The Augar report: what happens next?

What could the review of post-18 education mean for the sector?

“It will be up to the government to decide at the upcoming spending review, whether to follow this recommendation,” Theresa May said on May 30, after welcoming the findings of the independent review she commissioned Dr Philip Augar to lead. At the next spending review – pending any unanticipated developments – the government will no longer be headed by May. The recommendations could be shelved entirely, or the shinier vote-winning initiatives enacted by her successor.

Since the review was released at the end of May, debate has centred on proposals for lower university tuition fees, but it was one small suggestion amid a raft of other measures.

What was welcomed?

Generally, the report was welcomed for its focus on further education as part of the post-18 qualifications market. Every single principal of an FE college in England (203 in total) signed a letter that said: “In many respects the Augar Review represents a wider emerging consensus across England.” They continued: 

“We are sure that you will agree with us and other key stakeholders that further education colleges have been neglected, and that there is now a growing appreciation of their unique role, value and potential.”

Recently, the University and College Union (UCU) used a freedom of information (FoI) request to reveal that 29% of colleges employed half of their staff on “casual contracts”. Sixty-nine per cent of respondents to UCU survey said they had earned less than £1,500 a month, and a half said they had trouble paying their bills. If the picture in colleges is as stark as this, more investment is overdue. 

Theresa May welcomed the reintroduction of maintenance fees and said: “Removing maintenance grants from the least well-off students has not worked, and I believe it is time to bring them back.” But the maintenance grants at £3,000 a year might still leave many students short of money because of ballooning accommodation costs. The £3,000 grants would be 23% below 2008 levels if measured using the consumer price index. 

The lifelong learning allowance has also drawn support particularly given the ever-quickening pace of technological developments. 

Tim Daplyn, managing director of Red Brick Research, thinks the policy needs fine-tuning if it is to help those it is aimed at. He says: “The people that are in a position to take advantage of these new ideas are the wealthy well-to-do middle classes. Look at whose children have taken advantage of the best, most prestigious degree apprenticeships. You need a degree of social capital and equity to be able to exploit the system and the value of government policy.”

A reduction in the graduate contribution, without a top-up from the Treasury, could bring into question the financial sustainability of many universities – Josh Hardie, CBI

And what wasn’t?

The abolition of foundation degrees, often used by those who do not have the requisite qualifications to enter higher education but want to, came under fire. Some have said the move will limit social mobility, particularly for mature students who want to gain a degree later in life but missed out on the right opportunities earlier in their lives.

Jefferson Frank, founding head of the economics department at Royal Holloway disagrees. He wrote in FE News that foundation years “are directed at home students who have not succeeded in achieving suitable A-level grades. Remarkably, universities can charge full fees for these, of which – under projections of the losses in the contingent-repayment loan scheme – the taxpayer will end up paying half.”

Daplyn counters this assessment. He thinks the evidence that it is being manipulated as a recruitment tool is “pretty weak”. He said those that benefit from foundation degrees are equipped with the “social equity” to make a success out of their degrees – something they would not at the moment gain from an FE college.

The freeze in funding has also been roundly lambasted. Adam Tickell, vice-chancellor of the University of Sussex has said it will push universities into “survival mode”. Josh Hardie, CBI deputy director-general said: “A reduction in the graduate contribution, without a top-up from the Treasury, could bring into question the financial sustainability of many universities, jeopardising quality and the high-skilled talent the UK economy needs and which businesses value.” 

In an international marketplace, many universities (which have pensions and large estate costs) can precious afford less money.

Dr Vicky Lewis, a consulting fellow for Halpin Partnership, fears universities may pursue a “’knee-jerk international student recruitment drive”. She fears that with a post-Brexit slump anticipated in EU applicants and a “tougher international market now more than ever” this income stream might not hold all the answers. Lewis also suggests a reform of visas for international students is needed if the sector is to rely on non-domestic revenue streams.

Chris Skidmore, speaking at the Higher Education Policy Institute (HEPI), distanced himself from comments made by Damian Hinds (and echoed by Augar) on low-value degrees and “bums on seats” at HEIs. Skidmore said longitudinal education outcomes (LEO) data needed to “mature” and stressed regulators should “need to look at social value too”. He also said he would “revoke that language [‘bums on seats’] from any politician” and added he had “never met any university professional who simply wants to drag students in without giving them the best possible experience and the best possible qualification”. 

There are several issues with the way Augar selected data in this area. The report cites an Office for National Statistics (ONS) report from 2017 on graduates in the UK labour market which found that 49% of graduates work in non-graduate jobs. The ONS includes police officers and nurses in its list of non-graduate jobs but simple classifications such as this do not reflect individuals and their career paths. Oxford University-educated Cressida Dick, who is now the most senior police officer in England, started her career as a police constable. 

The ONS report notes there is a marginal difference in average earnings of non-graduates and recent graduates but that “annual income for graduates increased at a fast pace as they became older and more experienced in the workplace, before levelling out around the age of 39 at an average of £35,000. In contrast, gross annual earnings for those educated to an A* to C grade GCSE standard increased at a more moderate pace and levelled out at around the age of 30 at an average of £19,000.” It is a problem Skidmore has acknowledged when reflecting on his own sudden rise from lowly paid academic to well-paid MP. One of the flaws of LEO is that it does not yet measure graduates who are older than 31. 

London Economics (LE) has analysed the likely winners and losers from the changes to tuition fee repayments. Lengthening the time in which graduates have to repay loans means that lower-earning graduates will pay more in the future than they do at the moment. Lowering the cost of degrees and capping repayments means higher-earning graduates will pay less back than they do at the moment.

Daplyn says the drop in tuition fees is a change “not a single student in the country will care about. They will still see it as a large amount of money.” He added: “So much of our policy-making is dominated by economists who understand the utility of everything, and the psychology of nothing. Which is why we’re in the situation we’re in. The original model had students as consumers and universities as providers. That view of things demands that it is down to students to decide how to spend their money not governments. Governments have consistently failed to achieve their social mobility objectives because economists consistently underestimate the social equity barriers to people accessing higher education and career paths.”

Javid, an advocate for personal learning accounts (similar to Augar’s lifelong learning allowance) looks likely to remain influential

What happens next?

Jeremy Hunt has already pledged to write-off tuition fees for graduates who start a new business and employ more than 10 people for five years. He has also said he would reduce interest rates on student loan repayments. His decision to abolish NHS bursaries for nurses means his record on HE is not been popular.

Similarly, Boris Jonhson has said interest rates on student loans should be lowered. In mid-June, he also said a Johnson government would “do more to fund our amazing FE colleges, which have all too often been forgotten”. As far back as 2006, while a shadow universities minister under David Cameron, Johnson wrote for Politeia: “Among the general public there is huge scepticism about whether all these 2.3 million students need to be at university, and a general belief that many of the courses they are doing are a waste of time, or worse than a waste of time.” In the same piece, Johnson commends the work of Alison Wolf for her “brilliant analysis” in Does Education Matter?, a 2002 book about the dearth of good technical education in Britain. Wolf, incidentally, was one of the Augar review panellists which suggested a refocus on further education.

While still in the running, Sajid Javid advocated personal learning accounts (a policy not dissimilar from Augar’s suggestion for a lifelong learning allowance) and broadening the apprenticeship levy to encompass a skills levy. He looks likely to remain influential within the party and could yet encourage uptake on some of those policy areas.

Although at this moment less influential than the aforementioned Conservatives, both Jo Johnson (former universities minister) and Justine Greening (former education secretary) greeted the report frostily. The former said Augar will “destabilise finances, imperil many courses and reverse progress in widening access. Bad policy, bad politics.” The latter tweeted: “Augar review risks backwards step on social mobility and access to uni. Paying back debt for 40 years on lower earnings threshold is regressive. We need a long-term, radical overhaul.”

For the Conservatives, post-18 education is a discussion that looks far from resolved. 


What was proposed? 

Below is a brief of summary of each section

Skills 

● Introduce a single lifelong allowance for every adult

● Access to tuition and maintenance fees for students on level 4–6 qualifications

● Streamline the number of level 4–5 qualifications

● A lower fee cap for most FE courses

● Every secondary school to join a ‘careers hub’.

Higher education

● Remove support for foundation years

● Freeze per-student funding until 2023

● Drop fees to £7,500 and increase government teaching grants

● More money for courses with “social and economic value” and less for others

● Address retention and employability. Potentially introduce minimum entry thresholds and caps.

Further education

● More funding (including £1bn at the next spending review)

● Relaxed rules providing more autonomy

● FE colleges to have a “protected title” much like universities.

Apprenticeships 

● Ofsted to offer accreditation of qualifications – providers should be dependent on
this certificate.

Student contributions

● Lower the repayment thresholds for tuition fee loans

● Extend the repayment period for fees to 40 years

● Lifetime cap for repayments to be set at 1.2 times the initial loan

● Remove in-study interest rates.

Maintenance 

● Reintroduce maintenance loans (which are as “high
as possible”) to students on all qualifications above level 4 

● OfS to investigate student accommodation costs

● Bursaries should increase. 


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