State control damaging health of universities


OPINION:As Government funding has come to dominate universities, so has Government policy, write BRIAN LUCEYand CHARLES LARKIN

AS BRITAIN and America come to grips with the possibility of a double-dip recession, Ireland continues to squander resources and suffer from the same hubris that brought our economy to its knees. We speak of laying the foundations for a truly smart economy, but unfortunately pay homage to a Government ideology unlikely to produce this.

Higher education fees now cost the taxpayer €1.3 billion per annum. There is no strong evidence that this expenditure has widened access to third level. But it has transformed the sector.

As Government funding has come to dominate universities, so has Government policy. For the State, these places of learning are simply economic mechanisms, rather than crucial institutions for the creation and dissemination of knowledge, which should – among other roles – actively critique the society of which they are a part. This fundamental responsibility of universities has been undermined by reliance on Government funding.

Government intervention has consisted of picking “winners” in research policy objectives and favoured undergraduate courses.

There is ample evidence that Government attempts to pick winners provide lamentable returns. In fact, a flexibly minded population, well-educated in the basics, is more conducive to economic growth.

In response to these problems, we suggest a restructuring of third level. Institutions need the freedom to set and deliver their own courses, and to control their own funding in order to produce a system fit for purpose.

Freedom to set and deliver courses would mean granting “university” (ie degree-granting) status to all third- and fourth-level institutions. But – as seen in the UK and Australia – this freedom in itself is not a panacea.

With freedom comes responsibility, most importantly that of ensuring that all institutions offer an education which will promote flexible thinking.

To oversee quality in teaching and research, a single independent evaluation unit should be given a status in education akin to that of the Food Safety Authority, but important reforms in employment and funding structures are the first and vital step.

Education to promote flexible thinking cannot be narrow. At a minimum, it would demand annual engagement with the three broad domains of arts, life and natural sciences.

To ensure that students are exposed to the frontiers of thinking, all academic staff must be active researchers throughout their careers. This could be achieved by maintaining a system of tenure based not on a once-in-a-lifetime assessment, but on continuous appraisal.

Meanwhile, freedom should be extended to salaries. Universities must be able to set salaries to compete for the best personnel and to reward job performance. But this does not mean the cost of “superstar” researchers invisible to the average undergraduate should be funded through the undergraduate programme. The US marine motto, “Every man a rifle man”, should be adapted by the newly freed institutions: “Every scholar a teacher, every teacher a scholar.”

Undergraduate funding has been a significant policy issue since the introduction of “free fees”. Postgraduate funding through the award of research grants is a less controversial but substantial investment of public money. An element of public funding is appropriate at undergraduate level: policy articulates society’s wishes to fund the undergraduate stream.

However, some payment at point of use – ie fees – is needed. Fees could be paid upfront at a discount, deferred and repaid via the tax system or, where appropriate, covered by means-tested grants.

To determine the State’s contribution, universities would produce a full economic costing of their undergraduate provision, which would be funded retrospectively 50 per cent en bloc by the State. This would preserve the independence to manoeuvre and to set appropriate fees to make up the remaining 50 per cent.

To remove incentives to crowd undergraduates into cheaper courses subsidising more expensive programmes, no course fees would exceed 75 per cent of true economic costs. This would produce differential fees for courses within the same university and across the sector.

With the new requirement for broad education in arts and sciences ensuring balance, universities’ ability to manage courses without State control or perverse financial incentives would vindicate one economic argument for public funding of universities: they are providers of public goods – well-educated citizens.

This “public goods” argument should not be over-extended. It is less applicable at postgraduate level.

Masters or doctoral students either seek entry to an area or profession (investment) or act from personal interest (consumption). There is no obvious reason why the Government should fund the latter over other consumptions.

In other cases, the individual gains by the qualification, and the tax/PRSI system offers a return to society via his or her increased taxable earnings, thus capturing the public good element. Under our system, research would be funded primarily through internal allocation of surplus funds from running courses, and from philanthropic and competitive sources.

Freedom, of course, also means freedom to fail. If a university was unable to deliver, it would ultimately fold or be subsumed by another, more successful university. But success in this system would reflect genuine interdependence of teaching and research, and stewardship of resources amid freedom of action.

A price worth paying?

Prof Brian Lucey is associate professor of finance at the school of business studies in Trinity College Dublin. Dr Charles Larkin is research associate at the same school

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