Katerina Georgiadis ESRC Post-Doctoral Research Fellow Social Policy Department, LSE
The funding of higher education in Scotland: implications of further devolution and/or independence...
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Transcript of The funding of higher education in Scotland: implications of further devolution and/or independence...
1
The funding of higher education in Scotland: implications of further devolution and/or independence
Professor David BellESRC Research FellowUniversity of Stirling
2
INTRODUCTION
3
Constitutional Options for Scotland• Status Quo
• Devo +
• Devo More
• Full Fiscal Autonomy
• Independence
4
The Status Quo - Scottish Budget 2013-14
Scottish Further and Higher Education Funding Council
2012-13 Budget
£m
2013-14 Draft
Budget £m
2014-15 Plans
£m
Scottish Funding Council FE Programme 506.9 511.7 470.7Scottish Funding Council HE Programme 1,002.2 1,041.6 1,061.8Scottish Funding Council FE/HE Capital 60.7 45.9 56.4Scottish Funding Council Administration 7.9 7.9 7.9Total Level 2 1,577.7 1,607.1 1,596.8of which:
DEL Resource 1,517.0 1,561.2 1,540.4DEL Capital 60.7 45.9 56.4
SG Spending Limits — Cash Terms 2010-11£m
2011-12£m
2012-13£m
2013-14£m
2014-15£m
Revenue DEL 27,259 26,270 25,896 25,429 24,961Capital DEL 3,462 2,837 2,707 2,319 2,320Total 30,721 29,107 28,603 27,748 27,281Real-Terms Change – year on year -5.3% -1.7% -3.0% -1.7%Real-Terms Change – cumulative -5.3% -6.9% -9.7% -11.2%
5
The Status Quo - Scottish Budget 2013-14Higher Education Student Support
Level 3
2012-13 Budget
£m
2013-14 Draft
Budget £m
2014-15 Plans
£mDELStudent Support and Tuition Fee Payments 325.9 302.4 307.0Student Loan Company Administration Costs 5.0 5.0 5.0Student Loan Interest Subsidy to Bank 4.5 4.5 4.5Cost of Providing Student Loans (RAB Charge) (Non-Cash) 88.4 134.0 181.6Student Awards Agency for Scotland Operating Costs 8.4 8.7 8.7AMENet Student Loans Advanced 241.3 408.3 468.3Capitalised Interest (47.0) (50.0) (52.0)Student Loans Fair Value Adjustment (69.0) (69.0) (69.0)Student Loan Sale Subsidy Impairment Adjustments 0.5 0.5 0.5Total Level 2 558.0 744.4 854.6of which:
DEL Resource 431.8 454.2 506.4DEL Capital 0.4 0.4 0.4AME 125.8 289.8 347.8
6
Alternatives to independence
• Devo plus and devo more– No obvious implications for HE sector relative to status quo.
• Fiscal autonomy – research councils part of “shared services”?
“A payment from Edinburgh to London would be required to cover common UK public goods and services (i.e. “shared services”). The range of services included in this basket of “shared services”, how they would be paid for, and the authority the Scottish Parliament would have over such policies, would be subject to negotiation at the time of any revised settlement” (Fiscal Autonomy in Scotland, Scottish Government 2009)
Would the research councils form part of these shared services?
7
Independence and Higher Education• Key questions for Scottish Government
– Would an independent Scotland want to increase/decrease level of support for HE
– Could it afford increased support?
• Existing structures and relationships – Student demography – stocks and flows– University funding
• The tuition fee issue– A proposed solution
8
DESIRABILITY AND AFFORDABILITY OF POST-INDEPENDENCE HE SUPPORT
9
Graduates make up an increasing share of the Scottish workforce
20012002
20032004
20052006
20072008
20092010
20112012
0.00
0.50
1.00
1.50
2.00
2.50
GraduateNon-graduate
Num
ber o
f em
ploy
ees
(mill
ions
)
10
Graduate premium declining slightly
20012002
20032004
20052006
20072008
20092010
20112012
40%
50%
60%
70%
80%
90%
100%
rUKScotland
Grad
uate
Pre
miu
m (%
)
Graduate premium = Graduate wage/non-graduate wage – 1Source: Labour Force Survey
11
Spending on HE in UK low, but effective
Iceland United Kingdom
Norway Ireland Sweden Denmark Finland Korea United States
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Spen
ding
on
HE a
s Sha
re o
f GDP
29 of the world top 200 universities in the UK
12
Scottish HE Institutions 2012 – Significant Income Generation
Funding C
ouncil gr
ants
Tuition fe
es
Researc
h gran
ts an
d contra
cts
Other inco
me
Endowmen
t and in
vestm
ent in
come
£0m£100m£200m£300m£400m£500m£600m£700m£800m£900m
£1,000m
13
Scottish Growth Sectors Have Strong Links to HE• Oil and Gas• Food and Drink• Technology and Engineering• Renewable Energy• Life Sciences• Tourism• Creative Industries• Financial and Business Services• Chemical Sciences• Construction• Forest and Timber Technologies• Textiles
Unlikely to change immediately post-independence
14
HE as an export earner in an independent Scotland?• Issues
– Migration/visa policy• Implications for border arrangements?
– Co-operative/competitive outcomes among institutions– Technological challenges– Product differentiation
• What makes a Scottish HE course better?
– Policies to attract best scholars• Salaries, working conditions etc
15
STUDENT DEMOGRAPHICS
16
Potential student numbers in Scotland static, growing in England
18 16 14 12 10 8 6 4 2 060
70
80
90
100
110
120
ScotlandWalesNIEngland
Current Age
Inde
x 20
13 =
100
17
Scottish Higher Education Initial Participation Rate (HEIPR) static
2006-07
2007-08
2008-09
2009-10
2010-11
0%
10%
20%
30%
40%
50%
60%
Other HEHNC/HNDFirst Degree
Cum
ulati
ve H
EIPR
18
Share of Students studying in HEIs in the UK by domicile and country of institution: 2009-10
Scotland England Wales Northern Ireland0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
72.4%84.5%
58.0%
92.1%
12.6%
2.6%
25.5%
2.4%17.9% 17.3% 18.2%
11.5%
International students
Other Uk students
Home students
Country of InstitutionPe
rce
nta
ge
sh
are
of s
tud
en
t po
pu
latio
n in
ea
ch c
ou
ntr
y (%
)
19
RUK students share varies by institution
Bell CollegeThe University of West of Scotland
UHI Millennium InstituteScottish Agricultural College
The Rober Gordon UniversityThe University of Strathclyde
Glasgow CaledonianEdinburgh Napier
University of AbertayThe Univerisity of Dundee
The University of StirlingThe University of Glasgow
Queen Margaret UniversityThe University of Aberdeen
Heriot-Watt UniversityThe Royal Scottish Academy of Music
Edinburgh College of ArtGlasgow School of Art
The University of EdinburghThe University of St Andrews
0% 10% 20% 30% 40% 50% 60%
Proportion of RUK Students in Undergraduate Intake
These data are calculated from HESA microdata and provided by Marta Odendal
20
Significant post-graduation cross-border flows
0%20%40%60%80%
100%
First Career Destination of Students Entering University 2003-2006
First Career Destination WorldFirst Career Destination EUFirst Career Destination RUKFirst Career Destination Scot-land
These data are calculated from HESA microdata and provided by Marta Odendal
21
More rUK students come to Scotland
2003 2004 2005 20060.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Ratio of student flow rUK-> Scotland to Scot-land -> rUK
These data are calculated from HESA microdata and provided by Marta Odendal
22
FUNDING
23
Spending relative to population on HE is high in Scotland
England Wales Northern Ireland
Scotland0%
20%
40%
60%
80%
100%
120%
140%
Public SpendingHigher Education
24
Income by Institution 2011-12
Royal Conservatoire of Scotland
Glasgow School of Art
University of Abertay Dundee
Queen Margaret University, Edinburgh
SRUC
University of the Highlands and Islands
The Robert Gordon University
The University of the West of Scotland
The University of Stirling
Edinburgh Napier University
Glasgow Caledonian University
Heriot-Watt University
The University of St Andrews
The University of Aberdeen
The University of Dundee
The University of Strathclyde
The University of Glasgow
The University of Edinburgh
£m £100m £200m £300m £400m £500m £600m £700m £800m
25
The Funding Status Quo• No tuition fees charged for higher education in
Scotland• Fees of up to £9000 per annum payable in rest of
UK. Those charging fees above £6,000 have to allocate some funding to widening access initiatives.
• But according to the NUS, even with tuition fees in England, “Scotland has the worst record on widening access in the whole of the UK”
26
Income from tuition fees and education contracts by country of HE institution 2011/12
England
Wales
Scotland
Northern Ireland
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Full-time undergraduate Full-time postgraduatePart-time undergraduatePart-time postgraduateNon-EU domicile students
27
SFC support varies by institutional size and makeup
Royal S
cotti
sh Aca
demy o
f Music
and Drama
Edinburgh
College
of Art
(*)
Glasgow Sc
hool of A
rt
Queen M
argaret
Univers
ity, E
dinburgh
Abertay
Dundee, U
niversi
ty of
Highlan
ds and Is
lands,
University
of the (
**)
Stirlin
g, Unive
rsity
of
Heriot-W
att U
niversi
ty
Robert Gord
on Unive
rsity
St Andrew
s, Unive
rsity
of
Edinburgh
Napier
Unive
rsity
Wes
t of S
cotla
nd, Unive
rsity
of the
Glasgow Cale
donian U
niversity
Dundee, U
niversity
of
Aberdeen
, Unive
rsity
of
Strath
clyde,
Universi
ty of
Glasgow, U
niversi
ty of
Edinburgh
, Unive
rsity of
(*)£0
£20,000,000
£40,000,000
£60,000,000
£80,000,000
£100,000,000
£120,000,000
£140,000,000
£160,000,000
ResearchPostgraduateGrantResearchExcellenceGrantTeachingGrant
SFC
Gra
nt V
alue
28
Non-Scottish domiciled students in higher education in Scottish HEIs and colleges by domicile: 2000-01 to 2009-10
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
0
5,000
10,000
15,000
20,000
25,000
30,000
35,0002
5,8
45
26
,73
0
26
,87
0
26
,23
5
25
,95
5
26
,70
0
27
,27
0
28
,29
0
28
,52
0
29
,83
0
7,8
50
7,9
85
8,3
70
9,1
95
9,8
70
10
,87
5
12
,07
0
12
,67
0
13
,85
0
16
,07
5
10
,83
0
12
,75
0
15
,37
0
16
,91
5
18
,23
0
19
,47
5 23
,08
5
22
,44
5
25
,15
5
25
,99
5
Rest of UK
EU
Non-EU
Academic Year
No
n-S
cotti
sh d
om
icile
d s
tud
en
ts
29
Increased flows from rUK during “noughties” – fee effect?
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
-30%
-20%
-10%
0%
10%
20%
30%
-0.1%
22.1%
22.9%
-19.0%
% Change in student numbers in Scottish HEIs and colleges from UK countries since 2000-01
Scotland
England
Wales
Northern Ireland
Academic Year
% C
ha
ng
e s
ince
20
00
-01
The zero line represents no change since 2000-01.
30
Scottish Domiciled Students in English HE Institutions
1999-00
2000-01
2001-02
2002-03
2003-04
2005-06
2006-07
2007-08
2008-09
2009-10
0
2000
4000
6000
8000
10000
12000
14000
Other HEUndergraduatePostgraduate
31
POST-INDEPENDENCE -SOLVING THE TUITION FEE ISSUE
32
Post-independence – must treat rUK students as EU• EU citizens are automatically entitled to study in other EU member
states: they should not be paying higher tuition fees and they should be able to receive a residence permit (in order to obtain financial sustain as any other national student) – after 5 years
• Hence, substantial increase in inflows post-independence from rUK?
• Studying in Scotland would not be free – living costs incurred
• Recent NUS estimates of living costs = £12,056 per annum (£4,834 for rent, £1,956 for food, £316 for household goods, £42 for insurance, £2,074 for personal items, £1,524 for travel and £1,310 for leisure).
33
Floodgates?• Are living costs higher/lower in Scotland than elsewhere?
• Depends partly on place of domicile
• Paying no fees would reduce costs from £21,000 to £12,000 per annum – 42 per cent (31 per cent if comparing 4year with 3 year course)
• How responsive is student demand to changes in fees?
• Recent estimates from Germany – the imposition of any fees reduces enrollment by 2.7 per cent (Hubner 2012)
34
Floodgates?• Suppose 1 per cent of qualified rUK students
seeking to enter a full-time undergraduate course respond to lower course costs in Scotland by applying to Scottish institution.
• Increase in rUK applications = 3,900
• Equivalent to 12 per cent of Scottish annual intake.
35
A Welsh Solution? • Allow universities to charge (conditional) fees• Use conditionality to support initiatives such as
widening access/STEM etc• Offer Scottish tuition fee grants and loans to all
Scottish domiciled students• Could be universal or means-tested• Means supporting the approximately £12,000
Scottish domiciled students studying in rUK – approx. cost = £120m
36
It won’t work!!!
• EU students must be offered the same fee support and grants as home students.
• The only cash they can’t access are maintenance grants which can be offered to home students only.
• Spillover effects of large neighbour applying marginal cost pricing to merit goods when borders are porous. No obvious solution for small country wishing to subsidise these goods.
37
References• Hübner, M. (2012). Do tuition fees affect enrollment behavior? Evidence from a
“natural experiment” in Germany. Economics of Education Review.
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