU announced that it has reviewed its plans to sell its services and has opted for an in-house solution after sustained opposition.

Sussex is embarking on a government-supported path of increased private involvement in universities on its own, leading the way for others to follow. The management of Sussex anticipated theincreased role that the market would have in the university sector, before tax-incentives and cuts to funding had been implemented by the government. For Sussex, anticipating market reforms by the government meant enhancing competition between subjects and sectors of the university. In 2009, the university announced its plans to put 112 academic staff and support staff out of jobs, as part of the vice-chancellor’s ‘Proposals for Change’. These proposals recommended, amongst other things, that the university be financially viable, as well as each individual school within the university. Financially viable in the eyes of university management meant making 4% in surplus a year, including 4% surplus for each individual school. This was done to mitigate against financial cutbacks from the government, as cuts to social sciences and the arts & humanities were widely expected. Competition between universities was anticipated by Sussex, yet competition at Sussex was within the university instead. All schools of study became financially independent, meaning that certain prosperous schools were not allowed to subsidise less profitable schools. The result was major cuts to Engineering and Design; English; History, Art History and Philosophy; Informatics; and Life Sciences, resulting in 115 redundancies in the university as a whole.
The Higher Education sector is heading towards an increasingly market-led future, one where for-profit companies compete with non-profit universities over students and resources. In this future, envisioned by the Conservative Universities minister David Willets, universities will not receive any state-funding which may distort the competition between actors in the Higher Education sector. Looking ahead, this may very well imply a change to the role of HEFCE from a funding body to a single regulatory entity which supervises all tertiary education institutions. This would mean removing or significantly changing the current maximum cap on student numbers, something Michael Farthing has been advocating for over a year. It seems that the management of Sussex University has put itself in the vanguard of government policy, pushing ahead decisions which are welcomed by the government but rejected by students and staff.

When the National Union of Students demonstrate on November the 21st in Central London, they aim to oppose all of these changes. Profit-driven, competitive universities are the agents which are currently pursuing the Con-Dem education agenda, against the will of the largest representative body of students in the UK. Privatisation and cuts to university funding are political decisions which created the £9,000 fees, and set the agenda of ‘enhancing efficiency’ against all odds. Will the national government realise the impact of its policies, as Sussex students bring their local grievances to the national stage?

 

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