The Australian Universities Accord interim report recommends overturning the most controversial Job-ready Graduates policy, using student contribution price signals to guide student course choices.

But overall the Accord interim report and Job-ready Graduates have strong parallels. They both take a utilitarian view of higher education, that its purpose is to provide benefits to others rather than being of any intrinsic value. Universities exist to meet skills needs, find practical uses for research, contribute to their local communities, and promote equity. The main difference is the interim report proposals are, with student contributions the main exception, more extreme and interventionist than Job-ready Graduates.

Substantially reduced university autonomy

Historically universities in Australia and other western countries have operated with a significant degree of autonomy from government. But despite using the word ‘autonomy’ a few times the Accord interim report shows little interest in this idea.

On my count at least 25 interim report proposals would reduce the scope of university-level decision making or are new reporting requirements that set universities up for future regulation. In my list these cover general mission direction, student admissions, the mix of disciplines and courses, curriculum and teaching, use of funds, and accountability.

Mission control

Under the Accord proposals a key new organisation, a Tertiary Education Commission, would be established. It would ‘negotiate mission-based compacts to deliver against local, regional and national priorities and needs’.

It’s not clear who will decide on local needs, but regional and national needs would be decided by the government. The section on funding student places is under-developed, but distinguishes between demand driven funding and what the Accord panel has in mind. They say that the new system would need ‘better planning than demand driven funding’, and that the system needs to ‘supply graduates who meet the societal and economic needs of their region and the nation.’ The TEC and Jobs and Skills Australia are ‘likely to be central’ in determining these needs.

The interim report’s support of targets (which were required by the terms of reference) also look like a centralisation of mission-setting. It wants equity groups to attend university at parity rates with the general population by 2035. This will require universities ‘to embed equity more effectively in their institutional missions’. There would also be overall attainment targets, with 55% of people aged between 25 and 34 years to be degree qualified by 2050.

To achieve longer-term targets ‘short-term step-change targets’ would need to be disaggregated by ‘state, region and provider‘ (emphasis added).

Universities would be subject to a ‘national student charter’ on the ‘welfare, safety and well-being of all students’.

They would also be required to work more closely with VET ‘under a more aligned system’.

In all of this, a number of universities could cease to exist as independent institutions, being incorporated into a ‘National Regional University’.

Admissions

Overall and equity group targets have inevitable flow-through effects on student admissions, another area of historical university autonomy within not-obviously-enforced rules.

The interim report wants a ‘consistent national approach’ to tertiary education admission and ‘recognition of existing learning experience and credentials’. Students would need to be ‘capable’.

Admission requirements would be ‘facilitative’ for equity groups, although this is already standard practice at the institution level.

Elsewhere the report says that it wants to ‘ensure students can access a CSP at an institution of their choice‘ (emphasis added). I’m not sure whether that just means that there should be no artificial caps on student places at the institution level, or whether it means that prospective students have a right to a place if they meet requirements set in the ‘consistent national approach’ to admissions.

Mix of disciplines and courses

While students may have a choice of institution, their course choices would be restricted. ‘Advice about economy-wide skills requirements would be translated into ‘necessary action from the higher education sector.’ Student choices would be need to be ‘balanced’ with the ‘system needing to supply graduates who meet the societal and economic needs of the region and the nation.’

Historically decisions about the distribution of student places between courses have largely been university decisions, within funding constraints set centrally. Except for the cap on medical students and allocating new student places at the course level the government has not micromanaged the detail of courses or student numbers. In my first submission to the Accord review I showed that, at the broad field of education at least, universities are responsive to changes in student demand under both demand-driven and block grant systems.

Job-ready Graduates gave universities more discretion over what courses to offer and how to distribute Commonwealth Grant Scheme funding between them. The interim report looks more like the British government’s decision to cap student numbers in ‘low value’ courses.

Curriculum and teaching

As with what courses are offered, historically governments have not been highly interventionist in the curriculum or how it is taught. The main recent exception is teacher education, where state governments as the principal employers have sought more of a say.

The interim report states that

• there should be ‘greater levels of co-design of the curriculum’ between industry and higher education;
• more education in generic skills; and
• more academic staff should be active in the profession they are teaching.

On these topics the interim report does not say who should regulate further or how it should be done (TEQSA perhaps, but I doubt they want to check on the courses of universities that are supposed to be self-accrediting). But given the general approach of the report there will be more university bureaucrats filling in forms and more government bureaucrats checking these forms.

Use of funds

One of the ‘guiding principles’ of the interim report’s new funding model is that ‘institutions are free to use their own funds as they see fit, given legislative requirements are met and spending is guided by the strategic plan of the institution’. Those are big caveats, and overall the report’s recommendations would see a significant departure from historical practices of universities using their funds as they see fit.

This approach was evident in the ‘immediate actions’ in response to the Accord report that were announced last week. Ostensibly the COVID-19 guarantee of Commonwealth Grant Scheme funds, which was due to finish this year, was extended for another two years. What this originally meant was that universities could receive their maximum basic grant amount even if they had not delivered student places of sufficient value (on the relevant Commonwealth contributions multiplied by EFTSL formula). The purpose, as set out in the enabling legislative instrument, was to help providers keep employing staff during a downturn to ‘provide quality education services into the future’.

But in 2024 and 2025 universities can only have the money if they ‘invest any remaining funding from their grant each year on additional academic and learning support for students from poor backgrounds, from the regions and from other under-represented groups.’ So it is actually a new spending program, capped for each institution at their MBGA minus the value of student places actually delivered. There is no money for maintaining other staff during a period of soft domestic demand. As the universities don’t currently report expenditure on these services, it also means a new acquittal for teaching spending, possibly involving new data collection.

Knowledge is power, as they say, and the interim report proposes more detailed collection of expenditure data. One reason the interim report gives for this is that they dislike cross-subsidisation, where money earned from one activity is spent on another, with a suggestion to ‘reduce its prevalence as much as possible’. Student fees are the main source of university discretionary income. Controlling privately-funded as well as publicly-funded expenditure would remove one of the few ways in which universities can act independently of the state.

In contradiction to this concern about cross-subsidy, 13 pages later the report proposes examining a levy on international student fee income, which could ‘fund sector priorities such as infrastructure and research’. But either way universities would lose control over how their earnings are spent.

Conclusion

In The Conversation last week I suggested that in student contribution policy the Accord was heading broadly in the right direction. I support ending the 50 per cent subject fail loss of Commonwealth support, in favour of giving universities more discretion in what to do about students who are not on track for getting a degree (although predictably the report proposes ‘stronger accountability and reporting processes’ on universities in these cases).

But overall I find myself in deep disagreement with the Accord interim report – about the nature of higher education, about the proper relationship between the state and universities, about whether people can reasonably aspire to lives other than those approved by Canberra technocrats, about the plausibility of long-term targets, about the ethics of enrolling the under-prepared students needed to reach those targets, and about where the knowledge and judgment needed for a good higher education system resides. I’ll have more to say about the Accord interim report in the coming weeks.