“We are the Lions, Mr Vice-Chancellor!”

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“We are the Lions, Mr Manager!” is a brilliant play by Townsend Theatre Productions currently touring the UK about the 1976-78 Grunwick Film Processing Factory Strike and its equally brilliant leader Jayaben Desai.

As Linda McDowell and colleagues explain, “after a long day’s work in the cramped and poorly ventilated space where the photographs were collated and packed”, Desai, in response to a “demand to work beyond her core hours with no notice” walked out of the Grunwick factory in protest. By the following Monday morning, “an additional 132 workers failed to show up for work, all of whom were sacked when they demanded union recognition”.

“The Grunwick strike has become a persistent myth in the British labour movement. It is a mythical story of brave, fragile women, recent in-migrants to the UK, exploited and oppressed not only by capitalism but also by patriarchy at home and in the workplace and by the consequences of post-colonialism that saw them expelled from East Africa in the late 1960s and early 1970s, who nevertheless became the active participants in strike action.

“The cause of these women workers – low-paid factory workers, processing the holiday photographs of the more affluent British working class – was taken up by the union movement as a grand struggle about workers’ rights to join a trade union and by the women’s movement as a valiant struggle against patriarchal power. At its height, several thousands of industrial workers – miners, postmen, electricians and other representatives of the then industrial, dominantly male, working class as well as a range of other supporters ranging from women’s groups to left-wing activists – were involved in mass picketing.

“The strikers ultimately lost, but the strike has become constructed as an iconic moment in the history of the labour movement, the moment when the working class recognised the rights of women and minority workers to join a union as part of the British working-class movement.”

As I watched the Townsend play in Coventry last week, organised by Coventry Trades Union Council with the support of the local trade union and labour movement, I was struck by the similarities to a struggle that is currently being waged in the city between Coventry University and its University and College Union (UCU) branch, over the right of staff in one of the University’s wholly-owned subsidiaries – CU Coventry – to be collectively recognised by the union.

Firstly, a large proportion of the staff in CU Coventry – which offers no-frills “life shaped learning” to students who don’t necessarily want the traditional model of campus-based, full-time education with the £9,000 price tag that goes with it – come from minority ethnic groups and are on precarious contracts.

Secondly, the working conditions more accurately resemble a sweat shop than a college or university, with staff working long hours with a heavy teaching load – what Desai described in her context as ‘forced overtime’ – low pay relative to unionised colleagues in universities and high levels of management bullying and intimidation.

Thirdly, and most importantly, in response to staff in the University’s subsidiaries self-organising with the help of UCU, demanding their legal right to union recognition, the University is trying by any means necessary to prevent these workers from having collective representation.

For the last three years, Coventry University UCU has been fighting for recognition in the University’s subsidiaries where teaching is taking place. Two years ago, the union successfully balloted English pre-sessional teachers in another subsidiary, CU Services, gaining statutory recognition with an impressive 100% yes vote on a 76% turnout.

However, just two weeks later, the University sacked all these English teachers, forcing them to re-apply for their jobs via another subsidiary, this time a student temping agency ‘thefutureworks’. After a painful and highly-public campaign by the UCU – with the University’s employment practices being compared by Aditya Chakrabortty in The Guardian to that of Sports Direct – these teachers were reinstated on their original contracts and with their recognition agreement in place.

Meanwhile, the local UCU branch has also been for the last two years been working with colleagues in CU Coventry to get union recognition. Earlier this year, the union had the support it needed to go through the statutory route and sat down with management to discuss voluntary recognition, only to find that the University had six months previously registered its own staff consultative forum – intentionally set up to undermine the union’s growing influence in the subsidiary – as a trade union and voluntarily recognised it for the purposes of collective bargaining.

This kind of premeditated union-busting behaviour is literally unprecedented in higher education, and has been seen only rarely in the private sector, for example in the recent case of Boots Pharmacy, which also recognised its own staff association to prevent the Pharmaceutical Defence Association (PDA) going through the statutory route.

Since this development, the UCU has launched a national campaign to shame the University into de-recognising its staff consultative forum – under the hashtag banner #CovUniShame – and to grant its employees their legitimate and legal right to be collectively represented by whatever union they wish.

Again, like Desai and the Grunwick strikers, the brave and determined education workers at CU Coventry have enjoyed fantastic support from local politicians, with local MP Jim Cunningham slamming the University’ behaviour in a public statement and submitting an Early Day Motion in Parliament. The EDM now has over 25 signatures, including Jack Dromey, MP for Erdington in Birmingham, who played such a pivotal role in supporting Desai and the Grunwick strikers

Although the campaign at CU Coventry hasn’t had quite the same level of backing from the trade union movement – it is early days, and there has been massive support from within UCU, from other branches across the UK as well as the national executive – a demonstration on the 16 May (3pm Broadgate) coinciding with a meeting of Coventry University’s Board of Governors, like the mass pickets at Grunwick in June 1977, may present the perfect opportunity.

 

Sweat shop university

At a deeper level, it is the similarities between CU Coventry as an institution and the Grunwick factory that are not only striking, but also disturbing, revealing much about the state of higher education today.

Coventry University has pioneered the use of subsidiary companies to create for-profit higher education within not just a still quasi-public sector – with the taxpayers effectively subsidising the student fees and loans system through the amount written off after 30 years (the so called RAB charge) – but within a single charitable institution.

Alongside CU Coventry, the CU Group, which could be described as a ‘super-subsidiary’, also includes for-profit colleges in Scarborough and London. All these subsidiaries are 100% owned by the University as sole shareholder, and have members of the Coventry University senior management team as directors and board members. All profits of these subsidiary colleges – which have proved to be very lucrative, with CU Coventry registering a post-tax profit of £3.8 million in 2016 – are then ‘gift-aided’ to the University at the end of the financial year.

All of this is perfectly legal, although ethically questionable. UK charity law encourages the creation of for-profit subsidiaries, so that charities can engage in business activities not directly related to its primary purpose, if the profits made as part of these activities are then redirected to this purpose. However, it states clearly on the UK Government website, “trading subsidiaries must be used for non-primary purpose trades involving significant risk” (emphasis added).

In the case of the Coventry University, its for-profit subsidiaries are engaging in the charities primary purpose. Furthermore, these activities – through the union-busting that the University itself argues is necessary for the ‘business model’ of these subsidiaries to be viable – are in a serious way undermining the reputation of the registered, tax-exempt charitable owner.

As the UK Government advice to trustees makes very clear, “trustees of charities with one or more trading subsidiaries need to be aware of their responsibilities”. The primary responsibility of any charity trustee is to “avoid exposing the charity’s assets, beneficiaries or reputation to undue risk”. The Government continues that trustees “need to remember, in all decisions made regarding a trading subsidiary”, that “the interests of the charity are paramount”, and that the interests of a trading subsidiary, its directors, creditors or employees, “must all be secondary to those of the charity”.

“This is because the purpose of using a trading subsidiary is to benefit the charity in some way, for example to protect the charity’s assets from the risks of trading, or to increase the level of financial return to the charity by saving tax. If the charity’s assets are employed or put at risk for the benefit of the subsidiary, or its directors, creditors or employees then that purpose is frustrated. In such cases, the trustees of the charity may be personally liable for any loss of, or decline in value of, the charity’s assets.”

By not just endorsing but actively scheming against union recognition, the trustees of Coventry University have clearly vacated this responsibility. But where does this drive to experiment with subsidiaries come from? What was wrong with just offering quality higher education through the Coventry University charitable vehicle, which, after all, has won numerous awards over the last few years for teaching excellence and student experience?

 

Universities as TNCs

Much has been written on the ‘marketisation’ of higher education since the Tories began their “great university gamble” in 2010. For almost a decade now, they have been aggressively deregulating the English higher education system (Scotland, Wales and Northern Ireland have devolved responsibilities for this sector, and in Scotland in particular, deregulation has not been pursued with anywhere near the same vigour), beginning with drastic cuts to public funding, replacing the university teaching grant with direct funding through the ‘income-contingent’ student fees and loans system, and legislating for the easier entrance of new, for-profit ‘alternative providers’.

Critics often counter the arguments of free market ideologues – like former Minister for Universities and Science, David Willetts, and chair of the higher education regulatory body, the Office for Students, Michael Barber – for increased competition, which is said with almost religious fervour and faith to “drive up quality”, with a defence of the public university system, which is now viewed with the rosy spectacles of hindsight.

However, to obsess about the dangers of competition and to moan about the power of students to hold their ‘service providers’ to account is not only to leave oneself open to accusations of conservativism and the defence of narrow interests – what Willetts calls “producer power” –  but also to misrecognise both the origins of marketisation and its ultimate direction of travel.

Marketisation really began in the 1980s, under Margaret Thatcher. As part of the Higher and Further Education Act 1992, polytechnics – public institutions for higher learning created out of the democratic optimism of the 1960s – were made into universities. While this represented an important move away from the ‘binary divide’ in elite and mass higher education, through ‘incorporation’, the ‘norms’ of corporate capitalism were introduced into the system.

Polytechnics became ‘higher education corporations’ with a ‘chief executive’ officer at the helm, governed by boards dominated by a business consensus of white, male, corporate ‘lay’ elites. The Act also abolished academic tenure – a core pillar of academic freedom – and subordinated academic self-governance to neutered ‘academic boards’ with little say over the direction of travel of these increasingly competition-obsessed institutions.

Vice-chancellors of traditional, elite universities subsequently started to become envious of the executive power and freedom of their ex-poly colleagues, and began to emulate their peers, replacing academic self-governance with ‘new public management’ and capturing power and monetary reward for themselves.

Combined with savage cuts to higher education funding under Thatcher – while the system continued to expand – university leaders increasingly pushed for marketisation ‘from below’. The 2010 reforms, therefore, were merely the completion and acceleration of tendencies already present (which may partly explain why there was not more resistance from both vice chancellors and academics to market reform).

But the crucial thing to understand is where this is all heading. Willetts and Barber say they want a market in which institutions respond to the needs and demands of students, shedding the clunky baggage of traditional universities to concentrate on a ‘unique selling point’: no frills, elite, cool, luxury, etc. But in fact, as evidenced by Willetts’ memoirs of his time as Minister ‘A University Education’, what they know will really happen is a rapid consolidation of this market in which the big fish swallow up the small, with those that do not play the game falling by the way side in a race for monopolisation.

Coventry University, then, is merely ‘playing the game’, rigged by neoliberal reformers in favour of monopolisation. The subsidiary/group model that Coventry University is using to exploit its staff and outmanoeuvre union recognition is in fact a model straight out of the private sector. It is also a model – an experiment that the University of Central Lancashire tried first, before the reality of reputational damage made them reverse course – which allows subsidiaries in foreign countries to be created, by-passing even the basic UK labour rights that even CU Group must respect.

This is the future of higher education, not just in England, but in the US too. Universities as ‘trans-national corporations’, loyal to no community, happy to outsource labour costs to developing countries, with ‘lecture-capture’ and Massive Open Online Courses (MOOCs) providing the technological infrastructure to scale up the ‘no frills’ CU Coventry model for the creation of super-profit.

 

Why should you care?

If you are an academic, you should care because this could be your future, sooner than you think. No one has counted how many universities use subsidiaries, but from a preliminary search on Google, it looks like most of them. In many cases, these subsidiaries are being used for what they were intended, non-primary trading. It seems that only the most ‘entrepreneurial’ of the post-92 universities have experimented with for-profit teaching subsidiaries. But you can bet, as the history of marketisation above indicates, if there is a surplus to be made, others will follow suit.

If you are a UCU activist – and if you are an academic and not yet a member of UCU, now really is the time to join – you should care because the struggle at Coventry University is a struggle over the future of the union. Aside from the outright attack on UCU and unions in general that the creation of this sham union represents, the use of subsidiaries to by-pass collective bargaining and national framework agreements means, in the long-run, a shrinking core of traditional academic staff and a growing army of de-professionalised, non-unionised, casualised ‘workers’ in the periphery.

If you are a member of a community surrounding a university, you should care because the somewhat uneven economic benefit that these growing universities provide is increasingly being directed away from the community. The gentrification that comes with university expansion in local areas creates not just fashionable shops, cafés and craft beer bars but also unsustainable hikes in rent and house prices for ordinary people and relentless pressure on public services already subject to massive cuts, with universities, students and student-housing landlords not contributing anything to these communities through the tax system.

As we know from 30 years of neoliberalism, multi-national corporations are loyal to no-one, they will move production to wherever is cheapest, with the subsidiary model, in conjunction with technological rationalisation, as argued above, providing the ideal means of shifting universities overseas to where labour rights and land-access are least protected. Tory reformers are incredibly naïve and short-sighted in thinking that if they help create English educational corporations they will stay in the country and contribute to the regeneration of our stagnating post-crisis economy.

But most disturbing is the fact that with the 2017 Higher Education and Research Act – rushed through Parliament just before the snap election the same year – universities can fail, with no guarantee of a government bailout. As Willetts has suggested, rather than direct government support, most likely profit-driven multinational corporations – not necessary educational – would be courted by government to come in and ‘save’ these HEIs. All the public wealth and civic space attached to them would also be handed over, and there would be even less concern for the welfare of local communities.

For post-industrial cities like Coventry, almost anything would be better than a return to the past. As Coventry-based The Specials famously sang: “This town, is coming like a ghost town/All the clubs have been closed down/Bands won’t play no more/Too much fighting on the dance floor”. I remember what this was like, growing up in the city during the 1980s.

But we can prevent this from happening again by drawing a line in the sand. No more union busting, no more marketisation. We need to support our brave and determined colleagues in CU Coventry before it’s too late.

“What you are running here is not a factory, it is a zoo. But in a zoo there are many types of animals. Some are monkeys who dance on your fingertips, others are lions who can bite your head off. We are the lions, Mr. Manager!”

 

 

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Willetts the conqueror Pt 5: knowledge exchange

The sausage room at the P & M Packing CompanyScene in the sausage room at the P & M Packing Company. Source: U.S. National Archives & Records Administration.

This is Part 5 in a five-part series on Willetts: Introductionpart 1part 2part 3part 4.

The last two installments of this multipart review of David Willetts’ A University Education analysed the rationalisation of the two core functions of the modern university, as envisaged by Alexander von Humboldt in the early 19th century: teaching (part 3) and research (part 4). This installment completes this analysis, following the addition of a ‘third mission’ to the university within neoliberal marketisation: ‘knowledge exchange’. The introduction of this new mission—pursued aggressively by Willetts’ successor, Jo Johnson—represents not only a fundamental attack on the academic profession, but also a desperate attempt to marshal the knowledge-producing powers of universities to kick-start a stagnating post-crisis global economy.

Although only in its infancy, the third performance management system for English higher education, the Knowledge Exchange Framework (KEF)—which completes the set alongside the Research and Teaching Excellence Frameworks (REF and TEF)—may turn out to be the most devastating to the academic profession.

While the REF and the TEF ‘nudge’ the core functions of the 19th century modern university, research and teaching, towards a neoliberal governance agenda, the KEF explicitly and directly imposes the needs of an increasingly desperate monopoly capitalist system as it faces an intractable long-term economic crisis.

For decades, the so-called Haldane Principle—which protects academic freedom from interference from government—has been considered, even by Margaret Thatcher, sacred. But now, a Conservative government freed from compromise with Coalition partners and bolstered by its own narrative of austerity, has its sights set on finally disregarding this Principle.

The austerity agenda, now ten years in, has not helped the UK economy recover, and if anything has lengthened and deepened the recession resulting from the 2008 Financial Crisis.

Rather than address the underlying causes of this recession—which is, as monopoly capitalism theorists point out, in fact a return to the norm of stagnation that haunts the capitalist system of accumulation—the Conservatives have returned to well-worn neoliberal themes: human capital theory and Silicon Valley style ‘disruption’.

The 2017 Industrial Strategy—a remarkable document that seems to recognise the problem of stagnation while making every attempt to obscure its significance—calls for renewed investment in niche, highly advanced technologies and the skills development needed to support these proposed economic growth areas.

Universities play a key role in this strategy, providing both the skilled workforce required for these new industries—that in fact only make up a tiny proportion of the economy overall, which is dominated by mainly non-productive services—and ‘impactful’ research.

However, for Willetts, an important aspect of such impactful research has been forgotten: research and development (R&D).

R&D is the kind of potentially monetisable, useful research that companies should be investing in to generate ‘organic’ growth (as opposed to ‘inorganic’ growth coming from acquisitions and mergers), but are not currently pursuing due to unfavourable economic conditions and acute risk-aversion.

Today, the key problem for neoliberal governments like that of the UK is how to incentivise companies, especially big multi-national corporations—which are currently sitting on billions of dollars of unproductive yet liquid capital, and working well below productive capacity—to invest in such organic innovation.

The neoliberal solution is to provide universities as outsourced R&D factories for multi-national corporations, in the naïve hope that by subsidising private-sector R&D, companies will keep some element of production in the UK, re-balancing our own services dominated economy.

Thus, by connecting the dots of performance management systems like the TEF, REF and now the KEF with larger scale initiatives concerned with overcoming the acute stagnation of a global neoliberal economy that has run out of steam, we can see the true direction of travel of marketisation.

Although currently only a tentative set of largely unconnected proposals, the KEF—which according to Louis Coiffait’s (Wonkhe) latest intelligence, could represent a sizable £14 billion carrot for universities—is the final piece of the puzzle and the biggest threat to the academic profession so far.

The invention of research

Returning to his theme of the history of universities as subsequent waves of market disruption (see Pt 1), Willetts recounts the creation of the “research-intensive university”—which still provides a model for universities worldwide—at the hands of Wilhelm von Humboldt in 19th century Germany.

In a short policy paper “which proved to be one of the seminal documents in the emergence of the modern university”, according to Willetts, Humboldt proposed that “the “university should become a centre of research” (p. 90).

Willetts explains that before this, research—by which he means science—was mostly conducted outside universities, in independent academies. Universities had become dominated by religious conservativism, and were hostile to the new science.

Crucially, the modern German university established the autonomy of research from state interference: “Göttingen was the first German university to break free from religious censorship and establish philosophy as the dominant discipline. Kant’s essay The Conflict of the Faculties uses this pre-eminent role for philosophy to place academic study above censorship.” (p. 91)

While this model was exported to the U.S. during the late 19th and early 20thcenturies, Willetts criticises the UK for “lagging behind” Germany and the US, slow to realise the power of scientific research for building what David Edgerton calls the ‘warfare state’ (p. 94).

This situation eventually changed, prompted by the First World War, which showed just how advanced Germany had become because of its rapid industrialisation in the late 19th century, within which the new universities played a key role.

Richard Haldane, an intriguing figure in early 20th century British history—Secretary of State for War 1905-12, raised to the peerage as Viscount Haldane in 1911, Lord Chancellor between 1912 and 1915, finally joining the Labour Party and again serving as Lord Chancellor in 1924 in the first ever Labour administration—exerted a lasting influence on British higher education.

Haldane recommended in 1904 the creation of the University Grants Committee, a body composed of academics who would together advise the government on where public funding for higher education and research should be allocated.

Then in 1918, Haldane recommended that research, while funded by the government, should be under the control of the autonomous UGC, which would be free from political and administrative pressures that might discourage research in certain areas.

Meanwhile, new ‘redbrick’ universities were set up to meet the new economic research needs, based on the Humbodltian model, thus also importing the strong institutional basis for institutional autonomy that came with this model: the freedom to choose what to teach (Lehrfreiheit) and the freedom to choose what to research/study (Lernfreiheit).

So, when the UK did finally pump money into university R&D after the Second World War, it only strengthened the independence of academia, with individual institutions and national funding allocations governed collegially by academics.

In practice, then, what became known as the ‘Haldane Principle’ formed the ‘de facto’ basis of academic freedom in the UK, until the 1992 Further and Higher Education Act codified this Principle for the first time in law.

Willetts is extremely ambivalent towards institutional autonomy. Firstly, he sees the Haldane Principle as the basis for the continued tendency of academia towards ‘scholasticism’, the “classic weakness of academic research”: “looking inwards not outwards” (p. 254).

As noted in Pt 4, for Willetts this tendency is exacerbated by the REF, which puts “relentless pressure on academics to produce papers that are going to be assessed by fellow academics as of the highest quality and frequently cited” (p. 253).

However, we also argued that while the REF reinforces the power of ‘star academics’ to resist marketisation, open access licensing, MOOCs and centre-periphery casualisation actually re-capturing the value created by these academics through

More importantly, for both Willetts and his successor Jo Johnson, the Haldane Principle prevents the UK government from directing research—specifically R&D—towards the wider economic needs of neoliberal capitalism.

Willetts confesses that, while the Haldane Principle is “right”, it does “not fully resolve the task of finding the right and respectful way of linking university research and public policy” (p. 110).

With so much prestige and research activity concentrated in autonomous universities and protected by the Haldane Principle, critics argue that the balance of power is with the university ‘providers’ not the Research Council funders, which means that ministers require a certain amount of ingenuity to deliver any more detailed strategy than excellence everywhere. (p. 114)

What happened to R&D?

Willetts spends a long time in his account of research in A University Educationlamenting the loss of publicly-funded R&D outside universities.

The account of the origins of the research-intensive university is designed not just to give historical context, but, like the revisionist history earlier in the book, is there to distinguish ‘bad monopolies’ that undermine ‘diversity’ from the ‘good monopolies’ that drive competitive change.

We saw in the opening chapters how the mantle of Oxbridge autonomy has fallen on more and more universities. So a university founded by the local business community to meet their needs becomes increasingly detached from these origins. It operates in an environment where there is only one way of being ‘good’ and that means becoming a prestigious research-intensive university. (p. 264)

Willetts again attacks the REF for exacerbating the alleged inward-facingness that comes from institutional autonomy. Teaching and applied research “do not score well in the university rankings”—which it is true, as league tables are disproportionately weighted in favour of academic research—and other kinds of activity focused on “local or national priorities loses out.”

Public research institutes seek the safe haven of a university and research becomes predominantly a university activity. So there is a limited range of funding streams and a limited range of types of institutions doing the research—notably the research-intensive university. Diversity is lost. (p. 264)

This alleged prejudice against publicly-funded R&D is traced back to that bastion of academic self-governance, the University Grants Committee: “After the Second World War there was a fear that science unconstrained by the ethical framework of the humanities and Sir Walter Moberly [head of the UGC from 1935 to 1949] argued that scientific research should therefore best be conducted on a multidisciplinary university campus.” (p. 97)

Even Thatcher is scolded for her attitude towards publicly-funded R&D. Perhaps surprisingly, she wasn’t interested in subsidising applied research for businesses: “Government should concentrate on funding basic science and leave its application and development to the private sector” (Thatcher, In Willetts, p. 261).

Thatcher was responding to a proposal by Victor Rothschild, which Willetts enthusiastically approves of in the book. Rothschild proposed a what Willetts calls “a kind of dual system”:

On the one hand there would be a science budget focused in blue skies research and academic excellence and protected behind the bulwarks of the Haldane principle … [On the other hand] separate from a general science budget, [government] departments should become contractors, buying the research that was needed for their priorities. They might even use the funds to run their own research institutes. (p. 260)

Willetts obsession with departmentally commissioned R&D is bizarre as it seems to contradict the direction of travel he himself initiated with the marketisation of higher education.

Firstly, such direct purchasing of R&D with public funds would be an example of old fashioned statism, rather than the kind of competitive, indirect funding he prefers for non-R&D research and HE teaching.

As Willetts himself points out, such funding—as it comes out of departmental budgets—would be subject to changes in government priorities and to budget cuts if costs needed to be slashed.

Furthermore, if departments did run their own institutes, employees in these institutes would be civil servants and subject to public sector standards of pay and terms and conditions, which are predominantly set by national agreements between employers and public-sector trade unions.

Most bizarrely, Willetts suddenly, somewhere near the end of the chapter on universities as ‘drivers of innovation’, gives up on the idea of publicly-funded R&D outside universities and the Rothschild proposal

In the end, Willetts “recognises the obvious”: “British universities are where most of our publicly-funded research happens.”

Therefore, rather than redirecting funding away from these universities towards third sector research institutes, the “university takes on a broader role as the driver of innovation” (p. 267).

The university may not have sought economic greatness but finds greatness is thrust upon it. The role of the university is brought into every discussion of growth, innovation, and productivity. As well as teaching and researching they take on what called a ‘third mission’ of promoting economic growth. (p. 267)

One metric to rule them all

Jo Johnson—who succeeded Willetts as Minister for Universities and Science in 2015 and oversaw the implementation of the TEF—is also ambivalent about what he calls “curiosity-driven research”.

On the one hand, such research is of “vital importance” and the UK’s status as “research superpower”—based on ‘field-weighted citation impact’ measures—is something “to be proud of and respect.”

On the other, “high-quality publications do not by themselves guarantee impact in the world at large”, nor is there “a simple linear relationship between academic excellence and economic growth.”

“If the research that goes on in our universities is to have the greatest possible impact, our universities need to be deeply connected to the wider world. This is an important challenge in any advanced economy.”

Johnson points to the “outsize role” that UK universities play in the country’s “research and innovation system.” “Over half of the money the UK taxpayer provides for R&D goes to the higher education sector – £4.8 billion out of £8.8 billion in 2015.”

“The result is a far greater proportion of R&D—26% – takes place in our universities than in comparable countries, with 20% in France, 17% in Germany, 13% in the U.S. and 12% in Japan.”

But Johnson draws a much clearer conclusion than Willetts: this public investment “brings with it increased responsibilities.” In other words, like ‘curiosity-driven research’ and teaching, ‘knowledge exchange’ (KE) must be performance managed.

“Because they loom so large in our research ecosystems, it is particularly important that universities engage with the wider world, and help to ensure that their work leads to wider social and economic benefits.” Johnson proposes a series of measures to bring KE—the new “third mission” of universities—in line with both the wider rationalisation of higher education and the needs of neoliberal capitalism.

Firstly, the impact weighting of the REF2021 should be raised to 25%. In fact, as Johnson notes, this decision had already been taken by HEFCE and UKRI, and he “welcomes” this “greater emphasis.”

Secondly, twelve more ‘Science and Innovation Audits’ (SLAs)—a government-led initiative designed to “help local organisations map their research and innovation strengths and identify areas of potential global competitive advantage”—should be undertaken.

And finally, a new performance management system, the Knowledge Exchange Framework —which I argue, rather than the TEF (and contra Andrew McGettigan), is the ‘one metric to rule them all’—should be introduced.

It is noteworthy that the UK university system has public frameworks to track two of the missions of universities—the REF for research and the TEF for teaching—but nothing for the third mission of knowledge exchange and engagement.

Given the importance of knowledge exchange to the national mission of universities, I believe there is a strong case for doing more to measure how good a job universities are doing and to link funding more directly to such an assessment.

I see a key role for an enhanced performance assessment in creating a constructive competitive dynamic between institutions that incentivises them to make the most of opportunities they have for knowledge exchange.

However, while Johnson notes that the UK government has the “building blocks” for the KEF, as well as “considerable amounts of relevant data”, information about “excellent (KE) practice” is “hard to access.”

Additionally, such information is not “weighted to reflect the differences in size and research income between different institutions.”

In a moment of frankness regarding the real function of such assessments, he admits that this limits the capability of a future KEF to identify the “outperformance and underperformance” of universities.

The return of stagnation

But where does the ‘knowledge exchange’ (KE) agenda come from?

As Professor Dame Ann Dowling explains in the 2015 ‘Dowling Review of Business-University Research Collaborations’, “business-university collaboration has been an exceptionally popular target for reviews and studies in recent years”—see Figure 1— something she considers “not surprising given the significance of research and innovation as drivers of a knowledge-based economy.”

Recent Reviews addressing Business-University Collaboration

Dowling also points to the “several important developments in the UK research and innovation landscape” leading up to 2015, including: “the growth in innovation funding through Innovate UK, establishment of the network of Catapults, introduction of Local Enterprise Partnerships (LEPs) and the conclusion of the first Research Excellence Framework (REF).”

But Dowling returns repeatedly to one, over-arching factor, mentioned in pretty much all the policy-based justifications for increased university-business interaction from Willetts to Johnson: “the need to boost UK productivity.”

As Johnson explains in the Foreword to the Dowling Review: “Excellent research, as well as being worthwhile in its own right, is vital to tackling the productivity gap that is the foremost economic challenge facing this country.”

“Business research and development is the foundation of productivity and growth; university research collaborations have a vital role in providing business with new processes and technologies, highly skilled people and access to world-leading experts.”

In other words, this isn’t just the usual ‘human capital’ argument for expanding while privatising higher education in advanced economies.

There is a startling recognition in the Industrial Strategy white paper is that a deep problem is haunting the British economy: stagnation. A condition Marxian political economists Paul Baran and Paul Sweezy argued was the “normal state of monopoly capitalist economy” (Monopoly Capital [New York: Monthly Review Press, 1966], p. 108).

Expanding on this pathbreaking work, John Bellamy Foster and Fred Magdoff explain in The Great Financial Crisis (New York: Monthly Review Press, 2009) that the “enormous productivity of the monopoly-capitalist economy, coupled with oligopolistic pricing, generates a huge and growing surplus, goes beyond the capacity of the economy to absorb it through the normal channels of consumption and investment.”

As a result, the capitalist system is constantly required to find new ways of externally stimulating ‘effective demand’ to counter-act this norm of stagnation, for example through civilian government (the welfare state) and military spending, the expansion of the sales effort (marketing/advertising), and most recently, speculative finance.

However, all of these artificial stimulants “prove inadequate to support the economy over time, since bigger and bigger injections [are] needed just to keep it going.”

Stagnation doesn’t mean that there is no growth, but rather that the economy functions “well below its potential—with appreciable unused productive capacity and significant unemployment and underemployment.”

The problem of stagnation can be evidenced by data on the current state of the UK economy.

According to Trading Economics, capacity utilisation in the UK “decreased to 81% percent in the first quarter of 2018 from 85% in the fourth quarter of 2017.” (NB: Capacity utilisation in the U.S. is even lower, just about rising to “78% in February from 77% in January of 2018”). This means that about a fifth of our productive capacity is not being used.

Despite the claims by the Conservatives that the employment rate (the proportion of people aged from 16 to 64 who are in work) is now the highest since comparable records began in 1971, this has been achieved through an increase in precarious work. Figure 2 shows that employment numbers have in fact only just returned to approximate pre-2008 levels.

Unemployment rate in UK 1971–2016

Out of this recovery, 43% of this growth actually comes from self-employment—the so called ‘gig economy’ (Figure 3). According to the Labour Force Survey, the number of self-employed in the UK “increased from 3.3 million people (12.0% of the labour force) in 2001 to 4.8 million (15.1% of the labour force) in 2017.”

Self-employment as a proportion of new jobs

The situation in the UK is only one part of a larger, global stagnation problem, that in fact began before the 2008 Financial Crisis. According to Foster and Magdoff, “the total cash available to corporations, just ‘sitting in the till’ at the end of 2005 was, according to Barron’s, a record $2 trillion” (Great Financial Crisis, p. 37).

For Ursula Huws (Labor in the Global Digital Economy: The Cybertariat Comes of Age[New York: Monthly Review Pres, 2014]) the 2008 Financial Crisis merely coincided with a crisis of profitability for international capital that was already undergoing massive restructuring.

While 2007 “represented a peal in global investment flows”, the number of ‘green-field FDI projects’—a type of foreign direct investment (FDI) in which a company builds its operations in a foreign country from the ground up—“actually decreased” by 6% to 11,703 in the year.

This indicates that though the process of concentration was accelerating, there was actually a slowdown in the generation of new production.

In other words, the largest transnational corporations (TNCs) were sustaining their profits not so much as a result of new production but through the cannibalisation of pre-existing production capacity. Without some new source of commodities from which to generate surplus value, the preconditions were in place for a decline in profitability.” (Huws, p. 120)

As argued in previous instalments, the marketisation of English higher education is driven by these macro-economic changes.

Opening up the accumulated public wealth contained in some of the world’s best universities to private capital is one short-term solution to this crisis of profitability.

Forcing those universities that do retain their public function and ‘quasi-public’ status to perform R&D for corporate capitalism is another.

Sausage factories

The (Conservative) UK Government’s 2017 Industrial Strategy—which, among other things, has a whole section on universities and knowledge exchange, announcing the introduction of the KEF and the increase of impact weighting in the REF to 25%—is an astonishing document.

In the section ‘Ideas’, it admits to four fundamental challenges facing the British economy that seem to come straight out of, and confirm, monopoly capitalism theory.

The first, arguably most serious, challenge is that “neither the government nor the private sector is investing enough in R&D.”

The following diagram included in the document shows nicely the problem with ‘innovation’:

UK Innovation Survey Data 2015

Although the graph is meant to show that the UK is innovating well, when the figures contained in the graph are actually broken down, it shows, if anything, the kind of serious lack of innovation that monopoly capitalism theorists see as a sign of stagnation.

For a start, the headline claim is that only half of UK firms are innovating. Furthermore, of all the types of investment illustrated by the graph, only one can be characterised as the kind of investment that actually adds something: the introduction of new products.

And even then, for monopoly producers, a large part of this 36% will mean line extensions or rebranding/repackaging of an existing products rather than genuine innovation. In other words, a percentage of a third of a half of firms in the UK are innovating.

For the Conservatives, R&D is the solution to the UK’s underperforming—or stagnating—economy, exacerbated and extended by austerity.

We need more “lively and thriving start-ups” and publicly-subsidised universities “need to do more to ensure that [this R&D] translates into improvements in earning power.”

Part of the problem, the manifesto admits, is that the UK economy is “dominated by services”—which by definition don’t produce anything—and what little R&D exists is “concentrated in a small number of big businesses and in a small number of sectors such as pharmaceuticals, motor vehicles and technology.

This is as clear acknowledgement of the oligopolistic nature of global capitalism as you will get from a neoliberal tract like the Industrial Strategy. “Indeed, just over three quarters of private R&D investment in the UK is driven by 400 businesses.”

What the Conservatives can’t admit is that no amount of R&D will do anything to address wage stagnation, which is not the direct result of low productivity but of the weakness of collective bargaining in the UK.

Strong unions—not hamstrung by repressive laws like the Trade Union Act 2016—and full employment are the drivers of wage growth, while wages are actively undermined by the growth of precarious work and self-employment.

The second challenge has already been mentioned: private companies and universities need to do more to commercialise R&D: “our world class science and research does not always feed through to world-leading home-grown businesses.”

Again, the impact of monopoly capitalism is indirectly acknowledged: when ideas are developed they are “bought by businesses overseas”:

We are good at low-cost innovation and flexible start-ups but the long and patient process of getting a new technology to market is difficult. As a result many of our innovative businesses are nimble, flexible and imaginative but do not grow to be substantial, big or strong. There are exceptions, but in general British businesses’ R&D tends to favour quick routes to market, rather than long development times, and selling businesses to growing them.

The point about monopoly capitalism theory isn’t that competition doesn’t exist or that there aren’t any small or medium sized businesses (SMEs) with competitive advantage. The point is that these businesses and their practices do not represent the norm.

Furthermore, while these ‘innovative, nimble, flexible and imaginative’ start-ups and SMEs may grow fast and disrupt existing markets, as soon as they are established and clearly profitable, monopoly interests usually swoop in and buy them out.

The third challenge, according to the Conservatives, is the London-centric nature of the UK economy. This challenge is barely addressed, with the strategy proposing some undeveloped and woolly ideas about regional “ecosystems” and “clusters” as potential solutions.

However, the Conservatives have been over the last few years pushing ahead with their devolution agenda, which does not refer to the devolution of some budgetary and policy areas (for example, higher education funding) to Scotland, Wales and Northern Ireland, but to the creation of regional ‘combined authorities’ (CAs).

As Richard Hatcher argues, business leaders sit directly on the boards and committees of these CAs, rather than merely advising local government as has been the case with the Local Enterprise Partnerships (LEPs).

Additionally, the political function of the CAs is to defer responsibility for austerity onto regional authorities, with the elected Mayors becoming distractions from the real source: central government. By asking local people to vote for a leader of something they know little about, due to the obscurantism of devolved governance structure, the blame as always lands with ordinary people.

The fourth and final challenge is the one most directly relevant to universities: how to square the circle of international competition and the collaboration that is a necessary part of the idea of the ‘community of the competent’ that John Dewey argued was the basis of academic freedom, and therefore the academic profession.

It is this contradiction that held back earlier reformers like Margaret Thatcher: what happens to knowledge and education when they are instrumentally directed to narrowly economic ends?

Again, this question goes right to the heart of the capitalist model of production. As Karl Marx explained, the extraction of surplus involves at its most basic level a conversion of quality into quantity: of labour into labour-power, of use into exchange, of the individual into the mass.

But as Marx also pointed out, the annoying fact for capitalists remains: real people have real needs that must be met for commodities to keep circulating, profit to be extracted and the system to retain its legitimacy.

Higher education is no different. It’s primary functions are education and research, the further it strays from these activities in the pursuit of economic objectives, or ‘nudged’ towards them, the more its ‘quality’ is undermined.

Willetts the Conqueror Pt 2: Creative Destruction

turner4
J.M.W. Turner – Snow Storm – Steam-Boat off a Harbour’s Mouth (1842)

Welcome to Pt 2 of the multi-part critical Review of David Willetts’ ‘A University Education’. This part of the Review focuses on Willetts’ plans for so-called ‘alternative providers’ – a euphemistic term which should be read as synonymous with for-profit colleges and universities – and his reflections on wanting to see a British higher education (HE) monopoly rise up to compete with global HE mega-corporations.

“One of the most controversial parts of the ‘marketisation’ agenda was my drive to create space for insurgent new providers to challenge incumbents. We have already seen how the story of English higher education in the past two centuries is of successive waves of new entrants.” (Willetts, p. 280)

The above quote clearly links Willetts’ own project of “opening up the system” of English HE to competition from for-profit colleges and universities to the ‘revisionist history’ of English, European and US HE outlined at the beginning of his book. The quote also links with a infamous speech Willetts gave in 2011 to the HE employers ‘mission group’ Universities UK, in which he claimed that letting for-profits into the system would be the “rising tide that lifts all boats”.

Six years later, Willetts seems as convinced as ever, despite the growing evidence that marketisation has failed: “I wanted to make it easier for these alternative providers to get student loans for their students and make it easier for them to get full higher education and university status, and make it easier to establish new providers as well. Insurgents drive innovation.” (p. 282)

In the Introduction to this multi-part Review,  I asked whether Willetts was an ‘idiot’, genuinely believing in the power of competition, or a cynic, rationalising the asset-stripping of HE by private interests (HE Marketisation, 16 January 2018). My answer: Willetts was a textbook neoliberal.

Neoliberalism stretches the common sense meaning of competition to its limits by suggesting that anti-competitive outcomes – for example saturated markets with multi-national oligopolies controlling prices and sitting on mountains of cash – are competitive as long as they are the result of competition (at some stage in the past, no matter how long ago) and are open to the possibility of competition (at some point in the future, no matter how remote or unlikely).

In ‘A University Education’, aside from the occasional ideological flourish, Willetts seems to re-trace the neoliberal journey from utopian free markets to market realism. Rather than competing with established universities, alternative providers went for an entirely new market of working class and part-time students, merely introducing another tier to the traditional two-tier system of ‘elite’ and ‘modern’ universities. Rather than driving innovation, or driving up quality for students, all Willetts’ reforms did was reproduce and reinforce the existing class system of English and global capitalism.

By the end of the book, Willetts abandons the market populism described in Pt 1 (HE Marketisation, 20 January 2018), accepting the reality of one monopolistic system replacing another, reflecting wider national and global capitalist systems of inequality and stratification.

The only thing that Willetts is left with is a vague hope that technology will do the job that alternative providers failed to do, and produce a multi-national educational corporation to fly the (neo-imperialist) flag of English HE across the world.

Tide receding, boats sinking

According to the funding body for higher education – the Higher Education Funding Council for England (Hefce) –  as of 13 March 2017 there were 115 alternative providers with specific course designation, which means students at these providers can access support through the Student Loans Company (SLC). Between 2010/11 and 2014/15, maintenance loans paid to students at alternative providers grew from £58 million to £207 million, the Higher Education Policy Institute (HEPI) reported, peaking at £292 million in 2013 (HE Marketisation, 13 November 2017).

Loans for tuition fees grew from £36 million to £175 million, during the same period, reaching a high point of £236 million in 2013. According to BBC figures, “about £400m-a-year is received by 112 private colleges through the student loan system”. Including other alternative providers that do not have access to SLC funding, the Higher Education Statistics Agency (HESA) estimated that there were over 700 alternative providers in England in 2017.

HEPI summarised the wide range of business models that such providers are based on: “‘catch-up’ for profit; sub-degree colleges; generalist colleges, serving both undergraduates and postgraduates; small specialist, not-for-profit colleges; exclusively postgraduate small specialists; for-profit providers focusing on international students; for-profit distance learning; and campuses overseas”.

“Alternative providers are hard to classify because they have different legal forms, different objectives and different target audiences,” HEPI commented. “They provide a diverse range of academic offers and have a variety of organisational arrangements.”

Rather worryingly, according to Willetts this confusion about what alternative providers are and how many of them currently exist in the system is reproduced within Westminster:

“When I arrived at BIS [the Department of Business, Innovation and Science] it thought higher education in our country was just those institutions funded by HEFCE [the Higher Education Funding for England],” Willetts notes. “Nobody knew much about the rest.”

This is significant because Willetts’ 2010 White Paper ‘Higher Education: Students at the Heart of the System’ proposed not only opening up the system to alternative providers but also moving towards a ‘risk-based system’ of regulation:

“We will introduce a risk-based quality regime that focuses regulatory effort where it will have most impact and gives power to students to hold universities to account. All institutions will continue to be monitored through a single framework but the need for, and frequency of, scheduled institutional reviews will depend on an objective set of criteria and triggers, including student satisfaction, and the recent track record of each institution.” (BIS, p. 10)

Problem was, this ‘risk-based system’ – predictably (and as pointed out by pretty much everyone who knew anything about HE) considering how little was known about such providers – didn’t really work.

Willetts acknowledges that “there was some abuse of the system” and that “some courses received loans which should not have done” (p. 283), but does not spend much time dwelling on the actual consequences of his intervention.

In 2014, the National Audit Office (NAO) published an ‘Investigation into financial support for students at alternative higher education providers’, which found that:

“EU students at some alternative providers had claimed or attempted to claim student support they were not entitled to.”

“Dropout rates at 9 alternative providers were higher than 20% in 2012/13. By comparison, the average dropout rate across the higher education sector was 4%, but no-one had defined what might be an acceptable dropout rate when students were benefiting from public support.”

“20% of Higher National students recruited by alternative providers and claiming student support may not have been registered with the qualification awarding body in 2012/13.”

“Between 2012 and 2014, the Department for Business, Innovation & Skills (BIS) suspended payments to 7 providers and their students owing to concerns that providers had enrolled students on to unapproved courses. Furthermore, a lack of clarity has existed within BIS and its partner organisations about which courses were approved for student support.”

“In 3 cases, BIS suspended student support payments to providers or their students where it had concerns that the providers had supplied incorrect information about student attendance.”

In 2017, the NAO published a ‘Follow-up on alternative higher education providers’ which concluded:

“The Department for Education had made progress towards addressing weaknesses in its oversight of alternative higher education providers, but still had important issues to address before it can provide assurance on current and emerging problems.”

“The rate of students at alternative providers who drop out of their studies had fallen, but it remained much higher than in the rest of the higher education sector. Between 2012/13 and 2014/15 the non-continuation rate reduced from 38% to 25%, but remained three percentage points higher than the sector benchmark, and 15 percentage points higher than for the rest of the higher education sector.”

Many critics pointed to the inevitability of such results within a risk-based system, especially as Ministers were ill-informed about alternative providers, and had made little effort to look at what had happened in other countries.

John Holmwood in 2014 pointed to a two-year investigation by the Senate Committee on Health, Education, Labor, and Pensions into for-profit universities in the US higher education system, known as the Harkin Report, as evidence of what would happen if alternative providers were allowed into the system without sufficient regulation. This Report found that:

“Federal taxpayers are investing billions of dollars a year, $32 billion in the most recent year, in companies that operate for-profit colleges. Yet, more than half of the students who enrolled in in those colleges in 2008-9 left without a degree or diploma within a median of 4 months.”

“Many for-profit colleges fail to make the necessary investments in student support services that have been shown to help students succeed in school and afterwards, a deficiency that undoubtedly contributes to high withdrawal rates. In 2010, the for-profit colleges examined employed 35,202 recruiters compared with 3,512 career services staff and 12,452 support services staff, more than two and a half recruiters for each support services employee.”

“This may help to explain why more than half a million students who enrolled in 2008-9 left without a degree or Certificate by mid-2010. Among 2-year Associate degree-seekers, 63 percent of students departed without a degree … During the same period, the companies examined spent $4.2 billion on marketing and recruiting, or 22.7 percent of all revenue.”

“Publicly traded companies operating for-profit colleges had an average profit margin of 19.7 percent, generated a total of $3.2 billion in pre-tax profit and paid an average of $7.3 million to their chief executive officers in 2009.”

Rather than driving up quality, the reality has been that alternative providers drag down the widely-accepted world-class quality of the English HE system pre-Willetts.

Everyone in their right place

For Willetts, alternative providers are “entrepreneurs” that “might spot a gap in the market for training which mainstream providers did not meet” (p. 282). “They are more willing to take risks and they are devoid of the assumption that they should still be around a century from now – that all depends on the market” (p. 286).

Ironically – when it is remembered that Willetts’ intention was to drive up quality through competition – alternative providers did spot a gap in the market that mainstream providers weren’t meeting: “no frills” HE for working class, mature and working students who were less interested in the status of going to university and more interested in getting a signed piece of paper that would help them in the labour market.

Andrew McGettigan has repeatedly pointed that the market in HE has failed to appear not just because of the nature of the ‘income contingent loan’ system – through which students never really see the money they pay in fees, and therefore do not consider the up-front cost of their education – but also because alternative providers did not compete with existing institutions for students, but went for a different market altogether.

Speaking at a UK Parliament Treasury Committee in October last year, Andrew McGettigan said:

“The feeling was that you could run a degree in business or law for £4,500 or £5,000, make a bit of profit, but offer something that would undercut the established provision. Therefore, there would be a downwards pressure on prices elsewhere. That did not happen at all, because by and large the most aggressively expanding of those institutions did not compete for the kind of students who were applying to universities.”

McGettigan pointed out that there were lots of “[alternative providers] in Whitechapel and other parts of London offering the kinds of subjects, like business and law, that they could run for under £6,000 a year”. Between such providers there could be price competition. But as for alternative providers coming in to the system and “challenging established universities”, this “did not work, because those providers, by and large, went to whole new constituencies of people who were not previously applying to university”.

According to an IFF Research report commission by the Department for BusinessInnovation and Skills in 2016, “data returns from 276 alternative providers showed that their population of students was a diverse one” in 2014, with ‘mature students’ aged over 25 at the point of starting their course “represented in greater proportion than in the publicly funded HE sector (44 per cent and 36 per cent respectively)”.

Furthermore, there “was some evidence” that alternative providers were “fulfilling a widening participation role insofar as these students were more likely to be from an ethnic minority background (46 per cent compared to 19 per cent of students in publicly funded HE institutions), the report pointed out, and to have a disability (15 per cent) than students in publicly funded HE institutions (nine per cent)”.

A particularly high proportion of alternative providers’ students were domiciled internationally, outside of the EU, prior to starting their course, the report added. “Such students comprised around a quarter of the known alternative provider student population (27 per cent) compared to one in eight (13 per cent) of the publicly-funded HE population.”

It was also common for students in the sector to come to their course having previously been in full-time employment, the report said, and for them to have a “comparatively low level of prior academic achievement compared to the publicly funded sector”.

What this points to is that Willetts’ market reforms, far from driving up quality or introducing competitive pressure on existing providers, only served to reinforce existing divisions in the English higher education system. Middle and upper class students compete, as they always have done, for places at elite universities and for access into the upper tiers of the British class system.

The majority of other students make decisions as to where they go based on practical considerations – cost of living, distance from home, reputation for student experience, etc – but there is now a division within this category as to how far applicants feel they can commit to a ‘real’ HE experience or just want to get a piece of paper representing a degree. In other words, by creating a new tier below the already second-class ‘teaching-focused’ post-92s, Willetts has made higher education itself into a luxury that not everyone can afford, both in terms of time and money.

This jars with Willetts’ attack on this same class system as represented by Oxbridge and the Russell Group, which for him have a negative effect on not just the English school system – which for middle class children has become a factory for producing successful elite university applicants – but also on the geographical division of wealth, with middle class families clustering near ‘excellent’ rated primary and secondary schools in the hope of getting their kids into good universities.

Of course, Willetts has got this upside down: it is the English class system based on inherited and accumulated wealth and advantages bestowed on those with greater economic, cultural and social capital that determines where people live, go to school and ultimately study. The English HE system merely reflects this stratification, with Oxbridge and Russell Group universities providing access to elite jobs in business, government and the media.

“Perhaps we shouldn’t be surprised or shocked if our elite universities reflect our class structure,” Willetts concedes (p. 192). But like the neoliberal rationalisation of monopoly, class is accepted on the condition that people can and do travel up through this class system, that barriers of entry are not absolute.

Willetts holds out hope for this “cautiously meritocratic approach” – which could be better described as pure ideological fantasy – that higher education could counter-balance this class system, succeeding where all previous levels of education have failed.

“The English system is riddled with selection not only to identify the candidates with the greatest potential but to ensure the producers get the most prestige with the least effort to add value. That is why it is right to put them under pressure to broaden access. We are trying to create an open, fair, national higher education system on top of a deeply divided school system.” (p. 201-2)

The problem is that, if alternative “no frills” providers do not challenge this class system and only attract those students that would not have gone to elite or even post-92 ex-polytechnics, then what we have is a system where everyone has their place, much like the Tripartite school system that was abolished in the 1960s and 1970s.

When faced with the facts, Willetts’ meritocratic premise for marketisation is revealed for what it really is: ideology.

Columbus in a mortarboard

Perhaps the strangest and most self-contradictory parts of A University Education are those on ‘The Future’. In the space of three chapters, Willetts abandons the heroic iconoclasm of the first few chapters, describing instead an almost Platonic system of HE divided by class, and then arguing for ‘a broader education’ that the reader cannot but read as a utopia that the masses will soon no longer have access to.

Along the way, Willetts also embraces with open arms monopoly-capitalist future for HE, urging for a bizarre and frankly offensive educational imperialism which suggests it is the duty of vice-chancellors and government ministers to lift the developing world out of economic backwardness through the export of English HE.

Willetts starts the chapter on ‘Globalisation’ with an extended attack on his hard right Tory colleagues, who have insisted that international students be included within immigration figure. For him, recent immigration policy “confuses selling a service with migration” (305), and misses a trick, as the internationalisation of UK HE is a “great British export opportunity’” (p. 305)

“Universities are significant export industries. They are now the leading export industry of towns and cities from Exeter to Bradford. One study showed that Sheffield enjoyed a new benefit of £140 million form its overseas students.” (p. 305)

International students should be seen as “permanent migrants” – an OECD category which covers “regulated movements of foreigners considered to be settling in the country from the perspective of the destination country” – and even if they do decide to settle permanently should be seen by the UK Government as a “national gain not a loss” (p. 309).

Instead “taking a growing share of a growing global market” in international students HE, Willetts berates his colleagues for “deliberate policies” that have “instead seen overseas student numbers in the UK broadly flat, which means we have been losing market share” (p. 307).

This tirade against current policy – which is, without a doubt, absolutely ridiculous and driven by an entirely Sisyphean and reactionary-nationalist project of insulating the UK as much as possible from the outside world – is meant by Willetts to set up a larger argument about transnational education as an ‘investment opportunity’.

Basically, Willetts argues that there is a growing middle class in the ‘developing’ world that needs good quality HE, and that the UK should be exporting – in the sense of international students coming here to study, which counts as an export, but also of setting up foreign campuses to supply these markets directly –  its good quality to these countries.

Yes, this argument is as bad as it sounds. Why do these countries need us to set up shop in their countries or entice their students to come to us instead of studying at home? Willetts names China, Malaysia, Iraq, and sub-Saharan Africa as possible ’emerging markets’ for HE exports – but China has two universities in the top-50 Times Higher World Rankings.

If Willetts, and anyone else trying to sell HE exports in terms of social benefit for that matter, is serious about wanting to help other countries to build their HE systems, he would be suggesting a demand-driven, Government sponsored consultancy service, where representatives from UK HE would go and help in any way they could – if asked – without any expectations of economic returns.

Otherwise this is just state-sponsored neo-colonial, educational imperialism. What is this, the 19th century? But this uncomfortable truth – and its not the first time neoliberalism is associated with neo-colonial foreign policy – see the Chicago Boys documentary or read Naomi Klein’s The Shock Doctrine – begins to emerge alongside Willetts’ acceptance of monopoly:

“One reason why I was so keen on promoting alternative providers was that I hoped at least one big British based global higher education chain would emerge. But there is no sign of this. The world now has fifty mega-universities, several with around a million students. But there is only one British institutions on the list – the Open University with around 200,000 students. There are global university chains such as Amity, Phoenix, Laureate, Manipal, and Kaplan but none of these are British.” (p. 317)

Let’s ignore the fact that top executives at Phoenix took home $6m each in 2008 and that in the same year, the US Federal Court jury found the Apollo Education Group – which owns Phoenix – guilty of “knowingly and recklessly misleading its investors” and were forced to pay $280m in reparations. Even more surprisingly, as if Willetts was himself making the link between marketisation and monopoly capitalism, he points to the importance of financialisation in growing such UK-based ‘mega-universities’:

“A major investment bank came to seer me as minister to say that of we could create a commercial model of British higher education they could immediately raise $1bn to invest in it because the global brand was so strong and the international opportunities would create a vehicle to list on the Stock Exchange, and the structure to go global, but none has yet done so. That would give it access to private capital and the capacity to create the broader management structures for a big international organisation.” (p. 318)

Sausage factory

Willetts laments the fact that neither Pearson nor Buckingham University have “so far tried to create a chain delivering higher education across the world” (p. 318). His hope now is with neoliberalism’s ultimate ‘blue pill’: technological ‘disruption’.

“We are now at the moment when the technological revolution which has changed so much else in our lives is going to transform education.” (p. 320)

Predictably, Willetts focuses on Massive Open Online Courses, or MOOCs, in particular the way that they “replace the conventional economics of rising marginal costs of output with a new model in which the marginal costs of an extra student on a course are close to zero” (p. 322). What he means is that, once you have set a MOOC up, it is not only significantly cheaper than traditional HE to run – Willetts estimates that it costs about £55,000 a year – scaling this model up in terms of student numbers makes little difference on this cost.

In this way, MOOCs mirror the wider revolution in logistics that other digital commodities, like music, have already gone through. It still costs roughly the same to produce the original piece of music, but once finished and recorded in digital form, it can be endlessly reproduced with no additional cost(as long as people buy the digital form) and with no cost for storage or distribution.

What he is suggesting is that MOOCs could cut out the need for teachers, who are replaced by videos or online activities. In reality, of course, someone still needs to make the videos, but as Willetts points out, the business model – once a way is found to monetise courses through the additional payments for qualifications or through advertising content – is one of moderate initial outlay and diminishing costs in the future.

The attractiveness of MOOCs for business-focused universities – with ex-polytechnics leading the march towards marketisation since their incorporation in 1992 (HE Marketisation, 4 October 2017) – can only be understood in terms of the introduction of monopoly-capitalist norms into the HE system via market reforms.

In response to the rapid and large-scale changes introduced by Willetts, but even before this when New Managerialism was introduced into modern universities in the 1990s, universities have sought to restructure themselves into what Ron Barnett calls ‘entrepreneurial universities’, led by the figure of the CEO as ‘entrepreneur’ who attempts to move the university through this situation of intensified risk.

Following the rules of the neoliberal game, the VC as CEO must aim at monopoly or bust, seeing marketisation as an opportunity to gain temporary ‘first mover advantage’, establishing the university’s brand before the entry of new providers.

Within this context, ‘lecture capture’ – which provides the material for MOOCs and ‘flipped classrooms’ – provides a way for entrepreneurial universities to push down on costs while increasing margins: “Radically egalitarian peer learning begins to look like a suspiciously neat way to save money on educators,” admits Willetts (p. 326).

Meanwhile, modern universities seeking to gain first mover advantage, such as University of Central Lancashire (UCLan) and to a larger extent Coventry University, have experimented with the post-92 corporate form in response to the opportunities presented by marketisation, creating wholly-owned for-profit subsidiary colleges within an over-arching group structure.

Commenting in 2013, in his important book The Great University Gamble, McGettigan wrote that CU Coventry (formerly Coventry University College) “offers a stripped-back model of learning and tuition: classroom-only subjects with all learning materials provided as handouts or online”.

Less diplomatically, University and College Union’s general secretary Sally Hunt pointed out that this “no frills” model is possible because this ‘wholly-owned (for-profit) subsidiary’ presses down radically on staff costs by de-professionalising academics into ‘tutors’, relying on large levels of casualisation, offering only minimal terms and conditions, all possible because workers are taken out of existing local and national collective, union-negotiated agreements.

Essentially such universities are creating what Megan Kimber calls a ‘centre-periphery’ model of exploitation, emulating the global division of labour within a single institution (which is itself increasingly globalised), pitting an expanding reserve army of under-employed ‘early career researchers’ against a shrinking core of traditional academics.

The automated university

Modern universities thus become permanently “restructured universities“, with a two-tier workforce, a shrinking percentage of quasi-tenured star academics in the ‘centre’, producing content and research-funding income, and an army of relatively secure but deprofessionalised and/or ‘permatemp’ service workers delivering standardised ‘products’ in the periphery, all micro-managed through audit by the administrative-entrepreneurial leadership team.

Flipping and (enforced) lecture capture allow expert knowledge to be captured in discrete multimedia packets, distributed via online technology to be administered by de-professionalised, outsourced and casualised tutors. These tutors only need to receive minimal training, much like Costa Coffee baristas, in order to deliver low-cost, minimum effort, ‘life shaped learning’.

This model can be easily scaled up: educational corporations such as Edexcel can offer MOOCs with material supplied through open access research, as well as face-to-face support provided either in-house or in partnership with existing institutions.

Academics uncritically celebrating the revolutionary potential of ‘openness’ do not realise how they are unwittingly obscuring the way that open access functions within a wider process of neoliberal restructuring of HE enabled by the ‘enclosure’ and commercialisation of publicly-funded research.

What we are seeing in higher education is the same process of rationalisation that occurred in the heavy industries in the early 20th century under Fordism and Taylorism, which through management and technology successfully emptied the tacit knowledge of the skilled worker into the machine, and alienated him or her from the labour process the industrial working class (HE Marketisation, 26 November 2017).

This process is also the first part of a neoliberal rationalisation of public services – which we have seen most clearly in the NHS – through which Tory privatisation is prefaced by simultaneous expansion and underfunding to create a ‘crisis’ in the service in question, while – as Ursula Huws explains – public sector work itself is standardised and de-professionalised so that it can be easily outsourced brought in line with the pay and conditions of a globalised reserve army of labour, enabling these pay and conditions to be squeezed collective organisation to be undermined:

“Tacit knowledge is progressively codified; tasks are standardised, output measures are agreed; management processes are reorganised; organisations are broken down into their constituent parts; the constituent parts are formalised, sometimes as separate legal entities; and market-like relationships are introduced between them … Only when the activity has been actually or potentially transformed into something that can be made or sold by a profit-making enterprise is the ground prepared for further restructuring in ways that form part of the normal practices of multinational companies: mergers, acquisitions, reconfiguration of parts in new combinations, and the introduction of a global division of labour.” (Huws, p. 140)

As with his pseudo-imperialist reflections on English HE as economic export, Willetts seems disappointed that this rationalisation hasn’t done it’s disruptive work yet in the English HE sector:

“The next stage could be for the conventional higher education institution and the examining bodies to be disintermediated themselves. The digital revolution exposes universities to these risks as it lowers barriers to entry … It also makes it easier to unbundle the different functions of the university and pick-off specific ones. But so far this unbundling has been more of back-office functions and has not affected the core academi8c functions which students m ost value: the university has not yet been dismantled in front of our eyes.” (Willetts, p. 337)

But as argued in the Introduction, it is enough for the threat of disruption to exist to justify marketisation. That marketisation will end with one monopoly replacing another is a moot point, this is just the market going about its business of ‘creative destruction’.

Willetts the Conqueror Pt 1: Market Populism

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In the first instalment of this multi-part critical review of David Willetts’ (2017) ‘A University Education’, we look at his ‘revisionist’ history of the university as it is modernised through successive historical periods – medieval, modern and neoliberal – in Britain, Europe and the US. This post follows the ‘Introduction’ last week (HE Marketisation, 16 January 2018).

Willetts is former Minister of Universities and Science and was the architect of marketisation in English higher education within the UK Tory-Lib Dem ‘Coalition’ Government during the period 2010 – 2015. He decided not to stand in the 2015 General Election, and was replaced by Jo Johnson, who continued enthusiastically Willetts’ marketisation project in English HE. Without the burden of compromise within a Coalition government, Johnson managed to succeed where Willetts had failed: primary legislation, the 2017 Higher Education and Research Act (HERA).

As with Willetts’ reforms, Johnson had to beg, bribe and bully this Bill through Parliament, managing to rush it past the post just before the 2017 ‘snap’ general election, which saw the Tories’ majority almost entirely wiped out as a result of Theresa May’s arrogance and complacency. In hindsight, if the Bill would have come after the election, Parliamentary opposition probably would have defeated it altogether.

Willetts’ hindsight in the book is also 20-20, seeing ‘alternative providers’ everywhere in the history of English HE from the 16th century to the present day. Along the way, Willetts by implication compares himself favourably to a series of historical ‘disruptors’ of ‘producer power’, including: Napoleon Bonaparte, Adam Smith, William Gladstone, Joseph Chamberlain, Lionel Robbins, Clark Kerr, and, of course, Margaret Thatcher.

Through history’s mirrored (but distorted) reflection, Willetts considers himself as a great emancipator of higher education, saving universities from the ‘necessary’ cuts of post-Financial Crisis ‘austerity’, finally realising Robbins’ vision of a mass HE system in England.

But Willetts wilfully ignores Thatcher’s swingeing cuts to HE in the early 1980s, part of a now well-documented project of privatisation that sought to simultaneously expand the use of public services while intentionally under-funding them. This creates crises that are firstly meant to show how public funding doesn’t work, and secondly that the only solution is privatisation. This is exactly what we are seeing at a more advanced stage with regards to the National Health Service (NHS).

Rather than representing the realisation of Robbins’ vision of a democratised system of mass higher education, Willetts’ ‘experiment’ in marketisation is in reality the completion of Thatcher’s war against the public sector.

 

Breaking up the Oxbridge ‘duopoly’

“We can think of today’s wide range of universities as successive levels of archaeological deposits with their distinctive identities shaped by other historical origins. But there is a deep tension between on the one hand the growth and diversity and on the other hand a single dominant benchmark of what is best about a university. While new entrants may do things differently their distinctiveness may be eroded under pressure to confirm to a single scale of values.” (p. 36)

The above quote sets the scene for Willetts’ revisionist history of universities in the UK, Europe and US in the first few chapters of ‘A University Education’. On the one hand, the “distinctive identities” shaped by the “successive levels” of the history of HE are to be celebrated under perhaps Willetts’ foundational concept in the book – ‘diversity’. While on the other, each level presents an obstacle to liberators such as Willetts, with the status quo pushing against what is always retrospectively argued to be necessary reform.

Willetts begins his story in the medieval era, with the Oxbridge “duopoly”. Straight away, even in this precapitalist socioeconomic formation, he sees competition driving efficient outcomes: “the lecturing staff had to submit to a competitive trial to win the custom of their fee-paying consumers … teaching was viewed as a commodity like any other and it was logical that new students should sample lecture courses before making their academic purchase” (p. 1).

Students “came first” according to Willetts: “groups of students were looking for training to get qualifications that would help them practise medicine or law and employed teachers to help them” (p. 13). Willetts points to the tensions “between town and gown” that this new institution created, which often “boiled over into violence” (p. 14).

He also notes the symbiotic relationship between universities and the state that has defined the history of higher education to this day. Early European universities “looked to the Church, the major countervailing power of the time, for protection from hostile locals” (p. 14).

While newly-established universities had to deal with this “persecution” from locals, they also had to contend with “greedy councils taxing them too much”. This perfect storm of demands in some cases forced groups of scholars and students to “march out of town to a new home” (p. 14).

In 1209, a group of scholars and students left Oxford University to found Cambridge University, establishing for the next 500 years what Willetts calls the “Oxbridge duopoly”.

Oxford University “emerged when in 1167 King Henry II banned English students from going to Paris to study because France was too strongly linked to his great opponent, Archbishop Thomas Becket” (p. 14).

After the Cambridge University succession, Oxford University persuaded King Henry III to “issue a proclamation” that no new universities should be allowed except in the form of Oxbridge colleges, and also to impose “an oath on all new masters that they would not lecture outside the universities of Oxford and Cambridge” (p. 17).

However, this duopoly was challenged first in 1828 when English Radicals, “led by Jeremy Bentham”, set up a “secular, fee-based college as a joint stock company” as a “deliberate alternative” to Oxbridge (p. 21). Then in 1872, William Gladstone commissioned an inquiry “into Oxford and Cambridge, what funds they had, how they were used, and what subjects we studied” (p. 23).

Willetts immediately draws an analogy to his own situation as Minster for Universities and Science from 2010-15, grumbling that the abuse Jeremy Bentham received for setting up University College London (UCL) “was similar to what we hear today” about ‘alternative providers’ (p. 231). Willetts notes that UCL “wasn’t allowed to call itself a university” and was “denounced” as a threat “to the established model of a university” (p. 35).

Extending the analogy with marketisation, Willetts then celebrates the creation of the  University of London in 1836 – a “solution brokered by government” to a stalemate that had emerged between Oxbridge and the newly established UCL (p. 35).

Willetts explains how the state-subsidised and managed University of London was given the power to award ‘external degrees’, enabling colleges to be set up across the country, offering degrees validated by the University of London.

Gladstone’s commission, 50 years later, represents for Willetts another example of ‘benign’ government intervention. The commission found that “universities, great institutions with a noble purpose, had been captured by a small self-perpetuating group and were not fulfilling any higher purpose” and that “the collegiate monopoly of instruction had led to decay of professorial teaching” (p. 25).

As a result, an Act was passed in 1877 that “gave Government appointed Commissioners the power to merge and rationalise college fellowships to fund new University professorships and lectureships” (p. 25).

“After the Oxbridge monopoly was broken in the 1830s, England saw the creation of colleges with diverse missions including delivering education and training to meet the needs of the local economy” (p. 35). As a result of the 1877 Bill, there was a “surge in the creation of new academic institutions in Victorian England”, which meant there subsequently “several distinct routes to becoming a university” (p. 26).

Critics who see neoliberalism as an ideology of ‘laissez faire’ may be confused at Willetts’ celebration of government intervention. But for early neoliberals such as F. A. Hayek, ‘laissez faire’ – the doctrine that markets should be left alone and government interference should be kept to a minimum – was a mistake. In the absence of ‘natural’ markets, the role of a neoliberal state was to create the conditions for competition to appear, even if this meant large-scale government intervention.

Willetts clearly, albeit cautiously, recognises this role for the state when it comes to higher education: “the tension between respecting [universities’] independence and challenging what we would now call producer power runs though this narrative and through my time as minister’ (p. 25).

 

Massification and monopoly capitalism

Willetts continues this narrative of tension into the modern era, with the first ‘modern’ research-intensive university: the University of Berlin.

The University of Berlin was founded by Wilhelm von Humboldt in 1810, as Willetts notes, right in the middle of the Napoleonic Wars. Prussia’s defeat by Napoleon, the “great disruptive force destroying the decaying medieval universities of Continental Europe” – pushed it to “modernise its failing institutions” (p. 20).

Humboldt “proposed a new type of university that would lead to national renewal”. He advocated a university “which did not just train the elite” but also “promoted research and an understanding of national culture to strengthen Prussia and catch up with the Industrial Revolution happening in Britain” (p. 20). As a result, “German universities were the dominant force in the nineteenth century” (p. 29).

The German research university then became a model for universities across the world through its export to the quintessentially ‘modern’ country, which rose to global dominance in the 20th century: the USA.

According to Willetts, John Hopkins was the “first explicitly research-focused university deliberately based on the Humboldt model” (p. 30). Thanks to the GI Bill – which provided veterans returning from the Second World War with a range of benefits including state-subsidised college education – the US HE system saw a massive expansion within what is often referred to as the American economic ‘golden age’.

Willetts notes the effect of ‘welfarist’ social policy on the growth of the post-war US economy: “this combination of mass access to higher education together with university-based research is the origin of America’s great clusters which drive American innovation to this day” (p. 30).

However, Willetts ignores the other side to this coin – the central role that the US research-intensive university played in the development of what I have referred to elsewhere (based on the work of other theorists) as ‘monopoly capitalism’ (HE Marketisation, 10 December 2017).

In the 20th century, capitalism changed from a decentralised system of small(ish) firms competing with each other through ‘free markets’ to one where saturated markets were dominated by oligopolistic firms exerting a controlling influence on prices and relating to each other mainly through ‘rivalry’ (with frequent mergers and acquisitions).

Reality occasionally breaks through Willetts’ revisionist history – for example when he points to the hugely influential Dartmouth University case in 1819, which led to the judgement that corporations should be treated as ‘legal persons’ with legal rights to make contracts, hold property or commission torts. This case is now cited as a key factor in the rise of the American business corporation.

The American mass, public university system was created by the state in order to boost the monopoly capitalist system that had begun to establish itself before the Second World War. By importing the German university model into the US, the state could supply big, corporate firms with much needed R&D, as well a huge influx of ‘human capital’ as a result of the GI Bill. This intervention combined with other factors to produce one of the biggest economic booms ever seen in the history of capitalism.

Like the US, the UK (eventually) learned from what was going on with HE reform in the rest of the world, and saw how the US was using HE to drive their golden age. The UK was also committed to welfarist social policy after the Second World War, but had been slower to catch up when it came to HE policy.

In the UK, the Butler Education Act in 1944 – “which for the first time ensured universal publicly funded access to secondary education” (p. 33) – provided a demand-side expansion of HE, as a mass educated public began to push agaoinst the limitations of the still very elite English HE system. As Willetts explains: “Access to higher education only really became a major political issue when the Butler reforms together with the post-war baby boom interacted to create real pressure for places in the early sixties” (p. 33)

Although many commentators begin the story of mass public HE in England with the 1963 Robbins Report, Willetts argues that the Anderson Report that immediately preceded it 1962 was just as important.

This report recommended a new system of funding which would enable “British residents with two A-level passes (or equivalent) admitted to first-degree (or comparable) courses” to “receive generous awards for maintenance and tuition that were consistent across the county.’ (p. 41) This recommendation was implemented by the 1962 Education Act, and administered locally according to a national formula.

Willetts also notes that in 1961, the Universities Central Council on Admissions (UCCA) was created in order to manage the “intensified competition for places” which had become “unmanageable” for applicants and institutions.

Under the existing system, universities “didn’t know who was going to turn up at the beginning of term because they did not know if a student had received a separate offer from another university and was going there instead” (p. 42). Through the UCCA, the Government replaced this chaotic and uncoordinated system with a centralised, competitive system of university applications, which eventually morphed into UCAS.

“Macmillan’s Government had created a national system of higher education, but crucially still based on university autonomy and student choice. National government set the terms of the financial support and local government paid it out but universities still had the power to decide who to admit and so in practice determined who received the support. They had created a single market in higher education, very different from the localist continental model and from the American state-based system.” (p. 44)

 

The long, bumpy road to the market

As the above quote suggests, despite this new “national system” of HE being state-funded, Willetts sees this as a fundamentally important period in the pre-history of marketisation.

But what was significant about this period wasn’t so much the creation of a “single market”, which was if anything a seller’s market; universities chose who would be accepted and were not subject to price competition, as the student numbers cap meant there while there was a limited amount of funding, so there was no shortage of students fighting for places. Rather it was the ‘funding crisis’ that emerged in the wake of the Robbins Report.

Robbins outlined four key aims of HE, including: (1) “instruction in skills”; (2) the promotion of “general powers of the mind”, operating on a “plane of universality”; (3) “the advancement of learning” – teaching should “partake in the nature of discovery”; and (4) the transmission of a “common culture and common standards of citizenship” (Robbins, in Willetts p. 45).

These four aims echoed those of Humboldt, indicating that Robbins recognised the that English HE could play in driving Britain’s own post-war boom. But most importantly, the so-called ‘Robbins Principle’ stated that “courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so” (Robbins, in 45).

These conclusions were accepted by the government on 24 October 1963. Robbins predicted, and along with the government, hoped for a rapid expansion in student numbers in the following years. They weren’t disappointed.

In the following decade, the number of students in full-time HE more than doubled, from 216,000 students in 1962/3 to 457,000 students in the 1970/71 academic year (p. 47). By 2010 – the year that Willetts became Minster for Universities and Science – this number had almost quadrupled again, reaching 1.74 million full-time students in English HE (p. 47).

However, the coherence of Willetts’ revisionist/emancipatory narrative comes under real strain as the story reaches the Thatcher era. He defends Thatcher as an “optimist” who “saw the value of higher education” as Minister of Education. In contrast to her successor, Keith Joseph, she pushed for further expansion.

Joseph had tried to reduce numbers because “he was trapped in a funding model which held the resource per student broadly constant, and therefore controlled public spending by controlling numbers” (p. 57). Kenneth Baker, Joseph’s successor, then “broke this log jam” by shifting to a funding model in which universities received the marginal cost of extra students, unleashing “another great surge in student numbers in the late 1980s and early 1990s” (p. 57).

What Willetts neglects to mention – a strange omission considering the level of detail in his narrative up to this point (Willetts covers the Thatcher era in just under two pages, compared to 17 pages on the Robbins era) – is the swingeing cuts that Thatcher applied to the HE sector during her time as Prime Minster.

For Roger Brown, professor of higher education policy at Liverpool Hope University, Thatcher’s policies were “the beginning of a long decline” for universities. “The cuts in 1981 were a disaster for British higher education – some of worst things that have ever happened to higher education,” he adds.

Andrew McGettigan, in his hugely important book, The Great University Gamble, uses the following graph to show the consequences of Thatcher’s policy of growing student numbers (which were state-controlled) while cutting public funding (McGettigan, p. 19):

The graph shows a consistent fall in funding per student during the 1980s, only lifting slightly again with the introduction of fees in 1997.

We now know – mainly from the reform of the NHS – that the simultaneous expansion and under-funding of public services is an explicit and long-term strategy of Tory privatisation.

As Colin Leys and Stewart Player argue, the privatisation of the NHS has proceeded through “misrepresentation, obfuscation and deception”:

“Opinion polls show that, any time since 2000, if the public had been asked whether they wanted to see the NHS broken up and replaced with a healthcare market on American lines, to be run for profit by a variety of multinational health companies, private equity funds and local businessmen, they would have overwhelmingly rejected it. If the idea had been openly put before parliament only a handful of Conservative MPs in very safe seats could have risked supporting it. Whatever its faults, the NHS remains the most popular institution in the country. So if the project was to succeed it was essential to minimise public attention to what was really intended – and when attention could not be avoided, to obscure it.” (Leys and Player, pp. 64-5)

Others, such as Charles Webster, accuse Thatcher’s Conservative government of deliberately under-funding the NHS during the 1980s and 90s, thus creating the conditions for it to be replaced by a private insurance based system, as in the US.

More importantly, Ursula Huws points out that multinational companies themselves “actively” lobbied and marketed their services to neoliberal governments throughout this period, advising sympathetic governments on “how to modernise their services, recommending on with one hand the sorts of outsourcing strategies from which they, and other companies, benefit with the other”.

A quote from Willetts is telling: “The shift from elite to mass higher education system had brought with it a significant decline in the quality of the academic experience. Arresting the decline in the funding of students was essential, and a precondition of raising standards.” (p. 204)

Like with the NHS, an alleged decline in the quality of English HE, which if real – the Government has never really evidenced this – had been a result of simultaneous expansion and under-funding, is joined up with a defence of consumer welfare to justify privatisation and marketisation.

 

The inefficiency of democracy

Within Willetts’ revisionist narrative, the cuts do not point to sneaky Thatcherite privatisation policy, but to HE historically – and mistakenly – being treated like a public service. This meant that when cuts to public funding were ‘needed’ – which they always are under a Tory government in power as capitalism eventually reaches another period of crisis and stagnation – HE fell victim to a ‘necessary’ prioritisation of public funds.

After all, who would argue that higher education was more important than primary or secondary education? Or social services? No one. And this is where what I have called ‘market populism’ comes in (a phrase in fact coined by Thomas Frank who used it in a similar way to criticise the New Economy of the 1990s).

The basic premise of Willetts’ rationalisation of marketisation – after conceding that price competition is impossible due to the income-contingent loan system (see HE Marketisation, 29 October 2017) – is that it provides a sustainable way to fund the English HE system while protecting it from the winds of political change and the consequences of financial crises:

“Universities came to recognise that they needed a source of funding which was not public spending and hence not always at risk of cuts. They threatened to introduce their own emergency top-up fees of £300 per student in 1997 unless something was done, which would have turned higher education into a sensitive election issue. That is why the Dearing Enquiry was set up on a cross-party basis by the then Education Secretary Gillian Shepherd at the end of the Major government.” (p. 64)

The Dearing Report – published in 1997 –  proposed “for the first time” a graduate contribution, Willetts notes, suggesting that students pay £1000 to cover at that time about a quarter of the cost of their education. These fees were “structured as a loan to be repaid as a proportion of the graduate’s income (‘income-contingent’) rather than the fixed repayment mortgage-style loans which shad been introduced on a small scale already” (pp. 64-5).

“As soon as the Financial Crisis broke in 2008 it was clear to the more far-sighted Labour figures – such as Peter Mandelson – that there were going to be more public spending cuts and higher education would not be exempt from them. So he wanted to repeat Gillian Shepherd’s device and set up a review which would identify a way forward and straddle the Election due in 2010.” (p. 65)

The rest, as they say, is history. Under Willetts, £9000 fees and loans were introduced, rising to £9,250 in 2017 under Jo Johnson. At the same time, Willetts pushed for a simplified ‘risk-based’ procedure for granting for-profit colleges ‘university’ status and degree-awarding powers, thus edging closer to his dream of a truly ‘diverse’ HE system in England with ‘producer power’ replaced by ‘consumer power’.

All that was left to do was pass primary legislation: “It was as if we had privatised an industry but without a regulator in place and were expected to use the legal framework of the old nationalised industry” (p. 289).

The Tories finally managed to get the Higher Education and Research Act (HERA) passed, rushed through Parliament just before the shambolic snap election in spring 2017. At this point Willetts felt confident enough to write a book reflecting upon just how proud of himself he was:

“The system of fees and loans has now been operating for over a decade. It has been a conspicuous success – broadening participation in higher education, bringing more funds to university education, and saving public money. Taking most of higher education out of public spending has led to the removal of direct controls set by Government on student numbers university by university. Sweeping away those absurd controls away is one of the great social reforms of the Coalition Government and it was fitting that we should announce that policy in 2013, the year of the fiftieth anniversary of the Robbins report.” (p. 86)

But while patting himself on the back for ‘saving’ English HE from the cuts – imposed by his own Tory government in response to a Financial Crisis whose causes can in large part be traced back to Thatcher-Reagan neoliberal consensus of the 1980s – Willetts also freely admits to what McGettigan has pointed out was a serious “democratic deficit” in how these reforms were put in place even before HERA.

Willetts remembers how his 2010 White Paper had proposed primary legislation “which would have set up a proper regulatory framework for all this” – but because of “political resistance” and the fact that such primary legislation would provide “an opportunity for another Parliamentary vote on fees”, Willetts decided to “improvise instead” (p. 284).

As clear as day, and without shame, Willetts (p. 284) admits to “using existing powers in ways that had never originally envisaged” to push his reforms – which he knew damn well were unpopular – through Parliament. Rather than admit the legitimacy of dissent in a democratic system, Willetts and his fellow cronies chose to sneak reform through the back door.

Willetts excitedly recounts the example of the College of Law sale to a for-profit, venture capital company, which he achieved with the help of the Higher Education Policy Institute’s founder Nick Hillman.

The Law Society – who ran the College of Law as a charity “for providing legal education to people regardless of their personal financial circumstances” – wanted to sell the College because it had “grown very valuable”. The Society “thought they could best fulfil their charitable purpose not by running a law college but by selling it and using the proceeds for a charitable endowment to help fund legal education for low-income students” (p. 284).

“The sale was a fantastic opportunity, and the College was bought by a venture capital company which shared the vision of its management that legal education was an area where we excelled and aimed to create a big new for-profit enterprise providing legal education to the world.” (p. 284)

But, the new owners wanted assurance that they would meet HE regulations and be able to offer accredited courses, even though they were a for-profit institution:

“Nobody had done this for a private profit-making institution before, and in the absence of legislation there was no clear framework – the rules of the Privy Council for university statues did not apply in such cases. BIS officials and my excellent special adviser Nick Hillman worked hard to steer the project through. We found an ingenious route to do this – by using separate legislation on trade names to give it university title. It was a necessary piece of improvisation and a peculiar way to establish new universities, made necessary but the absence of a legal framework.” (pp. 284-5)

I found the excited language and references to ingenuity and particularly disgusting, because at no point does Willetts acknowledge his utter disregard for democracy –  disgraceful behaviour for an elected Member of Parliament. The absence of a legal framework, as Willetts has already admitted, was not something externally imposed, but rather a result of Willetts’ strategic avoidance of public scrutiny back in 2010.

“Creeping reform is inconsistent with democratic oversight,” McGettigan (p. 5) argues. “The vote on tuition fees in December 2010 was a ‘snap vote’ called with little notice and with little time scheduled in the House of Commons: a tactical means to curtail debate both inside and outside Parliament.”

As McGettigan also points out, the snap vote, brought forward using secondary legislation, happened before the publication of the White Paper – such policy papers are normally meant as public consultation exercises. “It was a political coup … no detail could be examined; the House of Lords, which voted the following week, was deprived of its now conventional role as a revising chamber” (McGettigan, p. 22).

“Had the new maximum fee moved through Parliament slowly, accompanying primary legislation, it may have been lost and split the Coalition. As it was the vote narrowly passed. This abuse had the desired effect of spiking the guns of those opposing the remainder of the plans and confusing potential activists about just what had been won on that occasion.” (McGettigan, p. 22)

The Tories used the same tactic seven years later when they finally felt confident enough to pass primary legislation, rushing the Higher Education and Research Bill through Parliament after Theresa May decided to call a snap election. After a lengthy ‘ping pong process between the House of Commons and the House of Lords – which proposed a series of major amendments which were rejected by the former – the Tories managed to pass the Bill on 27 April 2017.

 

Why gamble?

McGettigan asks, why gamble with a perfectly acceptable publicly-funded English HE system? He suggests an answer to his own question:

“What we have seen is largely lobbying conducted by either privateers or the vice-chancellors, through Universities UK or the various ‘mission groups’. The interests of these do not match those of academics, students  or the public in general. Universities, increasingly acting like corporations, were paid off: overall universities had expected to see an increase in annual income, albeit unevenly distributed, with the cost -passed on to the individual graduate and the underwriter of the loans: the Treasury or taxpayer.” (McGettigan, p. 6)

Willetts “held twelve meetings with representatives from private equity firms and educational multinationals prior to the publication of the Higher Education White Paper in June 2011” (McGettigan, p. 8). Among the attendees were Pearson, Kaplan, Duke Street, Sovereign Capital, Warburg Pincus, and A4E.

As we will see in Pt 3 of this multi-part critique of ‘A University Education’, Willetts is not ashamed of this attempt to court big business: he was keen to let big capital in to the English HE system to allow home-grown providers to compete with the emerging educational multi-nationals.

This is consistent with the neoliberal worldview: monopoly is ok, as long as it results from competition. Democracy can be inefficient, so can be by-passed for the ‘greater good’ – by which Willetts means the needs of monopoly capitalism.

 

 

Willetts the Conqueror: Introduction

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Before Jo Johnson and Sam Gyimah, there was David Willetts. As the Minister of State for Universities and Science from 2010 until 2014, under the Tory-led ‘coalition’ government, Willetts oversaw the introduction of a market into the English higher education system – often referred to as ‘marketisation’. As a result, he has become a somewhat hated figure for those who have had to suffer the consequences of this ‘experiment’ in HE reform, so much so that Willetts has often been on the receiving end of protests and abuse from those studying and working in the sector.

In his recently published memoir-cum-rationalisation ‘A University Education’ (1), Willetts recounts one of the ‘saddest experiences’ of his time as Minister, when he was trying to deliver a lecture on the benefits of ‘unleashing the forces of consumerism’ at the University of Cambridge, only to be ‘shouted down by angry students chanting that they were not consumers’ (p. 279). This is only one of many anecdotes in the book pointing to the massive (justifiable) resistance and anger that Willetts faced while rolling out his reforms.

To say I had mixed feelings when reviewing this book is somewhat of an understatement. I was studying for my undergraduate degree when the Financial Crisis 2008-9 hit, and when I graduated I spent two years unemployed in London. In order to ride out the storm, I started a Masters degree in 2010, the year that marketisation began. After finishing my Masters I managed to scrape a few hours as an hourly-paid lecturer (while holding various other part-time jobs to make ends meet), and have been on such a contract ever since.

I expected to hate the book, for it to be simply an ideological expression of ‘neoliberalism’, an apologetics for the destruction of a world-leading system of public higher education, a justification for the privatisation of yet another institution of the welfare state. It is, in fact, all of these things. However, I found to my surprise that – up to a point – the book was also very readable, with Willetts portraying himself as someone who meant well – the book begins with the statement ‘I love universities’ – and to some extent, meticulously researched.

It is important to give credit where its due, and to note that Willetts genuinely believed and stands by what he did as universities Minister:

‘The system of fees and loans has now been operating for over a decade. It has been a conspicuous success – broadening participation in higher education, bringing more funds to university education, and saving public money. Taking most of higher education out of public spending has led to the removal of direct controls set by Government on student numbers university by university. Sweeping away those absurd controls away is one of the great social reforms of the Coalition Government and it was fitting that we should announce that policy in 2013, the year of the fiftieth anniversary of the Robbins report.’ (p. 86)

This quote conveys how Willetts sees himself as a great emancipator, comparing himself (by implication) in the book to not just Lord Lionel Robbins, but also to figures like Napoleon Bonaparte, William Gladstone and Margaret Thatcher. What these figures all have in common is a war against various forms of what Willetts calls ‘producer power’: the absolutist medieval state, the Oxbridge ‘duopoly’ and the trade unions (respectively).

Rather than destroying the HE system, Willetts considers that he ‘saved’ it from the cuts. As will be argued in Pt 1 of this Review that will be published in four instalments over the coming fortnight, he wilfully ignores the origins of these cuts in the Tory austerity agenda, the Financial Crisis and a long history of Thatcherite privatisation that Willetts’ marketisation is in fact the completion of. Nevertheless, he is immensely proud that he was ‘able to deliver one of the single biggest cuts in public spending of the Coalition whilst at the same time increasing the total cash going to universities for teaching and access by £1.5 billion’ (p. 67). ‘That’s not bad’, he concludes.

Willetts the conqueror of bad monopolies – as will be argued below, for neoliberals monopoly is ok as long as it results from ‘market-like’ competition – delivered the ‘necessary’ cuts while increasing funding per student. But more importantly, he found a way to abolish the student numbers cap and achieve what no other UK Government had achieved, not even Labour under Tony Blair: mass higher education. Let’s not dwell for too long on the £50,000 debt that students now leave university with or the infamous and ever-rising RAB charge – which measures how close the reforms get to costing the Government as much as the publicly-funded system that preceded it (a point to be covered in Pt. 4 of the Review).

At first glance, the book seems to be irredeemably beset by contradiction. Again, it is full of contradictions, but there is an underlying ideology that gives it a coherence and that reveals the not so innocent neoliberal political project that Willetts conveniently erases from the book. Willetts surprisingly admits that the market in HE has not appeared and cannot, due to the nature of the income-contingent loans system (see HE Marketisation, 29 October 2017). In retrospect, he also concedes that his claim in 2010 that £9000 fees would be ‘exceptional’ was ‘a mistake – a wrong forecast based on a false analysis’ (p. 83). Willetts reveals that it was this claim that led to the widespread belief that the ‘reforms should generate price competition or they would have failed’ (p. 83).

However – and this seems a little far-fetched, as he was the architect of the fees and loans system – Willetts realised that what ‘really mattered’ for students ‘was the repayment formula not the fee level’. It then it became ‘clear’, he writes, that there would not and should not be much price competition’ (p. 83). This was because students, who in most cases would never pay back the full amount and never saw the money itself, did not treat the £9000 fee as a price, and therefore were not prompted to behave like rational, cost-benefit maximising consumers. In one of the many moments of humility running through the book, he reveals that this lack of price competition was a ‘terrible let-down’ for some of his Tory peers (p. 84).

Yet when he writes about ’empowering the student as consumer’, Willetts argues that marketisation ‘harnesses the power of choice and competition’ to drive up quality (the question of consumerism and quality will be addressed in Pt. 2 of the Review). I originally approached the book with a very simple research question: is Willetts an ‘idiot’ (sorry David, I can’t think of a gentler way to put this) who genuinely believes in the power of competition, or is he a cynic that expounds what Philip Mirowski (2) calls neoliberal ‘double truth’ to hide the harsh reality of corporate asset-stripping of previously state-protected public goods? This question followed from my other work on HE and monopoly capitalism theory, which argues competition is only a momentary reorganisation of a wider oligopolistic corporate capitalist system looking for a temporary boost to stagnating profits overall (HE Marketisation, 10 December 2017).

The answer is quite simple: Willetts is in fact a textbook neoliberal. As Will Davies (3) has shown, the key to the shift from liberal to neoliberal economic theory lay in the latter’s acceptance of monopoly as the successful outcome of competition, not as an example of ‘market failure’, as the former believed. The monopolist is the entrepreneur (individual or firm) that has played the game well, the ability to control prices the reward. But monopoly is only ever temporary – it is always possible for another entrepreneur or firm to play the game better and gain temporary advantage – or in some rare cases, rewrite the rules completely (often referred to as ‘disruption’). In an impressive about-face, neoliberalism ‘reconciled itself to monopoly and became its mightiest champion, despite its worldview—in theory—being based on a religious devotion to the genius of economically competitive markets’ (4).

Willetts seems to rehearse this journey from competition to monopoly through the course of the book, in the latter chapters admitting that the reason he ‘was so keen on promoting alternative providers’ was that he hoped ‘at least one big British based global higher education chain would emerge’ (Willetts p. 317). The justification for monopoly is couched in cliche-ridden theories of technological ‘disintermediation’, which propose, as all theories of disruption do, that the ‘creative destruction’ of traditional markets is inevitable and not a matter of politics at all.

Perhaps more disturbingly, the hope that the UK will produce HE oligopolies to rival those in the US is justified within a neo-colonial ‘ambition’ to ‘help to educate the world, drawing on the prestige of our education institutions and exams and the global role of our language’ (Willetts p. 319). All of these issues that centre on the idea of the university as trans-national corporation will be explored in Pt 3 of the Review.

So why read ‘A University Education’, if it is so ideological and self-congralutalory? Because, if read critically, it contains a lot of useful information about the history of universities, HE policy and the politics of knowledge production. It also clears up many of the common misunderstandings about income-contingent loans and the government accounting mechanisms behind them. But most importantly, it is the clearest expression of the principles of HE marketisation published so far, even more so than some of the best critiques (5). That is because it comes straight from the horse’s mouth.

If you want to understand marketisation, this book is essential reading – especially for activists and trade unionists who are still dealing with the fallout of what is described. But more importantly, the book marks out the terrain of the battle against marketisation, and hopefully the forthcoming four parts of this critical Review in HE Marketisation will help sketch out a map for the war to come.

 

References

(1) Willetts, D. (2017) A University Education. Oxford: Oxford University Press

(2) Mirowski, P. (2013) Never Let a Serious Crisis Go To Waste: How Neoliberalism Survived the Financial Meltdown. London: Verso

(3) Davies, W. (2016) The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition. London: Sage

(4) Foster, J. B., McChesney, R. W. and Jonna, R. J. (2011) ‘Monopoly and Competition in Twenty-First Century Capitalism’, Monthly Review 62(11) {Online} Available from: https://monthlyreview.org/2011/04/01/monopoly-and-competition-in-twenty-first-century-capitalism/ [Last accessed 16 December 2017]

(5) See for example: McGettigan, A. (2013) The Great University Gamble: Money, Markets and the Future of Higher Education. London: Pluto Press

Editorial: The myth of the market

A perfect storm has been making its way through higher education (HE) in recent months. Excessive vice chancellor pay, an industrial dispute over the Universities Superannuation pension scheme (USS), an £800 million loss on the sale of the student loan book, questions about student value for money, and students having to go to food banks to be able to survive while at university.

But is this a moral panic? Yes, of course. But that doesn’t mean there isn’t a genuine problem. The Tories rushed the 2017 Higher Education and Research Bill through Parliament – the crowning jewel of seven years of market reform – just before a snap election that turned out to be a spectacular fail.

Now the Tories are weak and are facing opposition on a variety of issues, not just from within Parliament (especially from a Corbyn-led Labour Party on the up and up) but also from the media – on both sides of the political spectrum.

The central problem that all of these painfully public crises point to is the failure of ‘marketisation’, which began in earnest seven years ago when David Cameron’s Coalition came into power: massive cuts to public funding of universities, the introduction of student fees and loans, and the entry of for-profit ‘alternative providers’.

Has any of this actually improved higher education? No. Students are now leaving university with £50,000 of debt (HE Marketisation, 27 October 2017) and the prospect of employment on a zero-hours contract or no contract at all in the ‘gig economy’.

Universities are still greedy for more income, leveraging decades – sometimes centuries – of history and reputation for risky bank loans in order to fund speculative fixed asset investments.

 

Point the finger

So who is to blame? The vice chancellors? Not really (bear with me). Jo Johnson, current Minister of State for Universities, Science, Research and Innovation? Not entirely. David Willetts, the brains behind marketisation? To some extent. Andrew Adonis, trenchant critic of VC pay levels but at the same time partly responsible for introducing £3000 student fees under New Labour? Partly.

But marketisation really began much earlier. Not surprisingly, it was a project initiated under Margaret Thatcher in the 1980s. Anecdotally, the idea for income-contingent loans – the current model in which students only pay their loans back once they hit an income threshold after graduation – was first floated by Sir Keith Joseph in 1985. It was rejected by Parliament at the time.

This is an important point, because privatisation and marketisation – key philosophies of the neoliberal Conservativism that Thatcher helped create – have never been popular. Rather than try to push such extreme policies through Parliament, the Tories have historically always preferred what Andrew McGettigan calls “creeping reform”.

Marketisation in HE began not with Keith Joseph’s income-contingent loan suggestion, but with the reforms to university governance first outlined in the Jarratt Report. Jarratt proposed that universities should be governed not by academic senates but by private sector-like boards – made up of ‘lay members’ that are actually mostly business leaders – and led by vice chancellors as chief executive officers (CEOs).

These reforms were applied to so-called ‘modern’ universities – newly privatised polytechnics – as part of the 1992 Further and Higher Education Act. From this point on, vice chancellors started behaving like their private sector peers (with many coming from the private sector) and post-92 universities – which were now “higher education corporations” – began emulating profit-maximising businesses (despite still having charity status).

In other words, Thatcher introduced the norms of ‘monopoly capitalism’ – top-down management, dysfunctional governance and growth through expansion and/or efficiency – into the higher education sector (HE Marketisation, 4 October 2017).

At the same time, Thatcher drastically cut public funding for higher education while steadily expanding the student population. In a classic example of Tory neoliberalism, the ‘objective’ conditions for marketisation were created, which could be completed at a later stage.

In 2010, market reform was accelerated under a Tory majority Coalition government. Public funding for universities was almost entirely cut, fees were increased to £9000, income contingent loans were introduced, and legislation was tweaked to make it easier for for-profit colleges and universities to enter the sector.

What changed? Apart from the Tories returning to government, the Financial Crisis gave the Tories an opportunity to engage in counter-factual history. The ‘austerity’ narrative created enough confusion for them to finally push through marketisation of public services, arguing that the ‘bloated state’ under New Labour had overspent in the good times and now the public had to suffer the consequences in the bad times.

Forget the bank bail out and the fact that the crisis was caused not just by greedy and irresponsible investment bankers, but neoliberal Tory deregulation in the first place…

 

Cultural lag

But why has it taken seven years for opposition to appear? Not just in HE, but in society more generally? Simply put, it takes a while for it all to sink in and perhaps controversially, for effects to be directly felt by the middle class.

The working class – immediately demonised as benefit scroungers and chavs – bore the brunt of the cuts, as did those with physical and mental health problems. Migrants were also picked on by the newly enfranchised nationalist factions of establishment parties.

The so-called ‘precariat’ – which is really just the ‘reserve army of labour’ – also felt the effects straight away, and were among the first groups to begin fighting back.

Many ‘millennials’ – particularly those who went who had gone to university before or during the Crisis – decided to carry on with their education, doing Masters and PhDs, to ride out the storm.

But the storm didn’t pass, and this highly-educated, rightly indignant population was faced with a limited range of career options, including service sector jobs and unpaid internships in the creative industries.

Some remained in the academy seeking refuge, accepting zero-hours contracts in the hope that one day their contribution – including hours of unpaid intellectual labour in the form of teaching preparation and research – would be recognised by their employers and they would receive something resembling tenure (which had also been abolished in the 1980s by Thatcher).

Some ended up in the ‘gig economy’, causing trouble there. A massive growth in self-employment has hidden the impact of the Financial Crisis on employment, enabling the Tories to claim that unemployment in the UK is at its lowest for 42 number of years.

However, the ethical bad taste that companies like Uber and Deliveroo leave in the mouths of consumers shows a growing awareness that such companies are exploiting the ‘in-work poverty’ that thousands face within austerity Britain, as people attempt to supplement their real-terms diminishing income.

The reality of a stagnating economy under neoliberalism is finally beginning to bite the middle-income population – particularly public service workers – as wages refuse to rise with inflation.

The Tories are mystified as to why this is happening. It’s ‘stagflation’ all over again. Of course, activists and trade unionists know very well what is causing this: the devastation of collective bargaining as result of 30 years of outsourcing (both in the public sector and in the global division of labour) and aggressive union-busting practices.

Today’s students – a generation that has reached adulthood within austerity Britain – are also beginning to see that they are being conned. For large segments of students from working and lower-middle class backgrounds, their £50,000 debt will not get them any closer to being able to afford to get ‘on the property ladder’: the Thatcherite meritocratic dream.

A serious debate is emerging around the ‘value for money’ of £9,250 a year degrees. The government has launched an inquiry into the current system of student finance.

But a Tory government, which still believes in the neoliberal myth of marketisation, cannot come to the only conclusion that makes any sense: that education is nothing like a consumer product in the first place.

 

What is to be done?

The focus on VC pay is important, because it raises the issues outlined above. But activists and trade unionists need to keep the focus on governance.

Governance – lack of transparency in not just renumeration committees, but also at board and council level – is the underlying problem behind VC pay, and also the terrain on which to fight to solve the problem (see my first Editorial: HE Marketisation 7 October 2017).

At a practical level, governance problems come from homogeneity in the make up of such bodies.

VCs as CEOs appoint lay members that already agree with the university-as-business model of HE, and in many cases are driving the reckless growth plans that we are seeing everywhere in the sector (see for example, Coventry University UCU’s pamphlet, ‘Growth is ok…but what about quality?‘).

Boards are also over-represented – as is the upper layer of the corporate world – by middle-aged, white men.

Principles of governance – for example the Higher Education Funding Council of England (Hefce) Memorandum of Assurance and Accountability, the Committee of University Chairs’ Code of Governance or the Nolan Principles – which universities are required to follow, but often don’t, are useful to pointing out the hypocrisy of governance under marketisation (see for example the University of Southampton UCU’s blog).

Is the answer a Co-operative University? Yes and no. On their own in a sea of marketisation – which has ironically made the possibility of a Co-op Uni a reality – such alternatives have little chance of survival (HE Marketisation, 30 November 2017).

Marketisation operates through technocratic interventionism – the Teaching, Research and now Knowledge Excellence Frameworks (TEF, REF and KEF) – creating ‘proxies’ for competition through elaborate ‘light-touch’ regulation (which is actually very heavy handed and statist in character) in the absence of real competition.

Co-operative Universities would be subject to the same (what Justin Cruickshank calls) “neoliberal interventionism” as traditional universities, post-92 universities and for-profit colleges and universities. It is, in a very real sense, a ‘rigged’ market.

Furthermore, while the government tries to invent more and more ingenious ways to create a market utopia, it actually just ends up emulating the real one: universities become huge multinational corporations with existing corporations like Pearson lurking in the shadows in anticipation of the first ‘failing’ universities coming up for sale.

As with VC pay and governance, the rigged market will end with monopoly capitalism: market consolidation and stable prices, neither of which benefit the consumer or any of the ‘stakeholders’ who rely on such corporations for their livelihoods.

I have argued elsewhere for the important – and very exciting – role that activists and trade unions can play in fighting this as yet incomplete and arguably failing project of marketisation.

Trade unions in particular can occupy the democratic-institutional space vacated by increasingly autocratic managers in universities-as-business. They can also rebuild local democracy through broad-based campaigns within local communities that have the potential to transform universities as ‘anchor institutions’ into hubs for the creation of socially-useful knowledge (HE Marketisation, 26 November 2017).

But whatever you do, don’t fall for the myth of the market. It’s all a massive con.