Tag: Chris

  • New Government, familiar problems – By Chris Husbands

    New Government, familiar problems – By Chris Husbands

    The higher education sector had high hopes of a new government last July. Early messaging from ministers suggested that they were justified.  The Guardian quoted Peter Kyle, the Science Secretary, declaring an ‘end to the war on universities’. Speaking to the Commons in September 2024, the Education Secretary Bridget Phillipson said that ‘the last Government ..use[d] our world-leading sector as a political football, talking down institutions and watching on as the situation became…desperate. I [want to]…return universities to being the engines of growth and opportunity‘.  In November, she announced a rise – albeit for just one year in the first instance – in the undergraduate tuition fee, with the prospect of alleviating pressure on higher education budgets.

    Ten months on, the hopes look tarnished as financial, political and policy challenges mount. The scale of the higher education funding challenge is deepening, it seems, by the week. The OfS has reported that four in ten universities will report a deficit this year.  Restructuring programmes are underway in scores of universities, with some institutions on their second, third or even fourth round of savings.  The post-study graduate visa, an important lifeline for international student recruitment, appears to be under threat.

    There are eerie echoes of headlines and comments under the last government.  The Daily Telegraph declared that a ‘record number of universities [are] in deficit’. The Times claimed that universities that appeared to report relatively poor progression to graduate-level jobs were to be ‘named and shamed’. Following the success of Reform UK in local elections, some backbench Labour MPs have been sharply critical of universities: ‘I would close half our universities and turn them into vocational colleges’, wrote the Liverpool MP Dan Carden (BA, London School of Economics, since you ask), whilst Jonathan Hinder, MP for Pendle (MA Oxford) declared himself ‘happy to be bold and say I don’t think we should have anywhere near as many universities and university places‘. Philip Augar, who reviewed skills funding for Theresa May’s Government, wrote in the Financial Times that the ‘English higher education market is broken‘ as a result of a ‘failed free market experiment’. It seems terribly familiar: a sector in financial crisis, losing political traction and friends.

    Policy direction appears to be unclear. The English higher education sector is still largely shaped by the coalition government’s policy decisions between 2010 and 2015. Its key design principles include uncapped student demand since number controls were abolished in 2013, assumed cross-subsidies across and between activity streams allowing for institutional flexibility, access to private capital markets since HEFCE capital funding was removed in 2011, diverse missions but largely homogenous delivery models based around traditional terms and full-time, three-year undergraduate provision, and jealously protected institutional autonomy. Familiar though these principles are in higher education policy, some are in truth relatively recent, and are creating tensions between what the nation wants from its university system, what universities can offer and what the government and others are willing to pay for.   

    Moreover, the sector we have in 2025 is not the sector which the 2017 Higher Education and Reform Act (HERA) envisaged: HERA was expected to significantly re-shape the sector. The government’s impact assessment of HERA suggested that there would be in the order of 800 HE providers by the mid-2020s.  This did not happen, though the impact of private capital, often channelled through established institutions and now rapidly growing for-profit providers, should not be underestimated as a longer-term transformative force in the sector.

    We are expecting both a three-year comprehensive spending review and a post-16 White Paper in a couple of months’ time. In my 2024 HEPI paper, ’Four Futures’, I sketched out possible scenarios for a sector facing intense challenges. The near-frozen undergraduate fee was reducing the unit of resource for undergraduate teaching as costs rose. Undergraduate demand seemed to be softening amongst (especially) disadvantaged eighteen-year-olds. International student demand remains volatile and subject to political change in visa regulations.  The structural deficit on research funding deepened.  ‘Four Futures’ outlined four scenarios, summarised in Table 1.

    Of course, we all want a mixture of cost control, thriving universities, regional growth and research excellence, but it is difficult to have all of them. Governments and universities set priorities based on limited resources, so there are choices to be made and trade-offs to be confronted for both policymakers and institutional leaders. 

    Government needs to make decisions about universities in the context of competing and changing policy imperatives. It needs to balance restoring government finances, allocating resources to other needy sectors, securing economic growth, and, more obviously important than a year ago, protecting sovereign intellectual property assets and growing defence-related R&D. The Secretary of State’s letter to Vice-Chancellors in the Autumn identified growth, engagement with place, teaching excellence, widening participation and securing efficiencies, but did not unpick the tensions between them.  That depends on articulating a stronger vision for higher education given the Government’s priorities and resources and the economic challenges facing institutions, and it is a task for the forthcoming White Paper.  

    But there are urgent choices too for institutions, and those need to be made quickly in many universities.  Institutional and sector efficiencies are vital, and a key theme of the UUK Carrington Review, but they need to be considered in the light of sustainable operating models for both academic delivery and professional services. Institutions need a clearly articulated value proposition, communicated strongly and effectively and capable of driving the operating model. In the past, too many universities have tried to do too many things – and with resources scarce, the choices cannot be ducked. That means there is a consideration which links the choices facing government and those facing individual institutions.  If a core strength of the English system lies in its diversity and its distributed excellence, individual institutions need to think about their place in, and responsibilities to, the wider HE system. For a sector characterised by intense competition, that is a profound cultural shift, notwithstanding the economic and legal challenges of collaboration.

    The higher education sector now is not the sector we have always had, and therefore it won’t be the sector we always have. How the sector collectively, and institutions individually, confront choices is a test for policymakers and institutional leaders.

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  • WEEKEND READING: Change is our ally by Professor Sir Chris Husbands

    WEEKEND READING: Change is our ally by Professor Sir Chris Husbands

    This blog has been kindly written for HEPI by Professor Sir Chris Husbands, who was Vice-Chancellor of Sheffield Hallam University between 2016 and 2023, and is now a Director of  Higher Futures, working with university leaders to lead sustainable solutions to institutional challenges.

    The scale of the funding challenge in higher education is widely known, though almost every week brings news of fresh challenges and responses. Real term funding for undergraduate teaching in 2025 is close to 1997 levels – levels which led the Blair government to introduce £1,000 top-up fees. Some commentators have argued that the scale of the challenge now is as great as the 1981 cuts in government funding for universities, which reduced spending on universities by 15%, and saw Salford University lose 44% of its income.

    As contemporary funding challenges have intensified, growth options have become more difficult:

    • international student numbers have either stalled or declined;
    • undergraduate growth, although evident, has not tracked demographic trends;
    • the Office for Students has identified persistent optimism bias in the sector’s funding projections; and
    • competitive pressures are multiplying.

    In many countries, flexible for-profit providers are growing fast, especially in professional and post-graduate education. Many of these are backed by funds with deep investment pockets; some UK for-profit providers are growing very quickly and the expansion of private provision in Germany, France and Canada has been remarkable. In summary, the funding challenge is not only real but increasingly profound.

    Institutional responses to these challenges have been extensive. Almost all universities are now undertaking significant change programmes. There have been major strides in revising operating models, especially for professional and support services, and the impact has been significant. On the other hand, although portfolio reviews are widespread, there have been fewer developments in reshaping business models for teaching and research, though some do exist. Core delivery arrangements largely remain based on a two-semester or three-term model. Staff-student ratios which, as the King’s College Vice-Chancellor Shitij Kapur has repeatedly emphasised are low by international standards, have not been significantly shifted. Undergraduate study remains relatively inflexible. Module sharing and simplified credit transfer arrangements remain small scale. Estate use has not been significantly intensified. All this suggests that individual institutions are finding it difficult to look at the challenge strategically with an eye to the longer term shape, size, structure and nature of the university. There is a lot happening in individual change plans, but probably not enough. Without a secure and sustainable core academic model, institutions will be forced into repeated restructurings, which will not be comfortable for them or for the sector more generally.  

    This is the background to the important Jisc-KPMG report Collaboration for a sustainable future, which was the subject of a this week’s HEPI / Jisc webinar. For all the evidence of individual institutional change, the report argues that a collaborative approach is needed to secure sustainability and reshape the sector. Institutions need to find ways to work together, in back-office functions, in professional services and perhaps in academic delivery. The report acknowledges that there are technical difficulties to overcome, including the requirement to pay VAT on shared services and the need to navigate competition law, though these need to be genuinely tested in practice, but it also argues that the deeper barriers to effective collaboration are cultural. 

    The ingrained habit of individual autonomy, even and perhaps especially in non-competitive services (as Nick Hillman reinforced, no one chooses their undergraduate degree based on the university’s finance system) is a major barrier to significant change.  Moreover, the report acknowledges that collaboration and shared service arrangements are unlikely to deliver cost savings in the short-term – and just now a good deal of thinking in the sector seems to be shaped by Keynes’ dictum that ‘in the long-run we are all dead’. Institutions are caught between the economic realities of the funding challenge and the cultural challenges of collaboration.

    In Four Futures, my HEPI paper published in June last year, I argued that the financial and funding circumstances which produced the sector we have no longer exist. Government is unwilling or unable to pay for the sector most university leaders would like. I argued that there were some policy choices for higher education, and that the sector will almost certainly be different in the future. There are public policy questions here, but there are also questions and challenges for institutions. That means strategic choices for leaders, with universities being much clearer about the things they can do well, and do well sustainably, and building different relationships with other institutions. Leadership matters. As the Jisc / KPMG report observes:

    Given the current trajectory, there is a window of opportunity for institutions to act now and help drive this forward before they are compelled into action by necessity.

    Competition over the past decade has undoubtedly delivered benefits, and we should not understate those, especially in estate investment, student experience, teaching quality and research performance. But competition has also delivered homogeneity, duplication and overlap, and that needs to change.   And for that, as the Jisc / KPMG report identifies, the leadership culture needs to change. Hyper-competitiveness has driven institutionally focused leadership behaviours and associated performance indicators, targets and rewards. But there have been different leadership assumptions in higher education in the past, and other sectors have grappled with the challenge of changing leadership culture. The most successful school improvement initiative of the past generation was London Challenge, in which the performance of schools across the capital was significantly raised. One of the most important shifts was a cultural one, persuading headteachers to think not about ‘my school’ but about ‘[all] our children’: success across the system was a leadership challenge for all.

    The Jisc / KPMG Report is strong on the potential for collaboration to shape the future of the system, though it also makes painful reading on the challenges which have bedevilled this in the past. In the current context, government is unlikely to provide additional funding. The private sector could no doubt provide standardised sector-wide services, but the risks of a single supplier for key services are enormous. If government is not the solution, if the private sector is not the solution, if the status quo is not sustainable, the answer must be imaginative and engaged leadership which is not simply about ‘my institution’ but also about ‘our future’.

    This week’s HEPI / Jisc webinar on ‘Competition or collaboration? Opportunities for the future of the higher education sector’ can be watched back here.

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