Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science, and his book a University Education is published by Oxford University Press.
Politicians and the media assume that if the public sector grows it is the result of lively, controversial arguments about nationalising an industry or increasing the burden of taxation. We are well-attuned to such debates. But there is another way of extending the public sector – by stealth. And we have just seen an example so effective that it has passed by without comment.
The Office for National Statistics is the ultimate custodians of the definition of the public sector. If a group of institutions have been treated as part of the private sector or perhaps local government but Whitehall interferes more and more then eventually the ONS will reclassify them to the public sector.
That is what happened last week to our FE Colleges. The ONS says that Government’s growing control of the amount they can borrow, together with powers it has taken to close or merge them, means that they should now join the public sector. That in turn will mean that all their spending counts as public spending and their pay counts as public sector pay. Their £1 billion of debt is added to public debt.
The Government responded to the ONS decision by announcing a further set of controls over colleges to control their activities now that they all add to public spending. The public sector has just swallowed another semi-autonomous set of institutions with little protest or controversy.
FE Colleges have been on the borders of the public sector for a long time. The ONS proposed to bring them in to the public sector back in 2010. The Coalition worked hard to avoid this, and we legislated to give FE Colleges more freedom, as a result of which the ONS withdrew its proposal. The reaction this time to the proposal is very different, and shows how our view of the state – and of education policy – has changed. Instead of trying to give back to FE Colleges more autonomy, the Government has accepted the decision and taken more powers over them.
One reason for the different approach is that last time colleges were under the Business Department (BEIS). It was denounced as barbarism that universities and colleges were under BEIS, but at least it knows that it can’t run British business and understands it is dealing with autonomous organisations.
By contrast, the DfE can treat colleges and universities as if they are mediocre secondary schools. Some advisers – and perhaps ministers – think it is very frustrating that they don’t have the same powers over post -18 education as they do for schools and want to do something about it.
This makes universities the next target. Universities used to be funded directly by the Treasury but, as they grew, this was no longer viable. The magisterial Robbins review of higher education 60 years ago was set up partly to tackle the question of where universities should sit in Whitehall. Robbins argued strongly against putting universities under the Department for Education because it would fail to understand they were autonomous. Instead, Robbins wanted them in a separate and very different ministry “with responsibility for other autonomous state-supported activities” such as science and the arts.
We are proud of the international reputation of our universities. One reason they have performed so well is that they are not in the public sector whereas in France, for example, academics count as civil servants. But the recognition of the autonomy of our universities is eroding fast in Whitehall and Westminster. During the recent Conservative leadership election, Liz Truss proposed that Oxbridge should be obliged to interview every candidate with 3A*s at A level.
But Oxford and Cambridge run their own admissions processes. Is it really for Ministers to instruct them on who to interview? Rishi Sunak wanted to ban universities from hosting Confucius Institutes, but there is no legal power to instruct universities on this. Regardless of what one thinks of Oxbridge admissions or Confucius Institutes if British universities are obliged to comply with such Government instructions then their autonomy is eroding.
The ONS is watching all this. It is now going to review whether higher education institutions should be brought into the public sector as well as FE Colleges. Their decision is due at the end of next year.
So the DfE now has a big strategic decision. It could take the same approach as it has with FE and look forward with relish to the conclusion of the approach it has taken so far and see universities enter the public sector and so be subject to increasing direct controls. Then ministers could indeed tell universities who to interview and ban Confucius Institutes and sack Vice chancellors – as a Tory MP on the Education Select Committee called for recently. Or it could take the opposite approach and try even at this late stage to value and promote university autonomy.
In my experience, the only pressure which actually stops creeping ministerial interference in independent institutions is when they are told that if they carry on like that these outside bodies will join the public sector with all the public expenditure and pay controls which follow. But maybe now we are in a different world and this is how the state grows. I hope not.