How is value for money measured within higher education institutions?

The Office for Students (OfS) issued their value for money strategy 2019 to 2021 on 18 October 2019. This made clear that value for money in the higher education sector is ‘in the eye of the beholder’ (or stakeholder) namely students as the first priority and taxpayers as the second priority.

Value for money will be measured through a number of high level proxies which (in the same way as the Teaching and Student Outcomes Framework (TEF) may be a proxy for teaching excellence) may or may not be in the control of the higher education provider, and have a greater or lesser correlation to traditional concepts of value for money based on economy, efficiency and effectiveness.

The two main stakeholder related objectives are:

  • students receive value for money when they experience the full benefits of higher education – both during their studies and afterwards – in exchange for the effort, time and money they invest; and 
  • taxpayers receive value for money when higher education providers use public money and students fees efficiently and effectively to deliver graduates, from all backgrounds, who contribute to society and the economy. 

These are both to some degree subjective measures, for example the student perceptions of value for money are currently generally collected whilst they are still a student, or whilst they are recent graduates. If asked again at the end of their career, the answer may be different and it is only at this stage that an assessment of ‘full benefits, afterwards’ can be made. In regard to taxpayer value for money, how is the ‘value for money’ of a graduate who doesn’t work and instead is a climate change activist measured? Depending on the measure, they are seeking to protect society from their assessment of the negative impacts of climate change which can also be measured in economic terms, but they are not in employment or further study which is a primary focus within the TEF.

In a similar vein, is someone who does a degree then qualifies as an accountant with an accountancy firm good value for money for the taxpayer when they could potentially have achieved the same career and qualification as a school leaver?

Factors informing the strategy

The Strategy quotes a Trendence UK 2018 study which identified the following ‘factors that demonstrate value for money’:

  • quality of teaching;
  • fair assessment and helpful feedback;
  • learning resources (IT, library, etc);
  • access to social and/or industry connections;
  • securing a higher earnings than a non-graduate;
  • securing a job within six months of graduation;
  • getting a good grade;
  • number of contact hours per week;
  • number of academic staff per student;
  • quality of social facilities/resources;
  • a wide range of academic and non-academic clubs; and
  • opportunities to get involved with the local community.

Most of these measures are related to input and output measures, and do not for example include developing the skills to become independent learners and thinkers. Becoming knowledgeable in a discipline and education and knowledge for their own sake do not feature in these priorities. Is this value for money?

The Strategy includes a second study from Trendence UK which asked ‘how helpful would these factors be when assessing whether your university provides value for money?’

The assessment factors included:

  • seeing a breakdown of how your university spends its fee income;
  • seeing a breakdown of income and expenditure at your university;
  • being able to compare the costs incurred by your course compared to similar courses at other universities;
  • being able to compare your universities expenditure with other universities;
  • being able to compare your course expenditure with other courses at the university;
  • reading about steps taken to reduce unnecessary costs;
  • an independent statement on value for money from the Student’s Union/guild/association;
  • seeing information on the ration of the teaching staff to students; and
  • seeing the cost of management salaries.

It is interesting that these ‘assessment’ factors, in and of themselves, do not automatically result in the ‘demonstration’ factors addressed in the first research. A higher education provider could publish all of this information, but not deliver ‘fair assessment and helpful feedback’ for example.

Measuring value for money

The OfS states ‘Our primary measure of value for money will be based on the perceptions of students and graduates’. It acknowledges that ‘value for money means different things to different students’ and they state that they will not impose a definition on students. OfS proposes to use the following measures:

  • NSS student satisfaction;
  • graduate outcomes survey – progression;
  • annual HEPI survey; and
  • Longitudinal Educational Outcomes (LEO) dataset on graduate earnings.

The OfS will also measure:

  • institutional growth; and
  • unit of resource (per student). 

As these are going to be the primary measures, higher education providers will be keen to measure this themselves. This could be through internal surveys and focus groups, whilst being careful that ‘feedback fatigue’ of itself could impact student perceptions.

Economy, efficiency and effectiveness?

The Strategy includes a section called ‘provider efficiency’ which references that those receiving OfS and UKRI funding must demonstrate ‘that they have adequate and effective arrangements in place to manage public money appropriately and in accordance with the principle of value for money – it must be used economically, efficiently and effectively’. The Strategy states that further guidance will be issued about how these requirements can be met. TRAC is also mentioned in this section and in particular the benchmarking of costs of activities against similar providers. As such value for money in more familiar guise remains an underpinning foundation of the new Strategy.

For more information please contact Louise Tweedie.

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