The knowledge market

The higher education sector has been turned into a market

The neoliberal transformation of the UK higher education sector is a process that has been going on for more than two decades. During this period of transformation universities have become increasingly competitive and corporatised, as systematic year-on-year reductions in public funding have forced them to find new income streams across the emerging globalised education market. They are no longer institutions that are publicly funded to generate and transfer knowledge in socially useful ways; instead they have been ‘repurposed’ to become producers of commodities that can be bought and sold in the international marketplace. As Wendy Brown recently commented, ‘the saturation of higher education by market rationality has converted higher education from a social and public good to a personal investment in individual futures, futures construed mainly in terms of earning capacity’.¹

Since 2012 there has been a significant step-change in this process, as the Higher Education sector in England has been further financialised, and opened up to private providers.² Following the Comprehensive Spending Review in 2010 and the publication of the HE White Paper in 2011, the Coalition government made funding cuts of £3 billion to English universities (reducing funding from £7.1 billion to £4.2 billion).³ The severity of these cuts effectively changed the basis on which universities are financed: by 2015 they had completely removed public funding for teaching humanities and social sciences courses (the disciplines where it is easiest for private providers to compete with cheap and profitable courses), and some cuts were also made in funding for STEM (Science, Technology, Engineering, Mathematics) subjects. In the name of austerity and deficit reduction, HE teaching in England has been subjected to a completely transformed funding regime - one in which private providers can now compete for students.

These cuts have been made to the funding of the block grants that universities hitherto received annually, calculated for each institution on the basis of a target number of undergraduate admissions. This was a relatively stable form of public funding, although one that has been declining in value as the neoliberal tourniquet of year-on-year funding reductions has been tightened. Today student fees - first introduced in England in 1998 as a way of displacing government expenditure on HE onto its ‘consumers’ and over time exponentially increased - have become the main source of income for many university courses.⁴ Moreover, universities have for some time needed to ‘top up’ the block grant in other ways and have become reliant on income streams such as the lucrative market in international students - and this trend is only going to intensify.

In order to enable universities to recoup these cuts in block grant income, the Coalition government allowed institutions to increase fees to new undergraduate students from 2012, up to a maximum annual fee of £9000 (as expected, and has become traditional, all but a few opted for the maximum fee). As with previous hikes in fees, students were legally entitled to loans to cover their full cost, as well as subsistence costs. Currently, loans for an undergraduate degree will amount to around £40-50,000 worth of personal debt at the end of a three-year undergraduate programme.⁵

The introduction of student fees for any ‘accredited’ undergraduate course in England has opened the sector to private providers, who are now able to access ‘risk-free’ funds via the loans system, so long as they meet the new light-touch forms of regulation that have been designed to ease their entry into the sector. Public money, collected through taxation - and under the former system paid directly to universities - is now being used to provide funds for the loan companies (and some of it is being effectively looted by private equity ‘providers’ whose primary commitment is to return a profit to investors).⁶ Andrew McGettigan quotes an executive from the Parthenon Group describing the HE sector as a veritable ‘treasure island’ - not only because of the potential it offers to cream off profits via the student loan system but also because of the access afforded to intellectual property in...