In a recent piece in the Times Cardiff University’s Vice-Chancellor, Professor Wendy Larner,  identified some of the broader risks arising from the savings universities are currently having to make and the longer term unsustainability of the current financial model for higher education.

In the light of observations from the British Academy, in its letter to the Chancellor ahead of the Spending Review, that almost 100 universities are contracting Social Sciences, Humanities and Arts provision Professor Larner expressed the fear that

humanities, arts and languages subjects would become the preserve of the privileged but that students were “voting with their feet” in rejecting them.

She also observed that 

Because of the CMA, I had been precluded from having that conversation with my higher education peers, with the Welsh government, with the NHS.

“We took legal advice. I do think this is a real challenge for the sector and for the new Universities UK efficiency task force. If we’re going to be more collaborative, take duplication out and all play to our strengths, these are precisely the kinds of conversations we need to be allowed to have.

“It means I couldn’t explore potential solutions prior to this point. I’ve got really upset staff who think we don’t care about them and really upset Welsh politicians who think I don’t care about the future of the NHS in Wales.

“I’m deeply frustrated. The structure is set up to enhance competition, not collaboration.”

This frustration and concern will be shared by university senior leadership teams across the country. 

Comply or else

The issues around compliance with competition law are ones with which the sector has been grappling with for some years now and a number have fallen foul of the legislation in the past.

The bulk of the CMA regulation is intended to protect the interests of prospective and existing students as consumers and, as originally published in 2015 and updated in 2023, the organisation’s guidance to universities and colleges covers issues including:

• Information provision: ensuring that students are given up front, clear, timely, accurate and comprehensive information about every aspect of their course.

• Ensuring that terms and conditions between HE institutions and students are fair and transparent – including in relation to variation of course provision and not imposing academic sanctions on students for non-academic debts.

• Ensuring that HE institutions’ complaints processes and practices are accessible, clear and fair to students.

The other element of the legislation though relates to bodies abusing a dominant market position to the detriment of consumers. And it is this aspect with which universities are currently most concerned.

A stitch up?

As it stands then in terms of universities wanting to work together to address realignment of their own subject and course provision in order to address a systemic higher education funding challenge it does look on the face of it that this would be in breach of competition law. They would be stitching up consumers by acting in a way which undermined competition and potentially left one institution in a dominant market position.

Let’s look at a completely fictional example of what this might look like. Say we have four universities A, B, C and D in the County of Mid-Shire. They are all pretty comprehensive institutions and offer most Arts and Humanities subjects, including as it happens, Portuguese language. There aren’t many universities which offer degrees featuring Portuguese but let’s say four of them happen to sit relatively near each other in Mid-Shire. (Portuguese is a completely random choice of modern foreign language here and nothing should be read into this – I just thought it was better to refer to a real rather than fictional language.)

All four universities are facing significant financial challenges and all are reviewing their academic portfolios. All are seriously considering whether there is a future for Portuguese. In each case they will be looking at every aspect of the provision in terms of existing and future students, the current staff base, future research prospects and other investment requirements. This will then be set against other institutional priorities for ongoing support.

The critical thing here though is that in all of this consideration by the four universities the interests of students will, rightly, have to remain paramount. The interests of students as consumers, which is what the bulk of the CMA regulation is concerned with, has to be addressed in ways which meet their needs and expectations. Any substantive changes to provision or the contract between a university and its students, should they be required, may entail compensation or other form of redress. And any wind-down of a particular degree course will potentially take at least four or five years to work through.

All of this would remain the case regardless of whether any discussions, formal or informal,  had taken place about the possibility of one institution taking on Portuguese provision from the other three. Each university, if they were looking to shut down their department, would be looking for the best arrangements they could make for their students (in line with consumer law) and staff in order to support their longer term plans for financial sustainability. So it really is not about stitching anyone up.

Best of intentions

The motivation in this case is to enable each university to establish itself on a sustainable financial footing and all will have taken independent internal decisions to close this particular department (or not) on the basis of anticipated student demand, market intelligence, relative performance in the sector and future strategic priorities for that institution. Sustainability of the university as a whole is absolutely in the best interests of everyone – all remaining students and staff, alumni, local communities and  regional and national economies. 

All four fictional universities are therefore acting with the best of intentions. It is important to stress that none would be able to charge higher tuition fees and thereby be penalising consumers as a result of any collaboration. Nor would they be passing additional profits to shareholders. Rather, this collaboration may well mean that there remains at least some Portuguese language provision in Mid-Shire. If all acted entirely independently it is quite possible there would not be. And nationwide if there is no dialogue among those other institutions which offer Portuguese then it is conceivable that all of them, acting independently but perfectly rationally, could take the decision to close their departments. And then there is no Portuguese language provision whatsoever in the UK higher education sector. (And for Portuguese you could substitute a range of different Arts and Humanities subjects.) 

It’s not so unfair

As noted above though the point of competition law is to prevent companies stitching up consumers in any form. Most of the CMA material relating to higher education is concerned with the fair treatment of students in their position as consumers – there is comprehensive advice and guidance for universities – and no-one is suggesting changes to this (although there may be an issue in the somewhat unlikely event that there are lots of sudden changes as a result of many institutional closures). 

The key element referred to in the Times article at the beginning though is about institutions engaging in conduct which could be viewed as preventing competition, distorting or restricting it or acting in a way which results in an abuse of a dominant market position.

The object though is the absolute opposite of all of this. It is to ensure that there is still actually a market there in a few years’ time which means that students are able to choose from among different courses at different institutions. If universities feel themselves unable to discuss the issues about whether they can protect the interests of their students, ie deliver their consumer rights, by talking to other institutions about potential transfers, then which is the more significant legal breach?

Many are arguing that these are unprecedented times and that radical changes to legislation are therefore required. (Actually they are not unprecedented. See this recent piece on the funding cuts in the early 1980s. At that time there was the University Grants Committee operating to try to protect strategically important subject provision across the sector. Although I’m not sure it got that far apart from with Russian.) But what can universities actually do?

What can be done

Looking at this through a strictly non-legal lens it seems to me that institutions have a number of broad options:

• Cloak and dagger – secret talks among Vice-Chancellors are surely not a good idea and given that universities are well known as the leakiest places in the country nothing would remain secret for more than 20 minutes.
• Brazen it out – everyone could just ignore all the legislation and work on the basis it would never come to court as would not be in anyone’s interest to levy big fines on institutions at this time. This would though not be a good position for a law abiding sector to adopt especially given its dependence on the good graces of government with a spending review coming up. But this would ultimately be in both students’ and the country’s interests.
• Head to Parliament – The sector could collectively make representations for changes in the law to allow exceptions for this kind of thing. Exemptions already exist in areas such as fuel provision at a time of disruption to the national supply of petroleum and related products. It might take rather a long time though and it is unlikely to be seen as a legislative priority for anyone.
• Get round the table – The Chair of Universities UK and other sector representatives could seek to have an open discussion with the relevant Secretaries of State to agree a period of understanding in relation to these matters meaning that no-one would be prosecuted for doing the right thing.

I do hope that the final option here will come to pass. All of this may be really naïve and ill-informed opinion and I very much want to be corrected by those who know about this stuff. But it seems to me that the sector too often assumes it can’t do things based on an intelligent and rational assessment of the regulatory environment. Universities can sometimes be poor at this kind of risk assessment.

Universities’ commercial legal specialists will be much better placed to advise their Vice-Chancellors on all of this and whatever they decide to do, individually and collectively, I do hope that sector is able to do take active steps to address this position.

The spirit of the law is about protecting the consumer. But the consumer really is not best served if every university decides to stop teaching a particular subject rather than take a collective view about whether there is another way. If every institution follows what appears to be the letter of competition law and does not collaborate then current and future students, our arts and humanities provision and indeed the country will not be well served.

Coda

Just to be clear I really am not an expert on any of this and stand to be corrected by lawyers who actually know what they are talking about. I do hope though that a sensible way forward can be found on this in everyone’s interests.