Paul Temple
The digital revolution is changing the world in often unexpected ways, although sometimes widely-predicted changes can take longer to appear than first suggested. “The end of the book” has been predicted for decades now: while UK physical book sales were still running at £1.5bn in 2012, they seem now to be in a slow, long-term decline in the face of e-book sales. The value of UK recorded music sales is also showing steady decline for the same reason – digital competition.
The world of academic journal publishing looks as if it is now about to undergo the same sort of digital shock-treatment. Academics have long grumbled about the handful of profit-making publishers – often, very handsome profits – (Elsevier; Palgrave-Macmillan; SAGE; Springer; Taylor and Francis; Wiley-Blackwell) which dominate the journal market. The Economist recently said that these firms possess “that rare thing in the media industry: a licence to print money”. That’s because they can get their authors and editors to work for nothing, and then sell the finished products back to the universities that mostly employed the authors and editors in the first place.
When journals were entirely printed artefacts, found mainly on the shelves of university libraries, commercial publishers arguably provided expertise in their production, quality control and distribution – although journal publishing had begun as a university-run activity, which over the years had typically been handed over to commercial firms, with their economies of scale. But now the internet seems to be putting the boot on the other foot. The unlovely term “disintermediation” is key here: the internet can cut out the middle-person, making it practicable for (in this case) academic research to be made directly available to anyone who fancies reading it. The editorial and peer-review costs need to remain, but these hidden subsidies to the publishing industry can now be brought in-house by the universities. Copy-editing, typesetting, indexing and so on also still have to be paid for: but again, digital technologies have simplified most of these processes.
Naturally, the big journal publishers have not taken this existential threat to their businesses lying down. They are pushing the model of the “gold” open access, online journal, which will be free for all to read – but funded by the authors paying “article processing charges”, or APCs. It is thought that these will average out at around £1,500 per paper. So the publishers’ income will still come from (mainly) the universities, but in the form of APCs rather than journal subscriptions. Better still, APCs will probably be easier and cheaper for the publishers to collect – no more sales people trudging from university to university to sell subscriptions – and university staff will still be doing the unpaid peer review and editorial work. If you’re a publisher, what’s not to like?
Luckily for universities, fee-paying students and the taxpayer (because most of the journal publishers’ profits ultimately come from these sources) there is an alternative. The “green” open access model publishes papers in online journals after the usual peer review and editorial processes, without APCs. The green journals can be owned and managed in a variety of ways, but are essentially non-commercial. Naturally there are costs involved, but the total costs of the green publishing model will always be much lower than the gold alternative (the title is well-chosen) because the profits of multinational corporations don’t enter into the equation. Instead, green publishing will get research into the public domain quickly and cost-effectively. By embracing green publishing, universities will reclaim one of their historic missions: producing and disseminating knowledge as a public good.

Paul Temple
For-profit higher education has been in the news on both sides of the Atlantic in the past year or so.
In the US, the for-profit sector was eviscerated by the Harkin report (PDF). Senator Harkin, Chairman of the Senate Health, Education, Labor and Pensions Committee, told The New York Times in July that his report had produced “overwhelming documentation of exorbitant tuition [fees], aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation”.
Meanwhile, over here, the Government’s 2011 White Paper, Higher Education – Students at the Heart of the System (PDF), appeared set on encouraging the arrangements shown to produce both appalling value for the American taxpayer, and damage to the students caught up in profit-driven higher education. The White Paper aimed to “make it easier for [new providers of higher education] to attract private investment”. The unstated implication here must be that these new providers will be for-profit organisations, as non-profit institutions are unlikely to be attractive to private investors (as opposed to philanthropists). And for-profit organisations have indeed moved in – BPP, owned by the US-based Apollo group is the best known; what is now the University of Law (formerly the College of Law) has been bought by a private equity firm; and Pearson, “the world’s leading learning company”, is looking for opportunities.
There are two difficulties with for-profit higher education, one about economics and one about effective public administration.
First, the economics. The notion of profit is usually seen as having theoretical benefits by signalling the existence of opportunities for new investment, and for indicating where innovation may generate high returns, both potentially leading to increased wealth for the economy in question. So why should profitability not have a role in providing higher education? (The argument that education is “too important” to be left to the vagaries of the profit motive is not compelling: there seems to be little controversy in most countries about the supply of food being largely determined by judgements of profitability by food producers, distributors and retailers.)
But there are several reasons why profitability is a difficulty in education, and in particular in higher education. One is to do with externalities (or spillover effects): the benefits of education are felt well beyond the parties directly involved in the educational activity. This argument applies most strongly to basic education, as the returns to society of universal literacy and numeracy are huge, but it also applies to higher education, as the benefits of high skills are also widely felt. But if the supply of education depended on the profitability of individual enterprises, it is likely that provision would be less than optimal for society as a whole, as these externalities would not figure in calculations of profitability.
Supply could be increased through public subsidies to students and/or institutions, but, as Senator Harkin showed, this creates a set of perverse incentives that are hard to manage in an educational setting. Running a profit-making enterprise is problematic when your customers are both your raw material and your finished product: as with most other enterprises, you want to maximise the quantities of both.
There are, actually, a large number of private institutions providing higher education in the UK – certainly over 1,000 of them, nobody knows for sure. Most are very small, typically teaching international students, often for non-UK awards. The business model of many of these institutions is puzzling, as they seem to have no distinctive academic or professional expertise.
This brings us to the second difficulty. The new English student fee regime means that UK/EU students at private colleges are able to apply for student loans on courses designated by BIS. The number of students at private colleges receiving taxpayer support more than doubled in 2011/12 over the previous year, involving £100m in loans. So big money is already involved – and the kind of abuses which the Harkin report identified look set to develop here.
In a recent case, Guildhall College, in London (not to be confused with the long-established Guildhall School of Music and Drama), was found to be registering students on courses designated for student support, when in fact the students concerned wished to study on courses that were not so designated. The College benefitted by some £750,000 before designation was withdrawn. It is difficult to see how practices of this kind can be prevented in a systematic way, if there are hundreds of such colleges, each with relatively small numbers of students, in a system which is constantly in flux. The scene is set for bad public administration and worse higher education.

Paul Temple
The Institute recently carried out an evaluation for the Open Society Foundation (OSF) of its scholarship programme, which has brought young people from the Western Balkan countries to study social science subjects in UK universities. Our study involved assessing aspects of university work in these countries – Albania, Bosnia-Herzegovina, Macedonia, Montenegro and Serbia – and making recommendations for future OSF programmes.
These are all small, or very small, countries, which accordingly have small higher education systems. Montenegro, for example, effectively has only one public university; Macedonia has two. By European standards, these countries are very poor, but their universities’ chronic lack of resources will probably be easier to deal with than their fragmented structures, organisational rigidity, intellectual isolation and endemic corruption. The small sizes of these higher education systems also create problems: the difficulty is not numbers of institutions or students as such (some of the universities, in Serbia for example, are actually rather too large), but rather the insularity to which small systems, without pre-existing international traditions, are prone.
As if these countries were not already small enough, ethnic tensions effectively create internal sub-divisions, in Macedonia and especially Bosnia-Herzegovina: here, a country with four and a half million people has, technically, 14 ministries of education. The internal division between the Bosniac/Croat-dominated Federation and the Serb-dominated Republika Srpska prevents any sensible national restructuring plans (and of course much else besides). And even within the Federation, ethnic tensions have led to the creation of two universities, one Croat and one (clearly unviable) Bosniac, in the small city of Mostar. Universities here are being used as symbols to identify a set of political aims and to help implement divisive programmes of identity politics.
Fragmentation is also a characteristic of internal university organisation in the region, stemming from the Yugoslav tradition of strong faculties, and chair systems within them. Despite current attempts in places to integrate faculties in order to create more effective unitary universities, this internal fragmentation persists, making institutional change hard to manage because of multiple and competing sources of authority. Formal institutional mission differentiation is hardly attempted. It is hard to avoid seeing this institutional fragmentation as mirroring the fragmentation found at national and regional levels.
Academic corruption remains a serious issue throughout the region, and obviously undermines any attempts to persuade Western universities to take seriously claims about academic standards there. The still-widespread use of frequent one-to-one oral examinations is one factor which facilitates academic corruption, but simply changing processes (as with the move to written examinations in Serbia, or new quality assurance procedures) is unlikely to eradicate a deep-rooted problem. Changed processes have to go hand-in-hand with a frank recognition of the problem (still mainly absent), followed by efforts at cultural change.
Other Institute colleagues involved in this study were Jane Allemano, Natasha Kersh and Holly Smith.

Paul Temple
The Institute of Education’s MBA in higher education management  marked its tenth anniversary with a conference on the theme “Managing higher education in the post-2012 era”, with papers given by graduates of the programme.
The title reflected the view that the new student tuition fee regime that begins this year marks the biggest single shift in the financial basis of higher education that the UK – and indeed, we think, any other country – has ever known. In future 2012 will be seen as a milestone year in higher education policy, perhaps on a par with 1963, the year of the Robbins Report, which set the seal on the expansion plans of the 1960s and beyond.
What’s the connection between the MBA and the new tuition fees plan? It is that the idea underlying the MBA, as conceived by its founding directors, Michael Shattock and Gareth Williams, is that the policy environment in which universities operate would become increasingly uncertain, and that both policy analysis skills and the ability to manage change effectively would become key management priorities in higher education.
The years since 2002 have amply justified this view, challenging university managements to an even greater extent than envisaged by the programme’s designers. The government helpfully provided the first MBA intake with its 2003 White Paper – proposing for the first time the introduction of variable tuition fees – as a case study in managing change And the pace has hardly slackened since, right up to the latest 2011 White Paper.
As well as tuition fees, and a continuous debate around their principles and practicalities, research funding has also become more unpredictable as a result of the Research Assessment Exercises of 2001 and 2008 – unpredictable not so much in the RAE findings of where academic excellence was to be found, but in the way that these findings were translated by the Funding Council into funding streams for universities: was the aim to support good work wherever it was found, or to build up a limited number of centres of excellence? Policy veered between the two, with destabilising results.
Regional policy has also affected universities, with first the growth of the Regional Development Authorities and their often substantial support for higher education in their regions, to their subsequent abolition. The growing divergence of higher education policies in Scotland and Wales offers another change in what until recently was a common UK higher education landscape.
We hope that the MBA will continue to offer its participants both a historical perspective on why we are where we are, but more importantly, how we should try to manage our universities to try to get to somewhere else – and perhaps, better.