This post continues where Part 1 left off.

The real goal of the green paper is to accelerate the formation of a fully functioning market in HE – as has already been discussed elsewhere by the brilliant Andrew McGettigan. The opening move was HEFCE’s QA consultation earlier this year which, as I explained on TDOT, was an attempt to dilute quality standards to make it easier for ‘alternative’ (i.e. private) providers to enter the market. Whereas HEFCE hid behind technocratic jargon, however, the green paper openly announces the government’s ‘clear priority’ to ‘widen the range’ of HE providers (p.50). ‘Our aspiration is to remove all unnecessary barriers to entry’ and create a ‘level playing field’ (p.42).

This would involve several changes, some of them requiring primary legislation, others (disturbingly) not. These include: quicker access to state-backed student loans, and the lifting of the current cap on student numbers by 20-30%; a fast-track to the acquisition of degree-awarding powers, with a radical dilution of the necessary ‘track record’ that must be demonstrated, both in terms of scope (to include ‘overseas track record’ and the experience of ‘individuals’ associated with the company) and length (from 4 years to 2); rapid access to the title of ‘university’, regardless of an institution’s size or location; and granting validation rights to the new Office for Students, or even ‘non-teaching bodies’ (i.e. companies) to enable firms to operate without their provision being quality assured by any established university.

Accelerating market entry (green paper, p.44)

While ‘alternative’ providers are thereby eased into the market, established (or perhaps future failing alternative) providers are to be eased out. The government notes that, with HE marketisation comes the ‘increased likelihood that a provider may need to exit’ the market due to bankruptcy, regulatory intervention, or its own choice (pp. 54-55). The green paper therefore proposes forcing institutions to establish contingency plans for their own market ‘exit’.  These solely concern provisions for students to continue their studies elsewhere, coupled with refunds for the disappointed ‘customers’ if they reject the alternative. Although the green paper flatly declares that ‘It will not be in the taxpayers’ interest to offer ongoing financial support… to sustain institutions in difficulty’ (p.54), it does envisage certain situations where temporary assistance may be offered: to maintain the provision of key subjects (STEM), or HE in general, in certain locales, and to safeguard ‘student choice’ (pp.55-56).

Obviously, the intention of these changes are to stimulate competition between universities. Established universities will be forced to compete either on price – thereby driving down staff salaries and cutting corners on service provision – or on quality – maintaining a high-price but high quality provision that private providers cannot realistically rival. The latter strategy is only viable for England’s elite universities. The rest will be deliberately placed at risk of decline and collapse when confronted by private providers that will cherry-pick cheap-to-provide, high return courses and seize market share. The green paper says of the contingency plan requirements, apparently without irony: ‘The strong focus for Government should be on protecting the interests of the student, and minimising the disruption to their studies, when through no fault of their own the provider is unable to fully deliver their course of study’ (p.54). The government apparently does not consider the alternative way to protect students from this unfortunate event by declining to put their universities’ very existence under threat. The green paper simply intones in faithful neoliberal jargon: ‘Widening the range of high quality higher education providers stimulates competition and innovation, increases choice for students, and can help to deliver better value for money’ (p.42). No data or evidence is provided for this assertion. Apparently it is just self-obvious.

Is it? What exactly is the record of private providers so far? As the green paper notes, in 2014/15 there were over 100 ‘alternative’ providers operating with around 60,000 students, a near-tenfold increase from 2010/11 (p.54). As McGettigan states, this means that these providers already receive about 10% of state-backed funds, around £700m, so it is not clear why boosting this further is a ‘clear priority’. The National Audit Office has declared that the sudden influx of private providers left the student loan system open to rampant abuse, with up to £50m going to the 20% of students who subsequently dropped out of subpar HND/HNC programmes – five times the national drop-out rate. Bilking the student loans system – entirely predictable based on US practices – was perhaps a very ‘innovative’ way to make money, but hardly the sort of ‘innovation’ that is desirable – and certainly not efficiency-boosting or money-saving, let alone good for students. Indeed, the sudden explosion in private providers left a £80m deficit in the budget of the Department of Business, Innovation and Skills, which prompted proposed cuts of £45m from established HE budgets, including £25m from the ‘Access to Learning’ hardship fund – so much for ‘social mobility’! BIS officials were left bemoaning their late realisation of ‘the size the blank cheque we’ve written to private providers’. As McGettigan also notes, the regulatory barriers now being attacked in the green paper are precisely those that the government had to hurriedly impose in response to these fiascos. Once bitten, twice shy? Not this bunch. We can look forward to future chaos, and to serious reputational damage to UK HE as a whole.

The government’s eagerness to cultivate market access for private providers, despite all the evidence as to the risks and the complete lack of any compelling evidence on the supposed benefits, suggests that this is where their true strategic commitments really lie. Bob Jessop’s insightful account of state responses to capitalist crisis shows that state managers always try – through trial and error, and not always successfully – to re-create the conditions necessary for capital accumulation in order to restore economic growth. In the immediate postwar decades, this was achieved through Keynesian economic management and a Fordist social compact: social investment and a social wage to expand consumption. Since the 1970s, these strategies have been abandoned in favour of efforts to exploit crises to open up new areas for capital accumulation that were previously off-limits. This is obviously what is occurring in Britain today. The government has really no other ideas about how to restore the conditions for capitalist expansion. Austerity actually causes economic contraction. Quantitative easing mainly fuels speculation and short-term consumption. Beyond that, the government has no industrial policy, no coherent programme of public investment in infrastructure, housing or future industries to get the economy going. Their main strategy to foster capital accumulation is to expand opportunities in areas previously dominated by public bodies: primarily universities and the National Health Service. This is not about ‘efficiency’, or ‘innovation’, or ‘competition’; it is about expanding capital accumulation, because this is the sine qua non of growth under capitalism. Mostly it involves the accelerated transfer of public wealth into private hands, which is one reason why the proportion of state expenditure to GDP tends to rise under actually-existing neoliberalism (this does not disprove neoliberalism’s existence, as one professor of political economy recently tried to persuade our departmental seminar). That this process is repeatedly shown to have socially disastrous consequences is apparently irrelevant.