The Great University Con

by David Craig

  “44% of Higher Education institutions were in deficit for 1999–00 – up from 28% in the previous year. Among universities £5m or more in the red were: Edinburgh (£11m), Aberdeen (£6.1m), Liverpool John Moores (£6.1m), Sunderland (£5.8m), Queen Mary College, London (£5.5m), and Ulster (£5m). The proportion of funding spent on teachers and staff had fallen from 70% in 1976–77 to 58% in 1999–00.”205

  A quick glance down this list shows that deficits were not confined to new universities, but also affected major research universities such as Edinburgh. This issue reappears every year, but with ever–larger debts. The names on the list might change, but the underlying message does not – many universities regularly operate at a loss. In 2009, data showed that:

  “Several universities had accumulated deficits of more than £4m by the end of the academic year 2006–07. Those with debts include the University of London (£6.9m), Manchester University (£12.4m), Nottingham Trent University (£7.4m), Thames Valley University (£5.8m), and the University of Sunderland (£4.2m).”206

  This financial situation further reduces the resources available within these universities for teaching and learning. Paying 5% interest on £4 million costs £200,000 annually, equivalent to the cost of employing six junior academics. Moreover, the greater the deficit of a university, the worse its interest rates will be. The effects of this financial instability are visible in crumbling buildings and antiquated laboratories at some of the UK’s elite universities. A 2010 report into the state of buildings across the Higher Education sector presented depressing findings:

  “LSE had 41% of their lecture theatres and classrooms deemed unsuitable for current use, Imperial College had 12% of its non–residential buildings branded ‘inoperable’. More than 90% of Higher Education institutions had at least 10% of their buildings judged below the ‘sound and operationally safe’ category. One in 10 had at least 10% of their estate judged at serious risk of major breakdown.”207

  The LSE and Imperial College are two of our five top universities, institutions we rely on to attract the brightest and best students and academics from across the world. Worryingly, the same issues had been raised in 2002, as the Guardian noted at the time: “Universities need £5.1bn more to bring out–of–date equipment and crumbling buildings used for teaching up to scratch, a consultants’ report advises today.”208

  Systemic financial instability has also been evident in round after round of redundancies at universities throughout expansion. As soon as a university gets into financial trouble (and many of them do) the first thing they do is reduce their biggest expense – staff. These redundancies often fail to reach the national news as they are salami–sliced over a hundred universities in tranches of 300 or less. The cumulative effect is significant staff churn, driven by crisis management rather than strategic planning. This approach can provide short–term financial relief whilst causing long–term operational damage. The Universities and Colleges Union (UCU) regularly reported on the scale of redundancies during the economic downturn. In 2009, they estimated: “... 4,593 jobs cuts expected in universities and 1,298 in colleges. According to UCU’s survey of 45 universities, more than 2,000 jobs could be lost in London alone, with large Russell Group universities including University College London and Kings College London potentially cutting nearly 900 posts.”209

  In 2002, similar problems with university finances were evident, only without a wider financial crisis as a backdrop. Our universities are consistent in their instability. Post expansion they face financial crises in good economic times and bad economic times alike. In 2002, the Guardian reported that: “Universities are axing at least 1,400 jobs after a raft of poor budget settlements and falls in student numbers on some courses. Compulsory and voluntary redundancies and retirements in more than 20 institutions could ultimately reach well over 2,000.”210

  We can track regular financial crises at universities by looking for large–scale redundancies. Here is a very small sample:

  In 2007, the University of Manchester needed to clear a £30 million debt created from a merger with UMIST. Part of the solution was 400 redundancies across the university.211

  In 2008, the University of Plymouth made 220 staff redundant as part of a cost–cutting exercise aiming to save £10 million to “correct an historic overspend”.212

  In 2009, Leeds University was looking to save £35 million a year. Its union estimated that this would translate in up to 700 jobs being lost.213

  Between 2010 and 2013, Salford University made around 400 staff redundant. This proved so expensive that in 2013 the university announced plans to reduce redundancy terms in a bid to save money.214 The same year it announced plans for a further 95 redundancies.

  In March 2015, it was announced that Aberdeen University would cut 150 jobs to reduce its budget by £10.5 million.215 Two months later Exeter University came forward with similar plans to cut over 200 jobs.216 In April, Surrey University stated that it would cut around 100 jobs. Queen’s University Belfast staff faced around 142 redundancies in November 2015.

  In 2016, Northumbria University announced plans for 112 redundancies to save £15 million over two years.217

  This chapter could simply have been a list of the same story repeated with different names and dates involving multiple universities and redundancies running into the thousands each and every year. During expansion, universities throughout the UK have faced continual financial difficulties. Fortunately, many institutions have no shortage of takers for voluntary redundancy. The working conditions in cash–strapped universities can be abysmal and there is also a large contingent of skilled academics who can take redundancy and quickly gain employment at another university.

  But whilst individual universities might make short term–savings in operational costs, they still face large redundancy payments. Considered in its entirety, the UK Higher Education system (and by this we really mean the taxpayer) suffers a net loss from these redundancies. Moreover, the staff most able to leave will take voluntary redundancy; those who aren’t able are more likely to stay in situ. The net result of this is that financial crises often prompt an exodus of the most talented and mobile staff from universities.

  Perhaps the best indicator of the instability of the expanded Higher Education system is the existence of a Higher Education Funding Council for England (HEFCE) “watch list”. This includes all universities that HEFCE knows to have serious or possibly critical financial situations. The list is divided into two categories: Category 1: where an institution’s health is at immediate risk; and Category 2: where an institution’s health is likely to be at risk in the near future without urgent action. Category 1 means exactly what it says. In 2010, the University of Cumbria was in this watch list category with a £30 million deficit. In April 2010, the UCU reported that the university was uncertain whether it would have the financial means to pay its staff that month.218 This was not an isolated incident. In recent years Gloucestershire University ran up a £31 million deficit and London Metropolitan University a £56 million deficit. That at least 30 universities out of 130 universities in England have been on the watch list since its inception testifies to the penny–pinching manner in which expansion has been carried out.

  Crumbling buildings, a financial watch list, huge deficits and revolving–door mass redundancies are all results of the Great Expansion. Underlying each is also an unwillingness on the part of the Higher Education system to publicly acknowledge any of these problems.

  In 2007, the Higher Education Funding Council for England (HEFCE) used legal action in attempt to prevent the Guardian from publishing the “watch list” of universities at risk of financial meltdown. The HEFCE was quite prepared to let students apply to these universities despite the threats of closure hanging over them. After two years of legal wrangling, the Guardian won the right to publish the watch list, noting that:

  “Secret files obtained under the Freed
om of Information Act reveal a catalogue of financial difficulties facing universities over the past five years. They include running out of money, severely under–recruiting students and serious management weaknesses.”219

  A 2009 report on crumbling buildings was also paid for by the HEFCE (a publicly–funded body). Nevertheless, its findings only became public, again after a prolonged legal battle between HEFCE and the Guardian newspaper. Clearly, the HEFCE didn’t consider this material to be of public interest. The stance adopted by the HEFCE in both situations appeared to be that of repressing any information that might paint UK universities in an unfavourable light. Whether universities were at risk of closure due to financial mismanagement or whether students were living or studying in unfit and possibly dangerous conditions, the reaction was the same – to bury bad news.

  The HEFCE’s position hadn’t changed by 2010 when the Sunday Times decided to publish an updated version of the watch list. This attitude, to suppress important information (at the taxpayer’s expense), typifies the selfish and self–absorbed nature of our degree–factory universities. This is because the protection of the system and of the perceived success of expansion is always more important than the protection of anything or anybody else. The self–interest of those benefiting from expansion dictates that there must be no doubt that the policy of expansion has been anything other than a total triumph and that universities are a valuable public good. This is simply not the case, though, when we look at the reality of expansion. Many of the additional graduates have taken dud degrees at third–rate universities which will offer them little or no economic advantage during their careers. For too many, studying for a degree will leave them and their families significantly worse off than if they had never applied to university. Expansion has not addressed the UK’s skills shortages and it has also ushered in decades of serious financial instability for universities.

  The money flows in

  Following the introduction in 2012 of annual tuition fees up to £9,000 and then increasing every year with inflation, it seems that universities’ financial situations have improved dramatically. In the year prior to the £9,000 fees, the UK’s 160+ universities and Higher Education institutes had reserves of £14.7 billion, mostly concentrated in the elite universities. By the academic year 2016–17, these reserves had ballooned to £44.27 billion – coincidentally more than the total schools budget for England of £40.22 billion.

  At the same time as their reserves rocketed, the universities were hit by a wave of damaging strikes by lecturers angered at proposals to change their pensions to cover an estimated £6 billion deficit in their pension scheme. As the Times reported, vice chancellors argued: “that they could not afford to make greater contributions to staff pensions or fund the generous defined benefit structure into the future without risking the financial health of their institutions.”220

  The recent flood of money into universities from the increased fees has resulted in a burst of enthusiasm for increased spending on new buildings – libraries, lecture theatres, laboratories and accommodation blocks. In 2017, universities spent about £4.87 billion on capital projects, up from £3.7 billion in 2012. What remains to be seen is who actually ends up footing the bill for the universities’ new–found prosperity and increasing numbers of building projects – students taking ever–greater loans to pay ever–increasing tuition fees or taxpayers landed with the bill for massive, ever–mounting levels of student loan defaults as huge numbers of graduates fail to find the elusive graduate–level jobs (see Chapter 13 The Student Loans Fiasco).

  * * *

  * This does not include Manchester University as its merger with UMIST in 2004 would distort rather than reflect the underlying pattern.

  CHAPTER NINE: ACADEMICS: RUNNING TO STAND STILL

  “Some 84% of the 314 (Higher Education) staff surveyed said they suffered from stress… and 46% had depression. 62% said their work performance suffered…. This led to 25% taking time off work, with 5% quitting their job” Teacher Support Network Group 2014221

  “62% of UK academics were actively considering moving abroad or into the private sector … (It also found that) 47% had suffered ill–health because of their job and 55% would not recommend a career in Higher Education to their children.”222 UCU (University and College Union) research 2006

  If we ask who has actually benefited from expansion, we can now discount a number of groups. Many students receive, on average, a worse deal in terms of their teaching and learning in spite of the massive rises in tuition fees first in 2006 and then in 2012. Many graduates are less likely to find graduate employment yet face crippling levels of debt. The economy and employers have been provided with graduates in subject areas that they neither want nor need and still face skills shortages in key areas. Taxpayers face shouldering the ever–increasing debt mountain likely to be left unpaid by graduates without graduate salaries. So, if the answer so far is “none of the above”, then who does this leave?

  The most obvious answer would be universities and their employees. After all, expansion has seen many new universities established and hundreds of thousands of new jobs created within those universities. So surely expansion has at least been a good thing for universities and their employees?

  Unfortunately, the evidence does not support this proposition. Expansion has seen the finances of many universities stretched to breaking point until the 2012 tripling in tuition fees and, whilst there is subset of university employees who do seem to have rather enjoyed expansion, they are in an exclusive and well–paid minority. For most academics, expansion has resulted in a deteriorating professional environment, declining relative pay, greater levels of stress and the erosion of academic culture and values. In this, their experiences are simply a mirror image of the student experience post expansion. The same messages have been heard over and over again from academics throughout expansion. They often suffer from stress, struggle to manage impossible workloads and are bullied and pressured by universities into passing undeserving students. Union surveys examining academic stress levels strongly suggest that all of these problems have worsened throughout expansion:

  “The present survey (from 2010) suggests that levels of perceived stress have increased in recent years … 81% of Higher Education respondents agreed or strongly agreed with the statement ‘I find my job stressful’, compared with 74% in the 2008 survey.”223

  In addition to this deterioration in working conditions, academic pay has failed to keep pace with that of other professions, with which it was comparable prior to expansion, such as solicitors or accountants. Post expansion, academics are also increasingly likely to be part–time or to be paid on an hourly basis. Expansion has not only made life more difficult for academics, it has also made it much more challenging and less rewarding for graduates who want to become academics. This has created a very real threat to the continuing ability of universities to develop and train their future workforce. In fact, the only group of people within universities for whom expansion appears to have been an unqualified success are vice chancellors. Their pay has rocketed both in absolute terms and relative to anybody else who works within a university. Their perks and conditions are often eye–wateringly impressive and there appears to be minimal connection between this pay and the performance of their universities.

  Academic workloads

  Academic workloads have changed in three ways during expansion. Firstly, they have increased due to the growing numbers of students that academics now teach and assess. The more seriously an academic takes their teaching and assessment, the more stress they can suffer as they try to complete a thankless task. The second problem is that academics now need to cater for a much greater ability range amongst their students. From an academic’s perspective, this completely changes the nature of their role. Rather than acting as an expert transmitting information to a potentially receptive and capable audience, the academic is required to
think and act more like a secondary–school teacher, pitching material at the pace of the slowest class member:

  “...the numbers of students with language difficulties and the number of students who simply cannot cope with a degree are making teaching more and more frustrating.” Anonymous lecturer UCU Stress Survey224

  As some universities will discipline staff when a percentage of their students fail a module, the easiest (and in fact the desired) response is for an academic to dumb down teaching and assessment to the lowest level that ensures passes for all. Students are happy, their parents are happy, the university management is happy, politicians are happy and this means less work for the lecturer. The academics who don’t take this route not only make life difficult for themselves in the short term, they also damage their future promotion prospects.

  The third workload problem is increased paperwork. This frustration is a constant theme in research into academic stress and runs through much of the evidence submitted to the 2009 House of Commons Select Committee report into universities. Paperwork further reduces an academic’s time both to conduct research and to work with students. This often results in academics undertaking unpaid overtime. A 2013 UCU (University and College Union) report, based on labour force statistics, found that lecturers were one of two occupational groups with the highest levels of unpaid overtime: an average of 11.1 hours per week.225

  Academic workload issues are also distributed unevenly. Those at new universities often face the heaviest workloads, partly as a result of the additional needs of their many students and a lack of government funding to address these needs. These problems were identified early on in New Labour’s Widening Participation agenda. In 2002, the lecturers’ union NAFTHE surveyed 1,000 lecturers in new universities, revealing that they: