A low quality higher education spending cut

I was right that universities would be high on the list when budget cuts were called for, but wrong about what would get cut.

Instead of postponing the demand-driven system they are abolishing the Australian Learning and Teaching Council (ALTC), and the Capital Development Pool.

Rather unusually for a government agency run by career public servants, the ALTC is offering a feisty response on its website:

The Federal Government will force the Australian Learning and Teaching Council to cease operations at the end of 2011 leaving a gaping hole in the sector.

CEO, Dr Carol Nicoll responded to the Prime Minister’s announcement made earlier today.

“The ALTC represents the Australian Government’s commitment to enhancing the quality of learning and teaching in higher education through means other than regulation,” she said.

“Obviously we are deeply disappointed that the Government’s stated commitment to improving the student learning experience for Australian students is not matched by continuing funding.” …

“The Government has taken the easy option of abolishing the ALTC. The savings to the government will be less than $22 million per annum but the damage to the higher education sector and student outcomes will be far reaching,” he [ALTC chair John Hay] said.

I have some sympathy for this view. With it’s hard to quantify what benefit the ALTC had, it was part of the slow professionalisation of higher education teaching, in institutions where both the culture and the financial incentives (at least until the arrival of international students) had favoured research.

If $22 million needs to be saved it could be done with no loss to public policy purposes by improving the HELP loan scheme or ending the excessive subsidies to science students (both of which would save much more than $22 million).

Abolishing the Capital Development Pool – a $75 million a year fund for smallish ad hoc infrastructure projects – was like cutting the ALTC’s funding chosen because it could be done by ministerial decision alone, and not because it was a well thought out prioritising of funding.

However given where overall policy is going I do not oppose this decision. When the demand-driven funding system comes capital needs to be incorporated into prices. Far more than it has been to date, the government will need to be a neutral player in the higher education market, rather than playing favourites through special handouts to particular unis.

27 thoughts on “A low quality higher education spending cut

  1. “Rather unusually for a government agency run by career public servants, the ALTC is offering a feisty response on its website”.

    They’ve been abolished. What have they got to lose by being critical?

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  2. It’s interesting that they cut the ALTC — although I don’t see good teaching as a priority for universities even in a totally deregulated system, since I doubt it’s a big factor in student’s minds when they select courses.

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  3. Andrew – Agree the ALTC seems an odd choice – to cut $22m a year (out of all federal expenditure) as a contribution to a $5b plus fund. You would think that with expanding student numbers a focus on teaching quality would be a priority. That said the government has previously tried to trim ALTC’s budget with limited success so it may be tidying up unfinished business? More broadly it will be interesting to see how/if those uni’s who have chose to over enrol react to the loss of the CDP.

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  4. Conrad’s observation is not completely right and btw I’m not an academic. Good teaching is critical to Universities however the system is regulated. Students are both openly critical of academics who are not seen as good teachers. Further, social media enables the praise/criticism of academics.

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  5. In the domestic u/grad market, perceived prestige and proximity to home have in the past been shown to be major factors for students with choice. However for internationals proximity to home is irrelevant and prestige has a big price penalty. Universities are very concerned about word of mouth negative comments to other potential international students. My view is that the rise of the internationals is the single biggest cause of improvements in teaching, though the shame factor of the CEQ and government programs have also made a difference.

    The other factor is lack of information. The CEQ results are very poorly publicised and there is an anti-competitive code of conduct which limits their use in marketing.

    I think MySchool indicates that when information is easily available it is of interest to education customers, and so maybe the promised MyUniversity will make teaching a larger factor in student choices.

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  6. “Conrad’s observation is not completely right”
    .
    As far as know, there is no evidence that any measure of teaching quality has a big effect on undergraduate admission (although I agree that the informal word-of-mouth of overseas students is important in some areas). I work at a university that gets a 5* teaching rating, for example, but the admin people were far happier to get into the top 500 in the SJT research index, and the reason is obvious. No-one thanked anyone for the first, but the university threw a party for the second. The second of these is now written on all of their advertising.
    .
    I also have a quite good knowledge of many universities that teach the same subjects as me, who teaches them, most of the subjects in their equivalent undergraduates, and whether they happen to be good or not from honors students that have done them we get, who are generally happy to say whatever they think. Now as it happens, I’m sure, in terms of teaching quality, the undergraduate course I teach on is better than the more prestigious alternatives (that’s being honest — other places I have taught, the quality has been truly woeful). This is mainly because we have a few members of staff that are really interested in teaching and doing a good job at it, and really do (ironically, only one was ever rewarded for it, and only then because he kept on getting Carrick teaching awards from the now closed ALTC for being so exceptionally good). Despite this, almost all students would choose the most prestigious university over mine if given the opportunity, excluding those that come because we offer a few majors that other universities don’t (one of which is really excellent), not because the teaching quality in those is good, bad, or indifferent. Thus prestige pretty much trumps teaching quality every time.
    .
    The same is true in fully privatized systems — the big private universities in the US, for example, pay lip service to teaching quality at the undergraduate level (the student-to-staff ratios are published, and some want to have the lowest possible number). Indeed, many of them get most of their teaching done by sessional academics, many of whom run 8 courses per semester, often at different universities. This makes the use of sessionals in Aus seem mild, and is awful for quality.
    .
    “Students are both openly critical of academics who are not seen as good teachers. Further, social media enables the praise/criticism of academics.”
    .
    Unfortunately, the simplest way many people have found to be a “good” teacher is to dumb courses down to the lowest common denominator, and to be too nice to students that don’t deserve it (such as by ignoring plagiarism, passing students that shouldn’t be passed etc.). The consequences of this are fairly obvious, and is one reason why the CEQ and MySchool stuff are really not comparable.

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  7. Conrad, even if it were true that quality of teaching had no impact on student admissions, don’t universities have additional motivations than just signing people up? One might assume that universities and governments also hope that students are learning something once they are at university. It seems rather dangerous to confuse the proximate goal (student admissions) for the ultimate goal (educating students).

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  8. “One might assume that universities and governments also hope that students are learning something once they are at university.”
    .
    As far as I can tell, at the general level, the main and almost only goal of Australian universities these days is to make money (perhaps some arn’t like that, although I’m not sure which). That’s just the reality — if you could start up a course that made money teaching people about Twinky and the other Telletubbies, you would get funding to do it and a promotion if it made a lot of money. This is just a hazard of continual underfunding and massive rules about how you can get money, whether you happen to like it or not. People should choose their majors well, as there are good and bad ones out there.
    .
    At the individual level it’s no doubt true that some and probably most of the _teaching_ staff think that things like education, quality and so on are important, but these can obviously come into conflict with making money. In addition, these people have surprisingly little power — management has all the power (some operate faux-democracies, and bore people with many meetings to pretend they don’t), and their goals can be entirely different at many levels. VCs may want to build big buildings to show they are important, research DVCs may want to get the university higher up a league table, accounting people may want to close a down an excellent course (for students) to show they can make hard decisions about making money etc .

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  9. Conrad – I know this is the standard view of academics at the coalface. But having worked closely with numerous senior university managers and knowing others I think the attitude to money is instrumental – it’s just the essential commodity needed for unis to do what they do.

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  10. Andrew — universities are now businesses — even the management will tell you that, and some of the more corporate managers hold even more more extreme views (e.g., Fred Hilmer), as they have publically expressed (Steven Schwatrz would probably be on the other end, although he’s gone now. Perhaps Hilmer should have looked at who was more successful, but I don’t think reality beat ideology for him).
    .
    Given this, do you think main thing McDonald’s wants to produce is money or burgers? If it’s the first, which it is, then I don’t see why universities are any different, and if students want better teaching, then they need to move good quality teaching up the list of things they look from from about 50th place to 1st. Until that happens, then it simply isn’t a selling point and hence won’t be focused on, apart from silly token efforts that measure how happy students are (cf., what they got taught) thanks to the government (like the CEQ and the thousands of surveys, almost all of which carry questions devised by management that have no idea of psychometrics or things you should actually be asking, which go in the bin each year).

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  11. Conrad – They are certainly run in a more business-like way (though I very much doubt too many successful businesses are run like universities) than in the past.

    But one reason there is so much acrimony in universities is that they are dominated by an internal dispute over resources, with internal stakeholders rather than external shareholders believing that they are entitled to a large share of the organisation’s income.

    Perhaps we are drawing overly sharp dichotomies; even in profit-making businesses people care about the product or services and not just the money, and in non-profits there is always much concern about money (try working in a think tank – makes unis seem opulent).

    But on the dominant purposes, it is still research and teaching (in that order) at universities, unchanged from the past.

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  12. The world’s best universities, such as Harvard and similar, care hugely about money, for it is money that allows them to buy the best people and facilities. They can be extremely hard nosed when it comes to decisions on where,when and on whom to spend it, and they make huge efforts to get more money in. But you rarely see the leaders of such places talk about money, or efficiencies, or other such grubby stuff. (An exception was during the GFC when the value of their endowments took a big hit but that was a special case.) The leaders operate publicly on a loftier plane, but behind the scenes they think all the time about money.

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  13. Conrad – I’m always intrigued by the view that ‘universities are now businesses’ and wonder what the alternative is? Arguments about resourcing and complaints about increasing administration/ managerialism aren’t new in higher ed.

    A common challenge for universities is more whether they seek to run not only as a business but as a single business – with the range of cross subsidies and hard choices on priorities that this requires – or a vague collection of small (departmental) businesses who may or may not pay their way depending on who’s doing the numbers.

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  14. Russell, it’s not quite as simple as “pay their way”. A first rate mathematics department will never pay its way because there just aren’t that many students who study mathematics (certainly not major in mathematics, let alone do higher degrees in it). But a first rate mathematics is a very good thing for a university to have. It’s inevitable, and desirable, that cross subsidies will occur from departments that have lots of students to those that have few students but excellent research. The question is where you draw the line, and that is matter of judgement.

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  15. “wonder what the alternative is?”
    .
    I agree with Andrew above that it probably isn’t best to look at in a dichotomous way, so I guess it’s the extent that matters. Some places have probably gone too far, depending on what outcomes you want.
    .
    “Russell, it’s not quite as simple as “pay their way”. ”
    .
    Actually, it’s pretty close.
    .
    “But a first rate mathematics is a very good thing for a university to have.”
    .
    Only if they generate something equivalent to paying their way. e.g., research outputs. That’s why maths has, in general, been culled across Australian universities in the last decade or so. You’d also be surprised how little cooperation there is in most universities across faculties — in some places it’s discouraged because it would mean money given to one faculty might need to be paid to another. For example, it’s easier for me to work as an external supervisor for a student at another university (something I do) than one in my own university but a different faculty, because the latter has funding implications attached.
    .
    “It’s inevitable, and desirable, that cross subsidies will occur from departments that have lots of students to those that have few students but excellent research”
    .
    It isn’t inevitable, and whether it’s desirable is a value judgement. The problem is everybody wants cross-subsidies, which of course would cheese the people off that actually earn the money, and if these are the people earning the money, it probably means they can change jobs fairly easily.

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  16. This is odd, I am agreeing with Russell for the second time in less than a week.

    It is never clear what plausible alternative academics are offering in their complaints. They seem to assume away the central problem of limited resources.

    Of course there are better and worse ways of dealing with this central problem – but of the two main options of cutting spending and raising more money, do they really think that the latter is worse?

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  17. “Only if they generate something equivalent to paying their way. e.g., research outputs.”

    That’s why I said, “first rate”.

    “The problem is everybody wants cross-subsidies”

    That’s why I said, “The question is where you draw the line, and that is matter of judgement.”

    “the people … that actually earn the money”.

    There are two ways of earning the money: teaching lots of students, or doing excellent research. (I suppose you could add a third way – inventing something that is a commercial success.)

    “It isn’t inevitable”

    It is in a good university that values research.

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  18. “but of the two main options of cutting spending and raising more money, do they really think that the latter is worse?”
    .
    How does one raise more money with all of those government rules?
    .
    I might point out that the reason I think it’s gone too far at many places is that the only thing most people get promoted for is money, and this terrible for good science — non-money making areas get completely wiped out, and people spend vast amounts of time looking for money versus doing something useful — and it’s not just me that believes this — there was an article by Peter Singer in the Australian a while back where he noted how lucky he was that he didn’t have to try and find money at Princeton, but could instead actually work on what he is interested in.
    .
    Another obvious side-effect of this (and there are many others) that gets mentioned from time to time is the corruption in the medical journals where there really is big money.
    .
    “It is in a good university that values research.”
    .
    I think you’ll find this is happening less and less, and will happen to an even smaller extent now the OS student market has been crushed. This isn’t surprising, because if you take money from the people that generate it, of course they’re going to be annoyed.

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  19. Conrad – Well obviously we’d all like endowments with tens of billions of dollars. But again this is just assuming away the central problem. Most unis can never have that kind of cash.

    My own view is that while anyone with intellectual interests needs time to pursue them, having to raise money is no bad thing (indirectly for many, in contributing to something that others value). The knowledge that financial survival is never assured is good for think-tanks – it leaves no room for complacency.

    And the brief funding golden age of universities in the mid-1970s, of lots of cash handed out with few demands in return – as uni histories show, money problems have been the norm since they started – isn’t really a great advertisement for the more money and less accountability mantra of academics.

    Unis are massively more productive now than they were then.

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  20. Andrew,
    .
    I’m not against raising money (I think it’s fine), it just when it’s almost the only criterion for many things, it isn’t a healthy state of affairs, and that’s pretty much where we are now. It basically kills areas where it is not easy to raise money research-wise; courses get closed on the basis that they are expensive to run, not whether they are good or not (we’ve had this discussion before); courses get opened because they make money, not because people learn things; people deliberately do things just to make money, whether they have scientific integrity or not; things that should be important, like good teaching, are not because they don’t make money etc .
    .
    Incidentally, I don’t think think-tanks are a great example, because most are partisan and hence work in particular areas where people want to pursue an agenda. Universities generally deal with a fairly broad range of science, many of which people haven’t heard of, let alone want to give money to. This doesn’t make them bad areas and nor does it mean that people with skills in these areas arn’t useful for the economy.

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  21. The contrast I’m drawing is between organisations that must raise money by persuasion (donations, selling things) and those that get their money without persuasion. Maybe there is a more obvious donor market for think-tanks than obscure areas of academic research, but unis more generally get far more donations than think-tanks.

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