Title: LLLLN: HE IN FE (October 2011) Presentation by: Nick D avy, AoC HE Policy Manager

1. Title: LLLLN: HE IN FE (October 2011) Presentation by: Nick Davy, AoC HE Policy Manager

2. LLLLN: HE IN FE (October 2011) Trends in HE 1: • 17% of Bachelor degree students study part-time • 28% of higher education students below postgraduate level study short cycle courses such as foundation degrees, HNC/D and Diploma in HE • 45% of all higher education students below postgraduate level are aged 21 and over and 32% are aged 25 and over • Nearly 40% of HE students study within 25 miles of their home location • 25% of new OU students enrolments aged between 17 – 25 • 40,000 HE students studying at non-public institutions • 22,000 + UK students study abroad on degree level programmes

3. LLLLN: HE IN FE (October 2011) Trends in HE 2: • Number of students studying outside country of citizenship – (a) 1990 – 1.3 million (b) 2000 – 2.1 (c) 2009 – 3.7 • Destinations: USA – 18% (- 5%); UK (- 1%); Australia (+ 2% ); Germany 7% (- 2%) • 17 countries doubled enrolments since 2000 • Denmark, Sweden, the Netherlands, Finland – many programmes in English; 14 countries some programmes • 14 countries higher tuition fees for overseas students • Type B tertiary education (short cycle/vocational): Australia/New Zealand – approximately 20%; UK – 6% (OECD average: 4%)

4. LLLLN: HE IN FE (October 2011)

5. LLLLN: HE IN FE (October 2011) Characteristics of HE in FE: • Generally older than university students; often vocational, rather than academic, qualifications; usually study around their work and/or family commitments; • Low-participation neighbourhoods, particularly FD students • Higher education ‘cold spots’ - Havering, Blackburn, Blackpool and Peterborough; university focussed on national recruitment - Durham • Areas with historically low HE participation rates – NE England, Essex/Havering • Study on Higher National Diplomas and Foundation Degrees; technician skills. • Niche national courses • Courses related to their particular locality HEFCE analysis 2007-08 Source: Foundation degrees: key statistics 2001-02 to 2009-10, HEFCE April 2010 http://www.dur.ac.uk/spa/statistics/college/4.4domicile/

6. LLLLN: HE IN FE (October 2011) • Browne Review • HE White Paper • Early Repayment • HEFCE Teaching Funding Consultation (TFC) 2012/13 • HEFCE TFC – January 2012 • BIS – Regulatory Framework • BIS – New challenges New chances – Section 8 • BIS Review of Non-prescribed HE • Skills Commission Inquiry into the provision of technician and higher level skills • Review of FDAP – 2012 • BIS comm. research: HE in FE (March 2012); growing P/T HE • Wilson Review – Industry Links • Enterprise • JISC/Information capacity

7. LLLLN: HE IN FE (October 2011) Reforms 1: Predicated: Research – world class; Teaching? • Quickly/Gradually open up HE to increased market forces • But managed/quasi market – Price, Volume • New Entrants – 6 tests – Quality/QAA; Complaints/disputes – OIA; Information/Data– KIS – HESA/SFA; Tuition Fee Cap/Access – OFFA; Student Controls; Financial sustainability. Introduced 2013 • New entrants • Tough entry/lighter monitoring or light entry/tough monitoring • New rules for DAP and University Title • New Awarding bodies – rules for entrance, monitoring

8. LLLLN: HE IN FE (October 2011) Key Issue – opening the market • Core/Margin Bidding – 20,000 places in year 1 – now 9% (2012); 8/16% in Year 2; 8% in year 3; by year 3 – 24%? • 9% now to be taken from all providers not just + £6K • Eligible – charging below £7,500 • Criteria – Price, Quality, Demand • Minimum bid – 25; maximum threshold – 20% new entrants • Demand – track record, NSS, QAA, Local • Win – direct funding • Several HEI changing fees to come under • Core/Margin – AoC: Need for broad based criteria including price, regional spread, low participation areas, and include indirectly funded provision • C/M – lead Institute + partner bids accepted [Provisional time scale: Publish – 17th October; Window – end/November; Decision – January]

9. LLLLN: HE IN FE (October 2011) Reforms2: • AAB students + – 60,000 places • Year 2 – ABB, year 3 – BBB etc? • Opportunities for growth (?) – high ND results + Internal prog. [AAB + and C/M withdrawn: (a) Attract more AAB (b) bid for 20K places] • Income contingent loans – AoC: supportive but too fast, too steep particularly with introduction of loans for L3 study. Impact on Access and WP/Social Mobility • Issue – part time students loans system – now changed: 4+ years after completion • Non-mainstream grants for all providers – JISC, WP – support • Issue – land-based Colleges ‘price group’ • Continuing problems – indirect funding, validation

10. LLLLN: HE IN FE (October 2011) Reforms 3: • Need to clarify roles of BIS, HEFCE, QAA, OFFA and OIA - separately and jointly promote student interests  • HEFCE – need new committee structure ensuring its different roles are separated; conflicts of interest are clear • HEFCE grants - open to any regulated higher education institution • HEFCE Board – needs broadly based membership - include a current or former College Principal. • The self-regulating organisations – representative of whole sector • New test – fit/proper person/organisation • OFT/HEFCE memorandum clear • Financial sustainability – Bond? • Risk Based QA – good practice as well?

11. LLLLN: HE IN FE (October 2011) The New HE Market?: • Price - loosened, but controlled • Entry- yes; Exit – unlikely; Mergers; partnerships • Profit-maximisers? • Competition – mainly, within a differentiated/stratified market (USA); continuing ‘cold spots’? • Information – PI/KIS – capacity issues • Introduction of technology – productivity gains? ________________________ Structures to establish market/transactional Costs? - MSC/VET WBL; HEFCE/HE: Takes Time

12. LLLLN: HE IN FE (October 2011) Interim Report: National Survey – Colleges Intentions to bid for the 20,000 Core/Margin Places starting in 2012. • 36% of Colleges offering HE responded • Responses were received from a good spread of Colleges in terms of HE size and geographical location • 88% indicated they intended to definitely bid • The larger the College the stronger intention, albeit in a range of 75 – 100% • 68% intended to bid for between 21 to 100 places; 21% for over 100 • As with other College-based surveys, HESA categories were problematic, with 20 responses outside these categories • In the HESA categories the four highest subject areas were in order of highest: Business and administrative services, creative arts and design, engineering and computer sciences [More work needed to ascertain a reliable estimate}

13. LLLLN: HE IN FE (October 2011) Continuing Issues 1: • Off Quota continue until new regulatory system introduced in 2013 • Part time loans system to be resolved – employer up front? • Non – prescribed: BIS: Review - Align or separate? • Indirect Funding/validation • New awarding bodies; Degree awarding powers? • CATS? • Articulation – FE/HE loans

14. LLLLN: HE IN FE (October 2011) Continuing Issues 2: • Private/Not-profit enter 2013 • Opportunities C/M in 2012 + • Price/Attractive Package • One College – Professional membership; International visit; Free kit • Part time; Controls from 2013? • Pressures on Private Colleges – new rules overseas students • Partnership – hire/lease facilities? • Niche markets?

15. LLLLN: HE IN FE (October 2011) Continuing Issues 3: • Problems with C/M guidelines: • HEI withdrawing student numbers – 9%, more, all • HEI withdrawing validation services • Short time-scale - validation • FEC – 9% withdrawn • 20% threshold – difficult to make large bid if medium provision • 25 minimum – difficult for some small HE in FE providers • Likely outcome – decrease in HE in FE numbers? • Potential for large providers with direct numbers to grow?

16. Thank you Any Questions?