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The White Paper on Higher Education: Is there a strategy?

July 11, 2011

Originally posted on 11th July 2011 on the Research Republic blog.

The clamour inside parliament, on the streets and online that surrounded last autumn’s vote on fees was starkly absent from the government’s release of their long-awaited white paper on higher education last Tuesday. David Willetts stated and restated that student choice is the core of a paper which shows comprehensiveness if not cohesion, outlines plans if not strategy, and has attracted more cautious acceptance than flat condemnation.

Two colliding narratives explain this muted response. The first is political: the parliamentary strategy adopted by the coalition government to press change upon the HE system incrementally. The decisive and most volatile factor behind the coalition’s reforms, tuition fees, were decided first in a ‘snap’ vote.  Actual draft legislation, in which the full institutional, financial and social implications of the reforms might be debated fully, is scheduled for next year, Willetts promised in parliament. In the meantime, BIS has invited a select counsel (including Aberdeen University’s Ian Diamond, former chief of Research Councils UK and controversial ex-president of the National Union of Students, Aaron Porter) to provide advice on discreet parts of the system. A string of white papers, hopefully published more promptly, are also scheduled. In short, by pencilling in the details of a regulatory structure, we are assured, government will reveal a lean, inclusive HE market.

The second is financial. Universities are still scrambling to find a place within the new tuition fee caps of £6000 and £9000 per year – and which cap applies depends upon each institution’s efforts to widening participation to higher education. Most have opted, unsurprisingly, for the top bracket. In these uncertain times the struggle for institutional prestige is a matter of institutional survival, not a simple call to compete. This is because drastically reduced teaching budgets remain tied to narrowly-defined measures of teaching quality, while the top tier of research universities continue to capture 90% of HEFCE funding for research[1]. For this reason, universities who charge lower fees effectively admit to providing inferior education.

While the white paper proposes to allow unconstrained recruitment for students gaining two A grades and a B in examinations, this does not signal a straightforward market remedy for quotas on student places, which will otherwise remain in place. Salford University Vice-Chancellor Martin Hall responded to the white paper by questioning its effects for the ‘squeezed middle’: modest academic achievers from socio-economic groups who are first in their families or communities to access university places[2]. These students stand to lose current opportunities for participation if the ‘squeezed middle’ of universities – who spend the majority of their budgets on teaching, and not research – can’t compete with the elite. So far, current plans appear to ignore the distorting effects of a reputation-driven system without removing the regulation that has perpetuated it.

Also affected are specialist providers like the regional universities, university colleges and performing arts schools of GuildHE, whose CEO emphasised the “risks of destabilising institutions and the broader system”[3]. In this regard, an early alarm was sounded by the National Audit Office in March. It stated that both the new funding environment and the transition to it is “raising the number of institutions at high risk of failing, and stretching the existing resources” of the Higher Education Funding Council for England[4]. The resulting panic about university bankruptcies obscured two of the NAO’s key messages. Firstly, that as the HE system emerges into a market whose exact parameters are still unclear, there is not yet a clear regulatory framework to smooth the way, much less guide universities into an uncertain future. Secondly, while according to the white paper HEFCE is to take up a significantly expanded mandate for quality assurance, it was singled out for concern in the NAO report over how it will balance its regulatory role with respect to its other responsibilities[5].

Clearly, now is the time for strategy – not only for the universities that are still trying to second-guess the institutional, financial and regulatory pressures to which they will be exposed. Government agencies also need to know whether they are intended to manage a transition to less regulation, as promised by Willetts, or will have to plan for the expanded regulatory challenges of a genuinely open market in higher education.


[1] Jonathan Adams and Karen Gurney (2010), ‘Funding selectivity, concentration and excellence – how good is the UK’s research?’, Higher Education Policy Institute

[2] Martin Hall (2010), ‘A paler shade of white’, University of Salford Vice-Chancellor’s Blog, 4th July, available from http://www.corporate.salford.ac.uk/leadership-management/martin-hall/blog/2011/07/a-paler-shade-of-white/

[3] GuildHE (2011), ‘White Paper published’, GuildHE News, 28th June, available from http://www.guildhe.ac.uk/en/news/index.cfm/nid/60435B31-43AD-406C-A7CFA854F78A075C

[4] National Audit Office (2011), ‘Regulating financial sustainability in higher education’, London: The Stationery Office

[5] Ibid.

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Report from ‘The Power of Local’ at How Power Corrupts

June 13, 2011

Originally posted on 13th July 2011 on the Roundhouse Journal website as a report on our public symposium and book launch, ‘How Power Corrupts’

This roundtable event began with  HPC co-host Chris Meade  describing the Unlibrary, which was inspired by his realisation that when we go to libraries we are often equipped with the largest possible collection of information already – the internet on our laptops. Why do these places still matter? Similarly, when a Crouch End bookshop closed recently the community was scandalised – despite the fact that the community itself could not support the bookshop with sales.

Mr Meade suggested that these contradictory impulses indicated that we need to return to the fundamental ideas behind institutions such as libraries and community bookshops. Libraries are spaces, in his view, for collaboration – which is why the shelves of the unlibrary are filled with profiles of its members. Bookshops, meanwhile, are important spaces for the community of readers that emerges around books, not as objects but as carriers of ideas.

From the audience, Councillor Mike Harris took up this theme when he recounted the difficulties Lewisham Council faced turning over five libraries to the ‘big society’. He argued that people still expect the state to provide such services. Forestalling the conclusion that the inevitable result of such moves is privatisation, panellist Anke Holst argued further that either fighting for government funding or selling out are not the only options.

Instead, a broad if cautious consensus emerged that the decline of such institutions as the public library might allow for new kinds of spaces and collectivities to emerge. Roundhouse member Dora Meade cautioned that uncritically defending older forms might actually re-legitimise them and their dysfunctions. To be sure, the kind of creativity that might find ways of engaging with the corporate sphere constructively, it was argued, might also help us take on stewardship of our collective knowledge when we can no longer afford librarians – or no longer need them.

Report from ‘Online Deliberation’ at How Power Corrupts

June 13, 2011

Originally posted on 13th July 2011 on the Roundhouse Journal website as a report on our public symposium and book launch, ‘How Power Corrupts’

The Online Deliberation discussion featured Tim Hardy, co-developer of the Sukey protest mapping application, Dr Lee Salter, lecturer in Journalism at the University of the West of England, and Dr Ricardo Blaug. Intending to investigate the interrelationships between deliberative public spaces and the internet, the contributors were strikingly unanimous that neither could be understood independently: Dr Salter insisted that ‘we can’t abstract the internet from the social and economic systems in which it is used’. They also agreed that they looked online for practical solutions to the problems facing deliberation.

This aim is evident from the Sukey application, which Mr Hardy described as a response to kettling tactics employed by police with increasing frequency on demonstrations. ‘Historically’, he said, ‘the footsoldier has never had a view of the battle’. Sukey was not written just to provide for a politically-active community of internet users, he argued: instead, it has the possibility to generate ‘swarm consciousness’ which draws on the collective intelligence of protesters. Similarly, Dr Salter described the problems he encountered in helping an east London borough to benefit from public resources. Universities, for example, were unwilling to open up to those living around them when it was not clear how they would benefit as institutions. These colonisation effects – where institutions founded to provide collective goods now operated according to a coldly instrumental rationality – led Dr Salter to turn to the internet.

Tim Hardy’s contribution, however, made clear that the internet has never been a genuinely free space.  Put plainly, he argued that participation online does the work of the surveillance state for it – pointing to how connective technologies such as the social web makes strategic arrests easier. The connection to established political realities is clear: commenting on recent purges of activist pages from Facebook, he said ‘you have no right of access to a shopping mall’.

However, the internet has created a certain paradox. As Dr Salter suggested, the internet was developed to its full potential by corporations, but now it serves to undermine them – creating fatal profitability crises across several industries and even shaking the corporate organisational form to its foundations. Dr Blaug pointed out that in democracies, similarly, what actually educates the masses is the ‘stunning incompetence of elites’. Once the failures of elites become so acute that we come out in the streets as a public, we return with new online resources to the oldest political questions that exist. Chief among these what form of organisation we choose at the moment when any is possible. In such a situation, time-honoured attributes of democracy like collective intelligence can re-emerge – even the straightforward recognition of our ourselves as a plural subject.

Universal Credit, Distinct Drawbacks

February 28, 2011

The prime minister’s exhortation last week for change towards a “culture of responsibility” around welfare bares a striking similarity to New Labour’s ambition to create a “change of culture among benefit claimants”[1]. There is also a distinct resonance between Tony Blair’s objective to bring “the new workless class back into society and into useful work”[2] and Teresa May’s pre-election statement that emphasised the benefits of work to “health, self-esteem and social inclusion”[3].  Finally, as Mike Brewer of the Institute for Fiscal Studies noted prior to the election, the corresponding Work Programme which constitutes the Conservatives’ sole welfare-to-work scheme, merely goes “a little further” in the direction of New Labour policy.

It appears that the UK escaped steep unemployment rises following the first shocks of recession in 2008-9, but this means little for “serious jobless concentrations among more marginal groups that 15 years of sustained growth did little to remedy”[4]. This is despite the fact that under Labour, benefit provision and corresponding sanctions were tailored closely to the needs of specific target groups, as suggested by the diversity of New Deal programmes. Will the Universal Credit effectively reach these groups?

Problems emerge when looking at underlying links between welfare and work: particularly the proliferation of ‘revolving door’ employment.  There is a one-way drive behind the combination of sanctions and job search assistance that is intended to encourage entry into the labour market. Research suggests that this often fails to “take account of people’s differing labour market attachment”[5]. If the Labour policy of classifying benefit claimants in the main Employment Support and Jobseekers’ programmes according to disability and claim length effectively “hides from the system” those caught in revolving door employment, the Universal Credit ought to reach them.  However, the Joseph Rowntree Foundation reports that the informal economy becomes much more attractive when sanctions regimes are tightened.  This impacts two important groups who are self-employed or more likely to work for less than the minimum wage: unskilled workers and young people[6]. The withdrawal of the Education Maintenance Allowance may also have knock-on effects here, discouraging young people from gaining higher-level skills, while increasing financial pressures on working members of the family. In addition, concerns that pressing claimants to find work will only work in areas with a healthy job market also remain unaddressed.  In areas where jobs are scarce, and as a result of a ‘work first’ approach to benefits, this may in fact mean increased competition for entry-level jobs between claimants and other jobseekers[7].

Evidence for the white paper on the universal credit also suggests that it is not enough to counteract in-work poverty, which actually grew in the growth years due to falling rates of pay for unskilled labour and increasing pay differentials. It is also difficult to see how reducing support to those working over 16 hours per week under current plans will encourage progression to more stable full time employment for those in low-wage jobs. There is a gap in policy that separates being supported in seizing job opportunities with few hours and being “stranded in low-paid work on the fringes of the job market”, as the Social Market Foundation has argued.


[1] Department for Social Security (1998), ‘A new contract for welfare: principles into practice’, London: HMSO.

[2] Blair, T. (1997), Speech by the Rt Hon Tony Blair MP at the Aylesbury Estate, Southwark, on 2nd  June, London.

[3] May, T. (2010), Tackling unemployment and worklessness, Speech by the Rt Hon Theresa May at the Conservative Jobs Summit, on 15th March, London.

[4] Gregg, P. and Wadsworth, J, (2010), ‘The UK Labour Market and the 2008–2009 Recession’, London: Centre for Economic Performance, London School of Economics.

[5] Mulheirn, I., Foley, B., Menne, V., and Prendergrast, J. (2009), ‘Vicious cycles: Sustained employment and welfare reform for the next decade’, London: Social Market Foundation.

[6] Griggs, J. and Evans, M., (2010), ‘Sanctions within conditional benefit systems: a review of evidence’, York: Joseph Rowntree Foundation.

[7]Kenway, P., MacInnes, T., Fothergill S. and Horgan, G. (2010), ‘Working-age ‘welfare’: who gets it, why, and what it costs’, York: Joseph Rowntree Foundation.

Do bankers vote with their feet?

January 25, 2011

The political fallout surrounding the gradual conclusion of a two-year battle to curb bankers’ bonuses can obscure the long-term regulatory, political and financial future of the City of London – and means that its potential consequences for the UK as a whole are unclear. To borrow a phrase, the debate is generating much heat but little light. The departing chief of the Confederation of British Industry, Sir Robert Lambert, has gone as far as to warn of a lack of substantial thinking by the government on the UK’s future “economic eco-system”: saying, “when it comes to micro policy initiatives, politics appear to have trumped economics on too many occasions over the past eight months”, as the Independent reported on Monday.

When Barclays chief Bob Diamond was questioned by MPs over bonuses on Monday, the Guardian reports, he claimed repeatedly that “he wished he could ‘isolate’ bonuses from the rest of the business.” Current strategy seems to suggest that Whitehall may agree. Agreement on the true shape of ‘Project Merlin’, in which Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland (RBS) are to contribute funds to the prime minister’s ‘Big Society Bank’ amongst other initiatives, has been delayed.  The BBC’s Robert Peston, responding to the news, suggested that the ‘Merlin’ decision may be delayed in order to coincide with the final settlement of the confrontation over bonuses. He has raised concerns that banks are essentially ‘too big to fail’: therefore, whether or not they have been recapitalised with public funds they have a de facto ‘taxpayer’s guarantee’.

A report from Sky’s business editor, Mark Kleinman, suggests that the four banks involved in the ‘Merlin project’, are unlikely to commit anything near the prime minister’s £200bn target for lending to the prospective Big Society Bank: “the final number is likely to be in the region of £65bn-£75bn”. Kleinman also explains that this issue is being considered separately from the hotly anticipated report of Sir John Vicker’s Independent Commission on Banking (ICB), set up to address such “structural issues” as “the complex issue of separating retail and investment banking functions” as well as “non-structural measures” to benefit consumers and businesses[1]. As other BBC coverage suggests, there is a certain divergence in understanding between government and banks in how the issue of bonuses relates to wider efforts to rein in the financial sector. The present point of concern for leaders of the ‘Merlin’ banks is governance: executives “argue that lending targets for what might be weaker businesses could breach rules that say any decision should be in the best interest of shareholders.”

PricewaterhouseCoopers’ Jon Terry warned last year that the implementation of European rules on bonuses “could make it more likely that banks move operations, or at least expand, outside of the European Union.” There is a clear echo here of a previous controversy over the regulatory framework more broadly. The outlines of this debate are found in a 2008 report for the City of London, which noted that “the existence of corporate tax differentials is now one of the few remaining significant distortions to the international allocation of capital.”[2] Amongst its conclusions was that should London “become uncompetitive on tax”, certain firms will, in certain circumstances, move their executive functions, capital base, or operations as a whole out of the City. However, the European Cities Monitor reports that London moved to second place in 2010 in terms of “the climate governments create through tax policies and availability of financial incentives”, edging out both Warsaw and Geneva[3]. This result is significant because Poland is widely considered to be the only European country to escape the recession, and is competing vigorously to lead Central Europe’s growing financial markets. Geneva was the destination of choice for employees of the hedge fund Bluecrest, in response to proposals for a windfall tax on the financial sector last year. As a report from the Guardian’s Heather Stewart suggested, too, departures from the city under the last government represented “a trickle rather than a flood”.

The public debate over tax reverberates, quietly, in academia. The model for tax competition dates back to the 1956 Tiebout hypothesis on local government: grossly simplified, it suggests that city residents vote with their feet when finding a suitable balance between public goods and taxation. As Wilson and Wildasin suggest without comment, it can be “applied, almost unaltered, to competition among jurisdictions for mobile firms”[4]. However, economists and political scientists are perplexed by lack of evidence of a ‘race to the bottom’ in tax rates on mobile capital amongst OECD countries. Trying to overcome the limits of these two perspectives, more recent research has argued that the assumption that capital owners react immediately or perfectly to changes in taxation is unconvincing, and also that political pressures on governments for fairness in the tax regime must also be taken into account[5].

Sir Richard Lambert urges that the government has proved “careless of the damage” recent policy “might do to business and to job creation”. This suggests that it is time to clarify exactly where regulatory reforms should be targeted. The surprisingly political tone of the departing CBI chief’s message is in marked contrast to the past position of the British Chambers of Commerce. Last year, it suggested that “regulation can penalise business by transferring resources needed away from business investment to employees or citizens in general.”[6] With fears over stagflation rising following recent GDP figures issued by the Office of National Statistics, there is a need for a substantial commitment to the real economy – instead of mobile capital – from both government and the financial sector.


[1] HM Treasury (2010), ‘Sir John Vickers to Chair the Independent Commission on Banking’, press release, 16th June.

[2] Butterworth, D., Moriarty, M. and Tilden, M. (2008), ‘The Impact of Taxation on Financial Services Business Location Decisions’, London: City of London.

[3] ‘European Cities Monitor 2010’, London: Cushman & Wakefield, p. 19.

[4] Wilson, J.D., and Wildasin, D.E. (2004), ‘Capital tax competition: bane or boon’, Journal of Public Economics 88, p. 1067.

[5] Plumper, T., and Troege, V.E. (2009), Why is there no race to the bottom in capital taxation?, International Studies Quarterly 53, p. 766.

[6] Ambler, T., Chittenden, F. and Miccini, A., (2010), ‘Is regulation really good for us?’, London: British Chambers of Commerce, p. 15.

Cuts, Leadership and Democratic Management

December 1, 2010

Originally posted on 1st  December 2010 on the Research Republic blog.

The Association of Chief Executives of public services began its annual conference last Wednesday with the shock of the Comprehensive Spending Review (CSR) still resonating.  They discussed “closing, merging and doing much more with much less”, while the plenary speech considered the imperative of engagement with the private and third sectors. As the Guardian’s Janet Dudman commented yesterday, the sombre tone of the conference is understandable: the Association’s members “run the bodies that now face abolition and merger”[1].

David Clark, head of the Society of Local Authority Chief Executives and Senior Managers, noted wryly after the CSR’s release that Secretary of State Eric Pickles had failed to address his customary note to Councils, which usually underlines the benefits of the government’s plans, to their Chief Executives[2]. What the Secretary’s dead letter contained was a description of the “settlement” as lessened funding for greater freedom. The “emphasis must be on creativity and innovation”, he concluded, and so “councils must really put every aspect of service delivery under the microscope”[3]. But what do creativity and innovation mean to a public manager facing a 28% reduction in the government’s revenue support grant, except short form for ‘desperate measures’?

However, even this blackest of clouds has something of a silver lining. Few Local Authority leaders and managers will miss the Audit Commission or indeed the 4,700 central targets that have already been scrapped, and the Secretary of State cites plans to roll back many other data reporting requirements. This is not merely the ‘carrot’ complementing the ‘stick’ of cuts, as Peter Hetherington has suggested[4]: the ‘settlement’ points to changes that have been emerging for some time, but have now become starkly visible.

The first is the realisation of a dramatic shift in power and responsibility to the local level – which in many ways has not been acknowledged in its scale. The Local Government (Power of General Competence) Bill currently being debated in parliament expands the Local Government Act of 2000, giving each council powers to do “anything which it considers is likely to be of benefit”[5] for their localities and citizens. It is a mistake to see this move as mere compensation. The original Act, as the Local Government Association (LGA) argues, “was intended to provide flexibility for new, innovative services and initiatives and the development of new service delivery architectures”[6]. However, as Jon Coaffe notes, previous drives towards the local have often hidden centralising impulses in the form of an auditing, evaluation and scrutiny regime, as well as ‘earned autonomy’ tied to performance[7]. These pressures have too often curbed innovation efforts. A 2009 case brought against the London Borough of Brent prevented it from partnering with London Authorities Mutual Limited (LAML), a collectively-owned insurance firm set up to provide insurance for ten boroughs in total. “Both localism and council efficiency efforts received a rude setback”, writes Mark Smulian, when the case became a legal battleground over whether councils were permitted to set up partnerships such as LAML at all[8].

Underlying the interconnected challenges of localisation and innovation is a fundamental question of legitimacy. A consensus is emerging that a fundamental change is underway in the relationship between state and citizens, and as the recent response of students to cuts in higher education demonstrates, strong antipathy towards this new settlement is simmering under the surface. However, British citizens have complicated relationship with the welfare state. Recent data from IPSOS MORI suggests that while few respondents are eager to participate in delivering them, 58 per cent of the public wants to be engaged with shaping public services.  However, survey results in the study indicate that enthusiasm for “‘shaping how public services are provided’ is contingent on knowledge about the ‘opportunities that were available’ for involvement and there being ‘help and advice on how to’ be more involved with services’[9]. Dismantling the welfare state is, at this point, still unthinkable for the public. There remains great potential for drawing on social resources to support and contribute towards new approaches to social needs – but public services will have to lead the way.

The LGA argues that before the partnerships controversy, “councils were extensively involved in finding more economical ways to provide services through shared arrangements, particularly for back office and support services”[10]. Democratic Management allows them to go further. Its emphasis on co-production in the design, delivery and evaluation of public services means that collaboration with the public, the third sector and other public services becomes an integral part of an organisations mode of operation. Deborah Szebeko, director of the ascendant consultancy thinkpublic, has strongly advocated a model of “self-improving public services” that “have the skills and tools to engage, listen and innovate rapidly by listening to citizens and frontline staff”[11]. This highlights the importance of integrating engagement both inside organisations and in their outward relationships. However, Dudman suggests that considering the relationships between staff and management in the public sector – which even before austerity measures were often strained – the “difficulty for senior managers is that taking what might otherwise be seen as sensible steps to cope with the cuts crisis leaves them vulnerable to ridicule”[12].

The demands of localism and innovation converge on the public manager. The Centre for Cities, responding to the CSR, has expressed its concern for local councils in these terms:

While they will be able to make the reductions most suitable to their local area, much of the blame for where cuts land will fall on them. Strong leadership will be vital not only to make difficult decisions, but to communicate these to the electorate and to the public sector workforce that remains[13].

For this reason, the “tools and platforms” Szebeko advocates may not be enough: what is required is a profound shift in the culture of public sector organisations. Some of the necessary skills managers will require to this end have been sketched out by The Work Foundation in a recent paper – they include handing over ownership to staff, fostering autonomy, focussing on the cohesion and internal dynamics of teams, and perhaps most strikingly, “co-creation of vision and strategy”[14]. But surely the call for “a deeply connective philosophy” to help leaders “see how the people and systems in an organisation fit together” is essentially a call for democracy?

Dudman laments that public managers will face “difficult conversations” after this week’s conference. Only a democratic shift towards democratic practices can authorise managers to lead their organisations through straitened times. We suggest that the concept of democratic management offers the skills needed to negotiate such encounters, and to turn them into discussions of a future for their organisations and the communities they serve.


[1] Dudman, J. (2010), ‘Sensible steps to cope with cuts leave public sector managers vulnerable’, The Guardian, 24th November.

[2] Clark, D. (2010), ‘CSR – Lost in the post’, David Clark’s blog at SOLACE, 22nd October.

[3] Pickles, E. (2010), Letter to Leaders of Local Authorities in England, 20th October.

[4] Hetherington, P. (2010), ‘All councils are the opposition in this era of cuts’, The Guardian, 23rd November.

[5] The Local Government (Power of General Competence) HL Bill (2010) 55.

[6] Ibid.

[7] Coaffe, J. (2005), ‘New localism and the management of regeneration’, International Journal of Public Sector Management 18(2), pp 108-113.

[8] Smulian, M. (2009,) ‘Laml ruling sends councils back to the drawing board on co-operation’, Public Finance, Undated.

[9]2020 Public Services Trust (2010), ‘What do people want, need and expect from public services?’.

[10] The Local Government (Power of General Competence) HL Bill.

[11]Szebeko, D. (2010), ‘Point of contact’, The Guardian Public, 15th June.

[12] Dudman, J. (2010).

[13] Larkin, K. (2010), ‘The implications of the Spending Review for cities’, Centre for Cities.

[14] Tamkin, P., Pearson, G., Hirsh, W. and Constable, S., (2010) ‘Collective leadership for sustainable high performance’, Paper to the Principal Partner Exchange Forum, The Work Foundation.