Factors affecting the current higher education system

For several years, universities have been subject to a great deal of uncertainty and volatility and the last 12-18 months have been no exception. This blog outlines a few of the major factors affecting today’s higher education operating environment, but there are many more. Perhaps someone else would like to produce Part 2 – Research, Brexit… the list goes on.

Economic Factors

• Across the sector, rising costs continue to outstrip relatively flat income, driven primarily by UK/EU undergraduate tuition fees. The pain of this is starting to bite and I suspect that, in many parts of the sector, the tone of discussions around financial strategy is starting to change.
• For some universities, the bridge may be starting to smoulder and it will be interesting to see how they react. We can’t all simply grow our way out of financial pressures …. there aren’t enough students.
• And in any case, we don’t yet know what gems the review of Post-18 Education and Funding will throw up, but I doubt many of us expect it to result in significant additional resource flowing to our institutions.
• Which means that some universities might be less bullish about major capital expenditure and other initiatives to maximise applications and conversion.

Market (UG student recruitment) Forces

• Nationally, there has been a 6% decrease in applications through UCAS this year. At the same time, for many in the sector, the response to financial pressure appears to be to grow student numbers.  Go figure – there will be winners and losers in this game!
• The government believes that informed students (“more and more information, please”), making free and rational choices about where to study, unencumbered by student number controls, will push up quality. The financial risk of studying for a degree understandably leads to students and parents looking for independent verification of quality – onto centre stage step the branding of mission groups, league tables and TEF.
• There has been an increase in the number of institutions making unconditional offers – evidencing a more aggressive market-place where some universities are trying to secure students earlier in the cycle.

Reputation, Media Coverage and Public Interest

• The past 12 months have witnessed negative media coverage of universities, most notably linked to the USS dispute and Vice-Chancellors’ pay. With regard to the latter, there’ll be more to come - the CUC has recently published a Remuneration Code and the Office for Students will require universities to provide far more detail on senior staff pay than HEFCE did.
• Universities Minister, Sam Gyimah, appears to be somewhat critical of the sector, he has already spoken out on free speech and compensation for students following the USS industrial action. More recently he has warned against running low quality, "threadbare" courses just to get "bums on seats". He has branded himself as England's “Minister for Students” as part of a wider positioning of the student as ‘consumer’.
• It seems that you can’t open (or click on) a newspaper without reading about racist incidents within the sector. We all want our universities to be inclusive and welcoming and it seems that we are going to need to do far more to make sure this is obvious and apparent to students and staff.

These are difficult and uncertain times and, as planners, we need to keep our ears to the ground and our minds sharp. It is our role to assess the landscape and help our senior colleagues to navigate the tricky terrain. We also need to use our internal knowledge, relationships and connections to better understand our own context so that we can advise on the strategies that best suit our own institution. For some this will be urging caution in financially constrained times, but for others a more ambitious approach may well be what is needed. It’s our role to gather the information and evidence to inform the strategic decisions necessary to maintain the strength of our universities and our sector. It’s a big responsibility, but it’s also exciting to be at the forefront of, and influencing, the decisions that will map out our future.

July 2018

Miranda Routledge

Director of Planning

Loughborough University