Jonathan Simons is Head of Education at Policy Exchange.
In almost all areas of our personal lives, we are accustomed to acting as consumers. Long gone is the age of monopoly provision of goods and services within the private sector, and the ‘take what you’re given and be thankful for it’ mentality.
Public services have been slower to make this switch, and one of the most radical elements of the work of the government since 2010 has been trying to change this.
This government has been consistent that choice and competition via markets are the best way to improve public services, whether via:
- personal budgets allowing individuals to purchase the support they need for their long term health conditions;
- 30 hours a week of childcare to be spent at a provider of parents’ choosing;
- the Community Right to Buy which gives groups the chance to run services in their local area;
- or Free Schools allowing parents and teachers to set up brand new schools.
Public services are not like private markets. For a start, public services normally have a universal obligation to serve all customers, rather than picking and choosing.
Consumers of public services often ‘buy’ on a one time only basis (rather than someone regularly buying a product, which gives them the opportunity to switch brands if dissatisfied).
They also often don’t undertake a direct financial transaction with their users, and providers of public services are generally driven by a range of goals including social gain rather than simply profit maximising.
But to use this as an argument against greater consumer power in public services is to pretend that what are known as ‘public service markets’ don’t exist. In fact, the truth is quite the oppositeL as much as £1 in every £3 that government spends on public services going to independent providers.
There is also a wide body of research, and an increasing number of examples from across the world, into how to make these work in the interests of consumers and taxpayers.
Higher Education is a classic public service market. Universities are largely autonomous, both the state and individual contribute some of the financing, and universities are regulated around what they must and must not do. And there has been a shift towards greater consumer power – most notably via the increase in tuition fees to £9,000.
This has led increasingly to students acting as consumers – weighing up the pros and cons of their choice and location of study. But despite these changes, there is still a sense that the job of consumer reform has been left half complete:
- Although 87 per cent of students are very or fairly satisfied with their course, only 41 per cent feel that they received good value for money – and a third say that knowing what they now know, they would have chosen a different course;
- 75 per cent of students feel they have not received sufficient information about how their tuition is spent;
- Around 2,000 students submitted formal complaints to the independent ombudsman last year about the treatment they had received by their university (of which 23 per cent were partly or totally upheld)
At the same time, it is common to read learned commentary from some in the higher education establishment that is – at best – sceptical about the concept of students as consumers, arguing that university should be seen as a separate, purer place concerned solely with learning – and where, presumably, students should be grateful to receive whatever tuition or lecturing is handed down to them.
David Willetts, when Universities Minister, published a well received White Paper on how to put “students at the heart of the system”. But the vagaries of Coalition and – ironically – competition for a Parliamentary slot meant that the legislative follow up never happened.
That is why it is even more important that the forthcoming Green Paper from Jo Johnson looks at how to take this agenda forward. Specifically, I would like it to keep pressing on the following areas:
- Providing more granular data for prospective students on what their course might mean for them, and specifically greater information on the expected wage return and employment prospects from not just their university but their course;
- Options for new providers to enter Higher Education on a level playing field with traditional universities, including on things like their ability to award their own qualifications (as opposed to having to have a rival university agree to authorise their degrees for them – a completely anti-competitive situation) and fair access to student loans (at present, students at private universities are limited to just £6,000 a year loans, against £9,000 for those going to public universities);
- A greater focus on how students can be protected under consumer law, including a new job for the regulator not just to be responsible for the maintenance of the system but to have – like Ofgem and Ofcom do for example – a specific remit to safeguard consumer interests.
If such moves can be taken forward over this Parliament, we may see a real revolution in student consumer power.