SUBMISSION TO THE REVIEW OF HIGHER EDUCATION FINANCING AND POLICY
by the
ACADEMY OF THE SOCIAL SCIENCES IN AUSTRALIA (ASSA)
9 May 1997
In this submission the Academy of the Social Sciences in Australia (ASSA) addresses the five key themes identified by the Review of Higher Education Financing and Policy.
Viz
Theme 1 The Role of Higher Education in
Australia’s Society and Economy
Theme 2 Factors Affecting the Demand for and
Provision of Higher Education over the next 10/20 years
Theme 3 Regulatory and Administrative Framework
for Higher Education
Theme 4 Financing Higher Education Teaching and
Research Training
Theme 5 Funding of Higher Education Research
ASSA expresses its willingness to discuss the submission with the Committee.
THEME 1 The Role of Higher Education in Australia's Society and Economy
1.1 In this submission, the higher education sector is defined as consisting of those institutions of formal education that presuppose, as a minimum requirement, the satisfactory completion of the final years of secondary schooling (or equivalent). Since 1988, there has been an increasing tendency to identify Australia's higher education sector with 'universities'. But what should constitute higher education, and what distinctive features, if any, should distinguish universities from other kinds of institutions within higher education, are basic issues that need to be addressed as a central element in any consideration of the role of higher education in Australia's society and economy.
1.2 A crucial basis for distinguishing different kinds of higher education institutions is the distinction between theoretical and practical knowledge and whether the former is studied mainly for the sake of deepening students' understanding of a systematic field of inquiry along with the objects that form its content or whether it is treated selectively in relation to a range of practical knowledge and skills.
1.3 When these distinctions are drawn, it becomes clear that 'higher education' should refer not only to universities, but to liberal arts colleges, institutes of technology, colleges of vocational or professional education and specialised institutes of research. At institutes of technology, the emphasis is on the study and development of theoretical knowledge for its application to techniques across the broad range of human activities; and colleges of vocational education, whether focusing on training for a single occupation or a range of related occupations, should also provide some components of liberal (or general) education.
1.4 The learned Academies have a special interest in the nature and role of universities. Although individual universities have always differed in details and been subject to many changes in their history, this Academy believes that there are some broad features that universities should possess, and on the basis of which they may be distinguished from other institutions of higher education:
1.5 A university is not exclusively a research institute. Its research role should be closely related to that of teaching at undergraduate or graduate levels or both. And its organisation should aim at maximising the interaction of teaching and research across a broad range of disciplines. Whilst it should not be expected that all academics engage in innovative research, the teaching of all academics should be informed by a scholarly knowledge of the significant research developments in their field.
1.6 In recent years, there has been a regrettable blurring of the distinctive role of universities in Australia. In particular, governments, with the acquiescence and even the endorsement of many senior academic managers, have given primacy to the role of universities as instruments of 'the economy'. As a major consequence, most universities have initiated an increasing number of vocational programs that do not meet the criteria specified above.
1.7 That trend has been associated with the widespread adoption of a simplistic belief in 'generic competences'. This is a doctrine which distorts the relationship between content and process, placing the whole weight of assessment on the performance of skills and encouraging a mistaken view that there is a growing 'convergence' of general and vocational education. The process of 'problem solving', for example, varies greatly depending on the knowledge that is relevant to the particular kind of problem. Without such knowledge, problems would not only fail to be resolved: they might well go unnoticed or, at least, be inadequately diagnosed.
1.8 It is true that, for a substantial majority of students, the prime motivation for university study is the desire to get the qualifications for entry to a well-paid, high-status job. But this does not settle what studies should be required of them as university students, nor the range of occupations for which a university is the suitable context for the related vocational education and training.
1.9 The growing practice in universities of devising courses for virtually any vocation is sometimes defended on grounds of anti-elitism. But if universities do have some distinguishing criteria to be met, it is commonsense, not elitism, to ask whether or not they are the most appropriate vehicle for the effective preparation of those seeking to enter a particular occupation.
1.10 Even when the 'convergence' thesis does not lead to the displacement of general studies, it tends to interpret them in a strictly instrumental way. If components of literature and history, for example, are included in the program, the content is selected for its perceived instrumental relevance. In summary, the primacy now being given to the role of universities as instruments of 'the economy' can distort their distinctive character and seriously weaken their more fundamental role as contributors to the broad cultural, social, political, and moral dimensions of human life.
1.11 On both theoretical and practical grounds it is desirable that universities themselves, while necessarily fulfilling the distinctive criteria which have been identified, should also exhibit, as a group, a range of diverse features. In the United States, for example, the Carnegie classification of universities identifies three main types:
1.12 In Australia's case, this Academy believes that diversity must be fostered not only at the national level, but to the greatest extent possible in each of our major regions. As most of the country's population lives in several large cities, each of which is a considerable distance from the nearest of the others, there is need for considerably more collaboration among universities in the same city or region. Unfortunately, competition between universities, which is promoted by many aspects of current arrangements, is seriously at odds with this kind of cooperative approach. An important benefit of such collaboration would be to facilitate the provision of important courses and subjects for which there is a relatively small demand, by ensuring that such courses/subjects are provided by at least one university in each major centre.
1.13 The Academy also sees the need for closer collaboration between universities in the provision of library facilities for research and study. We support the Council of Australian University Libraries (CAUL) in advocating and promoting Australia's 'distributed national collection' (DNC) as a 'precious foundation for Australia's entire community, supporting scholarship, business and community well-being'. Through participation in the National Scholarly Communications Forum (NSCF) and in other ways, the Academy will seek to ensure that Australia's university and research library network is recognised as being more than the sum of its part.
THEME 2 Factors Affecting the Demand for and Provision of Higher Education over the next 10/20 years
2.1 Adequate consideration of this theme invites detailed discussion of economic and demographic issues which we do not venture here, although we indicate our willingness to provide expert advice to the committee in these areas. In its written submission, this Academy wishes to emphasise educational matters relating principally to likely changes in higher education itself: viz.
2.2 Confronted with the prospect of changes of this magnitude, the prudent strategy is to ensure that this sector encompasses the kind of diversity referred to in relation to Theme 1 above, and that there is a substantial increase in the level of voluntary collaboration within and among the types of institutions that make up higher education and the whole of tertiary education. While the role of institutes of technology and specialised applied research institutes is likely to grow, they will need to draw increasingly on the development of pure research, a characterising work of universities.
2.3 Further, at a time of change and uncertainty, a highly appropriate preparation for graduates is a substantial program of liberal education. The neglect of a common range of general studies for all undergraduates is one of the serious deficiencies of our universities. Even when efforts are made to ensure that students who are enrolled in a vocational program undertake some liberal studies, the pressure of specific vocational relevance tends to undermine the basic purpose of general studies.
2.4 It would be a notable advance if all undergraduates were required to spend their first year in a liberal education program undisturbed by narrow utilitarian objectives. It would build on what can reasonably be expected by the end of Year 12 ( or equivalent). Among its components might be exposure to the cultural traditions of this and other societies, along with some comparative study in each area; history of the key ideas that shape the knowledge of our particular sociopolitical order (including its economy) and the physical world; basic elements of logic, epistemology and ethics; and close attention to the skills of speaking and writing.
2.5 This Academy endorses the view recently advanced in an OECD report that a full scale discussion and debate about the nature of the undergraduate curriculum is long overdue in Australia, and notes the proposed seminar devoted to this topic being sponsored in July 1997 by the National Academies Forum and the Higher Education Council.
THEME 3 The Regulatory and Administrative Framework for Higher Education
3.1 Under current arrangements, recurrent grants to universities are determined on the basis of educational profiles agreed with DEETYA. These profiles cover the number of DEETYA supported students, their distribution between fields of study and the proportion of undergraduates. Reporting requirements are such that DEETYA soon knows whether the target numbers of students and undergraduates have been met and whether there has been any shift of enrolment from higher-per-student grant fields of study to low-per-student grant fields of study and is then able to make financial adjustments. The relocation of growth places and the use of capital development funds also enables the Minister and DEETYA to influence the regional distribution of capacity.
3.2 One of the main purposes of the educational profiles as agreements between the Commonwealth and universities in the Unified National System (UNS) was to remove State authorities from the field. Now that the latter objective has been achieved, it would appear to be a simple matter to return to a policy which kept the Government at arms length from the universities but recent developments have left a mixed legacy. In particular, the Academy is concerned that, with the transfer of responsibility for policy advice and program administration from the Commonwealth Tertiary Education Commission (CTEC) to a government department, the Commonwealth Minister and the Cabinet have become directly involved in resource allocation and program administration decisions for individual institutions .
3.3 The Quality Assurance program was not well reviewed or conducted - the emphasis of the Committee was on formal processes designed to ensure quality rather than on the achievement of quality and on the various concepts of quality. The Committee did not inquire into the examining standards of old and new universities, though the rapid replacement of diploma programs by degree programs and the very low correlation between apparent standards of entry and pure rates pointed to the need for such an inquiry. Universities might be pressed to appoint external examiners for undergraduate degrees and take up with the AVCC a proposal to have groups of universities to appoint experienced examiners to review examination standards in simitar subjects, report on a confidential basis to the universities in the group and monitor responses over a three year period. It is very important for universities that trust in their standards be restored. The need to give attention to relative standards between universities and over time wilt increase in importance if pass rates are treated as "objective indicators" to guide the allocation of government grants.
3.4 As institutions established by their own Acts of Parliament and legally responsible for their own affairs, Australian universities should be autonomous bodies. But with the abolition in 1987 of CTEC - the buffer body which provided a mechanism whereby the Government and universities could interact without compromising university autonomy - universities have been drawn into direct dealings with Ministers and departmental officials, with the concomitant risk that decisions on the funding of growth places and the establishment of new campuses may be influenced by short-run budgetary and electoral cycles at the expense of longer-run educational priorities.
3.5 Autonomy of universities does not imply lack of responsiveness to the community's interest in higher education and research. Income from tuition fees and competition for students would ensure a degree of responsiveness to student views on the quality of teaching and degree programs and to employers' views on employability. There is also responsiveness to the views of professional bodies which decide on the professional recognition of graduates. But the importance of autonomy is that staff in universities know how the activities of their graduates in employment have changed in response to change in technology and international trade, and know how their courses have made their graduates able to cope with the environment of change which their own research is helping to generate.
THEME 4 Financing Higher Education Teaching and Research Training
4.1 The question of who should pay for higher education has received much attention in recent years. As the benefits of higher education accrue both to individuals and to society as a whole, it has increasingly been seen as reasonable that some portion of the cost should be borne by students, and some by the general taxpayer. The benefits to students of higher education take the form of personal, cultural and economic rewards, with graduates clearly enjoying substantial advantages over non-graduates in the labour market.
4.2 There is little doubt that higher education students are much more likely to come from advantaged socio-economic backgrounds, so that a system which is paid for entirely by tax revenue is one which redistributes financial resources from all taxpayers, including the vast majority who have not had the advantages of higher education, to a group which is relatively privileged. This outcome can only be avoided if students are charged for some part of the private benefit they receive from their university education.
4.3 But higher education also yields benefits for society as a whole. As identified by Professor Bruce Chapman, these include: more informed public debate and voting behaviour; less crime, and more tolerance; the community benefits from research not completely captured by the individual, in part because of a highly imperfect patents system for knowledge; the benefits accruing to workers and others from the imitation of the skills of the highly educated; higher tax revenue resulting from the higher productivity and wages of the more highly educated; and enhanced prospects for increased competitiveness and economic growth through more highly educated people being able to adapt and adopt new technological processes.
4.4 Although these benefits cannot be identified with precision, it can at least be accepted that their existence provides a rationale for some form of government intervention and subsidy. The conclusion is fairly clear: there is a strong case for charging university students, but it should be less than the cost to the taxpayer of higher education.
4.5 It is not possible to be prescriptive on what is the correct size of the subsidy, and thus what is the right amount to charge students. The original HECS requirement of about 20-25 per cent of the average public sector subsidy was based on precedent, with the majority of public sector colleges which charge fees overseas charging between 15 and 30 per cent. With the available evidence a charge exceeding 50 per cent of the public sector outlays would be difficult to defend, as the largest cost borne by full-time students takes the form of earnings forgone.
4.6 The nature of the charge is an important issue. The case for the charge reflecting course costs is strong, and this was the original recommendation of the Wran Committee. The changes announced in the 1996/97 Budget reflect this to some degree, but there are serious anomalies in the new approach.
4.7 A further important issue relating to the charging of students arises because a significant part of the population faces barriers to participating in higher education, and these barriers are at least in part economic. There is little doubt that charging an up-front fee would diminish access to the system by the poor, an issue now explained.
4.8 The economic problem associated with charging up-front fees for higher education is that for those who cannot afford them there is only an ineffective capital market available for borrowing. Moreover, having means-tested scholarships will not solve the problem, because families may not necessarily share appropriately the resources needed for a prospective student to participate. The Academy submits that there are no circumstances in which up-front fees can be justified on either economic or social grounds, and that income contingent repayment arrangements are the only satisfactory mechanism.
4.9 The 1996/97 Budget announced that universities would be able to charge up to 25 per cent of students whatever fee they choose. Of significance is the fact that no loans scheme has been offered to assist relatively disadvantaged prospective students to access these places. The arguments implied above suggest strongly that this is poor economic and social policy.
4.10 The Academy believes that the Review should address this issue, particularly given the fact that there are alternatives available which do not compromise the Federal Budget. The critical point is that under all possible circumstances the repayment of a higher education charge has to be based on the future income of former students.
4.11 There are also important issues related to price discretion for universities in the setting of charges. There is undoubtedly a case to be made for so-called price flexibility. It is that if institutions charge on the basis of their costs and the demand for their services, economic efficiency potential might be maximised.
THEME 5 Funding of Higher Education Research
5.1 In this section, we take advantage of the study of the British higher education research funding system being conducted by Professor Paul Bourke, President of the Academy of the Social Sciences, for the Australian Research Council and the Higher Education Council in offering broad comments on the structure of research funding in the UK and Australia.
5.2 Professor Bourke's study was carried out at about the mid-point of the Dearing Inquiry, the principal terms of reference of which are "to make recommendations on how the purposes, shape, structure, size and funding of higher education including support for students, should develop to meet the needs of the United Kingdom over the next 20 years, recognising that higher education embraces teaching, learning, scholarship and research". Central to the consideration of these issues is the future of the dual support system for university research.
5.3 The original dual support system was based on the assumption that the conduct of research was part of the mission of all universities and an expectation of all academics, if only to maintain adequate levels of scholarly teaching. The funding councils and the research councils recognised that they had distinct and complementary roles. The funding councils, in addition to meeting salary costs and the full costs of teaching, also supported the general infrastructure for university research: libraries, computing, technical, administrative and secretarial support. The research councils, for their part, undertook to meet for approved projects the costs beyond those that could be met by "a well-found laboratory", to quote the traditional phrase. Under this system, the less expensive research, such as work in the social sciences and humanities, was almost entirely met from university block grants.
5.4 These relationships, never as tidy as this brief description makes them sound, have come under heavy strain in recent years, rendering the future of the system unclear. Apart from the widening gap between the resources available to the research councils and the costs of research being pursued in universities, the main factor has been the decision to remove the binary line in 1992 and to abolish the funding distinction between universities and polytechnics. About 150 million pounds was transferred from the funding councils to the research councils to assist the research councils to provide the infrastructure and overhead money to meet the full costs of work, apart from the costs of premises and permanent university staff.
5.5 Notions about "the well found laboratory" have gone, especially in those institutions where nothing like it ever existed, and with them any assumption that university teaching and research are inseparable. The recent funding systems treat research and teaching quite separately, and funding for research increasingly has to be justified for the social or economic benefit is expected to bring.
5.6 A residual dual support system still exists in that research councils respond to requests for future work, while the funding councils fund research on the basis of past performance through the Research Assessment Exercise (RAE). Thus, on the one hand, the research councils are in a position to decide what project research is done, and to introduce explicit policy and strategic considerations into their funding programs; and, on the other, the funding councils reward quality assessed by peer review.
5.7 It is difficult to predict how the Dearing Committee will deal with quite conflicting submissions on the future of these arrangements. The research councils have been explicit in urging an even greater 'clawback' from the funding councils, some even proposing that the whole RAE operation be transferred to the research councils. The funding councils, for their part, are determined to retain their very substantial stake in research support and are increasingly entering the policy and strategic territory of the research councils. And universities vary widely in their views - those doing well from both RAE and from the councils are happy with the status quo, whilst others doing less well from the increasing selectivity of the RAE are inclined to support the clawback, in the hope of securing via project grants from the research councils support for their enclaves of excellent work.
5.8 The institutional framework of funding of higher education research in Australia is different, but some important issues are not. We too enjoyed a dual support system comprising one research council which embraced most of the disciplines, and block funding from the successive Commonwealth authorities. We too witnessed the distortions in these arrangements that have flowed from the increasing costs of serious research in all fields. But it was the collapse of the binary line following the introduction of the UNS, a change in which Australia preceded the UK, which has thrown most pressure on the public funding of university research in this country.
5.9 The new Australian arrangements have been more 'generous' than the British ones to the former colleges and institutes of technology, and there has been a much closer coupling of the research council line of support to core funding of institutions. For example, unlike the UK case, where the RAE panels vary quite widely in their treatment of research council income in particular fields, performance in Australian Research Council (ARC) programs is directly factored into outcomes under several of the major infrastructure programs of the government, especially the so-called Research Quantum. Earmarked rather than generally competitive schemes to provide infrastructure support to the newer institutions were established here and, via a major clawback from the operating grants to the ARC, the amount of discretionary research block funding remaining in the pre-1987 universities has been significantly reduced even since the UNS was established. It now lies somewhere around 5% of the operating totals, in comparison to the British RAE contribution to operating grants which is about 20%.
5.10 Notwithstanding this major reallocation, high-quality Australian university research activity remains very highly concentrated in the pre-1987 universities, and most of that is accounted for a small number of institutions. In short, the new arrangements have imposed substantial additional burdens on grant allocation processes, but may not have had a discernible impact on the distribution of funds between institutions.
5.11 This Academy has within its Fellowship representatives drawn from a wide range of universities in Australia and, recognising that there is a diversity of views about the optimal arrangements for research funding, does not seek to present a single view of the implications of the points set out above. Rather ASSA commends strongly to the Committee the desirability of scrutinising closely what has been learned from the past decade of institutional experiment in this area in Australia.
5.12 An important contrast between the British and Australian cases is that all of the British research councils, including the Economic and Social Research Council (ESRC), have developed very explicit priorities and strategic directions which heavily influence the work they fund. This has been tolerable in the British context because there remains such a substantial core of block funding at the discretion of the universities via the RAE.
5.13 In Australia, where the discretionary funding for research support in the universities is much lower than in the UK and shrinking, funding for research in the social sciences is much more dependent on centralised policies and institutional arrangements which, in the Academy's view, have not given sufficient weight to the need for continuing strength in the social sciences and the humanities. In this connection, we direct the attention of the Review to the conclusion of the Report of the Senate Standing Committee on Employment, Education and Training following its inquiry into The Organisation and Funding of Research in Higher Education (March 1994):
On the evidence presented to the Committee during this enquiry, it seems that major policy and funding initiatives directed at enhancing the research activity of the higher education sector have not served the humanities and social sciences nearly as well as they have served the natural sciences and engineering. While the Committee applauds the developments in these latter field of endeavour, it is imperative that Australia maintain a high level of activity in the humanities and social sciences. It is in these areas that minds are turned toward the important tasks of critique, ethical reflection analysis of social and economic change and re-evaluation of cultural norms. The humanities and social sciences are a vital element of Australia's intellectual life and their contribution to the nation's well-being must be acknowledged and adequately supported.