HEPI, LEO and VFM

Monika Antal, Executive Manager

Last week I attended the Hepi Annual Conference in London. Sam Gyimah MP, Minister of State for Universities, Science, Research and Innovation, opened the event with a keynote speech that focused on value for money, innovation and transparency.

The minister began by calling on universities to “focus relentlessly on value for money”. By value for money, the assumption was that value for money should be measured, in part, by graduate earnings, which just happened to be the subject of a new report published the same day by the Institute for Fiscal Studies/Department for Education looking at relative labour market returns to undergraduate degrees, and which draws heavily upon Longitudinal Educational Outcomes (LEO) data.

LEO has some fundamental flaws, which is problematic when the data is expected to inform policy and funding decisions. First, LEO only looks at PAYE earnings, which, by default, excludes the vast and growing cohort of self-employed workers. Second, it also excludes those earners who are below the tax threshold and those working outside the UK five years after graduation. Third, full-time and part-time graduates – whose median salaries and student profiles are often very different – are brought together for the purposes of analysis. This could present a misleading picture, as many part-time students are already in employment when they study. Fourth, the existing data set is out of date. The salaries of students who graduated over ten years ago might not necessarily provide a useful indication of the future employment prospects of those people who are about to start university. Fifth, LEO lacks the fine-grained contextual information that would enable us to recognise the spatial differences in labour markets and other socio-economic variables. As such, placing exclusive faith in this mechanism would undermine the importance the government has attached to ‘place-based development’, and it would do little to help rebalance an uneven and unequal UK economy.

Of course, universities should demonstrate their continued ‘value’ to students, to government, to local communities, businesses and others who all have a stake in ensuring the long-term success of higher education. And where things do not function as they should, then there should be appropriate accountability and steps taken to deliver improvements. However, we should also embrace a broader concept of value, beyond the narrow parameters of financial metrics. Instead, we should perhaps ‘measure performance’ according to the distinct contribution that universities make to individual and collective learning, research, and to economic, social and civic development and well-being.