campusreview. com. au
VC’ S CORNER
Do we need to be trying to de-politicise higher-education reform then, so the sector can gain some certainty rather than swaying with the whims of the government of the day? If so, how might that be achievable? I think it is possible to have a sensible policy debate about this. But I think the opposed positions the political parties are taking just create that climate of uncertainty. What is quite interesting is that higher education is now offered on such a scale in this country and in many other advanced countries – for very good reasons – that we’ ve almost become victims of our own success. We now have to confront the question head on as to how this government or any government can sustain the funding of a higher education system at the scale we’ ve got it.
Basically, there’ s a choice. We can either shift the cost further to the beneficiaries of the system, mainly the students, or we can wind the system back in scale so we can more sustainably fund what’ s left. I think, essentially, that’ s the choice we’ ll have to make at some point.
There are lots of reasons why the demand-driven system is desirable, very desirable. I think it’ s been a great thing … one of the great successes of higher education policy in recent years. It has improved participation rates amongst some important type of groups, such as low-SES students. I think it’ s delivered the sorts of graduates, on the whole, that the country needs, particularly in health and science disciplines. Their enrolments have increased in the last five years. I think the demand-driven system has worked well [ so ] from my point of view, it would be a retrograde step to move back to a more centralised model.
So how do we ensure the funding equation remains sustainable? I have always been a supporter of some sort of fee flexibility in the system. I think that has to be part of the policy response to the phenomenon we’ re now confronting, which is that governments of both sides in the last two or three years have indicated they think they’ ve reached the limits of their capacity to fund the system.
How do you respond to that? Well, you either increase the user pays component or you wind the system back, and you plan it more centrally. I’ m not sure I can see what other options there are open to us. For me, if that was the choice, I would rather go with some form of fee flexibility than curtail the demand-driven system.
[ Many ] assume that [ under a deregulated system ] every university would use fee flexibility to ramp up its price. The reason I support [ fee flexibility ], even though it wouldn’ t be a huge benefit in some ways to university like La Trobe, is that it gives other universities that might put their fees up by a larger amount the option to do that instead of simply taking more students.
At the moment, we’ ve got a situation where university costs are growing generally faster than their revenue base. To counter that, universities have to increase their revenue at a rate higher than the increase in their costs. The demand-driven system allows for them to do that by increasing the number of students they take. Now, that can’ t go on forever. I think we are starting to see the limits of that system; as big powerful universities with big brand names increase their intake there are fewer students to go round for those lower down the pecking order.
The logical end point of this is that we’ ll have a small number of very large universities and the [ small players will be marginalised out of the market ].
Of course, this is all being played out at a time of technology-driven change in the sector. How will the digital disruption element affect all this? The current funding regime assumes a uniformity across the sector of modes of delivery and the student experience – it doesn’ t encourage innovation in program delivery. Yes the innovation happens anyway, but the policy settings aren’ t there to recognise it and reward it and allow it to flourish. Whereas I think in the more deregulated environment, universities can set their price according to what they think the willingness will be of people to pay for a particular form of experience, whether that be online or blended or on campus. I think it is desirable.
So what are you expecting then as a result of technology-based disruption during the next decade? The forces of technology and competition will have a big impact over that period, almost irrespective of the policy and funding environment, just because those forces will be stronger, if you like, than local funding policies.
One of the big questions will be whether the current model of the three-year, two-semester degree can survive as the dominant mode of delivery. There are some people who predict its demise, others who say students will still have a preference for some form of on-campus, face-to-face experience. I think the traditional model is going to come under huge pressure, almost irrespective of what governments do, partly because of international competition and partly because of domestic competition, based on what students expect.
The generation of students coming through now has grown to expect very customer-focused, technology-enabled customer experiences in other parts of their life. I think they will bring that expectation with them to universities.
So this raises a number of questions. Why do we have to enrol only in January or why do we have only two or three enrolment periods every year? There are some private providers who have enrolling intakes every month. I think we’ ll have to think about whether that traditional model is going to serve us well and enable us to be competitive. ■
19