In a new report from the Higher Education Policy Institute, After
demand driven funding in Australia: Competing models for
distributing student places to universities, courses and students
(HEPI Report 128, attached), Professor Andrew Norton warns
against controlling student numbers when the population of young
people is rising.
The number of school leavers in the UK, which has been falling
for years, will soon start rising again and Australia’s 18-year
old population will increase rapidly from the mid-2020s.
The ‘demand driven’ funding system in Australia, which was
introduced a decade ago, removed limits on the number of
bachelor-degree students in public universities. England followed
suit by abolishing student number controls in 2015.
In both England and Australia, universities responded by
recruiting more students. The policy achieved many of its
objectives, although drop-out rates grew as universities enrolled
students who might previously have been shut out.
In late 2017, cost concerns meant the Australian Government froze
its bachelor-degree funding for two years. The number of student
places is now likely to fall. In England too, there is growing
interest in introducing new restrictions on student numbers.
The author of the report, Professor Andrew Norton of the Centre
for Social Research and Methods at the Australian National
University (ANU), warns that reducing the proportion of people
who can find a university place hits under-represented groups
hard:
‘Universities ration scarce student places by awarding them to
applicants with the strongest past academic performance. In
Australia and elsewhere, school students from disadvantaged
backgrounds on average receive the lowest grades. So fewer
university places inevitably mean more disadvantaged applicants
miss out on university offers. The gains made under demand driven
funding could easily be reversed.’
The new report acknowledges that demand driven funding is not the
only way to respond to demographic change. In the past,
governments in Australia and England have used block grant
systems to increase funding and student places. However,
Professor Norton concludes block grant systems are less effective
overall:
‘Block grant systems require activist ministers to push reform
through government processes, while demand driven systems
automatically respond to demographic and labour market changes.
Block grant systems can create unlucky generations who miss out
on university because policy cannot respond effectively to
population growth. It has happened before in both Australia and
England and it could well happen again in the 2020s.’
Professor Norton argues that systems that respond to students are
better at adjusting to changes in demand for universities and
courses. Under Australia’s demand driven funding, three
universities more than doubled their enrolments. Health-related
courses increased enrolments more than any other, responding to
strong student interest and labour market needs.
, HEPI’s Director, said:
‘England is at an earlier point in the policy cycle than
Australia. Policies discouraging extra student places remain a
historical artefact for now and some university admissions
offices still have their foot firmly on the gas.
‘But a close reading of recent political announcements suggests
that student number controls could be on the way back, just as a
demographic bulge starts approaching higher education. That could
be a disaster for social mobility.’
In an Afterword, Professor Alec Cameron, Vice-Chancellor of Aston
University and previously Deputy Vice-Chancellor at the
University of Western Australia, says:
‘In England, there are currently pressures from both sides of
politics, which have elevated the likelihood that the current
system may not survive in the medium term. …
‘As the experience of Australia demonstrates, if governments wish
to limit the cost of higher education to the public purse, the
options are to either restrict numbers or to restrict funding per
student. …
‘How much longer year-on-year reductions can be absorbed is an
ongoing experiment. It would seem that any fat in the sector has
been excised by now, with the ongoing cuts likely to impact on
the quality of the system and compromise the student experience.’
