Choice and competition is amongst the strategies and tools that the Office for Students (OfS) says that it will deploy to achieve twin goals of value for students and the taxpayer in higher education. Leaving aside ideological debates, such as what constitutes value, there are also some market strategic considerations as we head towards operationalisation of the policy.
Crucially even a simple analysis reveals the the risks of unfettered commercial approach and therefore the importance of not for profit ethos
What do we mean by ‘choice and competition’?
The idea is that value and consumer experience of public services can be enhanced by applying market principles – so called quasi markets. However, It’s not just a question of wholesale application of a commercial model
Considerations such as those suggested by Frontier economics in a review on behalf of the OFT and illustrated below, guide high level design and specifics of policy
A clear power imbalance Uni v Student
From even just a cursory look at the factors involved it is evident that there is significant imbalance between the Demand side – a student’s capacity to make informed choices and the Supply side – insight, planning tools and marketing techniques available to universities for recruiting them
Also for universities recruitment is an annual cycle, whereas for prospective students it’s a onetime purchasing experience
Dig deeper and we can see that universities marketing and technology prowess has developed markedly at the same time as investments in aspects such as Careers education and Information advice and guidance have reduced markedly
The value of a not for profit ethos
All of which explains the continuing importance of a not for profit ethos that pervades education – values, not just a pursuit of ‘value’
Finally, not for profit values and value for money are not mutually exclusive
I have worked for both commercial and not for profits and my experience is that context is key. I was the strategic marketing director for Which? wholly self-funded it combines great work on behalf of the consumer with a sustainable revenue model. Likewise, AQA, a charity where I was director of market strategy sustains market leadership in A levels and GCSE against alternative providers that include global commercial entity, Pearson
My experience has been that problems occur as organisations stray from the values path, or worse regulators unwittingly stack the deck
Is there a consumer v provider imbalance? To what extent is the pursuit of values and value compatible? What is the role of the regulator in this context?
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