The Conservative Governments’ Record on Higher Education: Policy, Spending and Outcomes, May 2015 to pre-COVID 2020

Abigail McKnight and Polina Obolenskaya

Published 27 April 2023

In this paper we evaluate the distributional impact of higher education policy in the period since the Conservative government took office in 2015 up until the eve of the Covid-19 pandemic in early 2020. We do this by following the common framework adopted by research papers in the Social Policies and Distributional Outcomes in a Divided Britain (SPDO) research programme. Higher education is a devolved matter, so to assess the UK government’s record the analysis mainly focuses on England with comparisons made between UK nations. Key policy changes in England include the removal of the cap on student numbers, changes to HE architecture including the new Office for Students (OfS) and UK Research and Innovation, the introduction of a teaching quality framework and a simplified single route into the sector for new providers. Annual government spending on HE in England, in real terms, remained stable at around £11 billion with the vast majority spent on subsidising student loans. The growing use of unconditional offers is causing concerns with their link to poorer A-level performance, higher rates of drop-out, greater use by lower tariff universities and among applicants from less advantaged areas. More young people attend university than in the past and there is some evidence of a slight narrowing in the socio-economic gap in England. However, inequalities remain including a wide gender gap in participation and ethnic inequalities in degree performance. On average, graduates continue to enjoy an advantage in the labour market. However, beneath average rates of return lie considerable inequalities and it is estimated that a significant share of students would have been financially better-off had they not attended university. While demand stays high, there is no disincentive for providers to offer low value courses as the cost of education for students with low lifetime earnings is borne by tax-payers. Although recent OfS regulatory changes and threats to withhold student loan income to providers not meeting minimum acceptable student outcomes, has the potential to change incentives. The sustainable financing of higher education in England is once again emerging as a major issue. The nominal value of tuition fees is unchanged since 2016/17 leading to a fall in real income per student from this source, and this will inevitably impact on education quality and student experience. The Government did not publish a full response to the most recent review (the Augar Review) until spring 2022, some four years after it was set-up. The review and recommendations already seem a bit dated.