Is HE spend­ing over­in­flated?

Si­mon Baker asks if other sec­tors are suf­fer­ing from some coun­tries’ uni­ver­sity bud­get boom

THE (Times Higher Education) - - NEWS - Si­mon.baker@timeshigh­ere­d­u­ca­tion.com

Is higher ed­u­ca­tion a bloated and in­ef­fi­cient money- gen­er­at­ing ma­chine that sucks in fund­ing while schools and fur­ther ed­u­ca­tion are forced to sur­vive on mea­gre scraps?

To many peo­ple work­ing to fur­ther the cause of uni­ver­si­ties, such a state­ment will seem like a gross ex­ag­ger­a­tion or sim­ply wrong. But nev­er­the­less it is a charge that has been lev­elled at UK in­sti­tu­tions in par­tic­u­lar in re­cent years.

And the lat­est fig­ures pub­lished in the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment’s Ed­u­ca­tion at a Glance dataset bring up the ques­tion of whether it is an ac­cu­sa­tion that can be raised across the industrialised world.

Ac­cord­ing to the 2018 edi­tion of the sta­tis­tics, be­tween 2010 and 2015 spend­ing per stu­dent in­creased by 5 per cent at the pri­mary, sec­ondary and post-sec­ondary non-ter­tiary lev­els across the OECD, but by 11 per cent at the ter­tiary level.

This is an un­weighted av­er­age (so does not take into ac­count the size of dif­fer­ent sys­tems) and masks wide vari­a­tion be­tween na­tions.

But look­ing at in­di­vid­ual coun­tries, it is strik­ing that the growth in ter­tiary ed­u­ca­tion spend­ing per stu­dent is out­strip­ping school and fur­ther ed­u­ca­tion in a num­ber of im­por­tant higher ed­u­ca­tion na­tions, in­clud­ing the US, Aus­tralia and Swe­den.

The UK is not in­cluded be­cause of a lack of data, but sta­tis­tics from the In­sti­tute for Fis­cal Stud­ies have shown that spend­ing per stu­dent in higher ed­u­ca­tion has surged above other ar­eas of ed­u­ca­tion since fees were tripled in 2012.

Even in coun­tries where the trend is the other way around, the only large de­vel­oped coun­try where per stu­dent spend­ing in schools grew at a much faster rate was Ger­many.

A ma­jor caveat to the fig­ures is that at ter­tiary level they in­clude re­search, but look­ing at some other OECD data that take this out con­firms that the US, UK and Aus­tralia – all sys­tems with large el­e­ments of pri­vate fi­nanc­ing for higher ed­u­ca­tion – spend the most per stu­dent.

So does hav­ing a sys­tem where in­di­vid­ual stu­dents can be charged sig­nif­i­cant sums for the cost of a uni­ver­sity ed­u­ca­tion mean that higher ed­u­ca­tion will un­fairly suck in more fund­ing than schools?

An­dreas Sch­le­icher, the OECD’s di­rec­tor for ed­u­ca­tion and skills, said that there is an is­sue in higher ed­u­ca­tion where the link be­tween the cost and the re­turn on in­vest­ment is im­per­fect for a num­ber of rea­sons.

“The pres­sure to pro­vide value for money is cer­tainly much greater for schools than for uni­ver­si­ties,” he said. In the uni­ver­sity sec­tor, there will al­ways be the temp­ta­tion to charge stu­dents (di­rectly or in­di­rectly) for the eco­nomic value of a de­gree over their work­ing life. That fig­ure will be well be­yond the value that uni­ver­si­ties ac­tu­ally add, be­cause it in­cludes value cre­ated through se­lec­tion and many other fac­tors.”

The more that pri­vate fund­ing is an el­e­ment in the sys­tem, the more that this gap be­tween the added value and the ac­tual price may show it­self, Mr Sch­le­icher added.

So does this mean that bet­ter value for money is pro­vided by coun­tries where per-stu­dent spend­ing on uni­ver­si­ties is not out­pac­ing schools?

An­swer­ing this prop­erly would re­quire be­ing able to mea­sure the ac­tual learn­ing gain from a de­gree, a nut that no­body has yet cracked.

But it may help to ex­am­ine the case of Ger­many, a ma­jor de­vel­oped na­tion that has seen per-stu­dent fund­ing for ter­tiary ed­u­ca­tion fall – seem­ingly, ac­cord­ing to the data, be­cause ad­mis­sions have been out­strip­ping spend­ing in­creases.

Di­eter Dohmen, di­rec­tor of the Ber­lin-based Re­search In­sti­tute for the Eco­nomics of Ed­u­ca­tion and So­cial Af­fairs, said that the pic­ture is com­plex, es­pe­cially since re­search fund­ing was in­cluded in the OECD fig­ures.

But in gen­eral “fund­ing vol­umes have not kept pace with stu­dent num­bers” for sev­eral rea­sons, in­clud­ing that the Ger­man Län­der – the re­gional states re­spon­si­ble for higher ed­u­ca­tion fund­ing – “have not fully com­pen­sated the uni­ver­si­ties” af­ter scrap­ping tu­ition fees.

“Less money for more stu­dents” could be seen as ef­fi­ciency from a cer­tain point of view, he added, but it could mean, for ex­am­ple, that “build­ings and class­rooms are of­ten not in a good shape” or that “funds to cope with dig­i­tal­i­sa­tion may be miss­ing”.

Prob­a­bly, the ideal sit­u­a­tion is some­where in be­tween per-stu­dent fund­ing spi­ralling out of con­trol and let­ting it de­te­ri­o­rate. But the fig­ures show that es­tab­lish­ing this “per­fect” bal­ance is no easy task.

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