The OECD's decision to back the return of third-level fees makes good sense, writes Don Thornhill.
Higher education has never been more important. It enriches people's lives and brings important economic, social and cultural benefits for society. Our higher-education sector is a national asset which will repay investment many times over. It has served the country well, as recently pointed out by the Enterprise Strategy Group. But in a world where knowledge creation and diffusion are at the core of economic activity, the system faces many challenges.
The report on Irish higher education from the OECD review team which visited Ireland earlier this year will be published next week. The decision by the team to recommend the return of third-level fees is consistent with HEA thinking.
Our institutions have to be funded adequately. We need to consider how individual students who stand to make considerable financial gains from higher education could contribute to its cost without creating financial and other barriers to access. We can learn from the experience of other countries where loan and grant schemes are used to ensure wide participation in higher education. Though important, there is a risk that the recommendation on fees may overshadow the other recommendations in what we expect will be a far-reaching and important report from the OECD. It is helpful that the fees issue has been headlined in advance of the main report. Other financial issues are addressed in the report from the HEA published today on the financial position of the universities. This report finds that the financial framework within which the universities have to operate is less than satisfactory.
The financial issues are important but there are other significant policy and structural challenges. We need to accelerate the pace of creating a higher-education system which will rank among the best in the world. We rank only a "good average" among OECD member-countries in terms of the numbers who graduate in Ireland with degree-level qualifications (11th of 17 OECD countries). Our research performance as measured by the numbers graduating with research-based higher degrees (14th of 27 countries) is "very average".
The HEA and the Enterprise Strategy Group believe that we should position Ireland within the top three performing countries in the OECD in higher education and research. This is an ambitious target. In 2004 it would mean that the participation rate in higher education would be 72 per cent rather than the current 55 per cent rate. Graduation rates for higher degrees (masters and PhDs) would be three times higher as would spending on R&D in the higher-education sector.
These are not fanciful numbers. The ESRI have already reported that sustaining our economic development will require over 300,000 new graduates in the labour force by 2010. If we continue with our current levels of performance, the number of new graduates will only be 200,000. We need to ensure that as many of our people as possible can avail of these opportunities. Immigration will only meet the shortfall to some extent and most OECD countries will also be seeking to recruit internationally mobile people with higher education, advanced skills and research experience.
Investment in research is also critical for future progress, both for economic development and wider societal development (for example in research in the humanities, social sciences, health and the environment, including the marine sector). Much of this investment should take place in our universities and institutes of technology. Greater investment is needed from Government and the private sector. Contrary to the view expressed by Constantin Gurdgiev in The Irish Times on August 28th, increased Government investment, particularly in basic research, is absolutely essential. Government investment will not, as Dr Gurdgiev argued, crowd out private investment.
Experience elsewhere is that government support for research and technology is necessary to provide the knowledge platform and supply the skilled workforce for increased private investment in research.
Establishing and protecting institutional autonomy is another key issue. It is an essential part of an effective higher-education system. Our universities and institutes of technology should be free to take decisions without being second-guessed on their management and operations by Government agencies or Departments. Centralised micro controls blunt the capacity of the higher-education system to contribute to national objectives.
Accountability is the counterpart to autonomy. The higher-education institutions are funded mainly by taxpayers, who get a good return from their investment.
But our higher-education system must continue to demonstrate to taxpayers, and to the Government, that it is making the best possible contribution to national development, and the best use of resources.
The latest report from the HEA makes the point that universities are complex institutions undertaking a wide range of activities in an increasingly commercial environment. They need to have the freedom and capacity to strategically manage their finances and assets.
Our universities and institutes of technology also need to be clear about what Government and society expect from them. The HEA has called for a national policy framework, established by Government, to articulate the outcomes that the system is expected to deliver. This would include targets in key areas such as maximising graduation rates, particularly in higher research-based degrees, widening access to higher education, supporting excellence in teaching and research. It would also include assisting the contribution by the institutions to society through, for example, supporting enterprise and fostering cultural development.
The system for public funding can provide an important link between national policy goals and institutional autonomy. At present, most public funding for the universities is provided on the basis of student numbers. That will remain important. The HEA proposes that a significant part of future day-to-day Government funding - in the long-term as much as 15 per cent - should be allocated on a competitive, performance-related basis. The objective is to provide development funding for institutions which would support them with strategic approaches to long-term development, linking institutional performance and strategy to national policy priorities.
The HEA has also proposed that a mechanism should be provided in legislation to allow some of our higher-education institutions to evolve into independent, not-for-profit, bodies, as is the case in the US and in other countries. This is not a proposal to "privatise" the universities and the institutes of technology into shareholder-owned institutions! Our belief, supported by international evidence, is that institutional autonomy will enhance the contribution of our institutions to national development. The current legislation in this country reflects a view of higher-education institutions as public-sector bodies. This needs to be relaxed - we suggest a self-selection process through legislation.
These not-for-profit institutions would still have strong links with Government by contracting to provide places and courses for agreed student enrolments. The same fee arrangements and public subsidies for undergraduates would apply to these institutions as in the "public institutions". The same protections and supports for widening access for students would also apply.
The theme of the Enterprise Strategy Group "Ahead of the curve" is apt. The decision of the Minister for Education and Science to invite the OECD to review higher education in Ireland is timely. The decisions flowing from the OECD report will give us an opportunity to take the policy and financing measures to achieve a leading position - and to stay there.
Dr Don Thornhill is chairman of the Higher Education Authority
