How do you price a university degree programme?
How do you price a degree programme? Well, ask most English universities and the answer is £9,000. Or rather, the answer may be ‘whatever the government-imposed upper limit for tuition fees is’. In fact, if the British government had followed Lord Browne’s recommendation that there should not be an upper limit, what would universities now be proposing to charge? £15,000? More? Or maybe less?
What is clear so far is that the British government’s strategy of suggesting a benchmark figure of £6,000, and then allowing up to £9,000 in exceptional circumstances, and establishing a whole new bureaucracy to deal with those exceptions (the Office of Fair Access) has not worked as intended at all. All universities to have declared their hand so far, except one, have gone for £9,000. The one exception to date is London Metropolitan University, which is actually going to charge less even than £6,000 for some programmes. Sheffield University, which has not yet made any specific announcement, may be going for less than £9,000, but we’ll have to wait and see.
The latest university to make its no-surprise £9,000 announcement is the University of Manchester, which has managed to declare its intentions in a sombre tone of regret, with its President saying that the decision had been taken ‘very reluctantly’ – which sounds odd, because either this is the right decision or it isn’t.
Some of the speculation doing the rounds is that universities now feel compelled to charge £9,000 as a quality statement: if we charge less, we are saying that our courses are less good. This suggests that pricing a university programme is now being seen as part of brand marketing, rather than determining a genuine cost structure.
Universities are not public service bureaucracies, but equally they are not for-profit commercial entities, and pricing their products on the basis of market expectations is not a good idea. But then again, it may be an inevitable consequence of the new English funding régime.
But it is equally wrong to see pricing primarily as a product of what the taxpayer can currently afford. The proportionate distribution of a sum of money fixed by government – as in Ireland and Scotland – does not reveal the true cost of a university degree. It may be that universities need to be both more forthright but also more transparent in explaining what costs must be met in order to offer programmes that are in line with mission and represent quality. Doing that properly will enhance the ability of the sector to be persuasive in coming to an appropriate funding mechanism. But right now it is hard to avoid the conclusion that both governments and universities are losing their way on this question.