Encouraging Cream-Skimming and Dreg-Siphoning? Increasing Competition between English HEIs

Abstract

We examine the impact of recent policy on the nature of competition within English higher education (HE) for students. Revisions made to the method of allocating Higher Education Funding Council for England (HEFCE) teaching funds and the introduction of performance monitoring and targeted recruitment premiums have changed the incentives facing higher education institutions (HEI)s when designing recruitment strategies. We consider the extent to which the experience of similar market-based reforms on the English secondary schooling system is being replicated in HE. Promoting increased competition by comparison was advocated as a means of stimulating greater allocative, technical and dynamic efficiency in both schools and universities. Similarly, relaxing institutions’ capacity constraints and introducing targeted financial incentives have been touted as effective mech-anisms to assist the attainment of policy objectives. However, the experience of market-based reforms of state secondary schooling indicates that dysfunctional responses occur and that the overall impact on market behaviour is more complex than anticipated. We consider whether similar processes are evolving in HE.