British Higher Education's Market Economy

Jul 19, 2011

Britain's higher education system has seen dramatic changes in policy since the coalition government took office last year. Funding cuts and increased tuition costs have the mostly publicly-financed higher education system moving in a market-driven direction. As an indication of this change in direction, last month the government released a series of controversial proposed reforms.

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Leading Up to Big Changes in Britain's Higher Education

With drastic public financing cuts from the new government and the increasing inability of universities to meet demand, changes in Britain's higher education system have been fast and furious. In July 2010, Britain's universities minister, David Willetts, gave the first for-profit school title of 'university college' (similar to the American community college). The title was granted to BPP College of Professional Studies, which is owned by the Apollo Group, the parent company of America's for-profit University of Phoenix.

Then in December, for the first time in 12 years, lawmakers approved sweeping financial changes in higher education, sparking violent student protests. These changes included budget cuts totaling $877 million and increased tuition costs. The bill, which goes into effect in 2012, allows universities to increase their tuition cap up to £9,000, more than $12,000; the current limit is £3,350, approximately $5,000.

The bill does requires higher-education institutions that plan to charge more than £6,000 to submit plans to the Office of Fair Access about how the school will ensure accessibility for disadvantaged students. However, when the deadline for such plans arrived in April, the list of both elite and less selective universities was in excess of initial government expectations. The Guardian newspaper estimated that close to three-quarters of English universities and university colleges were requesting the £9,000 cap, much to the frustration of the public, teachers and students.

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New Proposals and New Criticisms

This June, the British government released a series of proposals in the 'Students at the Heart of the System' white paper. As part of a broader government agenda aimed at giving more power to consumers, the white paper outlines several controversial proposals.

Competition for Top Students

Currently, publicly-funded British universities have a limited number of domestic students they can enroll without penalty. The white paper, in an effort to create greater competition for more selective courses, would allow schools to compete freely for 65,000 top-scoring students whose enrollment would not count towards the quota cap. Critics argue that competition resulting from this would be minimal for leading institutions and would negatively impact second-tier universities that may not be able to attract the same amount of students.

Opportunities for Private Universities

In an attempt to expand the range of higher-education providers, the white paper proposes taking 20,000 student slots currently spread out across the public university system and awarding them to higher-education providers, further education colleges and other nontraditional providers who offer a good value for education with an average charge of £7,500 or less. Opponents of this proposal say that it will only take students away from public universities and hand them over to private and for-profit providers. There is concern that this may diminish the quality of education. Additionally, these 20,000 students along with the 65,000 top-achieving students totals 85,000 students that public, private and for-profit schools must compete for, nearly a quarter of all incoming graduates.

Learn more about the privatization trend in higher education across the globe.

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