Alarm at Ofsted-style plan to rank universities by graduate earnings

Government plans to introduce Ofsted-style rankings for universities, with courses that produce lower salaries labelled as failing, would punish institutions outside London and threaten arts and humanities courses, worried academics are warning.

In November the Conservative manifesto set off alarm bells in universities by promising to tackle “low-quality courses”. Now senior academics close to Westminster say the government is pressing on with this in a plan that could replicate the four Ofsted categories used for schools, flagging up university courses the government considers inadequate.

There are already gold, silver and bronze rankings for teaching in universities under the Teaching Excellence Framework. Some of the UK’s leading universities failed to get the top gold rating, with the London School of Economics being awarded only a bronze. Now, one expert says: “They want a fourth category of something like ‘requires improvement’.”

Controversially, graduate earnings are expected to be the bar by which the government will judge courses. Higher education experts warn this would damage the arts and humanities, where starting salaries are typically much lower than in disciplines such as medicine or law.

In addition, they warn that universities outside London whose graduates stay on and work locally, rather than moving to the capital for a higher salary, will lose out.

Universities fear the government might refuse to provide student loans for “low-quality” courses, threaten universities with removal from the Office for Students’ register if they don’t improve, or shut down courses.

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Nick Hillman, director of the Higher Education Policy Institute thinktank, says the government is right to question whether courses are all of a good standard – but says earnings are likely to feature “more than they should” in assessing quality. “When Ofsted goes into a school it judges whether it is a good or bad school based on what is happening there,” he says. “It doesn’t say ‘we think this is a bad school because kids who have been here in the past have got bad jobs’. That is how universities will be judged.”

Prof Alec Cameron, vice-chancellor of Aston university, in Birmingham, says: “Salary is evidence of things, including where you live, what sector you’re in, and what sort of job you are pursuing. We should push back against the idea that a good salary is an adequate measure of how much a job matters to society.”

Vice-chancellors see the “Ofsted” idea as a government raid on their independence, with the head of a leading research university warning that universities should be in no doubt that the government has “radical” plans, and should prepare for battle. “There are deep issues that we need to confront. Do we really want a world where creative courses have no student loans?”

The worry is that courses classed as needing improvement would then struggle. Simon Marginson, professor of higher education at Oxford University, says this could push some struggling universities, especially in poorer areas, to the brink. “Would the government really want to jeopardise its position with voters in the north by doing this?”

He adds: “What is happening is there is almost a consensus in policy-making that we need to get more people into Stem [science, technology, engineering, and mathematics] and vocational disciplines. It should be possible to do that without creating an insidious structure that harms other areas.”

The government has been heavily influenced by experimental new official data that tracks graduates to the age of 29 through their tax returns. The “longitudinal educational outcomes” data shows that a 29-year-old male economics graduate, for example, will earn on average 33% more than his peers without a degree, but a male creative arts graduate of the same age will earn 14% less than peers who haven’t been to university.

Prof Nigel Carrington, head of the University of the Arts London, says the data “simply isn’t adequate”. He argues it doesn’t properly take into account those who work part-time while they top up their skills, regional differences in pay, or earnings from self-employment. “If a Cambridge graduate in law earns £50,000 and a law graduate of a university in a deprived area earns £19,000, that doesn’t mean the second graduate isn’t productive. They may be using their legal skills doing valuable work in a local authority.”

He adds: “Are we educating our students only to earn money, or to do something they love?”

Prof Anne Carlisle, vice-chancellor of Falmouth University, says: “The danger is that headline politics is becoming headline economics. To use a single metric like PAYE [to measure] economic value is absurd. When you look at the UK economy we are a land of SMEs.”

Falmouth, which has a focus on the creative arts, is encouraging its graduates to stay in Cornwall and set up their own businesses. Carlisle says judging courses on graduate salaries would give universities such as hers a perverse incentive not to help their regional economies, but instead to encourage its students to go to London, where could earn more.

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When graduates launch startups they rarely pay themselves large salaries, even when they secure investment, instead ploughing money back into the business, she says. “Who is driving this PAYE obsession when everything is shifting towards entrepreneurialism? It’s as if time has stopped still in government while the world is moving on.”

Erin Morris, who studied animation and visual effects at Falmouth, has set up a tech business with Tanuvi Thunandan, a Cambridge University economics graduate, at Falmouth’s acclaimed Launchpad postgraduate innovation hub. Their company, Data Duopoly, aims to help attractions such as the Eden Project to manage bottlenecks by offering visitors discounts if they avoid busier areas at key times.

Morris and Thunandan wanted to be their own bosses, do something creative and live in “beautiful” Cornwall. Although they have received a grant from the South West Technology Network, it only covers their rent and food and “bare living costs”.

Morris says: “It depends what you want out of life. Money wasn’t top of my priority list when I chose my course. I want to do something I’m passionate about.”

Thunandan agrees: “It seems wrong to judge our success on salary. They should be judging us 10 years down the line when hopefully we will be selling our successful business and making an exciting exit.”

Prof Gail Marshall, head of the school of languages and literature at Reading University, says: “For the government to say to students that the thing they do well and are passionate about doesn’t have value is extremely problematic.” She adds: “It seems foolish to pre-judge which subjects are most valuable when we are facing unprecedented challenges like climate change, which need to be solved by different disciplines working together.”

The Department for Education says: “The government subsidises around 50% of the cost of higher education and it is only fair that this funding is used as efficiently as possible, so students can be confident they are getting good value for money.” It adds that the education secretary will back the Office for Students “using its powers” where providers are not offering value for money.