Higher Education, Widening Access and Market Failure: Towards a Dual Pricing Mechanism in England

Over a period of around fifteen years English higher education has become characterised by an increasingly marketise and differentiated system, most recently with the encouragement of new “challenger” providers potentially creating price competition for undergraduate degrees. This paper explores shifting patterns of enrolments between different institution types (those requiring high entry grades and those requiring lower entry grades) for evidence of how these types may be responding to the new market conditions. We introduce the concept of a “dual-pricing” mechanism to model how different institution types may be reacting. Dual pricing would be exemplified as a situation where entry requirements (a “price” based on qualification tariff points required for entry) and tuition-fee are matched in a linear hierarchy of institutions: Only the most prestigious institutions offering the courses demanding the highest entry qualifications (tariff) would command the highest fee (in this case a maxima of £9250 per annum), with fees demanded by institutions requiring lower entry requirements tapering off towards £6000 per year. This dual-pricing mechanism is discussed here as a policy aim, and the intention of this paper is to locate it in relation to market failure (defined as the failing of a market intervention to meet that policy aim). This paper’s critique of the marketised direction of travel in English higher education (HE) policymaking is that a dual-price mechanism would seriously undermine efforts to widen access for underrepresented social groups, particularly those from low income households who may be more likely to access low-cost provision rather than more transformative HE opportunities (supposedly those deriving from having a degree from a more prestigious institution), even if they met the entry requirements for higher-cost provision.