Source: Dale Edwin Murray

When the University of Exeter responded to the revelation that it and the Russell?Group¡¯s three other most recent recruits had agreed to pay ?500,000 for the privilege, it argued that membership of the group was ¡°a brand asset¡± and ¡°well worth¡± the cost.

In my view, such pursuit of status for its own sake is the biggest crisis facing the sector. We continue to teach students and conduct research, but the increasing efforts we are putting into such academically worthless activities as marketing and branding suggest that it?is rank that really commands our attention.

Further evidence can be found in the fact that every university and higher education college will be entering the 2014 research excellence framework, even though for most departments and institutions the net financial impact of doing so will be negative or nugatory. When sensible proposals were put forward to compensate institutions for not entering departments in the REF¡¯s forerunner, the research assessment exercise, or for a different assessment method to be employed for institutions still developing their research, they were quickly rejected by all parts of the sector. It seems that everyone has to have a place on the honours board, even if it is only a modest one.

Meanwhile, nearly all of the institutions that acquired the title of ¡°university¡± under the Higher Education Act 2004 have sought and obtained research degree-awarding powers, even though this is no longer a requirement. Having such students almost certainly costs these institutions tens of thousands of pounds a year, bearing in mind the fact that they get so little of the postgraduate research money provided by the funding and research councils.

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Look, too, at fee levels. In 1998, no university charged less than the ?1,000 top-up fee limit permitted by the government. In 2006, only four institutions charged less than the ?3,000 variable fee and they soon fell into line with the rest. The government began the most recent set of reforms by saying, and apparently actually believing, that the average fee would be ?7,500 and that ?9,000 would be ¡°exceptional¡±. Yet the average fee after waivers is now more than ?8,600 and this academic year most institutions will be charging the full ?9,000 for their courses. Clearly, institutions want to maximise their incomes. But the real driver is the fear ¨C perfectly rational in what is effectively a positional market ¨C that by charging less than ?9,000 they will be viewed as second rate.

The reasons for their anxiety are manifold. One important point is that, as plentiful research attests, students, employers and potential donors are highly sensitive to institutional status. But even more significant is the belief on the part of many governments that markets are the best way of organising the supply of public services, causing universities to adopt business-like practices such as attending very closely to their ¡°brand value¡±. At the same time, the ¡°information revolution¡± makes it much easier to obtain and analyse data about comparative institutional performance, in turn stimulating commercial vendors to publish such information, which is then pored over by university managers and governments.

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There is little justification for the pursuit of status. Educationally, the influence of their peers on each undergraduate is much weaker than it is in school-level education, so status obsession cannot be expected to spur students on to greater effort. Economically, it is a waste of the sector¡¯s resources because, by definition, in a positional market one university can only gain at the expense of another. Socially, it reduces social mobility since the more selective universities¡¯ incentive to make greater use of ¡°contextual information¡± to recruit students from a wider range of backgrounds falls foul of the imperative to appear more selective and, thereby, ¡°elite¡±.

How can these detriments be avoided? A?good starting point would be to reaffirm the view that, paraphrasing the late American higher education scholar Martin Trow, higher education is a process and not an outcome. Recognition that it should not be organised as?a market need not rule out some carefully conceived competition for resources.

We need a balanced funding system. The sources of money and the way in which it is channelled to institutions must preserve both the public and private benefits of higher education. So tuition fees need to continue to be counterbalanced with block grants to universities, regardless of their place in the perceived pecking order. If the average annual cost of educating a full-time undergraduate is ?7,500, this would suggest a fee of no more than ?4,000.

It may be necessary for governments to intervene to limit variation in the level of resources available to different higher education institutions. We should also protect or promote their diversity by limiting their ability to pursue activities that may raise their status but which reduce the range of opportunities offered by the sector as a whole. This might include discouraging universities from focusing on research at the expense of teaching and ensuring that where research is conducted, it enhances rather than detracts from education (with students genuinely taught by cutting-edge researchers, rather than their PhD students, for example). Surely even the most status-obsessed vice-chancellor would welcome that.

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