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How to make premium funding fairer

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Announcing the rise in tuition fees last month, Bridget Phillipson was clear that she wasn’t issuing a blank cheque.

More cash comes with strings attached. Universities need to deliver better “value for money”, contribute to economic growth in their regions, improve access, raise teaching standards and make savings. In short, she wants the sector to do more, more efficiently.

Our new report on how to support care experienced and estranged students through Higher Education illustrates how universities can balance some of these competing priorities. We believe the sector can kill two birds with one stone, by better targeting existing widening participation funding to make student support more equitable.

The report draws on existing literature, alongside over a dozen interviews with policymakers and sector experts, and focus groups with care experienced and estranged students themselves.

We found that support for these groups was often inconsistent, inaccessible, and/or inadequate. And this almost always came back to funding – not necessarily that there wasn’t enough of it across the sector, but that it wasn’t concentrated in the right places.

What’s the problem?

We audited over one hundred different university websites to find out what support they offered care experienced and estranged students, and found a remarkable amount of support available – at least on paper.

Almost every university offers financial bursaries, the vast majority offer some form of accommodation guarantee, and some offer discounted housing. Based on this, we estimated that, across the sector, currently about £10-15 million each year is spent to support these groups of students.

But when we spoke to the students themselves, we heard a very different story. Some reported a positive experience at university, but this was often because they had access to external financial support, such as a Unite Foundation Scholarship.*

Those that were reliant on university support alone reported struggling to access funds, uncertainty over entitlement, and inadequate support to bridge the gap between maintenance loan and cost of living, filled for other students by parents or guardians.

Where financial support is generous, it risks distorting academic choices. Students felt forced to pick the university with the best financial offer, or where they could continue to access Local Authority support, rather than what was best for their academic or career aspirations.

But with £10-15 million kicking around the sector, you would expect the university offer to be stronger, especially for such a relatively small group of students – there are around 5,000 care experienced entrants each year. While more money would undoubtedly help, perhaps the bigger issue is the very uneven distribution of existing funds.

Average size of bursary offered by an institution, by number of care leavers enrolled. SMF analysis

As an example, the University of Sheffield offers a substantial bursary of £10,000 per care leaver student. However, they can partly afford this because they have low numbers – they are third from the bottom of Civitas’ ranking of institutions by the share of care experienced students in their student population.

By contrast, the University of East London, which has proportionately more care experienced students than any other, has the standard £1,000 bursary. This trend is common across the sector.

It is a regressive system in which the institutions that do the heavy lifting on access have the least amount of resource to put towards participation. This is partly influenced by historic trends in HE where ex-polytechnic universities tend to admit more diverse applicants and also tend to have less non-teaching income, but it is also about how widening participation funding is currently distributed throughout the sector.

The main source of earmarked funding for university widening participation work comes from the Student Premium, distributed by the Office for Students. Approximately £240 million is distributed across the sector each year, after deductions for ringfenced pots such as the Disabled Students’ Premium.

But as one interviewee said, “the student premium is distributed for entirely nuts reasons. It is based on [criteria] that was decided some years ago”, and is no longer appropriate. Another interviewee claimed that if the Secretary of State came asking how these hundreds of millions of pounds were being spent, the sector would not be able to answer. Institutional autonomy protects higher education providers from scrutiny, but the new government’s rhetoric suggests that it will have limited patience with obfuscation or excuses:

It obviously isn’t [fair]. [High-tariff provider] congratulates itself that it has this amazing bursary scheme for its disadvantaged students. You know, there are literally 10 of them, and, yeah, they give them the earth because they can afford to.” – Policymaker

What’s the solution?

So, there’s enough money going around, but its distribution is inconsistent, inequitable, and inefficient. Luckily, there’s an established funding scheme to support the education of disadvantaged students that we can draw inspiration from – the school pupil premium.

A far simpler and more efficient use of OfS’ £300 million pot would be to provide institutions with direct funding for each enrolled care experienced and estranged student, to ensure that they have the necessary resources guaranteed.

Set at £1,000 per care experienced or estranged student, the cost of this scheme would come to about £21 million. The money follows the student, which would incentivise institutions to recruit and retain these groups (important, because care leavers are three times less likely to enter HE, and more likely to drop out).

It would ensure that institutions have a guaranteed income to support these students and should improve consistency of support offer across the sector, meaning that care experienced and estranged students can make the best study choices for them and their aspirations, not based on which university is the most generous.

This funding would also come with requirements for universities to engage with TASO – the What Works center for HE – to figure out the most efficient and effective use of this funding, much like the Education Endowment Foundation helps schools make use of their pupil premium funding.

And on top of this, it can act as a pilot for a more efficient approach to widening participation funding more broadly. If our proposed scheme looks like it is working, restructuring the entire £300 million pot to be distributed via simultaneous pupil premium type schemes for particularly at risk students could be a more efficient and equitable distribution of funding across the sector. If it demonstrates success, it could even attract additional funding.

Managing constrained budgets, sustaining improvements on access, persuading sceptical policymakers and public of their value – there’s no doubt universities have a tough job on their hands. But a better programme for care experienced students would show universities can balance those objectives, and could be the first step on a path forward.

* A note of transparency that Unite Students, which funds the Unite Foundation, sponsored this report. The SMF retains full editorial independence of all our research and policy outputs.



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