Legislaton for the demand-driven higher education funding system was finally introduced into Parliament yesterday, more than two years after it was first announced.
The government’s nervousness about how much it might cost is very evident. It reserves the right to cap how much funding any university can receive, though the cap cannot be less than the previous year. So it will be demand-driven only up to the point that demand is too expensive. It effectively means that there is not actually a student entitlement to a Commonwealth-supported place, as originally envisaged, though in practice few are likely to miss out in the near future.
Nor will universities have complete freedom to respond to demand. There is a capacity to set both minimum and maximum numbers by course, though only medicine is certain to face a cap on numbers. The reason seems plausible enough, a shortage of clinical training places, but previous attempts to regulate medical student numbers are the most commonly-cited reason for moving to voucher system: the government’s 1990s assessment of how many students were needed was hopelessly wrong, and we would have been better off if universities had responded to demand.
So though the system will be called demand-driven, that is true only in a relative sense. Specifying the number of students by university and funding cluster (groups of disciplines with the same Commonwealth funding rates) will end, but the allocation of student places will only be partly and conditionally handed over to the market.