Core Argument: Where has all the money gone?

The School of Economics, Finance and Management is charging higher fees but not delivering a better education. We recognise that the School of Economics, Finance and Management (EFiM) at Bristol University offers a top-class education thanks to the ability and integrity of its academic and administrative staff. We recognise and appreciate the hard work of all who make studying here worthwhile. This is why we are demanding more. Since 2006, revenue per student from tuition fees has increased and we simply ask that the quality of our education be improved accordingly. Moreover, the resources are available; we estimate that top-up fees bring an extra £2 million to EFiM and that the School generates an annual surplus of £2 million – in effect channelling our top-up fees elsewhere. We also emphasise that the increased resources needed to fund our demands will benefit everyone in EFiM, both current and future. All students – whether they pay EU/UK tuition fees or International fees – will benefit from more resources allocated to their education, and staff in EFiM will be empowered to deliver this. This is, therefore, a call for cooperation. Part 1 outlines the justification for top-up fees in 2004, with which we are in agreement. Part 2 outlines the shortcomings of EFiM in implementing the improvements for which it argued top-up fees were necessary. Part 3 comprises notes and responses to anticipated criticisms. Part 4 briefly concludes. Part 1: Justification for tuition fees a) In 2004 Universities experienced a funding shortfall of around £2 billion, according to Universities UKi. b) Charles Clarke proposed to close this gap with approximately £1 billion from tuition fees, (providing Universities with a positive net revenue), and a further £1.1 billion provided by the Government to cover the Widening Access targets such as bursaries and grantsii. c) University revenues were being eroded by inflation. Real funding per student decreased by 36% between 1979 and 1997iii. At the same time teaching salaries were increasing, albeit at less than averageiv. d) University scope for productivity improvements is inherently limitedv, thus the fall of revenue relative to costs necessitated a reduction in the quality of education provided. The increased fixed costs were accommodated by increasing student intakesvi and thereby revenue. This resulted in reduced staff/student ratios and contact hours, and increasing class sizes. All these are indicative of a reduction in the quality of education. e) One of the justifications for top-up fees was to stop and reverse this decline in quality. Increased private contributions by students were considered reasonable given the private returns of a university education. These private top-up fees constitute a substantial net increase in university funding of £950 millionvii. f) It is reasonable for students to expect a corresponding increase in the quality of their education. This argument was supported by Ministersviii, and the Vice-Chancellor of Bristol University, who also explicitly acknowledges that top-up fees result in increased accountability of universities to their studentsix, x, xi, xii. Part 2: EFiM has not delivered on its obligation to improve the quality of education. While we agree with the justifications as presented in 2004, we are concerned that the promised increases in quality have not been forthcoming. We feel contact hours are a critical element of a quality education and in EFiM we are particularly concerned with the quantity and quality of contact hours. These concerns are all the more striking considering the following:

In Economics, total funding per student, including funding from the Higher Education Funding Council for England (HEFCE), has increased 48% since 2006 compared with a 28% increase in subjects like Mathsxiii. EFiM should therefore be providing proportionately more tuition resources.

We estimate that EFiM has an increased annual teaching revenue of between £1.5 and £2 million per

year as a result of top-up fees, based on student numbers and official statistics retrieved through the Freedom of Information Act .xiv

We also have reason to believe that the school of EfiM makes an annual surplus of between £1.5 and

£2 million. We have submitted a Freedom of Information request to clarify this. It therefore seems as if most, if not all, the increased teaching revenue for EFiM is not being used to better our education and is instead used elsewhere by the University. This is not only deeply unfair, but it goes against the University's Obligations in the Student Agreementxv and the justifications for top-up fees above. We therefore consider it reasonable to demand an increase in the quality of our education. These demands are mainly relating to the quantity and quality of contact hours, and are outlined in our proposals. Specific objections: a) Where have we seen an improvement in the quality of our education? We argue that quality of our education has at best remained the same, although we are more inclined to suspect it has fallen. The 2008 National Student Survey shows that there were more decreases than increases in perceived quality in comparison to 2007xvi. Further, the 2008 Survey results by themselves all underperform sector averages; in most cases by a significant marginxvii. These are strong indicators that any efforts undertaken thus far by EFiM to improve the quality of education are at best inadequate. Students are also concerned that these poor results may start to negatively affect the University's rankings. Further, improvements to teaching resources would improve the rankings of the University and the perception of the quality of a degree from EFiM, improving opportunities for graduates. b) Where have we seen an improvement in the quantity and quality of contact hours? We feel contact hours are crucial to a top quality education. It almost goes without saying that, whereas almost all our reading material is available outside the University, what differentiates Bristol University and EFiM is the teaching through contact with leading academics. However, since the introduction of top-up fees, we have not seen a satisfactory increase in the quantity and quality of contact hours. In the case of first year students beginning 2008, EFiM has severely underperformed against its own stated obligations. According to the prospectus "you [first years] will be taught in lectures (around 100 students) and classes (of around 15 students)". First years now have lectures of 380 people and classes of 25.xviii We outline below what we mean by quantity and quality of contact hours. Specific requests are outlined in our Initial Proposals section. Quantity: In second year there are no longer tutorials for core second year units in Macoeconomics and Microeconomics. Where there are tutorials, these have often been bi-weekly whereas in the past there have been weekly tutorials. Quality: There is a big difference between a one hour tutorial in a small group with a senior academic and a one hour exercise lecture or clinic. We understand the benefits of both, but do not consider these to be substitutes. In first year, students refuse to call a class of nearly thirty 'a tutorial', especially when this restricts opportunities for educational contact with the tutor.

Further, the quality of the contact hours includes the work set and the marking. In the case of first and second year tutorials, often large sets of exercises are handed in for only a small number, chosen randomly, to be marked and then returned after some weeks. In the past, exercises have been marked in full and returned weekly and similar courses, especially in the Accounting and Finance units, have had more marked work. c) Peer marking is not a substitute for academic marking. Current initiatives have a bias towards saving resources without re-investing them in teaching. To clarify further, we are aware that departments have already been discussing and trying out initiatives, such as peer marking, which are aimed at improving the quality of students’ education. Although we encourage these initiatives, and acknowledge their advantages, we have two objections to their current execution:

i. Peer marking should not be seen as a substitute for marking by an academic. Given our argument above, EFiM should be providing more contact with academics not less. We consider marking to be part of quality contact with academics and crucial to a top quality education.

ii. There is an unacceptable bias towards proposals which would save resources and these resources do not appear to be reinvested. For example, the reduction of some second year examinations from three hours to two hours resulted in a saving of marking time, yet this does not appear to have benefited teaching. In the case of peer marking, the hours saved should be re-invested in other contact hours.

It cannot be argued that peer marking and such savings add to the quality of our education. If, however, this is the case then EFiM can manage with even fewer resources and the justification for top-up fees paid by students is not met. We feel that alternative and concurrent proposals requiring an increased commitment of resources, which tuition fees make provision for, should also be among the changes being considered and implemented. Implementation should be in consultation with the needs and wishes expressed by students. Since 2006 the University has charged more and delivered less. We demand results today, for current students. Part 3: Anticipated criticisms a) “Quality has not been cut: teaching quality can remain the same with cuts in the amount of teaching and all cuts have been gains in productivity” If quality has remained the same, then the justification for top-up fees has not been met: if quality can remain the same whilst cutting inputs, then we should not have to pay more for the same quality of teaching. The argument put forward was that funding would actually improve teaching quality for those students paying. As it stands then, we have the right to demand that any saved resources be put back into improvements to our education. In the case of peer marking, for instance, the member of staff that would have marked work saves perhaps thirty hours of marking time. Whatever the precise amount, the University has saved resources in this area. These saved hours should be put back into improving quality elsewhere. Blaming a lack of resources is not a valid response.

If the quality of education has remained the same since 2006, why did the University need more resources in 2004 to deliver less teaching in 2006? The main reason must therefore have been to increase the salaries of teachers and put in place new facilities. The argument in favour of top up fees did not limit the fees’ distribution to be solely for changes to these two areas. Further, it is only reasonable that students paying more tuition fees should receive more tuition. It is untenable for the University to claim that the standards of quality since 2006 justify the increase in tuition fees, or that it is doing all it can to meet student expectations. The 2008 NSS results support our

objection that the University is charging more and delivering less. b) “Universities still need more money” Maybe so, but not from students. In the financial year 2007-2008, we have reason to believe the University of Bristol had a surplus of £5.0 millionxix Of this, £1.9 million was surplus from the EFiM. If such surpluses are being made, students who are paying more should demand a share. The Vice-Chancellor is also on record the same year announcing that the University “is in exceptionally good shape financially.”xx If such surpluses are being made, the University is in a situation to meet the demands of today and must answer the case of what it has done with current tuition fees before asking for more in 2009. Crucially, if universities cannot show that top-up fees are benefiting students, then the benefits are spread, and any increase in funding must come from the Government. c) “The Higher Education Bill was about widening participation, not teaching quality” The Government made a separate £1.1bn provision for the separate aim of meeting widening participation targetsxxi. The debate around the Bill acknowledged improvements in educational standards as a central aim. Students’ fees have gone up and we are interested in where this money has gone. d) “Teaching quality has improved in areas other than contact hours” In EFiM this is simply not the case. We accept that money has gone into infrastructure and facilities, particularly building. Even by the most conservative estimates, a £5 million project will carry a negligible cost per student per year – less than £70xxii, still leaving surplus for which EFiM must account. Moreover, many current students - mostly third years - will not see any benefit from this building work.

Crucially, contact hours are fundamental to a good quality education. Therefore, improvements cannot be constrained to the areas of building and teaching salaries if EFiM is to fulfil its obligation to improving the quality of teaching. Part 4: Conclusion. As we have argued, EFiM is charging more and delivering less, and in doing so is not meeting its obligations. We wish to re-iterate that this is call for co-operation from the administration of EFiM and the University. EFiM offers a top-class education, yet needs to do more to ensure that increased tuition fees are met with an increased quality of education. We look forward to productive discussions and to a beneficial outcome for all students and staff. i “Universities UK says that there is a shortfall of £2 billion a year in higher education funding.” Lynne Jones,

Higher Education Bill Second Reading, 27 January 2004. ii “We pay the support, and that is what we should do as a matter of public policy. The universities will still get the £1

billion to £1.4 billion from this package that we originally envisaged.” Alan Johnson MP, Higher Education Bill Second Reading, 27 January 2004

iii This statistic is cited by several MPs, including Clare Short and Alan Howarth. Higher Education Bill Second

Reading, 27 January 2004. iv As highlighted by Alan Howarth MP, academic salaries increased by less than average incomes “academic salaries

all but stood still while average earnings in the United Kingdom rose by almost half. “ In the same passage, Alan Howarth suggests that quality remained the same. Our reasoning disagrees with this (see

note v). “Universities trebled student numbers in 20 years while maintaining standards in teaching; in 20 years, too, funding

per student fell by 40 per cent; research ratings improved while funding failed to keep pace; ... No group of workers has increased its productivity more or been so poorly rewarded.”

Alan Howarth MP, Higher Education Bill Second Reading, 27 January 2004.

v Education is an example of the cost disease. Teaching requires contact with a teacher, thus the scope for increasing

outputs per input of a teacher is limited. See Baumol, W Healthcare, education and the cost disease: A looming crisis for public choice 1993 Public Choice, 77:17-28.

vi “The figures show that during the years of the Tory Government there was considerable progress on the number of

young people going to university. The proportion went up from 12 per cent. of the age group in 1979 to 34 per cent. In 1997.” Clare Short MP, Higher Education Bill Second Reading, 27 January 2004.

vii This statistic is widely cited. We believe it to be from the IFS, see Dearden L, Fitzsimons E, Goodman A, January

2004, An Analysis of Higher Education Reforms Institute for Fiscal Studies viii “......If we are to require some of that funding to come from fees, it should ensure that the effect of the fees does not

cancel out the gain of access.” Dr. Alan Whitehead MP Higher Education Bill Second Reading, 27 January 2004. Furthermore, Charles Clarke introduces the Second Reading by outlining that tuition fees will benefit the economy. To generalise the wide literature; there are two ways this occurs. 1) Increasing productivity. 2) Increasing Research and Development. Increasing productivity will lead to increased wages if we accept workers will be paid their marginal product. Thus, this is the private benefit that students should rightly contribute towards. Productivity is correlated with education, and increasing the quality of education requires increased teaching. Thus, if one argues that universities need more funding for the economy and that students should pay because they benefit as well, then one is implying that teaching quality will have to increase. “Our decision today in the House—the vote of every single Member of Parliament of every party—will determine the future of our universities and so determine the future ability of this country to prosper in the increasingly competitive global economy. In that world economy, the existence of the high-level intellectual and skilled talents of all our people will be decisive. Our success in that economy will determine the economic strength of this country.” Charles Clarke MP, Higher Education Bill Second Reading, 27 January 2004. This point is reiterated: “In their White Paper 'The Future of Higher Education', the Government rightly say 'Our economy is becoming even more knowledge-based and we are increasingly making our living through selling high-value services . . . A comprehensive review of the academic literature suggests there is compelling evidence that education increases productivity.' Michael Jack MP Higher Education Bill Second Reading, 27 January 2004. Finally, when talking about the Opposition's policy, Dr. Alan Whitehead implies tuition fees will provide the opposite: “The only explanation that I can come up with from what we have heard today is that the proposal from the Opposition might return us to the 1990s, with market incentives for institutions to expand: money goes per student, but we do not have the fundamental foundation that is needed to ensure that money for teaching expands, and that the universities have the money in their forward resource accounting to make sure that they can take the numbers that they require and ensure that they are taught and that the degrees are worth it after those students have gone through the university system.” ix “Furthermore, there was a strong argument that those who benefited from Higher Education - the students - should

also pay for some of it.” Professor Eric Thomas, Vice-Chancellor of Bristol University “Calm or Stormy Seas?” Bolland Lecture 16 June 2005

x “The beneficial impacts of increased variable fees are:

• [... ]

• They will make the student more of a client, who will thus will be more demanding and unlikely to accept poor service” “Calm or Stormy Seas?”

Professor Eric Thomas, Vice-Chancellor of Bristol University Bolland Lecture 16 June 2005

xi “As students start to pay more for their education, they are going to demand more, and rightly so. We ought really to start by acknowledging that they are already receiving a quality product at a very good price but we will have to look more closely at the supervision they are being offered, what our libraries are like and at the accommodation they are being given.” (emphasis added) Professor Eric Thomas, Vice-Chancellor of Bristol University Speech to the Standard & Poors UK Universities Conference, June 2003

xii “Nor should we forget that while the increase in undergraduate tuition fees is a vital source of extra cash, it

will only account for about three per cent of our total budget in 2007/08 and that it brings with it fresh obligations to our students.” (emphasis added) Professor Eric Thomas, Vice-Chancellor of Bristol University “A look at the future (and some truths about money)” Address to University Court 12 April 2007

xiii Based on estimates using information from HEFCE using the weightings per subject in the linked Excel file.

Funding per Economics student is taken as £5,854 in 2009, compared with £3,857 in 2006. Funding per Maths student is taken as £6,904 compared with £5,014 in 2006. http://www.hefce.ac.uk/research/funding/QRFunding/2007/mapping.xls

xiv These calculations are available on request. xv The Student Agreement states under the heading “The University's Obligations”: “The University will provide you with the tuition and learning support associated with your programme, subject to

these conditions, with reasonable care and skill.” Although we appreciate the considerable care and skill of EFiM staff, we feel that EFiM is not providing a

'reasonable' level given the increased tuition fees. http://www.bris.ac.uk/secretary/studentrulesregs/agreement.html#uniobligations xvi This table compares the 2007 and 2008 ratings given by students of Economics, Finance, and Accounting courses at Bristol according to each of the National Student Survey’s assessed fields as shown .

Source: National Student Survey 2007/2008

xvii The table below contrasts Bristol students’ assessments of their courses in 2008, with the scores separating the rankings of all the surveyed universities offering these same courses into the bottom 25%, 50%, and 75% respectively that year.

Source: National Student Survey 2008 xviii The Student Agreement states under the heading “The University's Obligations”: “The University will make all reasonable efforts to deliver your programme as described in the University's

prospectus for the appropriate academic year.” In the case of first years, we feel EFiM is not doing enough to meet the promises in the prospectus. http://www.bris.ac.uk/secretary/studentrulesregs/agreement.html#uniobligations xix We are requesting these figures through a Freedom of Information request. xx Professor Eric Thomas, Vice-Chancellor of Bristol University “A look at the future (and some truths about money)”

Address to University Court 12 April 2007 xxi See note ii. xxii These calculations are available on request.