The Universities: Innovation, Autonomy, Fees and Institutional Design

There has been much discussion in the press over the last few days over two issues affecting the universities: the issuing of an Employment Control Framework by the Higher Education Authority and the delivery of a report to the Minister for Education on the reintroduction of fees for undergraduate education. The two are linked because each has the potential to affect the autonomy of the universities in important ways. More broadly they raise questions of institutional design that apply also to other significant aspects of the machinery for governing the economy concerning the relative autonomy from government ministers of both state-owned enterprises and regulatory bodies. The current fiscal and financial crises are likely to put all of these relationships under pressure and beg the question whether exploiting the capacity for government to exert greater centralized control is simply opportunistic or offers a principled basis for addressing weaknesses. Let me declare at the outset that I am parti pris since, like many contributors to this blog,  I hold an academic appointment in a University.

Turning specifically to the universities the Employment Control Framework is reported by the Irish Times to impose restrictions on recruitment of new staff, promotion of existing staff and retention of temporary staff with a linkage between compliance and continuation of state funding. Although issued by the Higher Education Authority it is apparent that the Department of Education and the Department of Finance each had a significant role in shaping the document. The Framework has been widely interpreted as an attack on the autonomy of the Universities and in breach of the provisions of the Universities Act 1997. My learned friend  Steve Hedley offers his interpretation of the legal provisions here. There is discussion in the Sunday Tribune of the Irish Federation of University Teachers challenging the Framework in litigation, but in the medium term the legislation may not be important  since the government’s effective control of the Oireachtas means that legislation can be changed to give effect to the Government’s favoured position if a court rules against  it in judicial review proceedings. The more important question is the normative one whether it is advantageous to the capacities of the nation for ministers to assert more direct control over the universities through control over key staffing issues. Insofar as the position of the university heads may be ascertained it appears to be that such restrictions appear to undermine  their flexibility to determine the deployment of their resources to prioritise particular areas of research, to innovate and  to match teaching capacity to needs. Under the terms of the legislation the allocation of resources is the responsibility of the HEA, whilst prioritization is a matter for the Universities themselves. This principled separation of responsibilities has been considerably eroded in fact (but not in law) by the shift of resources away from formulaic block grant (based largely on student numbers) towards competitive awards of grants under such schemes as PRTLI, SIF and the programmes of Science Foundation Ireland and the Research Councils. Universities have been incentivised  by such competitions to shift resources into areas favoured by the government. Competition is not the only mechanism at play, since most schemes have a significant element of peer review and government deploys its hierarchical capacity to steer and approve decisions (with the potential for importing political priorities) within many of the schemes.

The discussion around the reintroduction of fees linked to a student loans scheme has the potential to affect the autonomy of the universities in the other direction, to the extent that the scheme permits the universities to grow their revenues directly through undergraduate student recruitment. The government has not yet committed to any of the variety of mechanisms which have been proposed (discussed in yesterday’s Sunday Business Post), suffice it to say that the separation of upfront fees from a loans scheme is likely to give the universities greater autonomy, whereas the linkage of additional revenue to a graduate tax is liable to give the government greater control.

The relationship between the two issues lies in the issue of funding dependence. Permitting universities to charge undergraduate fees, separate from a related loans scheme, reduces the capacity of the government to threaten funding sanctions to universities which breach government requirement s such as those set down in the Framework.

How does this all link to the Irish economy? It is widely held that the role of the universities in providing research, stimulating innovation (not only in science and technology, but also through translation of research into policy and creative domains) and in education at both undergraduate and graduate levels is relevant to Ireland’s future economic capacity (although there is disagreement on the extent of the universities’ significance). Comparative analysis demonstrates that there is no single model of university-government relations within the other OECD member states. The French government retains a high degree of central control over key aspects educational provision and academic appointments, whilst a mixed economy of public and private provision in the United States gives substantial autonomy to many higher education institutions. The UK balances substantial autonomy for the universities with a form of hyper-regulation over teaching and research quality which has never been seen in Ireland. The Irish regime under which universities are required to self-regulate explicitly (teaching) or implicitly (research) is a style which I refer to as meta-regulation. There is already a meta-regulatory alternative to the Employment Control Framework in the form of an Irish Universities Association document which caps employment numbers, but under which the control is exercised by the universities themselves.

A tangential issue arising from the Employment Control Framework is whether there is a continuing role for the Higher Education Authority if, in fact, ministers are determining conditions of grant for universities. A key aspect of the UK regime is the role of buffer organisations (such as the Higher Education Funding Council for England) which both funds and holds higher education institutions to account for their expenditure.  In a fairly similar regime of universities governance to that of the UK the Australian government abolished the buffer institution, the Australian Universities Commission, in 1976 and took its functions in funding and oversight into the education ministry. Given current strictures on public finances and controversies about the added value of quasi-autonomous non-governmental organisations (quangos) an agency that cannot demonstrate its distinctive role may be under threat.

Whilst these issues of institutional design can hardly be neutral in their effects in terms of the role of universities (and others such as state-owned enterprises and regulators) in sustaining and developing the Irish economy, we appear to have more questions than answers in the search for defensible (I would not dare suggest optimal) solutions.

Norman Glass

Readers of this blog might recall my support for the establishment of something modelled on the UK Government Economic Service.   I was sad to hear of the passing last week of a great Irish economist though perhaps one of the least known – Norman Glass – who was in many ways one of the architects of the GES.

The Guardian obituary is at

Norman was a pioneer in economics within policy circles.   He was the first economist in the UK Department of Health for example in the early 1970s.   But it was his time at the Treasury where he really made his impact, becoming in effect the Chief Microeconomist and the driver of the microeconomic revival at the Treasury during the early days of Blair and Brown particularly in the aftermath of the Bank of England independence move.  The development of the working families tax credit, the innovations in linking labour supply policy and welfare strategies, major initiatives in education and health – Norman was central to all of these moves and to the early success of the ‘New Labour’ era.   Norman also developed an interest in the early skills formation agenda, designing SureStart (and later became a vocal critic of what the UK Government did with that programme in letting it become bloated and without direction).   On retirement from the Treasury he went on to lead NatCen, perhaps the largest and best social research company in Europe.

Norman was a complete gentleman, quietly interested in what went on in Irish economics, hugely supportive of students and researchers who made contact with him.   He is also perhaps amongst the most influential Irishmen of the late 20th century, albeit also one of the most modest and ‘backroom’, completely anonymous in his homeland.

I thought it might be interesting to readers to learn about Norman, but in passing I can’t help but think that as we face up to the consequences of terrible decisionmaking in economic policy over the past 15 years or so, and how little evidence there is of clever thinking in economics within the Irish civil service, one of the most important figures in policy decision making and in creating the infrastructure for economics in Government in the UK system, was an Irish economist.   Knowing Norman, I suspect he would have found that funny too!

Skills Deficits

One of the things underpinning a lot of posts, notably Karl’s last one, is that there is an elephant in the living room here around the human capital available to deal with economic issues within the core Government Departments.  We know the tales of how there are no economists in the civil service.   What is badly needed is something like the Government Economic Service in the UK. This ensures two things – the presence of a cadre of professional economists within the sector, but also the harmonisation of the training across Departments giving a unity of approach regardless of the topic. Of course the development of PhD capacity in Ireland will help but that takes time – wondering aloud, should we as a body of economists not begin to work with the Government to develop a GES model for Ireland and also develop the training structures?


Thanks folks, for the comments.  I am going to stay out of the debate around constitutional crisis this would cause…..and just pick up some threads.  Cormac’s comment hits it well and he would know well from working at IFS in London what I mean.   The GES is NOT an new body accountable or otherwise – it is a training infrastructure for the civil service that ensures that economists are trained in a way that is consistent across the service regardless of their posting.  It also ensures that economists can move between Departments, be redeployed etc very easily and that economics has a core platform within the service.   Secondly, the issue is not creating new degrees etc but rather to work with the civil service to ensure that platform is in place.  Thirdly, there is both an immediate need for a small, highly skilled cohort now – perhaps this is the 10 or so that Brian L discusses – but the idea that we can continue with the lamentable lack of economics as a core discipline across all government departments needs to be tackled.   In effect health, education, environment and employment have no structured economics unit and to revert briefly to constitutional issues, to be relying on external ministerial advisors is worrying.   Finally, for sure this would need a change in how things work – the economics unit in the UK looks at EVERY piece of policy and proofs it against standard metrics.

Thanks again, folks, for the comments.


“High fliers”

No doubt we all noticed this article in today’s Irish Independent. Aside from the issue of whether great universities require great academics or great beurocrats (and the intriguing question of how come, in this trawl for world class talent, the people chosen are so often Irish), one needs to ask what price Irish universities need to pay to get great academics, assuming that they want them.

Presumably that price is falling rapidly, for several reasons. First, a little bit of googling suffices to make it clear that the academic job market is collapsing in the United States. The contributors to this blog will all be familiar with this AEA site listing cancelled or suspended job searches, and there are many more indicators available out there. Second, the high Irish property prices which were used as an excuse for high salaries are also collapsing.

And then there is the bigger picture. The state just can’t afford to pay enormous salaries any more. Moreover, there are obvious political considerations that can’t be ignored. Given that people at the bottom are going to see their net income fall, the case for a cap on all wages paid for in whole or in part by the taxpayer is becoming increasingly compelling. Many posts ago, I suggested a cap of 200K, but that now seems much too generous. 150K should be enough for anyone, and if people want to chance their luck on the national or international market places, good luck to them.