base funding to promote high-quality teaching and learning

The purpose of providing base funding is to ensure that public universities and other eligible higher education providers have sufficient resources to maintain the quality of course delivery expected from the Australian higher education system.

The focus of this Review is on how funding supports quality, but the Panel acknowledges the importance of support for quality beyond direct funding to universities. For example, in 2011 the Australian Government transferred the awards and grants work of the Australian Learning and Teaching Council to the Department of Education, Employment and Workplace Relations (DEEWR). It is to be hoped this departmental function with a revised strategy will be found to be as effective as the Higher Education Academy in England (Gibbs 2010, p. 26). The academy was established to raise the status of teaching in higher education by, inter alia, developing an evidence base and

promoting professional teaching training for university teaching staff (Mahoney 2011). Such a body is but one contributor to the development of a culture that values, supports and rewards teaching and innovation.

As discussed in previous chapters, the quality of the teaching provided by Australian universities is generally good, with examples of outstanding practice. However, student satisfaction with several elements of their university experience is lower than the levels in comparable countries for which data is available. Efforts to further improve quality and student satisfaction should remain a priority of the higher education sector given the evolving needs of society and the changing expectations of new cohorts of students.

The Panel has been told that targeted investment of funding in additional academic teaching staff could deliver disproportionately high quality increases relative to the level of funding supplementation. For example, in its submission to the Panel, the University of New England

estimated that a 5 per cent increase in base funding would allow a 10 per cent increase in academic staff resources (submission no. 144, p. 5).

4.1.1 incentives for lifting quality

The Panel believes there are grounds for strengthening incentives to lift teaching quality. For the potential of increased funding to be realised, the additional resources must bring about improvements in areas that relate directly to academic staff involvement with students. As noted previously, the best predictors of educational gain are said to be class size, level of student effort and engagement, who undertakes the teaching and the quantity and quality of feedback to students on their work (Gibbs 2010, p. 5). Whether a university works to enhance these elements will be driven by the priority it gives to the provision of quality teaching and the availability of suitably qualified staff.

As emphasised by many commentators, there is a perception that universities continue to undervalue teaching as an activity. Australian debate on the balance of effort by universities on teaching and research activities, and on whether too much effort and importance have been placed on research activities at the expense of teaching, reflects the debate in other countries. Emeritus Professor Frank Larkins (2011) has highlighted the rapid rise in expenditure on research at Australian universities, and Lawrence Cram (submission no. 103) argued that the last 20 years have seen a disproportionate amount of expenditure on research compared with teaching.

4.1.2 Options for providing funding for quality

If the Government were to allocate additional funding designed to improve the quality of teaching only through base funding, it would be up to universities to determine whether to direct it towards teaching activities. The Government would not necessarily achieve its objective of improving the quality of teaching in the higher education system just by increasing base funding.

The Panel has concluded that addressing risks around teaching quality depends on the way funding is used as much as the level of funding provided. As the core purpose of base funding is to support universities in providing teaching and learning to a given level of quality, theoretically the Government could consider making the provision of base funding conditional on universities achieving high-quality teaching and learning outcomes. The use of teaching outcome measures for base funding could link funding to achieving good outcomes that in turn require a certain level of expenditure and efficiency. Such an approach could involve retaining a proportion of base

funding to be allocated on the basis of an outcome measure, such as student satisfaction or student retention levels.

This option of using teaching quality outcome measures is problematic, and would present risks. Given the quantum of base funding, if a significant portion was to be allocated on the basis of achieving a particular outcome, the cost to institutions of failing to meet the performance measure could be considerable. To have this level of uncertainty in the base funding system would hamper an institution’s capacity for long-term planning. It would also be counterproductive in terms of achieving the stated policy objective in the longer term because the institutions considered most in need of improvement (according to the indicator) would receive reduced funding to make improvements. A model of rewarding institutional improvement rather than attainment as measured by a performance indicator would be fairer.

A second and related issue would be the increased complexity that funding on the basis of outcomes would add to the base funding system. The Panel is concerned that the base funding system should remain as simple and transparent as possible. To this end, the Panel is wary of attempts to tie base funding to outcome measures that would inevitably make the system more complex and involve more compliance costs. Such measures would also have the potential to create perverse incentives for institutions to behave in certain ways to ensure that they ‘deliver’ in terms of meeting a narrow indicator rather than achieving the broader goal of raising institutional performance.

Perhaps the most compelling disadvantage of these types of funding measures would be the notion of linking base funding to indicators of performance that are essentially imperfect. For instance, student satisfaction scores on their own, while a useful indicator when supplemented with other information, are not robust enough to use for the allocation of base funding.

The Panel therefore supports the approach of using targeted performance-based funding alongside a core base funding model that remains simple and transparent.