End of tenure, start of tender

Higher education should be restructured like the NHS so that self-employed academics submit bids to teach university courses. David Albury explains. Building on a study of the future and management of higher education carried out last year, involving interviews with vice chancellors, staff and students in 25 universities and colleges, I suggest that a fundamental restructuring of the system could resolve underlying tensions and create a more intellectually, educationally and economically innovative system.

The key proposal is a radical and drastic reshaping of the contract between academic staff and institutions. Universities and colleges (and, perhaps even more radically, entirely new organisations) would be reduced essentially to their senior managers and administrative support and reconfigured to have, as their primary role, the commissioning of courses and programmes. In place of the full-time/tenured or part-time/casual contract, academic staff would be self-employed and free to tender for the delivery of courses and programmes which the universities and colleges commission.

I propose this because the existing institutional framework cannot provide the basis for development for the coming decades. It is frequently claimed, and supported by a number of institutional surveys, that academic staff are demoralised, stressed and over-worked. Common factors adduced to explain this are: the burdens of research and teaching assessment; the twin pressures of rising student numbers and reducing resources; impositions of (inappropriate) managerial authority; and a perceived decline in the skills of the intake. In probing behind these feelings and factors during the course of my research, a singular phrase was uttered with striking regularity: "I don't have time for my own work."

In the health service, consultants make this statement specifically to indicate activities which are extra-contractual. Academics refer to areas of work - research, development of courses, and preparation for teaching - which most certainly are within their contracts of employment, and which all managers would regard as being within their contracts of employment.

Despite attempts to instil corporate loyalty through mission and vision statements, logos and brandings, many staff remain resolutely autonomous in their practice, preferring the identity of their subject to that of their institution. Perhaps we should reformulate the "contract", both legal and psychological, to reflect this underlying reality.

When discussing organisational development, it is de rigueur for senior managers to claim that "the staff are our greatest asset". Vice chancellors and principals are no exception. However, like colleagues in other sectors, many of them go on to see staff as the greatest obstacle to change and the achievement of strategic goals. Development of new courses, commercial activities and new ways of teaching, learning and administration are seen as being hindered by the intransigence of staff (as well, of course, as by lack of resources). This resistance, combined with the small but corroding annual efficiency gains, leads to an incrementalist rather than radical approach to innovation.

Experience across public services and private companies demonstrates that the managing of professionals is a complex and demanding activity. Critical success factors are a clear and shared understanding of the role of management and the development of appropriate skills among managers. A systematic approach to management development, lacking in higher education in comparison to other sectors, is necessary.

Despite much talk of flexibility and responsiveness, and a plethora of interesting and important experiments, pilots and small-scale innovations, much of higher education remains tutor (producer) driven. My proposal would lead to institutional arrangements which promote the development of courses and programmes that are responsive to the needs of students, employers and communities, but which give academics freedom to organise the ways in which they are provided. Public accountability would be increased while creativity was fostered.

The key and by no means trivial task for senior managers is to become champions of the "stakeholders" of their university or college by developing strong forms of engagement with potential students, targeted communities, employers, and relevant agencies. Free from the constraints of what staff want to teach, managers would be able to commission appropriate and relevant courses. In order to be able to contract in a rigorous manner for the provision and delivery of these courses, they will need to develop the capability to specify the outcomes and outputs desired. This specification, handled properly, would remove the need for detailed control over the syllabus and mode of delivery, while opening up for public debate, scrutiny and monitoring, the purpose and results of activities within higher education.

Equally, academic staff would be free to bid for the provision of courses in any number of universities and colleges and could not be required (except by the very real exigencies of having to win contracts and make a living!) to teach subjects in which they are not interested. Very quickly, groups of individuals, probably based on academic networks, would undoubtedly come, or could be brought together into partnerships, consortia, trusts or other organisational forms based on particular subjects, disciplines and/or approaches: the Progressive Particle Physics Partnership, the Renaissance in the History of Art Trust. Academics' traditional basis of identity would be reinforced and elements of competition and choice strengthened.

Through tighter definition of their strategic, marketing and commissioning roles, universities and colleges would be able to create real choice for students. And staff would be incentivised to become more efficient and effective in the delivery of courses through the carrot of increased earnings within a fixed contract price, and the stick of threatened non-renewal of contracts.

Universities and colleges would be financed by whatever remains of government funding together with cost and price sensitive fee income derived from direct payment and individual learning accounts in a learning bank. The funding councils could be recast as an educational investment bank providing loans at preferential rates of interest to associations of staff to promote and develop innovative forms of teaching and learning, including new educational, information and communication technologies.

What would be the place of research in this new framework? Paradoxically, the contract relationship would work the other way round. Currently there are two broad channels for research funding. For foundations, research councils, and companies, individuals and groups of individuals bid for funding and contracts on a more or less competitive basis, regulated, to a greater or lesser extent, by peer review. Funds are effectively assigned to the individuals or groups with an, often relatively arbitrary, overhead going to the institution.

The Research Assessment Exercise funding is based on the peer judgment of individuals, aggregated at subject unit level and (marginally) mitigated by the institutional context, weighted and aggregated to the institutional level for payment as a block grant. Nearly every institution and many research-active individuals know the value of a five-rated biochemist or a three-rated sociologist. The entirely predictable result of the funding being based on individuals but paid to institutions is the growth of an informal and unplanned transfer market.

Effectively, individuals and groups of researchers are deciding to which institution to take their funding on the basis of what it is prepared to offer by way of facilities, services and environment. If the funding were paid direct to the individuals, and they were organisationally separate from any particular university or college, as envisaged in the proposed framework, they would be in a stronger position to negotiate appropriate contracts. This would drive down the overhead price, leaving more money for the research activity, and drive up the quality of infrastructure support for research.

One of the strongest objections to the above proposal is that something similar has been tried and, some would argue, failed in the health service. While the effects of these reforms in the NHS are contestable in terms of health care and health improvements, it would be perverse for the higher education sector, which is normally averse to learning from other parts of the public sector, to reject the proposal on that basis. Indeed, if one looks at the public sector more widely and more internationally there is growing evidence of the social effectiveness, for both left and right, including authorities and governments, of clear separation of commissioning and providing roles. But there are lessons which can be learned.

Many errors can be made in the design and implementation of radical reform. The use of open, behavioural simulations and other processes can rigorously and realistically test the impact and implications of proposals but before that stage much detail needs to be added. How to secure the ownership and control of public educational assets? What, if any, supra-institutional quality agency would be necessary in this new framework? What mechanisms could be put in place to stop the short-term contracting and high transaction costs which have plagued the initial phases of similar reforms?

Throughout the design and development process, however, what is critical is agreement about the goal.

The final test of such an institutional framework is not whether it fits with any particular set of ideological pre-dispositions but whether it will nurture and sustain an intellectually, educationally and vocationally innovative, progressive and rigorous higher education which efficiently and effectively supports the economic and cultural development of individuals, communities and society.

David Albury is head of education sector development at the Office for Public Management. His study of the future and management of higher education is due to be published next year.