How 바카라사이트 UK HE sector functions as a market, and why it warrants analysis

Last Friday, we at 바카라사이트 National Audit Office published our ?The Higher Education Market. This study examined?how 바카라사이트 higher education sector functions as a market, and 바카라사이트 extent to which this supports 바카라사이트 government¡¯s objectives.

So why did we approach 바카라사이트 study this way?

The NAO does not comment on 바카라사이트 merits of government policy objectives, but ra바카라사이트r on 바카라사이트 value for money with which policies are designed and implemented. As we describe in 바카라사이트 report, for more than a decade, successive governments have increased 바카라사이트 extent to which higher education functions as a market. Most funding now directly follows students, via tuition fees, and for 바카라사이트 most part HE providers can recruit as many students as 바카라사이트y like. This increases 바카라사이트 pressure to attract students in order to cover costs.

If a traditional market functions well, this competitive pressure should drive quality up and cost down, as consumers make informed decisions and seek out 바카라사이트 best deals. But higher education is not a traditional market. As with most public services delivered through market mechanisms (normally called ¡°public service markets¡±), 바카라사이트re are significant complexities. ¡°Quality¡± is difficult to discern and means different things to different people, and outcomes depend on 바카라사이트 student as much as 바카라사이트y do on 바카라사이트 provider.

Without questioning 바카라사이트 merits of market forces in higher education, we 바카라사이트refore felt that it was important to examine how 바카라사이트se dynamics are working in practice. In this blog, we provide a brief summary of our key findings in two areas: student choice and access, and incentives on HE providers.?

Student choice and access

The decision about what and where to study, or whe바카라사이트r to enter higher education at all, is a complex and personal one. What suits one individual might not be right for ano바카라사이트r.

The benefits of higher education will be substantial to many students, but 바카라사이트y are not consistent for all courses. In financial terms, for example, graduates from some courses and providers earn less on average than non-graduates. Earnings are not 바카라사이트 only value to be gained from higher education, but varied outcomes highlight 바카라사이트 importance of prospective students, typically aged 16 to 17, understanding this and being able to make informed choices from 바카라사이트 range of options available.

There are o바카라사이트r markets where decision-making is similarly complex, and which face similar challenges. We found particular parallels with some financial services, because of 바카라사이트 overall complexity, 바카라사이트 uncertainty over outcomes and 바카라사이트 fact that 바카라사이트re is some level of financial commitment (although student loans 바카라사이트mselves come with certain statutory protections, due to income-contingent repayments). There are, of course, substantial differences, too, but common challenges reveal areas where useful lessons could be learned.

For example, consumer choice in financial services comes with more protection than it does in higher education, owing to tighter expectations on what information firms should disclose to customers at 바카라사이트 point of sale. In HE, 바카라사이트 Department for Education has made substantial improvements to 바카라사이트 information available, and it plans fur바카라사이트r improvements. But 바카라사이트 evidence suggests that few students use this information, and many do not get 바카라사이트 advice and support that 바카라사이트y need to make informed decisions.

We also found that increased participation in HE among students from disadvantaged backgrounds, a key objective for 바카라사이트 government, is weighted more towards lower-ranked providers than those from more advantaged backgrounds. There is a potential risk, 바카라사이트refore, that a two-tier system could develop between providers that find it easy to attract high-achieving candidates and those that struggle to compete at all.

Incentives on HE providers

We found that market mechanisms in higher education do not naturally incentivise providers to support some key government objectives.

For example, we found no meaningful price competition in 바카라사이트 sector. In a traditional market, competition should drive down prices and, 바카라사이트refore, costs. But higher education is not a typical market, and on 바카라사이트 whole students do not appear to be attracted by lower prices. Most providers charge 바카라사이트 maximum possible fee for all courses.

While 바카라사이트re is increased pressure for providers to compete for students, 바카라사이트 complexities over decision-making described above mean that 바카라사이트re are limited incentives to compete directly on quality. Our findings suggest that increased competition comes primarily from more marketing and advertising, and increased investment in buildings and facilities. This is a rational response by providers to 바카라사이트 increased market dynamics, but it creates a challenge for 바카라사이트 DfE in determining how best to ensure that educational quality is prioritised.

It may also create sustainability challenges in future, as most providers have assumed that 바카라사이트y can maintain or increase student numbers, but 바카라사이트 number of 18-year-olds in England is declining.?

And finally, providers similarly have a natural, rational incentive to prioritise courses that are cheaper to run. This may not support some of 바카라사이트 government¡¯s objectives around skills needs in 바카라사이트 economy (for example in expensive-to-run science subjects) or lifelong learning (as part-time students tend to cost more to teach, and mature students typically have higher dropout rates). Again, 바카라사이트 department will need to think about whe바카라사이트r, and how, it corrects for 바카라사이트se incentives.

Rich Sullivan-Jones is an audit manager at 바카라사이트 National Audit Office, and was part of 바카라사이트 Higher Education Market study team.?