Education: from a public value to a positional good

By John Holmwood –

British higher education is entering into a period of severe disruption brought about by the government’s recent policies for higher education. These are designed to increase private investment in the sector and make it more attractive to for-profit activities, including degree provision and cooperation between existing education institutions and for-profit partners.

In fact, a significant increase in private investment will come from the increased student fees that are designed to replace direct public funding via the block teaching grant from the funding agencies. These will be backed by an expanded publicly-supported student loan system. This is a system that most analysts argue will be as expensive to the public purse as the one it replaces (albeit appearing in the short-term as a saving). I contend that the primary purpose of the withdrawal of the block grant is to provide a ‘level playing field’ for the entry of for-profit providers and to make the student loans system available to students on their programmes.

In all of this, the government argues that it is concerned about increasing student choice, the quality of teaching and the efficiency of course delivery. These aims cannot be reconciled. It thinks the latter will come as a consequence of new entrants, increased competition and a system of differential fees for the same course. At present, there is a fee cap at the top, which is distorting the operation of this market and causing universities to cluster at the top end. At some time in the future, however, this cap will be removed and fees will move further apart. In the meantime, the ‘core and margin’ system is designed to increase competition at the ‘top’ and the ‘bottom’, with the intention being that if universities cannot recruit students at the market position they have sought to occupy they will reduce their fees.

The intention is that for-profit providers will be able to press fees down at the lower end, while a select few universities will be able to increase fees at the top, with a proportion of those fees supporting activities other than teaching. For-profit providers do not currently have the research or other public obligations of existing universities, and it is unlikely that they will be able to develop them. Similarly will existing institutions need to become more like for-profits in this new marketplace? This might include a significant increase in marketing budgets (25-35% of revenues at existing ‘for-profit’ providers like Apollo Group, Bridgepoint and Grand Canyon), an increasing reliance on casualised teaching staff and the separation of teaching staff from the design of the curriculum (itself ‘outsourced’ or provided in ‘teaching manual’ form by a separate team).

In this way, education at ‘low-fee’ institutions will begin to be removed from the university system, due to two main factors. First, an increasing proportion of students will be taught at institutions that do not have the accepted characteristics of universities (notwithstanding any change of university title to accommodate teachingonly institutions). Second, there will no longer be a UK-wide university system in that the emphasis will be on securing the performance of a minority of institutions within a ‘global top one hundred’, while the health of the system as a whole (where the British system really outperforms other national systems) will no longer be a concern of public policy. Indeed, market ideology dictates that the system will be functioning effectively providing it is fully marketised, notwithstanding the evidence from the USA that such a system, whether in health or education, produces poor outcomes for the general population at the same time as generating wasteful investment (for example, in the form of loans for ‘sub-prime’ education or spiralling health insurance charges).

Education is no longer about developing the individual and their critical understanding by engaging with a subject and teachers immersed within it, but instead is about investment in human capital and employability. The increased stratification of institutions of higher education is designed to be aligned with distinct employment trajectories. Just as employers have reduced their research and development budgets and sought to access and shape the research conducted by universities, so they seek to reduce their training budgets and seek to have skills training at universities shaped to their needs.

At the same time, there is little intention on the part of ‘high fee’ institutions to devote their additional income to improve the quality of undergraduate education. They will divert their income toward maximising their performance in international rankings. In part, this will involve diverting fee income toward research (especially as direct public funding of research is under pressure). This is possible because they are marketing education as a ‘positional good’ and place within the international rank order becomes a proxy for this function. Indeed, as studies have shown, the ‘marketing’ of education in this way is associated with grade inflation which, in the US, is driven by private, elite colleges.

When the British Social Attitudes Survey asked the public’s attitudes toward higher education prior to the introduction of the recent changes, 70% agreed with the statement that ‘there are more advantages to university education than simply being paid more’, with only 7% disagreeing with the statement. The most recent survey shows that 76% still think that it is important for a young person to go to university or college, while 57% think fees should be the same for all universities (down from 65%). More striking, however, is that, graduates and the economically advantaged are more likely to agree with rising fees and to be in favour of a reduction in student numbers (42% and 30% respectively), while those without qualifications are less likely to favour fees (just 11% favour fees) or a reduction of student numbers (only 19% favour this).

The government frequently poses the rhetorical question, why should the person without qualifications pay for university education for others. But it is clear that this is an argument that weighs more with the beneficiaries of higher education, who perceive it as a means of protecting their labour market position. The government’s argument is that it is right that those who benefit more should ‘pay more’. Yet ‘paying more’ means that universities will also be aligned with a secondary education system in which some ‘pay more’ to have access to better resourced private schools. In this way, a social elite is conflated with an intellectual elite and, in the name of student choice, existing social privilege is reinforced over time.

Where universities were once perceived to be part of social amelioration, they are now an integral part of a neo-liberal knowledge economy that has been associated with widening inequalities since the 1970s. These widening inequalities include an intergenerational shift in resources away from young people; something that is further accentuated by the increase in student fees (and by a financial crisis that has led banks to drastically reduce the financing of house purchases by first-time buyers).

In the wider discussion of social inequality it is frequently argued that benefits should be targeted on those most in need. Mr Willetts continues to assert that higher education will continue to be publicly-funded through the student loans system. However, this is the only area of public policy where that funding seems to be directly targeted to secure the private benefits of the privileged. Their future earnings are to be protected, but so too is the form of education to which they have become accustomed for themselves and their children. For the rest, education is to be reduced to poorly resourced training.

John Holmwood is Professor of Sociology in the School of Sociology and Social Policy at the University of Nottingham. He is a fellow of the Academy of Social Sciences and President of the British Sociological Association. He is co-founder of the Campaign for the Public University (

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